SUMMARY OF EMPLOYMENT TERMS
                                  BETWEEN
                             COFFEE PEOPLE, INC.
                                     AND
                               SECOND CUP INC.
                                     AND
                              TAYLOR H. DEVINE


These  summary  employment  terms are  effective  from the  Closing  Date of the
transaction  contemplated  by the Acquisition  Agreement  between Coffee People,
Inc.   ("Company")   and  Second  Cup  Inc.,   dated   November  13,  1997  (the
"Transaction").  All salary and bonus provisions  contained herein shall replace
any then existing compensation as at the Closing Date.


1.  TERM:             One year from the  Closing  Date of the  Transaction.  The
                      Closing  Date is  expected  to be on or  before  March 31,
                      1998.

2.  LOCATION:         Portland, Oregon with expense paid travel as required.

3.  TITLE:            President and Chief Operating Officer, Coffee People.

4.  DUTIES:           Reporting  to  the  CEO  of  Coffee   People,   Inc.,  the
                      President,  Coffee People is responsible  overall, for all
                      day-to-day  operations  for the Oregon stores and during a
                      transition  period,  to be  determined,  will have overall
                      responsibility  for  all  day-to-day  operations  for the
                      Arizona stores. In addition, the President,  Coffee People
                      will   be   responsible   for  the   development   of  the
                      non-traditional  business  for all  brands  within  Coffee
                      People, Inc.

5.  COMPENSATION:     Annual Salary: Base salary fixed at $150,000.00 per annum.

                      Success Fee:  $25,000.00  payable six months following the
                      Closing  Date,  provided the employee has not  voluntarily
                      resigned from the  employment of the Company prior to this
                      date.

                      Bonus: $18,750.00 payable six months following the Closing
                      Date,  provided the employee has not voluntarily  resigned
                      from the employment of the Company prior to this date.

                      $18,750.00  payable  twelve  months  following the Closing
                      Date,  provided the employee has not voluntarily  resigned
                      from the employment of the Company prior to this date.

6.  BENEFITS:         To be no less  favorable  than those  currently  in place,
                      including  without  limitation,  continuation  of existing
                      medical  coverage  and  $100,000.00  term  life  insurance
                      coverage with employee's designated beneficiary.

7.  TERMINATION       
      WITH CAUSE:     Wages  paid  through   termination  date  plus  one  month
                      severance paid.

                      Bonus  and  success  fee  entitlement  forfeited,   unless
                      termination  occurs  subsequent  to payment  dates.  There
                      shall  be no  accrual  calculation  of  bonus  or  success
                      fee--these  payments  vest  on a  lump  sum  basis  on the
                      payment dates.

                      Life  Insurance/Medical  Coverage  canceled at  employer's
                      option.
<PAGE>

8. TERMINATION
     WITHOUT CAUSE:   Wages  paid  through  termination  date  and the  later of
                      twelve  months  following  the Closing  Date or six months
                      following  termination,  paid  as  a  lump  sum  less  all
                      applicable withholding taxes.

                      All  outstanding  bonus and success fee payments vest upon
                      termination   and  are  to  be   paid,   less   applicable
                      withholding taxes.

                      Life Insurance/Medical  Coverage remains in effect for the
                      severance period.

9. VOLUNTARY
     RESIGNATION:     Employee  agrees to  provide  90 days'  written  notice of
                      resignation.

                      Wages paid through last date of employment, which shall be
                      90 days after  employee  has  provided  written  notice of
                      resignation,  unless at its option, the Company determines
                      an earlier  effective  date of  resignation in which case,
                      wages  shall  only  be  paid  to  the  effective  date  of
                      resignation.

                      No  additional  bonus or success  fee  monies  paid if not
                      otherwise payable by last date of employment.

                      All benefits,  including Life  Insurance/Medical  Coverage
                      cease as of last date of employment.

10.  NON-COMPETE:     For three years following cessation of employment with the
                      Company,  the employee  agrees not to, without the express
                      written  consent of the  Company,  directly or  indirectly
                      engage in, as owner,  operator or employee of any business
                      which competes with the business of Coffee People, Inc. in
                      the United States.  Competitors of Coffee People, Inc. are
                      those  retail  operations  for  which 50% or more of total
                      sales are  derived  from  coffee  (in liquid or whole been
                      form) or coffee related products.

These terms of employment,  effective from the Closing Date of the  Transaction,
are hereby agreed by:

                                              COFFEE PEOPLE, INC.


/s/ Taylor H. Devine                          By:  Kenneth B. Ross, CFO
---------------------                              -------------------
  Taylor H. Devine                                 Coffee People, Inc.


KA Welsh
-----------------
Second Cup Inc.