STEPHEN'S COFFEE HOLDING, INC.
                6090 Activity Road, Suite A, San Diego, CA. 92126


           CONFIDENTIAL DISCLOSURE AND CONSENT SOLICITATION STATEMENT
           ----------------------------------------------------------

                    ELECTION OF A NEW BOARD OF DIRECTORS AND
                    ----------------------------------------

       RATIFICATION OF RECAPITALIZATION OF STEPHEN'S COFFEE HOLDING, INC.
       ------------------------------------------------------------------

                                November 24, 1999


     Stephen's Coffee Holding,  Inc., a California  corporation (the "Company"),
is furnishing this Confidential  Disclosure and Consent  Solicitation  Statement
(the  "Disclosure  Statement")  to the  management  holders of the shares of the
issued  and  outstanding  Common  Stock  (the  "Management's  Shares")  and  the
non-management  holders of the shares of the issued and outstanding Common Stock
(the "Investors' Common Shares" or the "Investors' Shares") in order to describe
the terms of a  recapitalization,  merger  and its  effect on the  rights of all
Shareholders  (the  "Shareholders")  and to  obtain  the  ratification  from the
Shareholders and New Board to such  recapitalization and merger. This Disclosure
Statement  and the enclosed  form of Proxy and Consent (the "Proxy and Consent")
are  first  being  mailed  or  delivered  on  or  about  November  24,  1999  to
Shareholders of record as of the close of business on November 23, 1999.

                       I. GENERAL STATEMENT AND BACKGROUND

     The  Chairman of the Company  has  adopted a Plan of  Recapitalization  and
Merger,  a copy of  which is  attached  hereto  as  Exhibit  "A"  (the  "Plan of
Recapitalization  and Merger" or  "Recapitalization  and  Merger"),  pursuant to
which  the  Company  capital  structure  of the  Company  would be  modified  as
described  herein.  The   Recapitalization   and  Merger,  if  ratified  by  the
Shareholders,  as more fully described below, would have the effect of modifying
certain  terms,  rights and  privileges of the  Investors'  Shares and result in
certain management changes and corporate  restructuring.  Capitalized terms used
and not otherwise  defined herein shall have the meanings assigned to such terms
in the Plan of Recapitalization and Merger.

     The primary reasons for the  Recapitalization and Merger, were to effective
June 23, 1999,  are to (a) modify the  Company's  capital  structure in a manner
which will  enable the  Company  to proceed as a public  company,  (b) grow as a
viable business,  (c) preserve  shareholder  value, and (d) eliminate  potential
liabilities which could otherwise deter the interest of prospective underwriters
and  investment  banks in assisting the Company to raise  additional  private or
public  equity  financing.  As you may  have  been  previously  advised,  in its
continuing  effort to take the  Company's  shares  public on a  national  market
exchange  such  as  the  NASDAQ  national  market,   the  Company  entered  into
negotiations  with several  investment  banking firms and advisors,  pursuant to
which such firms or  advisors  have  expressed  their  interest in (a) acting as
managerial  and  financial  consultants  to the  Company in  connection  with an
initial  public  offering of the  Company's  Common  Stock (an  "IPO"),  and (b)
sourcing private equity  investment to be exchanged for  newly-issued  shares of
the Company to be used as a "bridge" financing for an IPO.

     The  Chairman  of  the  Board  believes  that  the  rights  and  privileges
associated with the Investors'  Shares should be modified as described herein in
order to facilitate an IPO. The Plan of  Recapitalization  requires that (a) 51%
of the  holders of  Investors'  Shares  shall  agree in  writing  hereby to have
originally  purchased their shares on the terms offered  pursuant to the form of
amended  Subscription  Agreement attached hereto as


SCH, Inc.
Confidential Disclosure and Consent Solicitation Statement
1998-1999 Annual Meeting of Shareholders
<PAGE>

Exhibit  "B",  and  (b)  51 % of the  holders  of the  Investors'  Shares  shall
expressly consent to the Plan of Recapitalization. The Chairman of the Board has
concluded that the  Recapitalization and Merger are in the best interests of the
Company and its Shareholders. Please note that, except as described herein, none
of these  changes  materially  adversely  affect the rights or privileges of the
holders of the Investors' Shares.

                 II. RECOMMENDATION OF THE CHAIRMAN OF THE BOARD

     The  Chairman of the Board,  having  adopted the Plan of  Recapitalization,
recommends and requests that the  Shareholders  ratify the  restructuring of the
Company as detailed in this Disclosure Statement. Please note that the Company's
Recapitalization  and Merger  requires the consent of the holders of at least 51
percent of the Management's Shares and the holders of at least 51 percent of the
Investors' Shares.

     The chairman of the Board believes that Recapitalization and Merger were in
the best  interests  of the Company and its  Shareholders  because,  among other
things, they have enabled the Company to:

          Capitalize  upon the business  expertise  and  contacts of  investment
     banking  advisors and agents  identified by management and thereby increase
     the  Company's  access to  capital,  as well as its  opportunities  to fund
     future growth, through future offerings of either equity or debt securities
     originated by and through such investment advisors and agents.

          Eliminate any Company liability for potential violations of securities
     laws,  although  the Company  does not  believe  that it has  violated  any
     securities  laws,  and to obtain waivers from the holders of the Investors'
     Shares of their rights and remedies  arising from any potential  violations
     of securities  laws  committed by the Company in  connection  with previous
     offers and sales of the Investors' Shares.

     Please be advised that the decision to ratify the Plan of Recapitalization,
and the specific terms thereof, have been made and structured for the Company by
its Chairman of the Board, and that the holders of the Investors Shares will not
have any right to vote on or approve such decision,  except as provided  hereby.
There can be no assurance  that the Company will succeed in its business even if
the  Shareholders  determine  that it is in the best interests of the Company to
proceed with the Plan of  Recapitalization.  Market conditions and other factors
may  prevent the Company  from  overcoming  current  financial  and  operational
challenges.

III. TERMS OF THE PROPOSED RECAPITALIZATION

     Proposed Terms of Investors' Subscription Agreements

     As part of the Plan of  Recapitalization,  the  Chairman  of the  Board has
approved an Investors' Subscription Agreements (the "Amendment"). Each holder of
the  Investors'   Shares   previously   executed  the  Investors'   Subscription
Agreements. A copy of the subscription agreement substantially as proposed to be
adopted, is attached to this Disclosure  Statement as Exhibit "B." The Amendment
contains  potentially  significant  changes  in the  rights  of  holders  of the
Investors' Shares.

SCH, Inc.
Confidential Disclosure and Consent Solicitation Statement
1998-1999 Annual Meeting of Shareholders

                                      -2-
<PAGE>

     The Chairman of the Board  believes  that the creation of the  Amendment is
desirable in view of the waiver of potential  violations of  securities  laws by
the holders of Investors' Shares,  which would benefit the Company.  Please note
that the proposed form of Amendment, if approved by a majority of the holders of
Investors' Shares, would be binding upon even those holders of Investors' Shares
who elected not to vote or who have voted against it.

Merger

     The Chairman of the Board now requests a ratification  of the merger of the
Company into La Jolla Fresh Squeezed  Coffee(TM)  Company Inc. (LJCC),  formerly
North West Farms, Inc, organized in Washington.

     The  Merger  Agreement  and Plan of  Merger  (the  "Merger  Agreement")  is
attached  hereto as Exhibit "E".  Under the terms of the Merger  Agreement,  the
Company merged with and into LJCC, a Washington corporation ("LJCC or "Surviving
Corporation") as of June 15, 1999. The Surviving  Corporation  assumed the name,
"La Jolla  Fresh  Squeezed  Coffee(TM)  Company,  Inc.",  and the  shares of the
Company in the Surviving  Corporation  are retired,  with the Company's  present
Shareholders  assuming ownership of the Surviving Corporation by converting each
share of Company capital stock into one-forth fully-paid and nonassessable share
of LJCC Common Stock pursuant to the Merger  Agreement.  A list of Shareholders,
and the amount of shares, which they own in LJCC, is attached hereto as Schedule
"A".

                       IV. CONSIDERATIONS FOR SHAREHOLDERS

     In considering  whether or not to ratify the  Recapitalization  and Merger,
Shareholders are urged to give careful  consideration to the following  factors,
in addition to the information  contained elsewhere in this Disclosure Statement
and its Exhibits.

New Shares Received By Investors Shall Be Restricted Securities

     Although  the Company  hopes that it shall soon  proceed with an IPO of its
Common  Stock on a national  market  exchange  for the trading of  publicly-held
shares,  holders of Investors'  Shares should be aware that the shares of Common
Stock  in the  Surviving  Corporation  they  receive  pursuant  to the  Plan  of
Recapitalization,  if ratified,  will be "restricted  securities" from and after
June 15,  1999  within the  meaning  of Rule 144 under the  Securities  Act.  In
general, under Rule 144, as currently in effect, a person (or persons who shares
are required to be  aggregated)  who is not deemed to be an  "affiliate"  of the
Company,  as that term is defined under the Securities Act, and who beneficially
owns restricted  securities for a period of at least one year since the later of
the date such  restricted  securities  were acquired from the Company or from an
affiliate of the Company, is entitled to sell the "restricted  securities" in an
amount calculated as follows. The holder of "restricted  securities" is entitled
to sell,  within a three month  period,  a number of shares that does not exceed
the greater of (a) 1 percent of the then-outstanding  shares of the Common Stock
or (b) the average weekly reported trading volume during the four calendar weeks
preceding the date in which notice of the sale is filed with the  Securities and
Exchange Commission. If the Company engages in an IPO within the next 12 months,
the  Company  believes,  based on the advice of  counsel,  that shares of Common
Stock  to be  issued  upon  the  Plan  of  Recapitalization  to the  holders  of
Investors' Shares will be deemed to have been acquired from the Company pursuant
to Rule  144(d)(3)(i)  on the date a Shareholder  received his or her Investors'
Common Shares for purposes of Rule 144.


SCH, Inc.
Confidential Disclosure and Consent Solicitation Statement
1998-1999 Annual Meeting of Shareholders

                                      -3-
<PAGE>

     Sales under Rule 144 are also subject to certain  manner-of-sale and notice
requirements  and to the  availability of current public  information  about the
Company.  A person (or persons whose shares are  aggregated)  who is not and has
not been an affiliate of the Company at any time during the 3 months immediately
preceding  the  sale of the  restricted  securities  is  entitled  to sell  such
securities pursuant to Rule 144 (k) without regard to the limitations  described
above,  provided  that one year has lapsed  since the later of the date on which
such restricted  securities were acquired from the Company or the date they were
acquired from an affiliate of the Company.

No Appraisal of Current Value of Common Shares

     Management believes that the Plan of  Recapitalization,  as proposed,  will
substantially increase the value of the issued and outstanding Investors' Shares
and Management's  Shares.  However, no appraisals,  independent  valuations,  or
fairness  opinions  from a  financial  point  of view of the  Company  or of the
Company's  assets have been  obtained in  connection  with the  valuation of the
Company,  either for purposes of the Recapitalization or potential  negotiations
of an IPO by management.  The Company has not obtained an independent  appraisal
of the  current  value  of its  Common  Stock.  Therefore,  the  Company  is not
providing  you with any  internal  or external  valuation  report as to the fair
market  value of your shares,  or the expected  value of the Common Stock of the
Surviving Corporation.  There can be no assurance that upon the Recapitalization
and Merger that the new Common Stock would have a value equal to, less than,  or
greater than the "old" Common Stock.

Federal Income Tax Consequences

     The Company believes that the Plan of  Recapitalization  will not result in
any material  adverse  federal income tax  consequences  to a Shareholder.  Each
Shareholder,  however, is strongly urged to, and should, consult with his or her
own tax  advisor  and  attorney  regarding  the  federal  income  and  other tax
implications  and  consequences  to such  Shareholder  of the  proposed  Plan of
Recapitalization.

               V. CERTAIN REPRESENTATIONS, WARRANTIES AND WAIVERS

     As part of the Plan of Recapitalization,  and although the Company does not
believe that it has engaged in any securities law violations,  each  Shareholder
is  being  asked,  to the  extent  allowable  by law,  to  waive  any  potential
securities violations by the Company arising from its previous private offers or
sales of the Common Stock,  including the  Investors'  Shares,  and to execute a
general  release  in  favor  of  the  Company  relating  to any  such  potential
securities  law  violations.  To the  extent  that any such  waiver of rights is
deemed to be  unenforceable,  each Shareholder is being asked to recontribute to
the Company all  proceeds of such an action.  Therefore,  each  Shareholder,  by
execution  of the Proxy and  Consent,  shall  have  agreed  to such  waiver  and
recontribution  as set forth in  Exhibit  "C"  attached  hereto  and made a part
hereof.

     The Chairman of the Board has also determined that in conjunction  with the
Plan of Recapitalization, particularly in connection with the proposed Amendment
to  the  Investors'  Subscription   Agreements,   it  is  appropriate  that  the
Shareholders  affirm certain  representations  and warranties  that were made by
each Investor in connection with the execution of the Subscription  Agreement by
which such holder originally purchased Common Stock.  Therefore,  each holder of
Investors'  Shares,  by  execution  of the  Proxy  and  Consent,  will  make the
representations  and warranties as set forth in Exhibit "C" attached  hereto and
made a part hereof.  The form of Proxy and Consent is attached hereto as Exhibit
"D."


SCH, Inc.
Confidential Disclosure and Consent Solicitation Statement
1998-1999 Annual Meeting of Shareholders

                                      -4-
<PAGE>

                             VI. CONSENT PROCEDURES

Vote Required

     The Plan of  Recapitalization  will not be ratified without the approval of
holders of at least 51 percent in interest of the outstanding  Investors' Shares
and  of  holders  of  at  least  51  percent  in  interest  of  the  outstanding
Management's  Shares.  To this end, the Company is holding an Annual  Meeting of
Shareholders  (the "Annual  Meeting")  on December 7, 1999,  at 10:00 am pacific
standard time, to be held at 9060 Activity Road, Suite A, San Diego, CA. 92126.

     As  of  the  date  hereof  there  are  8,004,000  shares  of  Common  Stock
outstanding,  of which 690,000 shares are Investors' Shares and 7,314,000 shares
are  Management's  Shares.  Accordingly,  the  approval  of  holders of at least
351,900 shares of Investors' Shares and 3,730,140 shares of Management's  Shares
are  required  to  approve  the Plan of  Recapitalization.  Because  holders  of
Management's Shares did not execute the Investors' Subscription Agreements, they
are not being asked to approve the form of Amendment thereto. Unless a Proxy and
Consent returned to the Company  expressly  specifies that not all of the shares
held by such Shareholder are to be voted in a particular  manner,  the Proxy and
Consent  will be deemed to be valid  with  respect  to all  shares  held by such
Shareholder.

Proxy and Consent Solicitation

     Proxies and Consents will be solicited until the commencement of the Annual
Meeting,  but may be requested by the Company subsequent thereto.  The Proxy and
Consents are being solicited by the Board of Directors of the Company. Except as
otherwise described herein, all expenses of the Proxy and Consent  Solicitation,
including the cost of preparing and mailing this Disclosure  Statement,  will be
borne by the Company. In addition to solicitation by the use of the mails, Proxy
and Consents may be solicited by directors,  officers,  employees and affiliates
of  the  Company  in  person  or  by  telephone,  telegram  or  other  means  of
communication.  Such  persons  will  not be  additionally  compensated  for such
solicitation, but may be reimbursed for out-of-pocket expenses arising from such
solicitation.   Arrangements   will  be  made  with  custodians,   nominees  and
fiduciaries  for  forwarding  the consent  solicitation  materials to beneficial
owners of shares held of record by such  custodians,  nominees and  fiduciaries,
and the Company will reimburse such  custodians,  nominees and  fiduciaries  for
reasonable expenses thereby incurred.

Effectiveness, Acceptance and Revocation of Proxy and Consents

     Shareholders   who  elect  to  approve  or   disapprove   of  the  Plan  of
Recapitalization  should so  indicate  by marking  the  appropriate  box on, and
signing and dating,  the form of Proxy and Consent included  herewith and either
(i) mailing it in the self-addressed,  stamped envelope provided, to the Company
as follows:  La Jolla Fresh Squeezed  Coffee,  9060 Activity  Road,  Suite A, La
Jolla, California, Attention: Mr. Stephen Corey, or (ii) delivering it in person
at the Meeting.  If no box on the Proxy and Consent is checked but the Proxy and
Consent is otherwise  properly  completed and signed,  the  Shareholder  will be
deemed to have  approved the Plan of  Recapitalization.  All questions as to the
validity  and  acceptance  of returned  Proxy and  Consents,  unless  revoked as
provided  below,  shall be  determined by the Board of Directors in its sole and
absolute discretion, which determination shall be final and binding.


SCH, Inc.
Confidential Disclosure and Consent Solicitation Statement
1998-1999 Annual Meeting of Shareholders

                                      -5-
<PAGE>

     All Proxy and Consents received by the Company shall be revocable until the
vote  with  respect  to  approval  of  the  Plan  of  Recapitalization  and  the
transactions  contemplated  herein, are taken at the Annual Meeting. A Proxy and
Consent may be revoked by a  Shareholder  by the  subsequent  delivery of a new,
properly-completed  and signed Proxy and Consent by the delivery to Mr.  Stephen
Corey,  as  provided  above,  of a notice of  revocation  or by the  Shareholder
attending   the   Annual   Meeting   and   therein    personally    revoking   a
previously-delivered Proxy and Consent. Any revocation of a previously-delivered
Proxy and Consent shall be effective  only as to those shares  identified in the
revocation.

                     VII ELECTION OF NEW BOARD OF DIRECTORS

     The  Chairman  of  the  Board  has  approved,   and  now  proposes  to  the
Shareholders,  that the following  persons serve on the Board of Directors until
the 1999-2000 Annual Meeting of Shareholders:

                   Stephen F. Corey                   Chairman of the Board
                   Gregory D. Writer, Jr.             Director
                   Kurt B. Toneys                     Director

     YOUR  VOTE  IS  IMPORTANT.  Each  Shareholder's  vote is  important  to the
Company.  The  Chairman of the Board  requests  that you  carefully  review this
Disclosure  Statement  and either  return the enclosed  Proxy and Consent to the
Company or attend the Annual Meeting.

                                      * * *

     Questions may be addressed to the  Company's  legal  counsel,  Robert Blair
Krueger II, Esq. at The Krueger  Group,  LLP,  Los Angeles and San Diego,  (619)
451-0200.


SCH, Inc.
Confidential Disclosure and Consent Solicitation Statement
1998-1999 Annual Meeting of Shareholders

                                      -6-
<PAGE>

                                EXHIBIT INDEX TO

           CONFIDENTIAL DISCLOSURE AND CONSENT SOLICITATION STATEMENT


Exhibit "A"           Plan of Recapitalization

   Schedule "A-1"     Definitions

Exhibit "B"           Form of Proposed First Amendment to Investor Subscription
                      Agreement, substantially as proposed to be adopted

Exhibit "C"           Representations, Warranties and Waivers of Shareholders

Exhibit "D"           Form of Proxy and Consent

Exhibit "E"           Form of Agreement and Plan of Merger



<PAGE>


                                                                     Exhibit "A"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


                         STEPHEN'S COFFEE HOLDING, INC.
                          9060 Activity Road, Suite A.
                           San Diego, California 92126

                       PLAN OF RECAPITALIZATION AND MERGER
                       -----------------------------------

                                November 24, 1999


                                   I. SUMMARY

     The Chairman of the Board of Directors (the "Chairman") of Stephen's Coffee
Company, Inc., a California  corporation,  in order to allow the Company to more
successfully compete and to facilitate a possible initial public offering of its
shares,  has  determined  that it is the best  interests  of the Company and its
Shareholders to modify the capital  structure of the Company as provided herein,
to make  certain  other  changes in its  corporate  governance,  and to pursue a
merger  with  La  Jolla  Fresh  Squeezed  Coffee  Company,  Inc.,  a  Washington
corporation. To that end, the Chairman has adopted this Plan of Recapitalization
and Merger (the "Plan of Recapitalization  and Merger" or the  "Recapitalization
and Merger"). Capitalized terms used and not otherwise defined herein shall have
the   meanings   set  forth  in  Schedule   "A-1"   attached  to  this  Plan  of
Recapitalization  and  made  a part  hereof.  The  Chairman  believes  that  the
Recapitalization  and Merger are in the best  interests  of the  Company and its
Shareholders because, among other things, they enabled the Company to:

          Capitalize  upon the business  expertise  and  contacts of  investment
     banking  advisors and agents  identified by management and thereby increase
     the  Company's  access to  capital,  as well as its  opportunities  to fund
     future growth, through future offerings of either equity or debt securities
     originated by and through such investment advisors and agents.

          Eliminate any Company liability for potential violations of securities
     laws,  although  the Company  does not  believe  that it has  violated  any
     securities  laws,  and to obtain waivers from the holders of the Investors'
     Shares of their rights and remedies  arising from any potential  violations
     of securities  laws  committed by the Company in  connection  with previous
     private offers and sales of the Investors' Shares.


     The decision to attempt to proceed with the Recapitalization, and the terms
thereof,  has been made for the Company by its  Chairman  of the Board,  and the
investors in the Company will not have any right to influence  the terms of such
decision except as provided hereby.
<PAGE>

                                                                     Exhibit "A"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


     The  Chairman  believes  the   Recapitalization  and  Merger  provided  the
framework  for the  Company  to satisfy  its trade  payables,  raise  additional
capital for the Company,  eliminate possible liabilities,  and to meet the other
goals  described  above.  The proposed  Amendment  to the Investor  Subscription
Agreement,  substantially  as  proposed  to  be  adopted,  is  attached  to  the
Disclosure Statement as Exhibit "B" and made a part thereof.

     The Plan of Recapitalization is summarized as follows:

     (1) The Chairman proposes to amend the Subscription  Agreements  previously
     signed by each investor with the Company.  Each investor's  Common Stock in
     the Company would be converted on a one to one half-share basis into Common
     Stock in LJCC.

     (2) The Merger of the Company into LJCC shall be ratified by the  Company's
     shareholders, with LJCC acting as the sole surviving entity.

     The  Recapitalization  would  be  accomplished  by  the  Amendment  to  the
Investors' Subscription Agreement, and such other actions as the Chairman of the
Board of  Directors  of the Company  believes  are  necessary  and  advisable in
connection with the  Recapitalization.  The Recapitalization  will be subject to
the  approval of holders in  interest  of at least 51 percent of the  Investors'
Shares  and  holders  in  interest  of at least 51  percent  of the  outstanding
Management's  Shares at the Annual  Meeting of  Shareholders,  to be held at the
9060 Activity Road, Suite A, San Diego, CA. 92126,  December 7, 1999 at 10:00 am
Pacific  Standard  Time, or at such date and time and at such place as the Board
of Directors may otherwise direct.


<PAGE>

                                                                     Exhibit "A"
                                                                              to
                                                     Confidential Disclosure and


                             II. ADDITIONAL MATTERS

Waiver of Certain Rights

     The Chairman of the Board has determined,  as part of the  Recapitalization
and Merger,  and  although the Company does not believe that it has violated any
securities  law,  that it is  appropriate  to require each  Shareholder,  to the
extent  allowable by law, to waive any potential  securities  laws violations by
the  Company  arising  from its offer or sale of Common  Stock and to  execute a
general  release  in  favor  of  the  Company  relating  to any  such  potential
violations of  securities  laws. To the extent that any such waiver of rights is
deemed unenforceable,  each Shareholder shall be required to recontribute to the
Company all  proceeds of such an action.  Each  Shareholder  will be required to
agree,  by execution of the Proxy and Consent or such other means as  determined
by the Chairman of the Board, to such waiver and recontribution substantially as
set forth in Exhibit "C" to the Disclosure Statement.

Certain Representations and Warranties by Shareholders

     The  Chairman  of the Board has  determined  that in  conjunction  with the
Recapitalization,  specifically  the  Amendment to the  Investors'  Subscription
Agreements, it is appropriate that the holders of the Investors' Shares reaffirm
certain  representations  and warranties  made in connection with the Investors'
Subscription  Agreements  and the  original  purchase of the Common Stock by the
Investors.  Each  Shareholder  will be  required  to verify to the  Company,  by
execution  of the Proxy and  Consent or such other  means as  determined  by the
Chairman of the Board, the representations  and warranties  substantially as set
forth in Exhibit "C" to the  Confidential  Disclosure  and Consent  Solicitation
Statement.


<PAGE>

                                                                     Exhibit "A"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement

                                SCHEDULE "A-1" TO
                                -----------------
                            PLAN OF RECAPITALIZATION
                            ------------------------

                                   DEFINITIONS

     "Amendment  to the  Investors'  Subscription  Agreements"  shall  mean  the
proposed Amendment to the Investors'  Subscription  Agreements  substantially in
the form attached as Exhibit "B" to the Disclosure Statement.

     "Annual   Meeting"   shall  mean  the  1998-1999   Annual  Meeting  of  the
Shareholders of the Company  scheduled for December 7, 1999, or such other date,
time and place as the Board of Directors may determine is advisable.

     "Board of  Directors"  or "Board"  shall mean the Board of Directors of the
Company.

     "Chairman of the Board" or "Chairman"  shall mean the Chairman of the Board
of Directors of the Company.

     "Charter"  shall mean the  Articles of  Incorporation  of the  Company,  as
amended or amended and restated.

     "Common  Stock"  shall  mean  the  common  stock  of  the  Company  or  its
successor-in-interest, the Surviving Corporation.

     "Company"  shall  mean  Stephen's   Coffee  Holding,   Inc.,  a  California
corporation.

     "Disclosure Statement" shall mean that Confidential  Disclosure and Consent
Solicitation Statement dated November 24, 1999 provided to the Shareholders.

     "Investors'" shall mean the holders of the outstanding Common Stock who are
not officers, directors or employees of the Company.

     "Investors'  Shares or Investors' Common Shares" shall mean the outstanding
Common Stock owned by Investors.

     "Investors' Subscription Agreements" shall mean the Investors' Subscription
Agreements  pursuant  to which the  Investors  acquired  their  Shares of Common
Stock.

     "Management  Shares"  shall  mean the  outstanding  Common  Stock  owned by
Management and Director of the Company.
<PAGE>

     "Plan of  Recapitalization" or  "Recapitalization"  shall mean this Plan of
Recapitalization as adopted by the Board of Directors of the Company.

     "Proxy and Consent"  shall mean that Form of Proxy and Consent  attached as
Exhibit "D" to the Disclosure Statement.

     "Securities Act" shall mean the federal Securities Act of 1933, as amended.

     "Shareholders"  shall mean all  holders of shares of the  Company's  Common
Stock, including management and the Investors.

     "Surviving  Corporation"  shall mean La Jolla  Fresh  Squeezed  Coffee(TM),
Inc., a successor-in-interest to North West Farms, Inc., and which does business
and operates as "La Jolla Fresh Squeezed Coffee(TM), Inc."

<PAGE>

                                                                     Exhibit "B"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement





                        FORM OF PROPOSED FIRST AMENDMENT
                       TO INVESTOR SUBSCRIPTION AGREEMENT

                         ------------------------------

<PAGE>


                                                                     Exhibit "B"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


                         STEPHEN'S COFFEE HOLDING, INC.
                         ------------------------------
               FIRST AMENDMENT TO INVESTOR SUBSCRIPTION AGREEMENT


     THIS AGREEMENT is made as of June 15, 1999, by and among  Stephen's  Coffee
Holding,  Inc., a California  corporation  (the  "Company"),  and La Jolla Fresh
Squeezed Coffee Co, Inc., a Washington corporation ("LJCC"), and the persons and
entities listed on the Schedule of Common Stock Purchasers (the "Purchasers") of
the Company (the "Disclosure Statement").  The parties hereby agree to amend and
modify, to the extent contrary, any and all previous subscription  agreements of
the parties, as follows:

     1.   Authorization and Sale of Common Shares.

          1.1 Subject to the terms and conditions hereof, the Company will issue
to each  Purchaser,  and each  Purchaser  will  purchase the number of shares of
Common Stock of the Company and LJCC  (collectively,  the "Shares") set forth in
Exhibit "E" of the Disclosure statement.

     2.   Closing Date: Delivery.

          2.1 Closing  Date.  The  closing of the  issuance of the Shares to the
Purchasers  (the  "Closing")  shall be held at the offices of The Krueger Group,
LLP, 11423 West Bernardo Court, San Diego,  California,  92127 (the "Law Offices
of The Krueger Group") at 1:00 p.m. on December 7, 1999 (the "Closing Date"), or
at such other time and place as the Company,  LJCC and the  Purchasers may agree
in writing,  and shall be subject to the terms and  conditions of this Agreement
and the Exhibits attached hereto.

          2.2 Delivery.  Subject to the terms of this Agreement,  at the Closing
LJCC  and  the  Company  will  deliver  to  each   Purchaser  the   certificates
representing the Shares to be issued to the Purchasers by LJCC at the Closing.

     3.  Representations and Warranties of the Company and LJCC. The Company and
LJCC hereby represent and warrant to the Purchasers that:

          3.1 Organization and Standing:  Articles and By-Laws.  LJCC is now, or
shall be as of the Closing Date, a corporation duly organized,  validly existing
and in good  standing  under  the laws of the  State of  California  and has all
requisite corporate power and authority to carry on its

<PAGE>

businesses as now  conducted and as proposed to be conducted.  LJCC is qualified
or licensed to do business as a foreign  corporation in all jurisdictions  where
such  qualification  or licensing  is  required,  except where the failure to so
qualify would not have a material adverse effect upon LJCC.

          3.2 Corporate  Power.  LJCC has now, or will have at the Closing Date,
all  requisite  corporate  power to enter into this  Agreement  and to issue the
Shares. This Agreement is a valid and binding obligation of LJCC and the Company
enforceable in accordance  with its terms,  except as the same may be limited by
bankruptcy,  insolvency,  moratorium,  and  other  laws of  general  application
affecting the enforcement of creditors' rights.

          3.3 Offering. In reliance on the representations and warranties of the
Purchasers in Section 4 hereof,  the issuance of the Shares in  conformity  with
the terms of this Agreement  will not result in a violation of the  requirements
of Section 5 of the Securities Act of 1933, as amended (the  "Securities  Act"),
or the qualification or registration requirements of the Securities Act or other
applicable blue sky laws.

          3.4 Registration  Rights.  Neither the Company nor LJCC has granted or
agreed to grant to any  person  or entity  any  rights to  register,  any of its
securities, including piggyback registration rights.

     4.  Representations  and  Warranties  of  Purchasers  and  Restrictions  on
Transfer Imposed By the Securities Act.

          4.1  Representations  and  Warranties By the  Purchasers.  Each of the
Purchasers represents and warrants to the Company and LJCC as of the date hereof
and as of the Closing Date as follows:

               (a) Investment Intent.  This Agreement is made with the Purchaser
in  reliance  upon such  Purchaser's  representations  to the  Company and LJCC,
evidenced by the Purchaser's execution of this Agreement or the majority vote of
the  Purchasers at the Company's  1998-1999  Annual Meeting of  Stockholders  on
December  7, 1999 (the  "Annual  Meeting"),  that  Purchaser  is an  "accredited
investor" as defined in Regulation D promulgated under the Securities Act or, if
unaccredited,  has  substantial  business and financial  experience  adequate to
evaluate and  understand the merits and risks of this  investment,  is acquiring
the  Common  Stock  (collectively  the  "Securities")  for  investment  for each
Purchaser's own account, not as nominee or agent, and not with a view to, or for
resale in connection  with, any  distribution or public offering  thereof within
the meaning of the  Securities  Act and the Law.  Purchaser  has the full right,
power and authority to enter into and perform this Agreement, and this Agreement
constitutes a valid and binding obligation on the Purchaser.

               (b) Shares Not Registered. Purchaser understands and acknowledges
that  the  offering  of the  Shares  pursuant  to  this  Agreement  will  not be
registered  under the Securities
<PAGE>


Act or  qualified  under the law on the grounds  that the  offering  and sale of
securities contemplated by this Agreement are exempt from registration under the
Securities  Act pursuant to Section  4(2)  thereof and exempt from  registration
pursuant  to Section  25102(f)  of the  California  Corporations  Code and other
applicable  state securities or blue sky laws, and that the Company's and LJCC's
reliance   upon  such   exemptions   is   predicated   upon   such   Purchaser's
representations  set forth in this  Agreement.  The Purchaser  acknowledges  and
understands that the Securities must be held indefinitely  unless the Securities
are subsequently registered under the Securities Act and qualified under the Law
or an exemption from such registration and such qualification is available.

               (c) No  Transfer.  Purchaser  covenants  that in no event will it
dispose of any of the Securities  (other than in  conjunction  with an effective
registration  statement  for  the  Securities  under  the  Securities  Act or in
compliance with Rule 144 promulgated  under the Securities Act) unless and until
(i) the  Purchaser  shall have  notified  the Company  and LJCC of the  proposed
disposition  and shall have  furnished  the Company and LJCC with a statement of
the circumstances  surrounding the proposed disposition,  and (ii) if reasonably
requested  by the Company  and LJCC,  the  Purchaser  shall have  furnished  the
Company and LJCC with an opinion of counsel  satisfactory  in form and substance
to the Company and LJCC to the effect that (x) such disposition will not require
registration  under the Securities Act and (y) appropriate  action necessary for
compliance  with the  Securities  Act, the Law and any other  applicable  state,
local or foreign law has been taken. It is agreed that the Company and LJCC will
not require opinions of counsel for transactions made pursuant to Rule 144.

               (d) Knowledge and  Experience.  Purchaser (i) has such  knowledge
and experience in financial and business  matters as to be capable of evaluating
the  merits  and  risks  of  the  Purchaser's   prospective  investment  in  the
Securities;  (ii) has the ability to bear the economic risks of the  Purchaser's
prospective investment; (iii) has been furnished with and has had access to such
information as the Purchaser has considered necessary to make a determination as
to the purchase of the Securities  together with such additional  information as
is necessary to verify the accuracy of the  information  supplied;  (iv) has had
all questions which have been asked by the Purchaser  satisfactorily answered by
the Company and LJCC; and (v) has not been offered the Securities by any form of
advertisement,   article,   notice  or  other  communication  published  in  any
newspaper,  magazine, or similar media or broadcast over television or radio, or
any  seminar or meeting  whose  attendees  have been  invited by any such media,
except by means of a public  announcement  pursuant  to Section  25102(n) of the
California Corporations Code.


                                                                     Exhibit "B"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement
<PAGE>

               (e) Not Organized to Purchase.  Purchaser has not been  organized
for the purpose of purchasing the Securities.

               (f)  Holding  Requirements.  Purchaser  understands  that  if the
Company or LJCC does not (i) register its Common Stock with the  Securities  and
Exchange  Commission  ("SEC") pursuant to Section 12 of the Securities  Exchange
Act of 1934, as amended (the  "Exchange  Act"),  (ii) become  subject to Section
15(d) of the Exchange Act, (iii) supply  information  pursuant to Rule 1 5c2- 11
thereunder,  or (iv) have a registration statement covering the Securities (or a
filing  pursuant to the exemption from  registration  under  Regulation A of the
Securities Act covering the Securities)  under the Securities Act in effect when
it desires to sell the  Securities,  the  Purchaser  may be required to hold the
Securities for an indeterminate period. Purchaser also understands that any sale
of the Securities  that might be made by the Purchaser in reliance upon Rule 144
under the Securities Act may be made only in limited  amounts in accordance with
the terms and conditions of that rule.

          4.2 Legends.  Each  certificate  representing  the  Securities  may be
endorsed with the following legends:

               (a) Federal  Legend.  THE SECURITIES  REPRESENTED BY THIS ARTICLE
HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
"ACT") AND ARE "RESTRICTED  SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER
THE  ACT.  THE  SECURITIES  MAY NOT BE SOLD OR  OFFERED  FOR  SALE OR  OTHERWISE
DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE  REGISTRATION  STATEMENT
FOR THE  SHARES  UNDER THE ACT OR (ii) IN  COMPLIANCE  WITH  RULE 144,  OR (iii)
PURSUANT  TO AN OPINION  OF  COUNSEL,  SATISFACTORY  TO THE  COMPANY,  THAT SUCH
REGISTRATION  OR  COMPLIANCE  IS  NOT  REQUIRED  AS  TO  SAID  SALE,   OFFER  OR
DISTRIBUTION.

               (b) Other Legends. Any other legends required by the Law or other
applicable state blue sky laws. The Company or LJCC need not register a transfer
of legended Securities, and may also instruct its transfer agent not to register
the transfer of the Securities,  unless the conditions  specified in each of the
foregoing legends are satisfied.


<PAGE>

                                                                     Exhibit "B"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


          4.3 Removal of Legend and Transfer  Restrictions.  Any legend endorsed
on  a  certificate  pursuant  to  subsection  4.2  (a)  and  the  stop  transfer
instructions with respect to such legended Securities shall be removed,  and the
Company or LJCC shall issue a  certificate  without such legend to the holder of
such  Securities if such Securities are registered and sold under the Securities
Act and a prospectus  meeting the  requirements  of Section 10 of the Securities
Act is available or if such holder  satisfies  the  requirements  of Rule 144(k)
and,  where  reasonably  deemed  necessary by the Company or LJCC,  provides the
Company or LJCC with an opinion of counsel  for such  holder of the  Securities,
reasonably  satisfactory  to the  Company or LJCC,  to the effect  that (i) such
holder, meets the requirements of Rule 144(k) or (ii) a public sale, transfer or
assignment of such Securities may be made without registration.

          4.4 Rule 144.  Purchasers are aware of the adoption of Rule 144 by the
SEC  promulgated  under the Securities Act, which permits limited public resales
of securities acquired in a non-public offering,  subject to the satisfaction of
certain  conditions.  Purchasers  understand that under Rule 144, the conditions
include,  among  other  things:  the  availability  of  certain  current  public
information  about the issuer and the  resale  occurring  not less than one year
after the party has purchased and paid for the securities to be sold.

     5.  Conditions  to  Purchasers'  Obligations.   The  Company's  and  LJCC's
obligation  to sell and  issue the  Shares  at the  Closing  is  subject  to the
following conditions:

               (a) Purchasers'  Representations and Warranties True and Correct.
That the  representations  and  warranties  made by the  Purchasers in Section 4
hereof shall be true and correct when made, and shall be true and correct on the
Closing  Date with the same  force and effect as if they had been made on and as
of said date.

     6.  Affirmative  Covenants  of the  Company.  The  Company  and LJCC hereby
covenant and agree as follows:

          6.1  Conflicts of  Interests.  The Company and LJCC shall use its best
     efforts to ensure that the Company's or LJCC's  employees,  during the term
     of their  employment  with the Company or LJCC, do not engage in activities
     which would result in a conflict of interest with the Company or LJCC.  The
     Company's and LJCC's obligations hereunder include, but are not limited to,
     requiring  that the  Company's  and LJCC's  employees  devote their primary
     productive  time,  ability and  attention to the business of the Company or
     LJCC provided; however, the Company's
<PAGE>

     and LJCC's employees may engage in other business activity if such activity
     does not  materially  interfere  with their  obligations  to the Company or
     LJCC,  requiring  that  the  Company's  and  LJCC's  employees  enter  into
     agreements  regarding  proprietary   information  and  confidentiality  and
     preventing   the   Company's   and  LJCC's   employees   from  engaging  or
     participating  in any business that is in competition  with the business of
     the Company or LJCC.

          6.2 Proprietary  Agreements.  The Company and LJCC will use reasonable
     efforts to prevent any employee  from  violating  the  confidentiality  and
     proprietary information agreement entered into between the Company and LJCC
     and each of their employees.

          6.3 Rule 144.  The  Company  and LJCC  covenant  that (i) at all times
     after LJCC first is subject to the reporting  requirements of Section 13 or
     15(d) of the Securities Exchange Act of 1934, the Company and LJCC will use
     its best efforts to comply with the current public information requirements
     of Rule 144(c)(l)  under the Securities  Act; and (ii) at all such times as
     Rule 144 is  available  for use by the  Purchasers,  LJCC will  furnish the
     Purchasers upon request with all information  within the possession of LJCC
     required for the preparation and filing of Form 144.

<PAGE>

                                                                     Exhibit "B"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


     7. Miscellaneous.

          7.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of  California  as such  laws are  applied  to  agreements
between  California  residents entered into and to be performed  entirely within
California.

          7.2  Survival.   The   representations,   warranties,   covenants  and
agreements   made  herein  shall   survive  the  Closing  of  the   transactions
contemplated  hereby,  notwithstanding any investigation made by the Purchasers.
All  statements  as to factual  matters  contained in any  certificate  or other
instrument  delivered by or on behalf of the Company or LJCC pursuant  hereto or
in connection with the  transactions  contemplated  hereby shall be deemed to be
representations  and  warranties by the Company or LJCC hereunder as of the date
of such certificate or instrument.

          7.3 Successors  and Assigns.  Except as otherwise  expressly  provided
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon,  the  successors,  assigns,  heirs,  executors and  administrators  of the
parties hereto.

          7.4 Entire Agreement. This Agreement and the other documents delivered
pursuant  hereto  constitute  the fill and entire  understanding  and  agreement
between the  parties  with  regard to the  subjects  hereof and thereof and they
supersede,  merge  and  render  void  every  other  prior  written  and or  oral
understanding or agreement among or between the parties hereto.

          7.5  Notices.  All  notices  and  other  communications   required  or
permitted  hereunder  shall be in  writing  and shall be  delivered  personally,
mailed by first  class  mail,  postage  prepaid,  or  delivered  by  courier  or
overnight delivery, addressed (a) if to a Purchaser, at such Purchaser's address
set forth on the  Schedule  of  Purchasers,  or at such  other  address  as such
Purchaser  shall have  furnished to the Company and LJCC in writing or (b) if to
the  Company  and  LJCC,  at its  address  set  forth at the  beginning  of this
Agreement, or at such other address as the Company and LJCC shall have furnished
to the Purchasers in writing.  Notices that are mailed shall be deemed  received
five (5) days after deposit in the United  States mail.  Notices sent by courier
or overnight  delivery shall be deemed  received two (days) after they have been
so sent.

          7.6  Severability.  In case any provision of this  Agreement  shall be
found by a court of law to be invalid,  illegal or unenforceable,  the validity,
legality and enforceability of the remaining  provisions of this Agreement shall
not in any way be affected or impaired thereby.
<PAGE>

                                                                     Exhibit "B"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


          7.7 Finder's Fees and Other Fees.

               (a) The Company and LJCC each (i) represents and warrants that it
has  retained  no  finder  or  broker  in  connection   with  the   transactions
contemplated  by this  Agreement and (ii) hereby agrees to indemnify and to hold
Purchasers   harmless  from  and  against  any   liability  for   commission  or
compensation  in the nature of a finder's  fee to any broker or other  person or
firm (and the costs and expenses of defending against such liability or asserted
liability)  for  which  the  Company  or  LJCC,  or  any  of  its  employees  or
representatives, is responsible.

               (b) Each Purchaser (i) represents and warrants that the Purchaser
has  retained  no  finder  or  broker  in  connection   with  the   transactions
contemplated  by this  Agreement and (ii) hereby agrees to indemnify and to hold
the Company and LJCC harmless from and against any liability for any  commission
or compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which such Purchaser, is responsible.

          7.8 Expenses.  The Company,  LJCC and the  Purchasers  shall each bear
their own expenses and legal fees in connection  with the  consummation  of this
transaction.

          7.9 Titles and Subtitles.  The titles of the sections and  subsections
of this  Agreement  are for  convenience  of  reference  only  and are not to be
considered in construing this Agreement.

          7.10 Counterparts.   This  Agreement  may be executed in any number of
counterparts,  each of which  shall be an  original,  but all of which  together
shall constitute one instrument.

          7.11 Delays or Omissions.  No delay or omission to exercise any right,
power  or  remedy  accruing  to the  Company  or  LJCC or to any  holder  of any
securities  issued or to be issued hereunder shall impair any such right,  power
or remedy of the Company or LJCC or such holder, nor shall it be construed to be
a waiver of any  breach or  default  under this  Agreement,  or an  acquiescence
therein,  or of or in any similar breach or default  thereafter  occurring;  nor
shall any delay or omission to exercise any right, power or remedy or any waiver
of any single breach or default be deemed a waiver of any other right,  power or
remedy or breach or default theretofore or thereafter  occurring.  All remedies,
either under this Agreement, or by law otherwise afforded to the Company or LJCC
or any holder, shall be cumulative and not alternative.
<PAGE>

                                                                     Exhibit "B"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement



     IN WITNESS  WHEREOF,  the parties  hereto have executed and delivered  this
Agreement as of the date first written above, with the execution and delivery of
this  Agreement by each Purchaser  evidenced  either by the majority vote of all
Purchasers at the Annual Meeting or the  Purchaser's  signature  below.

                                          LA JOLLA FRESH SQUEEZED COFFE CO, INC.
                                          a  Washington corporation


                                          --------------------------------------
                                          Kurt B. Toneys, President



                                          STEPHEN'S COFFEE HOLDING, INC.
                                          a California corporation


                                          --------------------------------------
                                          Stephen F. Corey, President
<PAGE>

                                                                     Exhibit "C"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


                     REPRESNTATIONS, WARRANTIES AND WAIVERS

     Section 1. Each Shareholder,  by the execution and delivery of his, her and
its Proxy and Consent or by his,  her or its  approval at the Annual  Meeting of
Shareholders with respect to the  Recapitalization  and Merger and certain other
matter,  hereby re presents and warrants as follows  (capitalized terms used and
not  otherwise  defined  herein shall have the meanings  assigned to them in the
Confidential Disclosure and Consent Solicitation Statement):

     A.  Any  shares  of  Common  Stock of the  Company  were  received  for the
Shareholders's own account and not for the account of any person, and not with a
view   toward   distribution,   assignment   or   resale   to   others,   or  to
franctionalization in whole or in part. No other person has a direct or indirect
beneficial  interest  in such  Common  Stock.  The  Shareholder  will not  sell,
hypothecate  or  otherwise  transfer  such  shares  unless  (a) such  shares are
registered under the Securities Act of 1933, as amended (the  "Securities  Act")
and any applicable state securities law, or (b) in the opinion of legal counsel,
with  which  legal  counsel  of the  Company  agrees,  and  exemption  from  the
registration  requirements  of the  Securities  Acts  and  such  state  laws  in
available. Specifically, the Shareholder is ware that the Common Stock issued to
them may not be sold pursuant to Rule 144  promulgated  under the Securities Act
unless all of the  conditions of such Rule are met. Among the conditions for use
of Rule 144 is the  availability of current  information to the public about the
Company.  Such  information  is not  available,  there is no assurance that such
information will be available.

     B.The  Shareholder has been furnished and has carefully read the Disclosure
Statement  and its attached  Schedules  and  Exhibits  and is familiar  with and
understands the terms of the Plan of Recapitalization  and Merger. In evaluating
the suitability of an investment in the Company and in making a determination of
whether or not to approve the Plan of Recapitalization,  the Shareholder has not
relied upon any  representations or other information  (whether oral or written)
from the  Company  or any other  person or entity  whatsoever  other than as set
forth in the materials  described  above and its  Schedules  and Exhibits.  With
respect to tax and other economic  considerations  involved in this  investment,
the  Shareholder  is not  relying  on the  Company.  The  Shareholder  carefully
considered  and,  to  the  extent  the  Shareholder   believed  such  discussion
necessary,  discussed with the Shareholder's professional legal, tax, accounting
and financial  advisors the  suitability of an investment in the Company and the
consequences of the Plan of Recapitalization  for that Shareholder's  particular
tax,  financial and legal  situation.  The  Shareholder  has determined that the
Common  Stock  he,  she or it has  received  is a  suitable  investment  for the
Shareholder.


                                                                     Exhibit "C"
                                                                              to
<PAGE>

                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


     C. The Company has always made available to the  Shareholder  all documents
and information that the Shareholder has requested  relating to an investment in
the Company and to the Plan of Recapitalization.

     D. The  Shareholder has been fully informed to the  Shareholder's  complete
satisfaction  concerning  the  organizational  aspects,  business,   operations,
finances and all other matters with respect to the Company that the  Shareholder
considered  significant  for the purpose of making an  investment  decision with
respect  to the  Company  and in  determining  whether  or  not to  approve  the
Recapitalization.  The Shareholder recognizes that an investment in the Company,
and the  Recapitalization,  involves  substantial  risks,  including loss of the
entire amount of such  investment,  and has taken in to account and  understands
all of these risk factors  including,  but not limited to, those set forth under
the caption "Considerations for Shareholders" in the Disclosure Statement.

     E. If the  Proxy and  Consent  is  executed  and  delivered  on behalf of a
partnership,  corporation,  trust or  retirement  plan:  (I)  such  partnership,
corporation,  trust of  retirement  plan has been  duly  authorized  and is duly
qualified  (a) to  execute  and  deliver  the  Proxy and  Consent  and all other
instruments  executed an delivered on behalf of such  partnership,  corporation,
trust or retirement plan or by use of a power of attorney in connection with the
approval of the Recapitalization,  (b) to delegate authority pursuant to a power
of attorney,  and (c) to purchase and hold such Common Stock; (ii) the signature
of the  party  signing  on  behalf of such  partnership,  corporation,  trust or
retirement  plan has not been formed for the specific  purpose of acquiring  the
Common  Stock,  unless each  beneficial  owner of such  entity is an  accredited
investor ("Accredited Investor") within the meaning of Rule 501(a) of Regulation
D  promulgated  under the  Securities  Act  ("Regulation  D") and has  submitted
information substantiating such qualification.

     F. The  Shareholder  is either an  Accredited  Investor or an investor who,
either  alone  or with  the  Shareholder's  purchaser  representative,  has such
knowledge and experience in financial and business  matters that the Shareholder
is sufficiently  capable of evaluating the merits and risks of the investment in
the Company and the proposed  Recapitalization.  The  Shareholder's net worth or
annual income is such that the loss of the Shareholder's  entire investment,  or
its  unavailability,  will  not  result  in  serious  harm or  detriment  to the
Shareholder.
<PAGE>

     G. The  Shareholder  shall  indemnify and hold harmless the Company and any
officer, director, control person, advisor, attorney,  accountant or other agent
of any such entity who was or is a party or is  threatened to be made a party to
any threatened,  pending or completed action, suit or preceding,  whether civic,
criminal,  administrative  or  investigative,  by reason of or arising  from any
actual or alleged  misrepresentation  or  misstatement  of facts or  omission to
represent or state facts made by the  Shareholder to the Company  concerning the
Shareholder  or the  Shareholder's  financial  position in  connection  with the
Recapitalization,  including  without  limitation,  any such  misrepresentation,
misstatement  or omission  contained in the form of First  Amendment to Investor
Subscription Agreement or in the Proxy and Consent, against losses,  liabilities
and expense for which the Company or any officer,  director or control person of
any such entity has not otherwise been reimbursed  (including  attorney's  fees,
judgment, fines and amounts paid in settlement) actually and reasonably incurred
by such person or entity in connection with such action, suit or proceeding.

     H. If the  Shareholder  is a person  acting  pursuant to  discretionary  or
similar authority with respect to an account beneficially owing its shares, such
Shareholder  represents that to the best of such  Shareholder's  knowledge after
due inquiry each of the  foregoing  representations  and  warranties is true and
correct with respect to each  individual  or entity  having any interest in such
account.

Section 2. Furthermore,  each Shareholder,  by the execution and delivery of its
Proxy and  Consent  or by its  approval  at the  Annual  Meeting  of the Plan of
Recapitalization and Merger hereby agrees that, in the event that the Company is
deemed to have violated any  applicable  federal or stated  securities  law with
respect of he offer or sale of its shares,  to the extent permitted by law, each
Shareholder  hereby  waives his, her or its right of  rescission  to recover the
consideration paid (or interest accrued thereon) for such shares including an ex
press waiver of rights or remedies,  he, she or it may have under  Section 25503
of the Corporate  Securities Law of California.  Each Shareholder,  on behalf of
himself,  herself,  or itself,  and each of his,  her or its  respective  heirs,
personal  representatives,  successors and assigns,  hereby forever releases and
discharges  the  Company,   and  its  past  and  present  officers,   directors,
Shareholders,  principals, joint ventures, partners, employees, agents, personal
representatives, successors and assigns, and all entities presently and formerly
related  to or  affiliated  with the  Company,  of and from all and all  claims,
demands, damages, actions, causes of actin of every kind, in law and equity, and
for the  otherwise  known and unknown,  suspected or  unsuspected,  disclosed or
undisclosed for damages,  actual,  consequential or exemplary,  past, present or
future,  arising  from the offer,  sale of  issuance  of the  shares,  including
without  limitation all claims and demands  arising out of or in any way related
to a claim of a right of  rescission to release  consideration  plus interest in
exchange for the shares.  Each  Shareholder  expressly  hereby waives all rights
under  Section 1542 of the  California  Civil Code,  which  Section  provides as
follows:
<PAGE>

                                                                     Exhibit "C"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


         SECTION  1542.  (GENERAL  RELEASE  -- CLAIMS  EXTINGUISHED).  A GENERAL
                  RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR  DOES NOT
                  KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF  EXECUTING
                  THE  RELEASE,  WHICH  IF KNOWN  BY HIM  MUST  HAVE  MATERIALLY
                  AFFECTED HIS SETTLEMENT WITH HIS DEBTOR.


     B.   In the event that any of the Shareholders are entitled to a rescission
          of the consideration  paid for the shares arising from the offer, sale
          or  issuance  of such  shares,  and  the  waiver  provided  for in the
          immediately  preceding  section  is  deemed  unenforceable  by a court
          competent jurisdiction or otherwise, each Shareholder hereby expressly
          agrees to  recontribute  any and all  proceeds  which they may receive
          arising from such rescission to the Company and hereby reaffirms their
          subscription for the shares pursuant to the terms of the form of First
          Amendment Investor Subscription.

<PAGE>

                                                                     Exhibit "D"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


                                PROXY AND CONSENT
                                -----------------
                         STEPHEN'S COFFEE HOLDING, INC.
                ANNUAL MEETING OF SHREHOLDERS - DECEMBER 7, 1999

     The undersigned  holder(s) of Common Stock (collectively,  the "Shares") of
Stephen's Coffee Holding, Inc. (the "Company") hereby nominates, constitutes and
appoints Mr. Stephen Corey, a California resident, the attorney, agent and proxy
of the undersigned,  with full power of substitution,  to vote all Shares of the
Company  which the  undersigned  is  entitled  to vote at the  1998-1999  Annual
Meeting  of  Shareholders  of the  Company  (the  "Meeting")  to be held at 9060
Activity Road, Suite A., San Diego,  California  92126,  December 7, 1999, 10:00
a.m.  Pacific  Standard  Time  and  any and all  adjournments  or  postponements
thereof, with respect to the matters described in the accompanying  Confidential
Disclosure and Consent Solicitation  Statement,  and in his discretion,  on such
other matters which properly come before the meeting, as fully and with the same
force and  effect as the  undersigned  might or could do if  personally  present
thereat, as follows:



1.   To ratify the Plan of Recapitalization, including the Merger,
     and Amendment to the Investor's Subscription Agreements

     FOR     AGAINST      ABSTAIN

2.   To vote Stephen F. Corey as Chairman of Board, and
     Gregory D. Writer, Jr. and Kurt B. Toneys as members of
     the Board of Directors until 2000 Annual Meeting of the Shareholders.

     FOR     AGAINST      ABSTAIN

3.   To transact such other business as may properly come before
     the Meeting and any adjournment or adjournments or postponements
     thereof.  Management presently knows of no other business to be
     presented by or on behalf of the Company or its Board of Directors
     at the Meeting.

     FOR     AGAINST      ABSTAIN

     THIS PROXY AND CONSENT IS  SOLICITED ON BEHALF OF THE CHAIRMAN OF THE BOARD
OF  DIRECTORS  AND MAY BE REVOKED  PRIOR TO ITS  EXERCISE.  PLEASE SIGN AND DATE
BELOW.

THE  CHAIRMAN   RECOMMENDS  A  VOTE  OF  "FOR"  THE  ADOPTION  OF  THE  PLAN  OF
RECAPITALIZATION,  INCLUDING THE MERGER,  AND AMENDMENT.  THIS PROXY AND CONSENT
COFERS  AUTHORITY  TO AND  SHALL  BE VOTED  "FOR"  THE  ADOPTION  OF THE PLAN OF
RECAPITALIZATION  UNLESS OTHER  INSTRUCTIONS  ARE  INDICATED,  IN WHICH CASE THE
PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS.
<PAGE>

                                                                     Exhibit "D"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement



BY  EXECUTION  AND  DELIVERY  OF THIS PROXY AND  CONSENT  EACH  SHAREHOLDER  WHO
ACQUIRED  SHARES  FROM THE  COMPANY  IN A  PRIVATE  SECURITIES  OFFERING  HEREBY
EXPRESSLY AGREES WITH AND REAFFIRMS THE REPRESENTATIONS,  WARRANTIES AND WAIVERS
CONTAINED IN THE CONFIENTIAL  DISCLOSURE AND CONSENT SOLICITATION  STATEMENT AND
HEREBY EXPRESSLY REPRESENTS,  WARRANTS,  AND WAIVES WITH RESPECT TO SUCH MATTERS
AS CONTAINED IN THE CONFIDENTIAL  DISCLOLSURE AND CONSENT SOLICITATION STATEMENT
AS OF THE DATE HEREOF.

     BY EXECUTION  AND DELIVERY OF THIS PROXY AND CONSENT EACH  SHAREHOLDER  WHO
ACQUIRED  SHARES FROM THE COMPANY IN A P RIVATE  SECURITIES  OFFERING  EXPRESSLY
WAIVES ALL RIGHTS UNDER SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH SECTION
PROVIDES AS FOLLOWS:

          SECTION 1542. (GENERAL RELEASE - EXTENT).
          A GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS  WHICH THE CREDITOR  DOES
          NOT KNOWOR  EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING  THE
          RELEASE,  WHICH  IF KNOWN BY HIM MUST  HAVE  MATERIALLY  AFFECTED  HIS
          SETTLEMENT WITH THE DEBTOR.


                                                -----------------------------
                                                   Initials of Undersigned


     IF ANY OTHER  BUSINESS IS  PRESENTED  AT THE  MEETING,  THIS PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.


Dated:                                      ------------------------------------
       -----------------------                   (Please print name)


                                            ------------------------------------
                                                 (Signature of Shareholder)


Dated:                                      ------------------------------------
       -----------------------                  (Please print name)


                                            ------------------------------------
                                                 (Signature of Shareholder)

<PAGE>

                                                                     Exhibit "D"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement



(Please  date this  Proxy and  Consent  and sign you name as it  appears on your
stock certificates. Executors, administrators, trustees, etc., should give their
full titles. All joints owner should sign).

     I do      do not    expect to attend the Meeting.  Number of Persons:____

     The undersigned's Purchaser Representative, if any, represents as follows:

I have reviewed and discussed the plan of Recapitalization and Merger, including
the Merger,  Recapitalization,  and  Amendment  to the  Investor's  Subscription
Agreements,  with the  undersigned  whose  signature  appears  above with a view
toward   determining   whether  the  undersigned's   approval  of  the  Plan  of
Recapitalization is appropriate in light of the undersigned's circumstances,  as
such circumstances have been disclosed to me by the undersigned.


                                  ----------------------------------------------
                                  Signature of Purchaser Representative (if any)


                                  ----------------------------------------------
                                  Signature of Purchaser Representative (if any)

<PAGE>


                                                                     Exhibit "E"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


                          AGREEMENT AND PLAN OF MERGER


     This  Agreement  and Plan of Merger dated as of June 15, 1999 (this "Merger
Agreement"),  by and  between  LA  JOLLA  FRESH  SQUEEZED  COFFE  CO.,  INC.,  a
Washington  corporation  (the  "Surviving  Corporation"),  and STEPHEN'S  COFFEE
HOLDING  CORP.,  a  California   corporation   ("SCH";  SCH  and  the  Surviving
Corporation  being  hereinafter  collectively  referred  to as the  "Constituent
Corporations").

     INTENTING TO BE LEGALLY  BOUND,  and in  consideration  of the premises and
material covenants and agreements contained herein, the Constituent Corporations
hereby agree as follow:


                                    ARTICLE 1

                                   The Merger

1.1  Merger of SCH With and Into the Surviving Corporation.

     (a) Agreement to Merge. Subject to the terms of this Merger Agreement,  SCH
shall be merged with and into the Surviving Corporation (the "Merger").

     (b) Effective  Time of the Merger.  The Merger shall become  effective upon
June 15,  1999.  The date  that the  Merger  becomes  effective  is  hereinafter
referred  to as the  "Effective  Date of  Merger,"  and the time that the Merger
becomes  effective  is  hereinafter  referred to as the  "Effective  Time of the
Merger".

     (c) Surviving  Corporation.  At the Effective Time of the Merger, SCH shall
be merged with and into the  Surviving  Corporation  and the separate  corporate
existence of SCH shall there upon cease. The Surviving  Corporation shall be the
surviving  corporation in the Merger and the separate corporate existence of the
Surviving  Corporation,  with all its  purposes,  objects,  rights,  privileges,
powers,  immunities and franchises,  shall continue unaffected and unimpaired by
the Merger.

1.2  Effect of the Merger; Additional Actions.

     (a) Effects. The Merger shall have the effects set forth in Section 1107 of
the California Code.
<PAGE>

                                                                     Exhibit "E"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


     (b)  Additional  Actions.  If, at any time after the Effective  Time of the
Merger,  the Surviving  Corporation shall consider or be advised that any deeds,
bills,  of sale,  assignments,  assurances  or any other  actions  or things are
necessary or desirable,  (I) to best,  perfect or confirm of record or otherwise
in the Surviving  Corporation it right, title or interest in, to or under any of
the rights,  properties or assets of either Constituent  Corporation acquired or
to be acquired by the  Surviving  Corporation  as a result of, or in  connection
with,  the Merger or (ii) to  otherwise  carry our the  purposes  of this Merger
Agreement,  each Constituent Corporation and its officers and directors shall be
deemed to have granted to the Surviving  Corporation  and  irrevocable  power of
attorney of execute and deliver all such deeds,  bill of sale,  assignments  and
assurances  and to take and do all  such  other  actions  and  things  as may be
necessary or desirable to best,  perfect or confirm any and all right, title and
interest in, to and under such  rights,  properties  or assets in the  Surviving
Corporation  and  otherwise to carry out the purposes of this Merger  Agreement;
and the officers and directors of the Surviving Corporation are fully authorized
in the name of each  Constituent  Corporation  or  otherwise to take any and all
such actions.

                                    ARTICLE 2

                          The Constituent Corporations

     2.1 Incorporation of the Surviving  Corporation.  The Surviving Corporation
was  originally  incorporated  under  the  laws of the  State of  Washington  on
February 9, 1987.

     2.2 Incorporation of SCH. SCH was incorporated  under the laws of the State
of California on April 17, 1997.

                                    ARTICLE 3

                      Articles of Incorporation, Bylaws and
               Directors and Officers of the Surviving Corporation

     3.1 Articles of  Incorporation  of Surviving  Corporation.  The Articles of
Incorporation of the Surviving Corporation in effect on the Effective Date shall
continue  to be the  Articles of the  Surviving  Corporation  without  change or
amendment  until further  amended,  if ever, in accordance  with the  provisions
hereof and applicable laws.


                                                                     Exhibit "E"
                                                                              to
<PAGE>

                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement


     3.2  Bylaws  of  Surviving   Corporation.   The  bylaws  of  the  Surviving
Corporation  in effect on the Effective  Date shall continue to be the bylaws of
the Surviving  Corporation without change or amendment until further amended, if
ever, in accordance with the provisions hereof and applicable laws.

     3.3  Directors  and Officers of Surviving  Corporation.  The  directors and
officers of the Surviving  Corporation  shall  continue and remain as such after
the effective date for the full unexpired terms of their respective  offices, or
until their  successors shall have been elected or qualified our until otherwise
provided by law.


                                    ARTICLE 4

                Effective of the Merger on the Securities of the
                            Constituent Corporations

     4.1 Stock of  SCH. Upon  the Effective  Date,  by virtue of the  Merger and
without any action on the part of the holder thereof,  each share of SCH capital
stock, including all Common Stock outstanding immediately prior thereto shall be
changed and  converted  into 1/4 full-paid  and  nonassessable  shares of Common
Stock of the Surviving Corporation.

     4.2  Stock  Certificates.  On and  after  the  Effective  Date,  all of the
outstanding  certificates  which prior to that time  represented  share of SCH's
Common  Stock shall be deemed for all  purposes to evidence  ownership of and to
represent the shares of the Surviving Corporation stock into which the shares of
SCH Common Stock  represented by such certificates have been converted as herein
provided.  The  registered  owner on the  books  and  records  of the  Surviving
Corporation or its transfer  agent of any such  outstanding  stock  certificates
shall,  until such  certificate  shall have been  surrendered  for  transfer  or
otherwise accounted for to the Surviving Corporation or its transfer agent, have
and be entitled  toe exercise any voting and other rights with respect to and to
receive any  dividend an other  distributions  upon the shares of the  Surviving
Corporation  Common Stock  evidenced by such  outstanding  certificate  as above
described.

     4.3 Other  Employee  Benefit  Plans.  As of the Effective  Date,  Surviving
Corporation  hereby  assumes all  obligations  of SCH under any and all employee
benefit plans in effect as of said date or with respect to which employee rights
or accrued benefits are outstanding as of said date.
<PAGE>

                                                                     Exhibit "E"
                                                                              to
                                                     Confidential Disclosure and
                                                  Consent Solicitation Statement

                                    ARTICLE 5

                               General Provisions

     5.1  Amendment.  This Merger  Agreement may be deemed by the parties hereto
any time  before or after  approval  hereof by the  shareholders  of SCH and the
Surviving Corporation but, after such approval, no amendment shall be made which
by law requires the further  approval of  shareholders  without  obtaining  such
approval.  This Merger  Agreement may not be amended  except by an instrument in
writing signed on behalf of each of the parties hereto.

     5.2  Abandonment.  At any time  before  the  Effective  Date,  this  Merger
Agreement  may be  terminated  and the Merger may be  abandoned  by the Board of
Directors of either SCH or the Surviving  Corporation  or both,  notwithstanding
approval of this  Merger  Agreement  by the sole  stockholder  of the  Surviving
Corporation and the stockholders of SCH.

     5.3  Counterparts. This  Merger 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 agreement.

     5.4 Governing Law. This Merger Agreement shall be governed in all respects,
including  validity,  interpretation  and  effect,  by the laws of the  State of
California without reference to principles of conflicts of law.
<PAGE>

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


                                   La Jolla Fresh Squeezed Coffee Co., Inc.
                                   A Washington corporation


                                   --------------------------------------------
                                   Kurt B. Toneys, President


                                   SCH CORPORATION
                                   A California corporation



                                   --------------------------------------------
                                   Mr. Stephen F. Corey, President