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                                                                   EXHIBIT 10.44


June 11, 1998


Catherine Saar
1217 West Bay Ave.
Newport Beach, CA 92661

Dear Catherine,

On behalf of Diedrich Coffee (Company), it is with great pleasure that we offer
you the position of Vice President, Marketing. In your role, you will guide
Diedrich Coffee's growth in the development and implementation of brand
development initiatives in marketing, merchandising, wholesale sales and public
relations.

Your cash compensation in this position will consist of $120,000 per annum,
earned and paid ratably on a bi-weekly basis, and an annual incentive of up to
25% versus your base salary, based on the Company's performance and your
performance versus specific objectives set for your areas of responsibility.

In addition to your cash compensation, as defined above, you will be eligible
for stock options under the Company's 1996 Stock Incentive Plan. Your initial
grant for 20,000 stock options will vest 50% annually for two years. During
subsequent years, you may qualify for additional option awards based on the
Company's Option Award Plan and your performance versus specific objectives set
for your areas of responsibility. Your option price for the initial grant of
20,000 shares is set at 7 3/4, the common stock price at close of business on
May 29, 1998.

As part of your employment, the Company will provide for accelerated vesting of
your stock options in the event of a change of control.

Your medical and dental plan (HMO) is a company sponsored plan for you, the
employee, and will be effective on the first day of the month after your start
date.

If Diedrich Coffee terminates your employment for any reason other than fraud or
other illegal acts, you will be eligible for a severance privilege equivalent to
four months of your annual salary. This sum will be paid in four equal
installments.

Catherine, I am very excited at the opportunity to work with you. I am confident
that you will make a difference at Diedrich Coffee.

Sincerely,

/s/ Timothy Ryan
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Timothy Ryan
President
Chief Executive Officer