SUMMARY OF EMPLOYMENT TERMS

                                      BETWEEN
                                COFFEE PEOPLE, INC.
                                        AND
                                  SECOND CUP INC.
                                        AND
                                  KENNETH B. ROSS

These  summary  employment  terms are  effective  from the  Closing  Date of the
transaction  contemplated  by the Acquisition  Agreement  between Coffee People,
Inc.  (the  "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:            Vice President, Finance and Secretary, Coffee People, Inc.

4.  DUTIES:           Reporting to the CEO of Coffee  People,  Inc.,  all duties
                      customarily assigned to this position.

5.  COMPENSATION:     Annual Salary: Base salary fixed at $115,000.00 per annum.

                      Salary Adjustment:  $7,500.00 payable six months following
                      the  Closing   Date,   provided   the   employee  has  not
                      voluntarily resigned from the employment of the Company.

                      $7,500.00  payable  twelve  months  following  the Closing
                      Date,  provided the employee has not voluntarily  resigned
                      from the  employment  of the Company.  Should the employee
                      resign  subsequent  to six months from the  Closing  Date,
                      this payment  shall be "pro rated" for the period  between
                      six  months  after the  Closing  Date and the last date of
                      employment.

                      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: $16,250.00 payable six months following the Closing
                      Date,  provided the employee has not voluntarily  resigned
                      from the employment of the Company prior to this date.

                      $16,250.00  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.
<PAGE>

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

                      If  termination  is in the first six months  following the
                      Closing Date, then no salary adjustment shall be paid.

                      If termination  is after six months  following the Closing
                      Date, then the salary  adjustment for the second six month
                      period  shall  be pro  rated to the  termination  date and
                      paid.

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

                      Employee benefits cancelled at employer's option.

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.

                      Any  unpaid  salary  adjustment  to  be  paid,  less  all
                      applicable withholding taxes.

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

                      Employee  benefits  remain  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.

                      Employee benefits cease as of last date of employment.

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

                                              COFFEE PEOPLE, INC.


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


/s/ KA Welsh
------------------------
Second Cup Inc.