Exchange of Lawyers' Letters Regarding Delegate's Demands for Information Needed Before Annual Meeting

Forum for Shareholders of Farmer Bros. Co.

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Exchange of Lawyers' Letters Regarding Delegate's Demands for Information Needed Before Annual Meeting

(February 3-9, 2004)

On February 2, 2004, in the absence of any response to the shareholder Delegate's January 29, 2004 letter reiterating his January 12, 2004 demand for information, the law firm representing shareholder interests, Goodkind Labaton Rudoff & Sucharow LLP, sent a letter to the law firm representing the management of Farmer Bros. Co., Skadden Arps Slate Meagher & Flom, asking for immediate advice of the company's intention to satisfy its obligation to provide the information according to applicable California law. It was noted that the Delegate's demand had explicitly sought information needed for investor decisions concerning matters to be presented for voting at the annual meeting of shareholders, which the company had scheduled for February 23, 2004.

The company's attorney answered in a letter dated the next day, February 3, 2004, promising a "substantive response" on Friday, February 6. The promised letter was transmitted to the Delegate after the close of business on February 6, stating that the company intended to attach some of the relevant documents to the company's next public report of quarterly results, and that the remaining information was "material" but would be provided only subject to confidentiality restrictions. Copies of both the February 3 and February 6, 2004 letters are available from the link below.

The Delegate's lawyer sent a reply the next business day, February 9, 2004, insisting on substantive statements about what would be provided, and when. The company was also asked to explain its intended restriction of information that the company itself considers "material" to investors, and its failure to publicly report that information. The text of this letter is copied below, beneath the link for the letters to which it replies.

Response of company's attorney to shareholder Delegate:

February 3 and February 6, 2004 letters from Eric S. Waxman of Skadden Arps Slate Meagher & Flom to Peter F. Brennan as shareholder Delegate (236 KB, in PDF format)

Reply of Delegate's attorney to company's attorney:

[letterhead]

Goodkind Labaton Rudoff & Sucharow LLP

100 Park Avenue
12th Floor
New York, NY 10017-5563

tel 212.907.0700 - fax 212.818.0477

February 9, 2004

BY FACSIMILE

Eric S. Waxman, Esq.

Skadden, Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue

Suite 3400

Los Angeles, CA 90071-3144

Re: Demand to Inspect Records of Farmer Bros. Co.

Dear Eric:

Please be advised that this office represents Peter F. Brennan in attempting to enforce the demands to inspect the records of Farmer Bros. which Mr. Brennan has made as Delegate.

With respect to your letter of February 6, 2004 to Mr. Brennan, which was faxed significantly after the close of business hours on that day, we find it unacceptable for the following reasons:

1. Contrary to what we expected from your prior representations, your February 6 letter was not, as promised, a “substantive” response to Mr. Brennan’s demands. We are still in the dark as to what, specifically, you intend to “attach” to the Farmer Bros. 10Q, and which of the demanded records you deem to be confidential. Please provide us, by 5:30 p.m., Eastern Standard Time on Wednesday, February 11, 2004, with a specific list of what documents you intend to “attach.” Furthermore, we note that you have not indicated how your plan to “attach” such documents (whatever they may be) will satisfy your obligation to make all material information available to shareholders before the meeting now scheduled for February 23rd.

2. With respect to those “other” documents, which you describe as “non-public, highly confidential, proprietary, and material,” you have not identified those documents other than to suggest that they would constitute all the records sought by Mr. Brennan which will not be “attached” to the 10Q, or what information therein would be confidential. We request that by 5:30 p.m. Eastern Standard Time on Wednesday, February 11, 2004, you provide us with a listing of each document to be produced, when it will be made available for inspection, and what you consider confidential about it.

3. Our client is willing, as previously stated, to enter into a confidentiality agreement which is consistent with conventional practice. Please provide us with a copy of the agreement you propose, excluding any conditions which would interfere with our client’s rights, by 5:30 p.m. Eastern Standard Time on Wednesday, February 11, 2004.

4. We do not understand your references to “material” information which has not yet been reported publicly because you deem it “confidential” and “proprietary.” While we do not object to a temporary designation of some proprietary information as “confidential,” we assume that any and all information which is “material” to the scheduled shareholder vote on February 23^rd will be made available to the shareholders with sufficient time for them to evaluate such material prior to any scheduled vote.

5. Our client reserves all rights to act to enforce his inspection demands.

Very truly yours,

Thomas A. Dubbs

cc: Peter F. Brennan

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