REGULATION D SUBSCRIPTION AGREEMENT

     THE SECURITIES  OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
     AND EXCHANGE COMMISSION OR ANY STATE OR OTHER SECURITIES AUTHORITIES.  THEY
     MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
     STATEMENT  OR AN  EXEMPTION  TO  THE  REGISTRATION  REQUIREMENTS  OF  THOSE
     SECURITIES LAWS.

     THIS  SUBSCRIPTION  AGREEMENT  DOES NOT  CONSTITUTE  AN OFFER TO SELL, OR A
     SOLICITATION  OF AN  OFFER TO  PURCHASE,  ANY OF THE  SECURITIES  DESCRIBED
     HEREIN  BY OR TO ANY  PERSON IN ANY  JURISDICTION  IN WHICH  SUCH  OFFER OR
     SOLICITATION WOULD BE UNLAWFUL.  THESE SECURITIES HAVE NOT BEEN RECOMMENDED
     BY ANY FEDERAL, STATE OR FOREIGN SECURITIES AUTHORITIES,  NOR HAVE ANY SUCH
     AUTHORITIES  REVIEWED OR  DETERMINED  THE  ACCURACY OF THIS  DOCUMENT.  ANY
     REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

     INVESTMENT IN THESE  SECURITIES  INVOLVES A HIGH DEGREE OF RISK.  INVESTORS
     MUST RELY ON THEIR OWN ANALYSIS OF THE  INVESTMENT  TERMS AND CONDITIONS OF
     THE PROPOSED INVESTMENT AND THEIR OWN ASSESSMENT OF THE RISKS INVOLVED.

     This Regulation D Securities  Subscription  Agreement (the  "Agreement") is
executed by the undersigned  (the  "Subscriber") in connection with the offer to
the Subscriber of, and the  subscription by the Subscriber for, shares of Series
D Preferred Stock, $1.00 par value per share (the "Preferred Stock"), of HARVEST
RESTAURANT  GROUP,  INC., a Texas  corporation (the "Company") and warrants (the
"Warrants") to purchase shares of the Company's Common Stock, $.01 par value per
share (the "Common Stock").  The Preferred Stock shall be issued in exchange for
the 133.2  outstanding  shares of Series B Preferred  Stock and 200  outstanding
shares of Series C Preferred  Stock of the Company and upon  payment of the sums
stated below.  Each share of Preferred Stock has a stated value (i.e., is in the
face amount) of One Thousand Dollars ($1,000.00).

     1. Exchange of Outstanding Series B and C Preferred Stock.

          1.1 Exchange of Outstanding  Series B Preferred  Stock. For each share
of Series B Preferred Stock exchanged,  the holder thereof shall receive fifteen
(15) shares of Preferred  Stock.  Based on the $1,000  stated value per share of
the Preferred Stock, this exchange ratio values each share of Series B Preferred
Stock at Fifteen Thousand Dollars ($15,000), or One Hundred Fifty percent (150%)
of original issue price.

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          1.2 Exchange of Outstanding  Series C Preferred  Stock. For each share
of Series C Preferred Stock exchanged, the holder thereof shall receive thirteen
(13)  shares  of  Preferred  Stock.  Based  on the  $1,000  stated  value of the
Preferred  Stock,  this  exchange  ratio values each share of Series B Preferred
Stock at Thirteen  Thousand  Dollars  ($13,000),  or One Hundred  Thirty percent
(130%) of  original  issue  price.  (The  shares of  Preferred  Stock  issued in
exchange  for the  outstanding  Series B Preferred  Stock and Series C Preferred
Stock as provided in this Section 1 are sometimes  referred to in this Agreement
as the "Exchange Shares.")

     2. Offering  Shares.  The Company is also  offering to qualified  investors
(the  "Offering")  up to an aggregate  stated  value (face  amount) of Preferred
Stock of Four  Million  Dollars  Six  Hundred  Thousand  Dollars  ($  4,600,000)
(representing  4,600  shares) for an  aggregate  purchase  price of Four Million
Dollars  ($4,000,000.00)  (the "Offering").  The Preferred Stock issued for cash
shall be the "Offering Shares."

          2.1  Subscription for 2,600 Shares of Preferred Stock for the Series C
Escrow Money. Two Million Dollars ($2,000,000;  the "Series C Escrow Money") was
placed in escrow in July 1998 for the intended subsequent purchase of 200 shares
of Series C  Preferred  Stock.  Because  the  conditions  for the release of the
Series C Escrow  Money from escrow were not met,  the Series C Escrow  Money was
never  released  from  escrow  and,  accordingly,  the 200  shares  of  Series C
Preferred Stock  originally  intended to be purchased with such funds were never
issued. In light of those  circumstances,  the Subscriber will be credited,  for
purposes of the Subscriber's  acquiring a portion of the Offering  Shares,  with
the portion of the Series C Escrow Money  specified on the  appropriate  line in
Section 11 below  (assuming  the Series C Escrow  Money is placed into escrow as
provided  elsewhere  in this  Agreement),  multiplied  by One Hundred and Thirty
percent (130%).  Therefore,  the Subscriber shall receive, for each Ten Thousand
Dollar ($10,000) increment  contributed from the Series C Escrow Money, thirteen
(13) shares of Preferred  Stock  having a stated  value of One Thousand  Dollars
($1,000) per share, or an aggregate  stated value of Thirteen  Thousand  Dollars
($13,000).

          2.2  Subscription  for 2,000 Shares of Preferred  Stock for $2,000,000
Not  Previously  Placed  in  Escrow.  Upon  funding  of  a  Two  Million  Dollar
($2,000,000)  portion of the  subscription  amount hereunder (and only upon such
funding) as herein  provided,  the shall receive,  for each Ten Thousand  Dollar
($10,000) increment funded by the Subscriber, ten (10) shares of Preferred Stock
having  a  stated  value of One  Thousand  Dollars  ($1,000)  per  share,  or an
aggregated stated value of Ten Thousand Dollars ($10,000).

          2.3 Warrants.  Subscribers shall be given Warrants,  the form of which
is attached  hereto as Exhibit D, to purchase  100,000  shares of the  Company's
Common Stock, for each $1,000,000 or pro-rata  investment thereof, at a price of
$2.00 per share.  Such Warrants are to be  exercisable  for five (5) years after
closing,  and the Company shall  register the shares  underlying the Warrants in
the registration statement filed by the Company with the Securities and Exchange
Commission  (the "SEC") to register,  among other  things,  the shares of Common
Stock  reasonably  anticipated  to be issuable upon  conversion of the Preferred
Stock (the "Registration Statement").

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          2.4 Terms of Preferred  Stock - Statement of Resolution.  The terms of
the Preferred  Stock,  including  the terms on which the Preferred  Stock may be
converted  into Common  Stock,  are set forth in the  Statement of Resolution of
Series D Preferred Stock (the "Statement of  Resolution"),  substantially in the
form attached hereto as Exhibit A. The solicitation of this  Subscription by the
Company,  and, if accepted by the  Company,  the sale of the shares of Preferred
Stock  subscribed  for,  are  being  made in  reliance  upon the  provisions  of
Regulation D ("Regulation  D") promulgated  under the Securities Act of 1933, as
amended (the  "Securities  Act").  The Preferred Stock, the Shares issuable upon
conversion  thereof (the  "Conversion  Shares"),  the Warrants and the shares of
Common Stock  issuable upon exercise of the Warrants (the "Warrant  Shares") are
sometimes referred to herein collectively as the "Securities."

     The  undersigned  Subscriber  and  the  Company,  upon  acceptance  of this
Agreement,  hereby  covenant,  warrant,  represent,  agree  and  acknowledge  as
follows:

     3. Offering.

          3.1 Offer to  Subscribe;  Purchase  Price and Closing;  and  Placement
Fees.

     Subject to  satisfaction of the conditions to the closing of a purchase and
sale of Preferred  Stock as to each purchaser of Preferred Stock (the "Closing")
set forth in Section 3.4 below,  the  Subscriber  hereby offers to subscribe for
and purchase shares of Preferred Stock,  for the purchase  price(s) set forth in
Section 11 of this  Agreement  and in exchange for the Series B Preferred  Stock
and Series C Preferred Stock, all in accordance with the terms and conditions of
this Agreement.

          3.2 Exchange Shares Closing.

     As to the Exchange Shares, they shall be issued upon fulfillment of Section
3.4.

          3.3 Offering Shares Closings. As to the Offering Shares:

               (1) Assuming that funds  representing  the Series C Escrow Money,
together with  subscription  agreements for all of the shares of Preferred Stock
offered in this Offering  (which  subscription  agreements have been accepted by
the Company),  are deposited  into the Company's  designated  escrow account for
this Offering (the "Escrow Account"),  and that the general conditions set forth
in Section 3.4 have been  satisfied,  the Closing  shall be deemed to occur when
this  Agreement has been executed by both the  Subscriber  and the Company,,  in
consideration for the Company's delivery of certificates representing the shares
of Preferred Stock so subscribed for at the times described herein.

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               (2) Notwithstanding  the foregoing,  the Offering Shares proceeds
(or portions  thereof,  as applicable)  shall not be released,  nor the Offering
Shares delivered (or portions thereof delivered,  as applicable),  except as the
conditions in Section 3.5 are fulfilled.

     The parties hereto acknowledge that J.P. Carey Securities Inc. is acting as
the placement agent (the  "Placement  Agent") for the placement of the Preferred
Stock and will be  compensated  by the  Company  in  shares of Common  Stock and
warrants to purchase Common Stock of the Company.  The Placement Agent has acted
solely as placement  agent and consultant in connection  with the offer and sale
by the  Company  of the  Preferred  Stock  pursuant  to this  Agreement  and the
ancillary  documents  referenced  herein or  attached  hereto as  exhibits.  The
information  and data  contained  in the  Disclosure  Documents  (as  defined in
Section 6.2 hereof)  have not been  subjected  to  independent  verification  or
investigation by the Placement Agent, and no  representation or warranty is made
by the Placement  Agent as to the accuracy or  completeness  of the  information
contained in the Disclosure Documents.

          3.4 General Conditions to Subscriber's  Obligations.  The Subscriber's
obligations  hereunder  are  conditioned  upon  the  occurrence  of  all  of the
following:

          (a) the  following  documents  shall  have  been  deposited  with  the
          Company's  escrow  agent  for  the  Offering  ("Escrow  Agent"):   the
          Registration  Rights  Agreement,  substantially  in the form  attached
          hereto as Exhibit B (executed by the  Company),  and the  Statement of
          Resolution,  substantially  in the form  attached  hereto as Exhibit A
          (together  with evidence  showing that it has been duly filed with the
          Secretary of State of Texas); 

          (b) corresponding  Subscription  Agreement(s)  accepted by the Company
          have been received by the Escrow Agent;

          (c) the  escrow  agreement  ("Escrow  Agreement")  to which the Escrow
          Agent is a party and which governs the Escrow  Account shall have been
          fully  executed by all  parties,  and the Series C Escrow  Money shall
          have been  funded into the Escrow  Account by wire  transfer in United
          States Dollars ; and

          (d) share  certificates  evidencing  the 133.2  outstanding  shares of
          Series B  Preferred  Stock  and 200  outstanding  shares  of  Series C
          Preferred Stock shall have been received by the Escrow Agent.

          3.5  Conditions  to  Offering  Shares   Closings.   The   Subscriber's
obligations regarding the Offering Shares are conditioned upon the occurrence of
the following:

          (a) Sections 3.3 and 3.4 are satisfied;

          (b) One Million Dollars  ($1,000,000.00)  of the Series C Escrow Money
          shall be  released  to the  Company  upon  filing by the  Company of a
          preliminary proxy statement (the  "Preliminary  Proxy Statement") with
          the SEC, one of the  purposes of which will be to solicit  shareholder
          approval  of an  amendment  to the  Articles of  Incorporation  of the
          Company to increase its number of authorized shares of common stock to
          not less than  100,000,000,  and upon such release,  the Company shall
          issue and  deliver  to the  Subscribers  in the  Offering,  based upon
          instructions   in   Section  11  of  the   Subscribers'   subscription
          agreements, certificates evidencing an aggregate of One Thousand Three
          Hundred (1,300) shares of Preferred Stock;

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<PAGE>


          (c) the remaining One Million Dollars  ($1,000,000.00) of the Series C
          Escrow  Money shall be released  to the  Company  upon  mailing of the
          definitive proxy statement (the "Definitive  Proxy  Statement") to the
          shareholders of the Company,  and upon such release, the Company shall
          issue and  deliver  to the  Subscribers  in the  Offering,  based upon
          instructions   in   Section  11  of  the   Subscribers'   subscription
          agreements, certificates evidencing an aggregate of One Thousand Three
          Hundred (1,300) shares of Preferred Stock; and

          (d)  Two  Million  Dollars   ($2,000,000)   shall  be  funded  by  the
          Subscribers  directly to the Company  upon the  effective  date of the
          Registration  Statement (of which effective date the Subscribers shall
          be given not less than five (5) days' prior written  notice)  pursuant
          to the Registration  Rights Agreement  attached as Exhibit B, and upon
          such funding,  the Company shall issue and deliver to the  Subscribers
          in  the  Offering,  based  upon  instructions  in  Section  11 of  the
          Subscribers'  subscription  agreements,   certificates  evidencing  an
          aggregate of Two Thousand (2,000) shares of Preferred Stock.

     4. Representations and Warranties of the Subscriber.  The Subscriber hereby
represents  and warrants to the Company as follows  (which  representations  and
warranties shall be true as of the date of Closing):

          4.1 Accredited Investor. The Subscriber hereby represents and warrants
to the Company that it is an  "accredited  investor,"  as defined in Rule 501 of
Regulation D, and has marked the  applicable box set forth in Section 11 of this
Agreement signifying such status.

          4.2  Investment   Experience;   Access  to  Information;   Independent
Investigation.

               4.2.1 Access to Information.  The Subscriber or its  professional
advisor has been granted the opportunity to ask questions of and receive answers
from representatives of the Company, and its officers, directors,  employees and
agents concerning the terms and conditions of the Offering,  and the Company and
its business and prospects,  and to obtain any additional  information which the
Subscriber or its professional advisor deems necessary to verify the accuracy of
the information received.  The foregoing,  however, does not limit or modify the
Subscriber's right to rely upon representations and warranties of the Company in
Section 6 of this Agreement.

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<PAGE>


               4.2.2 Ability to Evaluate.  The Subscriber has such knowledge and
experience  in  financial  and  business  matters  that it is fully  capable  of
evaluating  the  merits and risks of an  investment  in the  Company,  including
without limitation those set forth in the Disclosure Documents (as defined below
in Section 6.2).

               4.2.3  Disclosure  Documents.  The  Subscriber  has  received and
reviewed  the  Disclosure  Documents  (as  defined  below in Section  6.2).  The
foregoing, however, does not limit or modify the Subscriber's right to rely upon
the  representations  and  warranties  of  the  Company  in  Section  6 of  this
Agreement.

               4.2.4  Investment  Experience;  Fend for Self. The Subscriber has
substantial  experience in investing in securities  and has made  investments in
securities other than those of the Company. The Subscriber  acknowledges that it
is able to fend for itself in the transaction contemplated by this Agreement and
that it has the  ability  to bear the  economic  risk of its  investment  in the
Company.  The  Subscriber has not been organized for the purpose of investing in
securities  of the Company,  although such  investment  is  consistent  with its
purposes.

               4.2.5  Not an  Affiliate.  The  Subscriber  is  not  an  officer,
director or  "affiliate"  (as that term is defined in Rule 415 of the Securities
Act) of the Company.


          4.3 Exempt Offering Under Regulation D

               4.3.1  Investment;  No Distribution.  The Subscriber is acquiring
the shares of Preferred Stock  subscribed for (the  "Preferred  Shares") and the
accompanying  Warrants solely for investment  purposes for the  Subscriber's own
account (or for beneficiaries' accounts over which the Subscriber has investment
discretion but no  discretionary  authority as to voting or disposition) and not
with a view to a  distribution  of all or any part  thereof.  The  Subscriber is
aware  that  there are  legal and  practical  limits on its  ability  to sell or
dispose of the  Securities,  and therefore,  that the  Subscriber  must bear the
economic risk of its investment for an indefinite period of time. The Subscriber
has  adequate  means  of  providing  for  its  current  needs  and   anticipated
contingencies and has no need for liquidity of this investment. The Subscriber's
commitment to illiquid investments is reasonable in relation to its net worth.

               4.3.2 No  General  Solicitation.  The  Preferred  Shares  and the
accompanying  Warrants  were not  offered  to the  Subscriber  through,  and the
Subscriber  is not  aware  of,  any  form of  general  solicitation  or  general
advertising,  including,  without limitation,  (i) any advertisement,  articles,
notice or other  communication  published in any newspaper,  magazine or similar
media or broadcast  over  television  or radio,  and (ii) any seminar or meeting
whose  attendees  have been  invited  by any  general  solicitation  or  general
advertising.

               4.3.3 No Registration of Preferred Shares and Conversion  Shares.
The Subscriber  understands that neither the Preferred Shares nor the Conversion
Shares are not registered and therefore are  "restricted  securities"  under the
federal  securities laws inasmuch as they are being acquired from the Company in
a transaction  not involving a public  offering,  and that,  under such laws and
applicable regulations, such securities may not be transferred or resold without
registration under the Securities Act or pursuant to an exemption therefrom.  In
this  connection,  the Subscriber  represents  that it is familiar with Rule 144
under the Securities  Act, as presently in effect,  and  understands  the resale
limitations  imposed thereby and by the Securities  Act. The Subscriber  further
understands,  however,  that the Company is  obligated to register the resale of
the   Conversion   Shares  within  one  hundred  twenty  (120)  days  after  the
shareholders' meeting to which the Definitive Proxy statement relates.

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<PAGE>


               4.3.4   Disposition.    Without   in   any   way   limiting   the
representations  set forth above, the Subscriber  further agrees not to make any
disposition of all or any portion of the Securities unless and until:

          (a)  There  is then in  effect  a  registration  statement  under  the
          Securities Act covering such proposed disposition and such disposition
          is made in accordance with such Registration Statement; or

          (b) The  Subscriber  shall have  notified  the Company of the proposed
          disposition  and shall  have  furnished  the  Company  with a detailed
          statement of the circumstances  surrounding the proposed  disposition,
          and (ii) if reasonably  requested by the Company, the Subscriber shall
          have  furnished  the Company  with an opinion of  counsel,  reasonably
          satisfactory to the Company,  that such  disposition  will not require
          registration of the Securities  under the Securities Act. It is agreed
          that the Company will not require opinions of counsel for transactions
          made pursuant to Rule 144 except in extraordinary circumstances.

          4.4 Due Authorization.

               4.4.1 Authority.  The Subscriber,  if executing this Subscription
Agreement  in a  representative  or  fiduciary  capacity,  has  full  power  and
authority  to execute and deliver  this  Subscription  Agreement  and each other
document  referred to herein for which a signature is required in such  capacity
and on  behalf  of  the  subscribing  individual,  partnership,  trust,  estate,
corporation  or other entity for whom or which the  Subscriber is executing this
Subscription Agreement.

               4.4.2  Due  Authorization.  The  Subscriber  is duly and  validly
organized,  validly  existing and in good standing as such entity under the laws
of the  jurisdiction  of its  organization,  with full  power and  authority  to
purchase the Preferred  Shares and accompanying  Warrants  subscribed for and to
execute and deliver this Agreement.

     5. Acknowledgements. The Subscriber is aware of the following:

          5.1 Risks of Investment.  The Subscriber recognizes that investment in
the  Company  involves  certain  risks,  including  the  potential  loss  of the
Subscriber's  investment herein.  The Subscriber  recognizes that this Agreement
and the  exhibits  hereto do not  purport to contain all the  information  which
would be contained in a registration statement under the Securities Act;

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<PAGE>


          5.2 No  Government  Approval.  The  Subscriber  acknowledges  that  no
federal,  state or  foreign  agency has passed  upon or  reviewed  the terms and
conditions  of the  Offering  or made any  finding  or  determination  as to the
fairness of the Offering;
 
          5.3 Restrictions on Transfer.  The Subscriber may not sell,  transfer,
assign,  pledge or otherwise  dispose of all or any portion of the Securities in
the absence of either an effective  registration  statement or an exemption from
the  registration  requirements  of the  Securities  Act  and  applicable  state
securities law;
 
          5.4 Exempt Transaction. The Preferred Shares and accompanying Warrants
are  being  offered  and  sold in  reliance  on  specific  exemptions  from  the
registration  requirements  of  federal  and  state  law  and  the  Subscriber's
representations,  warranties, agreements,  acknowledgements and applicability of
such  exemptions  and the  suitability  of the  Subscriber to acquire  Preferred
Shares.

          5.5 Legends.  It is understood  that any  certificates  evidencing the
Preferred  Shares  and  (prior to  registration  as  provided  in Section 7) the
Conversion Shares shall bear the following legend:
 
          "The securities  represented hereby have not been registered under the
          Securities  Act of 1933, as amended,  or applicable  state  securities
          laws, nor the securities laws of any other jurisdiction.  They may not
          be sold or  transferred  in the absence of an  effective  registration
          statement  under  those  securities  laws or an  opinion  of  counsel,
          reasonable  satisfactory to the Company,  that the sale or transfer is
          pursuant to an exemption  to the  registration  requirements  of those
          securities laws."

          5.6  Convertibility of Preferred Shares.  The Subscriber  acknowledges
that the  Preferred  Shares  are not  convertible  until a date  that will be no
sooner  than 120  days  after  the  shareholders  approve  an  amendment  to the
Company's  Articles of Incorporation to increase the number of authorized shares
of Common Stock to not less than  100,000,000.  Notwithstanding  the  provisions
hereof or of the Preferred Shares, in no event (except with respect to automatic
conversion date, set forth in the Statement of Resolution,  upon the maturity of
the  Preferred  Shares)  shall the holder be entitled  to convert any  Preferred
Shares to the extent after such conversion,  the sum of (1) the number of Common
Stock  beneficially  owned and through the Subscriber and its (other than shares
of Common Stock which may be deemed  beneficially owned through the ownership of
the unconverted  portion of the Preferred Shares),  and (2) the number of shares
of Common  Stock  issuable  upon the  conversion  of the  Preferred  Shares with
respect to which the determination of this provision is being made, would result
in beneficial  ownership by the Subscriber and its affiliates of more than 4.99%
of the outstanding shares of Common Stock. For purposes of this provision to the
immediately  preceding  sentence,  beneficial  ownership  shall be determined in
accordance with Section 13(d) of the Exchange Act (as defined below),  except as
otherwise provided in clause 1) of such provision.

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     6.  Representations and Warranties of the Company. The Company hereby makes
the  following  representations  and  warranties  to the  Subscriber,  except as
disclosed in the  Disclosure  Documents or  otherwise  disclosed to  Subscriber,
which  representations and warranties shall be true as of the date of acceptance
of this Agreement by the Company and as of Closing:

          6.1 Organization,  Good Standing, and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas,  USA and has all requisite  corporate power and authority
to carry on its business as now conducted  and as proposed to be conducted.  The
Company is duly  qualified to transact  business and is in good standing in each
jurisdiction  in which the failure to so qualify  would have a material  adverse
effect on the business or properties of the Company and its  subsidiaries  taken
as a whole.  The Company is not the subject of any pending or, to its knowledge,
threatened or contemplated  investigation or  administrative or legal proceeding
by the Internal  Revenue Service,  the taxing  authorities of any state or local
jurisdiction, or the Securities and Exchange Commission, or any state securities
commission,  or any other governmental  entity, which have not been disclosed in
the Disclosure Documents (as defined in Section 6.2 below).

          6.2 Corporate  Condition.  The Company has timely filed all forms, and
reports and documents with the Securities and Exchange Commission required to be
filed by it under the  Securities  Exchange Act 1934, as amended (the  "Exchange
Act") through the date hereof (collectively, the "SEC Reports"). Each of the SEC
Reports,  at  the  time  filed,  complied  in all  material  respects  with  the
requirements  of the  Exchange  Act.  The  Company  has  made  available  to the
Subscriber  a copy of the  Company's  Form  10-KSB/A  for the fiscal  year ended
December 28, 1997, and a copy of the Company's  Forms 10-QSB,  8-K and S-3 filed
by the Company since January 1, 1998 (the "Most Recent Filings  Report").  There
have been no material  adverse  changes in the  Company's  business,  prospects,
operations  or  financial  condition  since the date of the Most Recent  Filings
Report.  The SEC Reports,  the most Recent Filings  Reports and any other report
furnished by the Company to the Subscriber are referred to  collectively  as the
"Disclosure  Documents."  The financial  statements  contained in the Disclosure
Documents have been prepared in accordance  with generally  accepted  accounting
principles,  consistently  applied,  and fairly present in all material respects
the  consolidated  financial  condition  of the  Company  as of the dates of the
balance sheets included therein and the  consolidated  results of its operations
and cash flows for the periods then ended. Without limiting the foregoing, there
are no material liabilities,  contingent or actual that are not disclosed in the
Disclosure  Documents  (other  than  liabilities  incurred by the Company in the
ordinary course of its business,  consistent  with its past practice,  after the
periods covered by the Disclosure Documents).  The Company has paid all material
taxes which are due, except for taxes which it reasonably disputes.  There is no
material claim,  litigation,  or administrative  proceeding pending,  or, to the
best of the Company's knowledge, threatened or contemplated against the Company,
except  as  disclosed  in the  Disclosure  Documents.  This  Agreement  and  the
Disclosure Documents do not contain any untrue statement of material fact and do
not omit to state any  material  fact  required  to be stated  therein or herein
necessary to make the statements  contained  therein or herein not misleading in
the light of the circumstances under which they were made.

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          6.3 Authorization.  All corporate action on the part of the Company by
its  officers,  directors  and  shareholders  necessary  for the  authorization,
execution and delivery of this Agreement,  the performance of all obligations of
the  Company  hereunder  and the  authorization,  issuance  and  delivery of the
Preferred  Shares (and  reservation  for  issuance),  of the  Conversion  Shares
obtainable on conversion  of the  Preferred  Shares and the Warrant  Shares have
been taken, and this Agreement, the Statement of Resolution and the Registration
Rights  Agreement  constitute  valid  and  legally  binding  obligations  of the
Company,  enforceable in accordance  with their terms.  The Company has obtained
all consents and approvals required for it to execute,  deliver and perform this
Agreement and the Registration Rights Agreement.

          6.4 Valid  Issuance of Preferred  Shares and  Conversion  Shares.  The
Preferred Shares,  when issued,  sold and delivered in accordance with the terms
hereof, for the consideration  expressed herein,  will be validly issued,  fully
paid and  nonassessable  and,  based in part  upon  the  representations  of the
Subscriber in this  Agreement,  will be issued in compliance with all applicable
federal  and  state  securities  laws.  The  Conversion  Shares  when  issued in
accordance  with the  terms of the  Statement  of  Resolution  shall be duly and
validly issued and outstanding, fully paid and nonassessable,  and based in part
on the  representations  and  warranties  of the  Subscriber,  will be issued in
compliance  with all  applicable  U.S.  federal and state  securities  laws. The
Securities  will be  issued  free  of any  preemptive  rights.  The  Company  is
currently  preparing the  Preliminary  Proxy  Statement so that the Company will
have a sufficient  number of shares of Common Stock  reserved and authorized for
issuance upon conversion of the Preferred  Stock.  The Company will use its best
efforts to file the Preliminary Proxy Statement with the SEC on a timely basis.

          6.5 Compliance with Other Instruments. The Company is not in violation
or default of any  provisions  of its  Articles  of  Incorporation  or Bylaws as
amended and in effect on and as of the date of this Agreement or of any material
provision  of any material  instrument  or contract to which it is a party or by
which it is bound or, to its knowledge, of any provision of any federal or state
judgment,   writ,  decree,  order,  statute,  rule  or  governmental  regulation
applicable  to the Company,  which would have a material  adverse  affect on the
Company's  business  or  prospects,   except  as  described  in  the  Disclosure
Documents.  The  execution,  delivery and  performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in any such
violation or be in conflict with or  constitute,  with or without the passage of
time and giving of notice, either a default under any such provision, instrument
or  contract or an event which  results in the  creation of any lien,  charge or
encumbrance upon any assets of the Company.  (Notwithstanding the foregoing, the
Company  presently  lacks  enough  authorized  shares of Common Stock to support
conversion of its outstanding shares of Preferred Stock.)

                                       10
<PAGE>


          6.6  Reporting  Company.  The  Company  is  subject  to the  reporting
requirements of the Exchange Act, and has a class of securities registered under
Section 12 or Section 15 of the Exchange Act. The Company  undertakes to furnish
the Subscriber  with copies of such publicly  disclosable  information as may be
reasonably  requested by the Subscriber  prior to  consummation of this Offering
and thereafter as long as the Subscriber holds the Securities.

          6.7  Capitalization;  Authorized and Issued Shares. The authorized and
issued  shares  of  Preferred  Stock,   Common  Stock  and  warrants,   options,
instruments  convertible  into Common  Stock and rights to acquire  Preferred or
Common  Stock,  as of the  effective  date  of  the  merger  of TRC  Acquisition
Corporation into Hartan, Inc., a wholly owned subsidiary of the Company, are set
forth on Exhibit C.

          6.8  Compliance  with Laws. As of the date hereof,  the conduct of the
business of the Company  complies in all  material  respects  with all  material
statutes,  laws, regulations,  ordinances,  rules, judgments,  orders or decrees
applicable thereto. The Company has not received notice of any alleged violation
of any statute, law,  regulations,  ordinance,  rule, judgment,  order or decree
from any  governmental  authority.  The Company shall comply with all applicable
securities laws with respect to the Offering.

          6.9 No Rights of Participation.  No person or entity,  including,  but
not limited to,  current or former  shareholders  of the Company,  underwriters,
brokers,  agents  or other  third  parties,  has any  right  of  first  refusal,
preemptive right, right of participation, or any similar right to participate in
the Offering which has not been waived.
 
          6.10  Disclosures.  There is no fact known to the Company  (other than
general  economic  conditions  known to the public  generally) that has not been
disclosed in the Disclosure  Documents that (a) could  reasonably be expected to
have a material adverse effect on the business,  financial  condition or results
of  operations  of the  Company,  or  which  could  reasonably  be  expected  to
materially  and adversely  affect the properties or assets of the Company or (b)
could  reasonably be expected to materially and adversely  affect the ability of
the  Company to perform  its  obligations  pursuant  to this  Agreement  and the
issuance of the Securities.

          6.11 Representations True and Correct. The foregoing  representations,
warranties  and  agreements  are true,  correct  and  complete  in all  material
respects,  and shall  survive the Last Closing and the issuance of the Preferred
Shares.

          6.12  Underwriter's  Fees and Rights of First Refusal.  The Company is
not  obligated  to  pay  any  compensation  or  other  fees,  costs  or  related
expenditures in cash or securities to any  underwriter,  broker,  agent or other
representative other than the Placement Agent in connection with the Offering.

                                       11
<PAGE>


     7. Covenants of the Company.

          7.1 Independent Auditors.  The Company shall, until at least three (3)
years after the date of the  Closing,  maintain as its  independent  auditors an
accounting  firm  authorized  to practice  before the  Securities  and  Exchange
Commission.

          7.2 Corporate  Existence and Taxes. The Company shall,  until at least
three (3) years after the date of Closing,  maintain its corporate  existence in
good standing (provided,  however, that the foregoing covenant shall not prevent
the Company from entering into any merger or corporate reorganization so long as
the surviving entity in such transaction, if not the Company, assumes all of the
Company's  obligations  with  respect to the  Securities)  and shall pay all its
taxes when due, except for taxes which the Company disputes.

          7.3 Registration of Conversion Shares and Warrant Shares.  The Company
will register the  Conversion  Shares and the Warrant Shares on the terms of the
Registration Rights Agreement (substantially in the form attached as Exhibit B).
 
          7.4 Rights of First  Refusal.  The Company shall not issue any debt or
equity  securities  for  cash  in  private   (non-registered)   capital  raising
transactions  ("Future Offerings") for a period beginning on the date hereof and
ending one hundred  eighty (180) days after the Closing  without  providing  the
Placement  Agent and the Subscriber the option to purchase the securities  being
offered in the Future Offerings on the same terms as contemplated by such Future
Offerings.
 
          7.5 Filings with Securities and Exchange Commission. Upon request, the
Company shall provide the  Subscriber  with copies of its annual reports on Form
10-KSB,  quarterly reports on Form 10-QSB and current reports on Form 8-K for as
long as the Preferred Shares remain outstanding.
 
          7.6 Payments for Late Conversion or Failure to Reserve  Authorized but
Unissued Common.

               7.6.1 Payments for Late Conversion. As set forth in the Statement
of Resolution, the Company shall use all reasonable efforts to issue and deliver
to the Subscriber or any party receiving  Preferred  Shares by transfer from the
Subscriber  (together with the Subscriber,  sometimes  referred to herein as the
"Holder"),  within three (3) business days (the "Deadline") after the Holder has
fulfilled all conditions and delivered all necessary documents duly executed and
in proper form, required for conversion pursuant to the Statement of Resolution,
including the original  certificate(s)  representing the Shares to be converted,
all in accordance  with the  subscription  documents (or, in the case of lost or
stolen  certificates,  after  provision  of  security  or  indemnification),   a
certificate  or  certificates  for the number of shares of Common Stock to which
the Holder shall be entitled  upon  submission  of a notice of  conversion.  The
Company understands that a delay in the issuance of the Conversion Shares beyond
the Deadline could result in economic loss to the Holder. As compensation to the
Holder for such loss,  the Company agrees to pay the Holder for late issuance of
Conversion  Shares upon  Conversion  in accordance  with the following  schedule
(where "No Business  Days Late" is defined as the number of business days beyond
the Deadline):

                                       12
<PAGE>


                                          Late Payment
                                       For Each Preferred
       No. Business Days Late        Share Being Converted
       ----------------------        ---------------------
                3                              $50
                4                             $100
                5                             $150
                6                             $200
                7                             $250
                8                             $300
                9                             $400
               10                             $500
  greater than 10                             $500       +$50 for each Business
                                                         Day Late beyond 10 days


     The  Company  shall pay any late  payments  to Holder  incurred  under this
Section by check upon the earlier to occur of: (i) issuance of Conversion Shares
to the Holder or (ii) each monthly  anniversary of the receipt by the Company of
such  Holder's  Notice of  Conversion.  Nothing  herein shall limit the Holder's
right to pursue actual  damages for the Company's  failure to issue and delivery
Conversion  Shares  to the  Subscriber  in  accordance  with  the  terms  of the
Statement of Resolution.

               7.6.2  Payments  for Failure to Reserve  Authorized  but Unissued
Common  Stock.  If, at any time a Holder or Holders of Shares submit a notice of
conversion  and the Company  does not have  sufficient  authorized  but unissued
Conversion  Shares  available to effect,  in full, a conversion  of the Series D
Preferred  Stock under Section 4 of the  Statement of Resolution (a  "Conversion
Default",  the date of such default being referred to herein as the  "Conversion
Default Date"), the Company shall issue to such Holder(s),  pro rata, all of the
Conversion  Shares  of  Common  Stock  which are  available,  and the  notice of
conversion as to any Conversion  Shares of Series D Preferred Stock requested to
be converted but not converted (the "Unconverted  Preferred  Conversion Shares")
shall become null and void. The Company shall provide notice of such  Conversion
Default ("Notice of Conversion Default") to all Holders of outstanding Preferred
Stock,  by  facsimile,  within one (1) business  day of such  default  (with the
original delivered by overnight or two (2) day courier).  No Holder may submit a
notice of conversion  after receipt of a Notice of Conversion  Default until the

                                       13
<PAGE>


date  additional  Conversion  Shares are authorized by the Company.  The Company
will use best efforts to authorize an appropriate number of additional shares as
soon as  practicable.  If the Company is unable to cure the  Conversion  Default
within  forty-five  (45) days, then the Company agrees to make to all Holders of
outstanding Preferred Shares a payment (the "Conversion Default Payments") for a
Conversion  Default  in the amount of  (N/365) X .25 X the  stated  value  (face
amount) of the  outstanding  Preferred  Stock held by each  Holder,  where N=the
number of days from the Conversion Default Date to the date (the  "Authorization
Date") that the Company  authorizes a sufficient  number of Conversion Shares to
effect  conversion of all remaining shares of Preferred Stock. The Company shall
send notice ("Authorization Notice") via facsimile,  with a copy by overnight or
two (2) day  courier,  to all  Holders  of  outstanding  Preferred  Shares  that
additional  Conversion Shares have been authorized,  the Authorization  Date and
the  amount  of  Holder's  accrued  Conversion  Default  Payments.  The  accrued
Conversion  Default  Payments for each  calendar  month shall be paid in cash or
shall be  convertible  into  Common  Stock  in  accordance  with the  Conversion
Formula,  at the Holder's  option,  payable as follows:  (i) in the event Holder
elects to take such payment in cash,  cash payments shall be made to each Holder
of outstanding Preferred Shares by the fifth (5th) day of the following calendar
month or (ii) in the event the Holder elects to make such payment in stock,  the
Holder may convert such payment amount into Common Stock in accordance  with the
Conversion  Formula at any time after the fifth (5th) day of the calendar  month
following the month the Authorization  Notice was received,  until the automatic
conversion  date set forth in the Statement of Resolution.  Nothing herein shall
limit the Holder's  right to seek actual  damages for the  Company's  failure to
maintain a sufficient number of authorized Conversion Shares of Common Stock.

          7.7 Removal of Legend Upon Registration.  Restrictive  legends will be
removed from the Common Stock when registered under the Registration  Statement,
or, if  registration  is not  timely,  the legend  may be  removed  or  modified
appropriately when the Holder demonstrates entitlement to sell Conversion Shares
without registration and without the applicability of a restrictive legend.

          7.8 Listing. The Company shall use its best efforts to list its Common
Stock on the Nasdaq Small Cap Market or another national  securities exchange or
national quotation system.

     8. Miscellaneous.

          8.1 Representations and Warranties Survive the Closing;  Severability.
The Subscriber's and the Company's  representations and warranties shall survive
the  Closing of the  transaction  provided  for hereby  notwithstanding  any due
diligence  investigation  made by or on  behalf  of the  party  seeking  to rely
thereon.  In the  event  that any  provision  of this  Agreement  becomes  or is
declared by a court of competent  jurisdiction to be illegal,  unenforceable  or
void,  this  Agreement  shall  continue  in full force and effect  without  said
provision;  provided  that  no  such  severability  shall  be  effective  if  it
materially changes the economic benefit of this Agreement to any party.

                                       14
<PAGE>


          8.2 Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective  successors and
assigns of the  parties.  Nothing in this  Agreement,  express  or  implied,  is
intended  to  confer  upon any  party  other  than the  parties  hereto or their
respective  successors  and  assigns  any  rights,  remedies,   obligations,  or
liabilities under or by reason of this Agreement,  except as expressly  provided
in this Agreement. Subscriber may assign its rights hereunder in connection with
any private  sale of the Shares,  so long as, as a condition  precedent  to such
transfer, the Transferee executes an acknowledgement agreeing to be bound by the
applicable provisions of this Agreement.

          8.3 Governing Law. This  Agreement  shall be governed by and construed
under the laws of the State of Georgia without respect to conflict of laws.

          8.4  Execution  in  Counterparts  Permitted.  This  Agreement  may  be
executed  in any  number of  counterparts,  each of which  shall be  enforceable
against the  parties  actually  executing  such  counterparts,  and all of which
together shall constitute one (1) instrument.

          8.5 Titles and  Subtitles;  Gender.  The titles and subtitles  used in
this  Agreement  are used for  convenience  only and are not to be considered in
construing  or  interpreting  this  Agreement.  The use in this  Agreement  of a
masculine, feminine or neither pronoun shall be deemed to include a reference to
the others.

          8.6 Written  Notices,  Etc. Any notice,  demand or request required or
permitted to be given by the Company or the Subscriber  pursuant to the terms of
this  Agreement  shall be in writing  and shall be deemed  given when  delivered
personally,  or by facsimile (with a hard copy to follow by overnight or two (2)
day  courier),  addressed  to the  parties  at the  addresses  and/or  facsimile
telephone  number of the parties set forth at the end of this  Agreement or such
other address as a party may request by notifying the other in writing.

          8.7  Expenses.  Each of the Company and the  Subscriber  shall pay all
costs and expenses that it respectively incurs, with respect to the negotiation,
execution, delivery and performance of this Agreement.

          8.8 Entire Agreement; Written Amendments Required. This Agreement, the
Statement of Resolution,  the Preferred  Stock  certificates,  the  Registration
Rights Agreement and the other documents  delivered  pursuant hereto  constitute
the full and entire  understanding and agreement between the parties with regard
to the subjects hereof and thereof, and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as  specifically  set forth herein.  Neither this Agreement nor any terms hereof
may be  amended,  waived,  discharged  or  terminated  other  than by a  written
instrument  signed by the party against whom  enforcement of any such amendment,
waiver, discharge or termination is sought.

     9. Subscription and Wiring Instructions; Irrevocability.

                                       15
<PAGE>


          9.1 Subscription

          (a)  Wire  transfer of  Subscription  Funds.  Subscriber  shall send a
               signed Subscription Agreement by facsimile to the Escrow Agent at
               999 Peachtree Street,  N.E., Suite 1400, Atlanta,  Georgia 30309,
               Attn.: Wade H. Stribling, Esq. and its subscription funds by wire
               transfer, to the Escrow Agent as follows:

               Bank:                     First Union National Bank of Georgia
                                         999 Peachtree Street, N.E.
                                         Atlanta, Georgia   30309
               ABA Routing No.:          #0610-0022-7
               Account No.:              #2080000501679
               ATTN:                     Wade H. Stribling, Esq.
               Re:                       Tanner's
               Notify:                   (404) 817-6191

          (b)  Irrevocable Subscription.  The Subscriber hereby acknowledges and
               agrees,   subject  to  the  provisions  of  any  applicable  laws
               providing for the refund of subscription amounts submitted by the
               Subscriber,  that  this  Agreement  is  irrevocable  and that the
               Subscriber  is not  entitled to cancel,  terminate or revoke this
               Agreement;  provided,  however, that if the conditions to Closing
               are not satisfied or if the  Disclosure  Documents are discovered
               prior to  Closing  to  contain  statements  which are  materially
               inaccurate,  or omit statements of material facts, the Subscriber
               may revoke or cancel this Agreement.

          (c)  Company's Right to Reject  Subscription.  This Agreement shall be
               accepted  by the  Company  when  the  Company  countersigns  this
               Agreement.  The Subscriber  hereby  confirms that the Company has
               full  right  in its sole  discretion  to  accept  or  reject  the
               subscription  of the  Subscriber,  in whole or in part,  provided
               that,  if the Company  decides to reject such  subscription,  the
               Company  must  do so  promptly  and in  writing.  In the  case of
               rejection, the Company will promptly return any rejected payments
               and (if rejected in whole)  copies of all  executed  subscription
               documents   (including  without  limitation  this  Agreement)  to
               Subscriber.

          9.2  Acceptance  of  Subscription.  In the case of  acceptance of this
subscription,  ownership of the number of securities being purchased hereby will
pass to the Subscriber upon the Closing.

          9.3 Subscriber to Forward  Original Signed  Subscription  Agreement to
Company.  The  Subscriber  agrees to courier to the Company its  original  inked
signed  Subscription  Agreement  within  three (3) days after faxing said signed
Agreement to the Placement Agent.

                                       16
<PAGE>


     10. Indemnification.  The Company agrees to indemnify and hold harmless the
Subscriber  and the  Placement  Agent  and  each of their  officers,  directors,
employees and agents,  and each person who controls  Subscriber or the Placement
Agent  within the meaning of the Act or the Exchange  Act (each,  a  "Subscriber
Indemnified Party") against any losses, claims, damages or liabilities, joint or
several,  to which it, they or any of them, may become subject and not otherwise
reimbursed arising from or due to any untrue statement of a material fact or the
omission to state any material  fact  required to be stated in order to make the
statements not misleading in any  representation or warranty made by the Company
contained in this  Agreement or in any  statements  contained in the  Disclosure
Documents.

     Promptly  after  receipt  by  an   Indemnified   Party  of  notice  of  the
commencement of any action pursuant to which indemnification may be sought, such
Indemnified  Party will, if a claim in respect thereof is to be made against the
other party  (hereinafter  "Indemnitor")  under this Section 10,  deliver to the
Indemnitor a written notice of the commencement thereof and the Indemnitor shall
have the right to participate in and to assume the defense  thereof with counsel
reasonably selected by the Indemnitor,  provided,  however,  that an Indemnified
party  shall  have the  right to retain  its own  counsel,  with the  reasonably
incurred  fees  and  expenses  of such  counsel  to be paid by the  Company,  if
representation  of  such  Indemnified  party  by  the  counsel  retained  by the
Indemnitor  would be  inappropriate  due to actual  or  potential  conflicts  or
interest between such Indemnified  Party and any other party represented by such
counsel  in such  proceeding.  The  failure  to  deliver  written  notice to the
Indemnitor  within a reasonable time of the commencement of any such action,  if
prejudicial to the Indemnitor's ability to defend such action, shall relieve the
Indemnitor of any liability to the Indemnified  Party under this Section 10, but
the omission to so deliver  written notice to the Indemnitor will not relieve it
of any liability that it may have to any Indemnified Party other than under this
Section 10 to the extent it is prejudicial.


                                       17

<PAGE>



     11. Number of Shares and Purchase Price. The undersigned  Subscriber hereby
subscribes  for and  agrees to  purchase  __________________  shares of Series D
Preferred Stock with a stated value of $1,000 per share , as follows:

Number  of  shares  of  Series  B  Preferred   Stock   exchanged  by  Subscriber
___________________,  multiplied by 15 = _______________________,  the number of
Exchange Shares to be received for Series B Preferred Stock.


Number  of  shares  of  Series  C  Preferred   Stock   exchanged  by  Subscriber
___________________,  multiplied by 13 = _______________________,  the number of
Exchange Shares to be received for Series C Preferred Stock.


Amount  of the  Series  C Escrow  Money  deemed  to be  provided  by  Subscriber
$_____________, multiplied by 130% = $____________________,  divided by $1,000 =
___________________, the number of Offering Shares to be received for the Series
C Escrow Money.


Number  of  Offering  Shares  subscribed  for  as  provided  in  Section  3.5(d)
__________________,  multiplied  by  $1,000 =  $__________________________,  the
amount Subscriber agrees to pay as provided in Section 3.5(d).


     12. Accredited Investor. The Subscriber is (please check applicable box):

     (a)   [ ]      a corporation, business trust, or partnership not formed for
                    the specific  purpose of acquiring the  securities  offered,
                    with total assets in excess of $5,000,000.

     (b)   [ ]      any trust,  with total assets in excess of  $5,000,000,  not
                    formed for the specific  purpose of acquiring the securities
                    offered,  whose  purchase  is  directed  by a  sophisticated
                    person who has such  knowledge  and  experience in financial
                    and business  matters that he is capable of  evaluating  the
                    merits and risks of the prospective investment.

     (c)   [ ]      an individual, who

           [ ]      is a director,  executive  officer or general partner of the
                    issuer  of  the  securities  being  offered  or  sold  or  a
                    director,  executive officer or general partner of a general
                    partner of that issuer.

           [ ]      has an  individual  net worth,  or joint net worth with that
                    person's  spouse,  at the  time  of his  purchase  exceeding
                    $1,000,000.

                                       18
<PAGE>


           [ ]      had an  individual  income in excess of  $200,000 in each of
                    the two most recent years or joint income with that person's
                    spouse in excess of  $300,000 in each of those years and has
                    a reasonable  expectation  of reaching the same income level
                    in the current year.

     (d)   [ ]      an entity  owner of which is an entity  described  in (a) or
                    (b) above or is an individual who could check one (1) of the
                    first three (3) boxes under subparagraph (c) above.

     13. Other Exemptions.  The Subscriber and the Company acknowledge and agree
that the  reliance on  Regulation  D as an exemption  from  registration  is not
exclusive and shall not preclude the Company from claiming the  availability  of
any other  exemption,  nor shall it preclude the Subscriber  from relying on any
exemption from registration with respect to the acquisition of the Securities or
any resale of the Securities.

The  undersigned   acknowledges   that  this  Agreement  and  the   subscription
represented  hereby  shall not be  effective  unless  accepted by the Company as
indicated below.

     IN WITNESS  WHEREOF,  the  undersigned  Subscriber does hereby execute this
Agreement this _______ day of ________________, 1998.



-----------------------------               -----------------------------
Name of Company You Represent               EXACT NAME IN WHICH YOU WANT
                                            THE SECURITIES TO BE REGISTERED
(if applicable)                                               

-----------------------------               DELIVERY INSTRUCTIONS:
Your Signature                              Please type or print address where
                                            your security is to be delivered

-----------------------------               ATTN:
Your Name:  Please Print                    -----------------------------


-----------------------------               -----------------------------
Title/Representative Capacity               Street Address 
(if applicable)   


-----------------------------               -----------------------------
Place of Execution of this Agreement        City, State or Province, Country,
                                            Offshore Postal Code


                                            -----------------------------
                                            Telephone Number

                                            -----------------------------
                                            Facsimile Number
ACCEPTANCE BY COMPANY:


     THIS  SUBSCRIPTION  IS ACCEPTED BY THE COMPANY AND THE COMPANY AGREES TO BE
BOUND   BY   THE   TERMS   AND   CONDITIONS    THEREOF   THIS   _____   DAY   OF
_______________________, 1998.



                                            By:

                                            Name:

                                            Title:

                                            Attest:

                                            Name:

                                            Title:

                                       19
<PAGE>

                              NOTICE OF CONVERSION

     (To be Executed by the Registered  Holder in order to Convert the Preferred
Stock)

     The undersigned  Holder hereby  irrevocably  elects to convert  ___________
shares of Series D Preferred  Stock,  represented  by stock  certificate  No(s).
______________ (the "Preferred Stock  Certificates") into shares of common stock
("Common Stock") of Harvest Restaurant Group, Inc. (the "Company")  according to
the conditions of the Statement of Resolution of Series D Preferred Stock, as of
the date written below, in connection  with the resale of the underlying  Common
Stock.  If  shares  are to be  issued  in the  name of a person  other  than the
undersigned,  the  undersigned  will pay all transfer taxes payable with respect
thereto and is  delivering  herewith  such  Certificates.  With respect to those
shares to be issued in the name of a person  other than the  Holder,  the Holder
should execute a Notice of Transfer or Assignment Form with the signature of the
Holder and the signature of each other person in whose name the shares are to be
issued  guaranteed by a commercial bank or trust company in the United States or
a member  firm of the New York  Stock  Exchange.  No fee will be  charged to the
Holder for any conversion,  except for transfer taxes, if any. A copy of each of
the Preferred Stock Certificates being converted its attached hereto.


Date of Conversion:

Applicable Conversion Price:

Number of Shares of
Common Stock to be Issued:

Name of Holder:

By:

Title:

Address:

                                       20
<PAGE>


                                   EXHIBIT "A"
                                   -----------

                          FORM STATEMENT OF RESOLUTION



                        FOLLOWS DIRECTLY BEHIND THIS PAGE



                                                       

                                       21

<PAGE>


                                   EXHIBIT "B"
                                   -----------

                       FORM REGISTRATION RIGHTS AGREEMENT



                        FOLLOWS DIRECTLY BEHIND THIS PAGE



                                                       

                                       22
<PAGE>


                                   EXHIBIT "C"
                                   -----------

                                 CAPITALIZATION



                        FOLLOWS DIRECTLY BEHIND THIS PAGE



                                                       

                                       23
<PAGE>

                                   EXHIBIT "D"
                                   -----------

                    FORM OF WARRANT AGREEMENT WITH SUBSCRIBER



                        Follows Directly Behind This Page




                                       24