SHARE EXCHANGE AGREEMENT

     This SHARE  EXCHANGE  AGREEMENT is made and entered into as of this ___ day
of March,  1998,  between HARVEST  RESTAURANT  GROUP,  INC., a Texas corporation
("Harvest"), and KOOTENAY HOLDINGS, L.L.C., an Arizona Limited Liability Company
("Kootenay") which is the sole shareholder of SURF CITY ACQUISITION II, INC., an
Arizona corporation ("Surf City").

                                    RECITALS

     WHEREAS, the parties,  together with Surf City Acquisition  Corporation II,
an Arizona corporation ("Surf City"), executed an Agreement in Principle wherein
the basic terms of the transactions  described herein were agreed to and reduced
to writing, subject to further negotiations;

     WHEREAS,  Kootenay  owns all of the issued and  outstanding  shares of Surf
City;

     WHEREAS,  the  intended  result  of this  Agreement  and the  Sports  Group
International,  Inc.  ("Sports")/Harvest  Share Exchange  Agreement of even date
hereof,  taken together,  is for Harvest to own all outstanding shares of Sports
and Surf  City and for  Harvest's  shares  of Common  Stock to be  allocated  as
follows upon the Effective Date:

                  4,089,500         To Harvest's shareholders
                  4,000,000         To Sports shareholders
                    542,045         To Sports debt holders
                  9,290,545         To Kootenay
                 17,922,090         Total issued shares of Harvest Common Stock
                                      on the Effective Date

     WHEREAS,  it is understood and agreed that Harvest's  outstanding shares of
Common  Stock shall be  determined  as of the  Effective  Date and that,  to the
extent Harvest Common Stock on the Effective Date is  proportionally  greater or
lesser than  4,129,130  shares,  then the shares of Harvest  Common  Stock to be
issued to Sports  shareholders  and to  Kootenay  as set  forth  above  shall be
adjusted pro rata in the same proportion;

     WHEREAS,  it is intended  that the Peterson  Note shall be exchanged  for a
single indivisible share of Peterson Preferred class of Harvest stock.  Peterson
Preferred  Stock shall accrue  dividends at the Wall Street  Journal's  National
Prime  Rate upon the first  business  day of each year upon a  principal  sum of
$4,500,000,  the dividend being payable by January 31 of each  succeeding  year.
Peterson Preferred shall have preferred rights against all assets of Sports, and
shall have default  rights in the event of failure to timely pay such  dividends
which shall permit the holder to demand immediate  redemption of the full amount
of  $4,500,000  and all  past-due  dividends.  Peterson  Preferred  may,  at its
holder's  option,  convert to 1,600,000 shares of Harvest Common Stock after two
years  from the  Effective  Date,  in which  event  Kootenay  shall  receive  an
additional  1,000,000  shares of Harvest Common Stock.  Peterson  Preferred is a
non-voting  share,  does  not  vote as a class,  and  does  not  participate  in
Harvest's dividends, or profits other than as is expressly set forth herein;

     WHEREAS,  it is the  intention of the parties  hereto that (a) the transfer
and  allocation  of economic  benefits and burdens  described in this  Agreement
shall for all purposes shall be deemed as having been  transferred and allocated
as of the  Effective  Date  and  (b)  if the  execution  of the  Agreement,  the
obtaining  of  certain  regulatory  consents,   the  actual  exchange  of  share
certificates  and other documents should occur subsequent to the Effective Date,
then each of the before- referenced events shall be deemed conditions subject to
an executed  contract and shall in no fashion be  considered as deferrals of the
effective  exchange  of  stock  which  occurred,  for  all  purposes,  as of the
Effective Date; and

     WHEREAS,  the  parties  intend this  transaction  to qualify as a "tax free
re-organization"  within the  meaning of Section  368(a)(1)(B)  of the  Internal
Revenue  Code of 1986,  as  amended,  and that  Sports  become a  subsidiary  of
Harvest.


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<PAGE>


                                   ARTICLE I.
                             CLOSING CONTINGENT UPON
                      CLOSING OF CONTEMPLATED TRANSACTIONS

     1.01 Share  Exchange.  The  obligation of the parties to this  Agreement to
close  this  transaction  is  contingent  upon  the  closing  of  certain  other
transactions  listed  below  and  defined   collectively  as  the  "Contemplated
Transactions."  Each of the  parties  to each of the  Contemplated  Transactions
shall use their best efforts to fulfill  their  obligations  to close all of the
Contemplated Transactions. If any of the Contemplated Transactions do not close,
parties  who are not in breach or  default of their own  obligations  under this
Agreement shall not be required to close their respective transactions which are
part of the  Contemplated  Transactions  and  will  not be in  default  of their
obligations for not closing the same.

     1.02  Contemplated  Transactions.  This  Agreement  contemplates  that  the
following multiple transactions (collectively,  the "Contemplated Transactions")
shall be closed before or concurrently with the Closing of this transaction.

          1.02.1  Sports/Harvest  Share Exchange  Agreement.  The Sports/Harvest
Share Exchange  Agreement executed between the parties of even date hereof shall
be closed before or concurrently  with the closing of the transaction  described
in this Agreement.

          1.02.2 Financing.  A $4,000,000 financing  arrangement shall have been
obtained on or before Closing, and is to be used, in part, as follows:

               (a)  $500,000 to partially redeem all Harvest Preferred B Stock;

               (b)  $1,000,000 to Kootenay;

               (c)  $1,000,000  loan to Kootenay,  which shall be evidenced by a
                    promissory note and secured by stock of Surf City;

               (d)  $250,000 payable to the Bank of L.A. for corporate purposes;

               (e)  $500,00 payable to Sports for corporate  purposes;  $500,000
                    paid to Surf City for corporate purposes; and

               (f)  $750,000  payable to Harvest  accounts  dedicated to Harvest
                    Food  Court/Red  Line  project;   and  the  remainder  being
                    retained by Harvest for corporate purposes.


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<PAGE>


          1.02.3 Voting  Agreement.  Harvest,  Sports,  and Surf City shall have
executed the Voting Agreement attached hereto as Exhibit "A" simultaneously with
the execution of this Agreement.  The Voting Agreement provides for the election
of a new Harvest Board of Directors at a Shareholder Meeting to be held promptly
after Closing of this  transaction the following to be the new Directors:  Kevin
Blackwell,  Kathy Blackwell,  David Guarino,  Ernest (KiKi) Vandewaehe III, Dean
Miller,  Clyde Drexler,  Bill Gallagher,  and Robert Schwartz.  It is agreed and
understood  that  election  of these  Directors  is  subject  to  closing of the
transaction described in this Agreement.

          1.02.4 Employment Agreements.  Dean Miller,  William Gallagher,  Kevin
Blackwell,  David Guarino,  Kathy  Blackwell,  and Ernest (KiKi)  Vandewaehe III
shall have executed the  agreements  with Harvest  which are attached  hereto as
Exhibits B-1, B-2, B-3, B-4, and B-5. The Miller and Gallagher  agreements  will
be  consulting  agreements  at $10,000  per month plus  approved  expenses.  The
Blackwell and Guarino agreements shall be employment  contracts paying an annual
amount of $200,000.  The Vandewaehe III Agreement will be a consulting Agreement
paying an annual amount of $70,000.  Each of these  employment  agreements  will
extend four years from the Effective Date.

          1.02.5  Peterson  Preferred.   The  holders  of  the  Sports  Peterson
Preferred Note have executed the Peterson Preferred Agreement attached hereto as
Exhibit C. The Peterson Preferred  Agreement will exchange the Peterson Note for
a single  indivisible  share of  Peterson  Preferred  Class  of  Harvest  Stock.
Peterson  Preferred  Stock shall accrue  dividends at the Wall Street  Journal's
national  prime rate on the first  business  day of each year upon the amount of
$4,500,000,  the dividend being payable by January 1, of each  succeeding  year.
Peterson Preferred shall have preferred rights against all assets of Sports, and
if Harvest  shall fail to timely pay such  dividends,  the holder shall have the
right to demand  immediate  redemption of the full amount of $4,500,000  and all
past-due dividends.  Peterson Preferred may, at its holder's option,  convert to
1,600,000  shares of Harvest  Common  Stock  after two years from the  Effective
Date, in which event  Kootenay shall receive an additional  1,000,000  shares of
Harvest Common Stock. Peterson Preferred is a non-voting share, does not vote as
a class, and does not participate in Harvest's dividends,  or profits other than
as is expressly set forth herein.




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<PAGE>



          1.02.6 Harvest  Preferred B Agreement.  The Harvest Series B Preferred
Stock amendments shall be entered into before Closing.

          1.02.7  Guarantee.  Harvest will  guarantee  the  guarantors of Sports
$500,000 note to the Bank of L.A. that the note will be paid.

                                       II.
                               FEASIBILITY PERIOD

     2.01  Feasibility  Study.  Each  party is  granted  the right to  conduct a
feasibility  study of all of the existing and contingent  assets and liabilities
of the other party including a physical inspection of all leases,  improvements,
fixtures,  mechanical  equipment,  personnel  property,  and other  tangible and
intangible assets ("Feasibility  Study").  Each party shall have until March 30,
1998 ("Feasibility  Period").  During the Feasibility  Period,  either party, or
their  designated  agents,  may enter upon the leased or owned  premises  of the
other  party  for such  analyses,  tests,  and  inspections  which may be deemed
necessary by either party. If either party determines,  in their sole reasonable
judgment,  that the transaction is not desirable for any reason, then that party
may,  on  written  notice to the other  party,  on or before  expiration  of the
Feasibility Period, terminate this Agreement without penalty or being in default
of their  obligations.  If the written notice is not given to the other party on
or  before  5:00  p.m.  Central  Standard  Time  on the  expiration  date of the
Feasibility  Period, this right to terminate shall be deemed to have been waived
by the party failing to give the notice.

     2.02 Documents to be Delivered. Each party shall deliver to the other party
copies  of the  following  within  five  business  days  from  the  date of this
Agreement.  Failure to deliver  any of the listed  documents  is an  independent
reason for the other party to rightfully terminate this Agreement. If any one or
more of the items described in Section 2.02 do not exist,  the disclosing  party
shall advise the receiving party, in writing, to that effect.

          2.02.1  Financial  Statements.  Copies of financial  statements as set
forth in Sections  5.01.20 and 7.01.20.  This includes monthly sales reports for
the period  commencing  January 1, 1998,  through the calendar month immediately
proceeding the date of submittal of the same.

          2.02.2 Asset List. A detailed inventory of all equipment, furnishings,
fixtures, and inventories.

          2.02.3  Leases.  All  leases  of real  or  personal  property  and any
documents pertaining to such leases in the disclosing parties' possession.

          2.02.4  Contracts.  Copies of all contracts and warranties and related
documents  including  service,  maintenance,  management,  employment,  or other




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<PAGE>


agreements,  including loan agreements  which affect the disclosing party or its
assets. If such exist, all documents, notices, or citations indicating a default
or breach by the disclosing  party of any contract in which the disclosing party
is a party.

          2.02.5 Certificates.  Certificates of all fire, hazard, liability, and
other insurance policies maintained by the disclosing party.

          2.02.6  Taxes.  The most recent real estate and personal  property tax
statements  regarding the disclosing  party's property along with the disclosing
party's  federal  income tax returns for the last two years and proof of payment
of all sales and payroll taxes.

          2.02.7 Litigation.  If such exists, all notices,  citations,  or other
documents  evidencing  actions,  suits or  proceedings  pending or threatened or
asserted  against the disclosing  party, at law or in equity,  before any state,
federal, county, municipal, or other governmental department, commission, board,
bureau, agency, or instrumentality, whether domestic or foreign.

          2.02.8  Violations.  If  such  exists,  all  documents,   notices,  or
citations  indicating a violation by the disclosing  party of zoning,  building,
fire, or similar law, ordinance,  code, order, regulation or restriction claimed
by any applicable governmental authority.

          2.02.9    Organizational    Documents.    All   currently    effective
organizational  documents and other records of the disclosing  party  including,
without limitation, articles, by laws, directors, minutes, and stock ledger.

                                  ARTICLE III.
                               THE SHARE EXCHANGE

     3.01. Closing.

          3.01.1  Time and  Place  of  Closing.  Subject  to the  provisions  of
Articles  V  and  VII,  the  Closing  of  the  transaction  contemplated  hereby
("Closing") shall take place at the offices of Titus,  Brueckner & Berny,  P.C.,
7373 N. Scottsdale Road, Suite B-252,  Scottsdale,  Arizona 85253 at 10:00 a.m.,
local time, on the Effective Date, or at such other place, date, or time, as the
parties may mutually agree upon writing for the Closing to take place.

          3.01.2  Actions of Harvest at Closing.  At the Closing,  Harvest shall
deliver to Kootenay and Surf City the following:

               3.01.2.1 Resignations. Harvest shall deliver to Kootenay and Surf
City the written and executed resignations of such directors of Harvest and such
executed employment agreements, dated as of the Effective Date, as called for in
this Agreement.




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<PAGE>



               3.01.2.2  Certificate  of  Harvest.   Harvest  shall  deliver  to
Kootenay  and Surf City a  certificate,  which  shall be dated as of Closing and
which shall be signed by Harvest's  Chief Executive  Officer  certifying (i) the
authority of Harvest to enter into and consummate the transactions  contemplated
by this Agreement;  (ii) the authority of the officers of Harvest to execute and
deliver any document contemplated by this Agreement on behalf of Harvest;  (iii)
that the  representations and warranties of Harvest obtained herein were correct
and true when made and are correct and true as of the date of Closing (except to
the extent that any representation or warranty of Harvest  specifically  relates
to an earlier  date);  and (iv) that each and every  covenant  and  agreement of
Harvest  contained  in the  Agreement  to be performed by Harvest on or prior to
Closing has been performed by Harvest.  Kootenay and Surf City may rely upon the
certificate as if it were delivered to them directly.

               3.01.2.3  Corporation  Resolutions.   Harvest  shall  deliver  to
Kootenay  and Surf  City  certified  copies of the  resolutions  of the Board of
Directors of Harvest  authorizing  the execution,  delivery,  and performance of
this Agreement and the transactions contemplated herein.

          3.01.2.  Actions of Surf City at Closing.  At the  Closing,  Surf City
shall deliver to Harvest the following:

               3.01.2.1  Resignations.  Surf City shall  deliver to Harvest  the
written  and  executed  resignations  of such  directors  of Surf  City and such
executed employment agreements, dated as of the Effective Date, as called for in
this Agreement.

               3.01.2.2  Certificate  of Surf City.  Surf City shall  deliver to
Harvest a  certificate,  which  shall be dated as of Closing  and which shall be
signed by Surf City Chief Executive Officer certifying (i) the authority of Surf
City  to  enter  into  and  consummate  the  transactions  contemplated  by this
Agreement;  (ii) the  authority  of the  officers  of Surf City to  execute  and
deliver any  document  contemplated  by this  Agreement  on behalf of Surf City;
(iii) that the  representations and warranties of Surf City obtained herein were
correct  and true when made and are  correct  and true as of the date of Closing
(except  to the  extent  that  any  representation  or  warranty  of  Surf  City
specifically  relates to an earlier date); and (iv) that each and every covenant
and  agreement of Surf City  contained in the  Agreement to be performed by Surf
City on or prior to Closing has been  performed by Surf City.  Kootenay and Surf
City may rely upon the certificate as if it were delivered to them directly.

               3.01.2.3  Corporation  Resolutions.  Surf City  shall  deliver to
Harvest  certified  copies of the  resolutions of the Board of Directors of Surf
City and the  shareholder  approval  of Surf  City  authorizing  the  execution,
delivery,  and performance of this Agreement and the  transactions  contemplated
herein.




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<PAGE>



          3.02.3 Effective Date. The date on which the Exchange of Shares occurs
and becomes effective is hereinafter  called the "Effective Date." The Effective
Date shall be March 31,  1998,  except and unless there is a delay in the filing
of Articles of Share Exchange with any state  Secretary of State which is needed
for the exchange of shares to lawfully  occur, in which event the Effective Date
shall be the earliest date after March 31, 1998, that is lawful for the exchange
of shares to occur.  The parties shall cause all such documents and  instruments
to be filed with the  appropriate  state  Secretaries  of State as  promptly  as
practicable upon satisfaction of the conditions described herein.

                                   ARTICLE IV.
                      EXCHANGE OF SHARES AND OTHER MATTERS

     4.01.  Exchange  of  Shares.  Upon the  Effective  Date,  by virtue of this
Agreement, each of the following shall be deemed to occur contemporaneously:

          4.01.1 Exchange of Surf City Common Stock.  All issued and outstanding
shares of Surf City Common  Stock shall be  exchanged  for a total of  9,290,545
fully paid and non-assessable  shares of Harvest Common Stock in accordance with
the  provisions  of Section  4.02.  An exception  is that,  if more or less than
4,089,500  issued  shares of Harvest  Common  Stock are issued on the  Effective
Date,  then the Harvest Common Stock shares received by Kootenay in exchange for
each  Surf City  share  shall be  increased  or  decreased  by the same pro rata
proportion as Harvest's Common Stock at Effective Date is greater or lesser than
4,089,500 shares.

          4.01.2 Total Harvest  Shares  Exchanged.  The shares of Harvest Common
Stock to be  issued  pursuant  to this  Section  shall  total  9,290,545  shares
adjusted as set forth herein.

     4.02 Exchange  Procedure.  Surf City Common Stock.  Following the Effective
Date,  Kootenay  shall  surrender  to the  Secretary of Harvest (or to any agent
designated  for such  purpose  by the  President  of  Harvest)  its  outstanding
certificate  which prior thereto  represented  Surf City Common Stock, and shall
upon such surrender  receive in substitution and exchange therefor a certificate
representing  the number of shares of Harvest  Common Stock into which such Surf
City Common Stock shall have been converted. Until so surrendered and exchanged,
each outstanding  certificate  which,  prior to the Effective Date,  represented
Surf City Common Stock shall,  following the  Effective  Date, be deemed for all
purposes to evidence  ownership of the number of shares of Harvest  Common Stock
into which such shares of Surf City Common Stock have been converted.

                                   ARTICLE V.
                   SURF CITY'S REPRESENTATIONS AND WARRANTIES

     5.01.  Surf  City's  Representations  and  Warranties.  Surf City makes the
following  representations and warranties to Harvest and to Sports and Surf City
as a material inducement for Harvest to enter into this Agreement and for Sports




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<PAGE>


and Surf City to enter into the Sports/Harvest  Share Exchange Agreement subject
only to such  disclaimers  as  disclosures  and  exceptions as are expressly set
forth in the  attachments  hereto.  These  representations  and  warranties  are
limited  to the best  actual  knowledge  of Surf City  Directors  and  officers.
Further,  immaterial  breaches  of  these  representations  and  warranties  are
specifically agreed to not comprise actionable breaches.

          5.01.1 Capitalization.

               5.01.1.1  Authorized Stock. The authorized  capital stock of Surf
City  consists of ______  shares of Surf City Common  Stock,  $___ par value per
share.

               5.01.1.2.  Issued Common Stock.  There are _______ shares of Surf
City Common Stock issued and  outstanding,  all of which are owned  beneficially
and of record by the listed shareholders. All such issued and outstanding shares
of Surf City Common Stock are duly  authorized,  validly issued,  fully paid and
non-assessable,  were not  issued in  violation  of the  terms of any  contract,
agreement  or  commitment  binding  upon Surf City or any  preemptive  rights or
rights of first refusal,  and were issued in compliance  with all of its charter
documents and applicable law.

          5.01.2  Organization,  Standing and Power.  Surf City is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Arizona  and is  qualified  to do  business  where the failure to be so
qualified  would  materially  and adversely  affect its  condition,  properties,
assets or operations.  Surf City has all requisite corporate power and authority
to enter into and perform and consummate the  transactions  contemplated by this
Agreement.  The copies of the charter  documents of Surf City and all amendments
thereto  and of its  bylaws  as  amended  to date  which  have  heretofore  been
furnished or delivered to the Harvest are correct and complete.

          5.01.3 Subsidiaries. Surf City has no subsidiaries.

          5.01.4  Title to Assets.  Surf City has good,  valid and  indefeasible
title to its assets, free and clear of all security interests, mortgages, liens,
encumbrances,  title  retention or security  agreements,  claims,  restrictions,
leases,  options,  rights of first offer or first  refusal,  confidentiality  or
secrecy  agreements,  non-competition  agreements,  defects  of  title  or other
encumbrances  or rights of others.  The execution and delivery of this Agreement
and the consummation of the transaction  contemplated hereby will not constitute
a violation of, nor be in conflict  with,  nor  constitute a default,  under any
terms or provisions of any contract,  lease, mortgage,  indenture,  or any other
document  whatsoever to which Surf City may be a party or to which Surf City may
be bound on each Closing Date.




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<PAGE>



          5.01.5 Other Relationships. No affiliate, director, officer, principal
executive,  or  employee  of or  consultant  to  Surf  City  owns,  directly  or
indirectly,  in whole or in part,  any  property,  asset or right,  tangible  or
intangible relating to or affecting Surf City.

          5.01.6  Other  Transactions  Etc.  No  affiliate,  director,  officer,
principal  executive  or employee  of Surf City,  has,  directly or  indirectly,
engaged in any  transaction  with Surf City  outside of the  ordinary  course of
business.

          5.01.7 Undisclosed Liabilities. Surf City has no debts, liabilities or
obligations of any nature, whether accrued,  absolute,  contingent or otherwise,
whether due or to become due,  including,  but not  limited to,  liabilities  or
obligations  on account of known fraud by any merchant  customer,  taxes,  other
governmental  charges,  duties,   penalties,   interest,  fines,  vacation  pay,
workmen's compensation claims, or pension plan obligations and there is no known
basis for the assertion against Surf City.

          5.01.8 Absence of Certain Changes or Events. The business of Surf City
has been  operated  only in the usual and ordinary  course of business and there
has not been any occurrence,  event or condition  outside of the ordinary course
of business.

          5.01.9  Condition  of  Assets.  The  assets  of Surf  City are in good
operating  condition for the purposes of conducting the business of Surf City on
the Effective  Date as such business has been or is being  conducted.  Surf City
has good and  marketable  title to all of the  Assets  subject  to no  mortgage,
pledge,  lien,  conditional  sales agreement,  encumbrance,  security  interest,
encumbrance, or charge of any nature whatsoever, except as herein provided.

          5.01.10 No Violation of Law.  Neither Surf City, nor any of its assets
or property  of Surf City or the  ownership,  leasing,  occupancy  or  operation
thereof,  is in  violation  of  any  applicable  law,  code,  rule,  regulation,
ordinance,  license or permit,  including,  but not limited to, those related to
building,  zoning,  environmental  matters or employee health and safety, and no
notice from any governmental body or other person has been served upon Surf City
occupied or operated by Surf City claiming any such violation.

          5.01.11 Contracts. All of Surf City' contracts,  agreements,  customer
and supplier purchase order and other  commitments are legal,  valid and binding
and in full force and effect, and there are no defaults thereunder.  None of the
rights of Surf City  thereunder  will be  impaired  by the  consummation  of the
transactions  contemplated by this Agreement, and all of the rights of Surf City
thereunder  will be  enforceable by Harvest after the Merger without the consent
or agreement of any other party except for the agreements specifically listed in
attachments hereto which contracts require consent to assignment.  Copies of the
all such  contracts have  heretofore  been delivered to Harvest by Surf City and
are true and complete and include all  amendments  and  supplements  thereto and
modifications thereof.



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<PAGE>




          5.01.12  Permits,   Licenses,   Consents,   Etc.  Surf  City  has  all
governmental leases, licenses,  permits,  consents,  approvals,  authorizations,
qualifications  and orders  necessary to conduct its business and to operate its
properties and assets, and such leases, licenses, permits, consents,  approvals,
authorizations,  qualifications  and  orders are in full  force and  effect.  No
notification  to or approval  of any  governmental  agency is  required  for all
governmental leases, licenses,  permits,  consents,  approvals,  authorizations,
qualifications  and orders to remain in full force and effect after the closing.
No violations exist or have been recorded in respect of any governmental  lease,
license,  permit, consent,  approval,  authorization,  qualification or order of
Surf City. No  proceeding  is pending or, to the best of Surf City's  knowledge,
threatened  looking toward the revocation or limitation of any such governmental
lease, license, permit, consent, approval, authorization, qualification or order
and there is no basis or grounds for any such  revocation  or  limitation.  Surf
City has complied in all material  respects with all present and, to the best of
Surf City's knowledge,  enacted but not yet effective,  federal, state and local
laws,  rules,  regulations,  ordinances,  codes,  orders,  licenses  and permits
relating to any of its properties or applicable to its business.

          5.01.13 Absence of Defaults. Surf City is not nor is it alleged to be,
in  default  under,  or in breach of any term or  provision  of,  any  contract,
agreement,  lease,  license,  commitment,   instrument  or  fiduciary  or  other
obligation.  No  other  party  to  any  contract,   agreement,  lease,  license,
commitment,  instrument  or fiduciary or other  obligation to which Surf City is
party is in default  thereunder  or in breach of any term or provision  thereof.
There exists no condition or event which, after notice or lapse of time or both,
would constitute a default by any party to any such contract,  agreement, lease,
license, commitment, instrument or fiduciary or other obligation.

          5.01.14  Litigation.  There is (i) no suit,  action or claim,  (ii)_no
investigation or inquiry by any administrative  agency or governmental body, and
(iii) no legal, administrative or arbitration proceeding pending or, to the best
of Surf City's knowledge, threatened against Surf City or any of the properties,
assets,  business  or  prospects  of Surf City or to which Surf City is or might
become a party, and to the best of Surf City's  knowledge,  there is no basis or
grounds for any such suit, action, claim, investigation,  inquiry or proceeding,
including but not limited to, labor,  equal employment  opportunity,  safety and
health,  environmental and antitrust laws. There is no outstanding  order, writ,
injunction or decree of any court, administrative agency or governmental body or
arbitration tribunal against or affecting or relating to Surf City.

          5.01.15 No Breach or Violation of Law. The  execution  and delivery of
this  Agreement  by  Surf  City  and  the   consummation  of  the   transactions
contemplated  hereby will not (i) conflict  with, or result in the breach of any
of the terms or conditions of, or constitute a default  under,  or result in the
acceleration of any obligation under, or require any consent, approval or notice
under, the charter documents or the bylaws or any resolution of Surf City or any




                                       10



<PAGE>


contract,  agreement,  commitment,  indenture,  mortgage,  deed of trust, lease,
pledge agreement, note, bond, license or other instrument or obligation to which
Surf  City is now a party  or by which  Surf  City or any of the  properties  or
assets of Surf City may be bound or  affected,  or (ii)  violate any law, or any
rule or regulation of any  administrative  agency or  governmental  body, or any
order,  writ,  injunction  or  decree  of any  court,  administrative  agency or
governmental body.

          5.01.16  Validity  and  Authorization.  This  Agreement  has been duly
authorized  by all  necessary  corporate  and  shareholder  action  and duly and
validly  executed and delivered by Surf City and is legally binding on Surf City
in accordance with its terms.

          5.01.17  Completeness;  No  Misrepresentations.   The  copies  of  all
instruments,  agreements, and written information,  including without limitation
the  Schedules  hereto,  delivered  pursuant  to  this  Agreement  or  otherwise
furnished or made available to Harvest by Surf City, or any  representatives  of
either  of  them  are  complete   and  correct  as  of  the  date  hereof.   The
representations  and  warranties  made by Surf City or the  Shareholder  in this
Agreement or in any Schedule or other document furnished in connection with this
Agreement  do not contain any untrue  statement of a material  fact,  or omit to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading.  The fact that Harvest and its  representatives  have
conducted an investigation of Surf City prior to the execution of this Agreement
shall not affect the representations and warranties contained in this Article or
the  extent of the  obligations  or  liabilities  of Surf City in the event of a
breach of any such representation or warranty.

          5.01.18 Tax  Matters.  Surf City has duly and timely filed all returns
with respect to any taxes required to be filed by it or for which it may be held
responsible,  and has paid, or will pay on a timely basis, all taxes shown to be
due and payable on such returns,  all  deficiencies  and  assessments  of taxes,
notice of which has been received by it, and all other taxes payable by it. Surf
City is not aware of any basis upon which any assessment  for a material  amount
of additional taxes could be made.

          5.01.20  Financial  Statements.  It is  understood  that  Surf  City's
financial  statements are not audited unless  indicated as such on the delivered
financial  documents.  The year-end  financial  statements and interim financial
statements  delivered  by Surf  City to the  Purchaser  have  been  prepared  in
accordance with generally accepted accounting  principles and present fairly the
financial  position of Surf City as of December 31, 1998, and as of February 28,
1998,  respectively,  and the statement of income presents fairly the results of
operations and changes in financial  position of Surf City for the periods ended
December 31, 1997,  and February 28, 1998,  respectively,  and sales reports for
the period  commencing  January 1, 1998,  through the calendar month immediately
proceeding the date of submittal of the same,  all in conformity  with generally
accepted accounting  principles applied on a basis consistent with that of prior
periods, except that the interim financial statements are not audited and do not
contain footnotes and are subject to audit adjustments.  Other than as disclosed




                                       11



<PAGE>


in the Financial  Statements,  or elsewhere herein,  as supplemented,  as of the
Closing Date,  Surf City has no  outstanding  liabilities as of the closing Date
and  Surf  City  has  no  knowledge  of  any  threatened   claims,   actions  or
investigations   which  would  result  in  the   incurrence  of  any  additional
liabilities  by Surf City which will result in Harvest being liable to any third
party  due to  Buyer's  purchase  of the  Transferred  Assets.  Surf City has no
indebtedness,  liability or obligation or any character  whatsoever,  whether or
not accrued,  whether  known or unknown,  fixed or unfixed,  choate or inchoate,
liquidated  or  unliquidated,   contingent  or  otherwise,   including   without
limitation   liabilities  for  taxes,  other  governmental  charges  or  pending
lawsuits,  other than (i) liabilities  reflected in the Financial  Statements or
Interim Financial Statements, or elsewhere herein, or (ii) liabilities since the
date of the Interim Financial Statements as disclosed in writing to Harvest.

          5.01.21  Full  Disclosure.  Surf City has  disclosed  to  Harvest  all
material  facts  relating to Surf City and its operations and has not omitted to
disclose to Harvest any material fact  relating to Surf City, or its  operations
necessary to make the statements made herein not misleading.

     5.02.    Survival   of   Representations,    Warranties,    Covenants   and
Indemnification.  All covenants,  agreements,  representations and warranties of
Surf City under this Agreement  shall survive  indefinitely  and shall be deemed
material and relied upon by the other parties,  regardless of any  investigation
made by or on behalf of the other parties.

     5.03. Disclosures. All of Surf City's warranties and representations herein
are modified to the extent  needed to take into account Surf City's  disclosures
set forth or identified in the attachment hereto entitled Surf City Disclosures.

                                   ARTICLE VI.
                              SURF CITY'S COVENANTS

     6.01.  Continuation  of  Business.  Surf City  covenants  and  agrees  with
Harvest,  Kootenay,  and  Sports as  follows:  between  the date  hereof and the
Effective Date,(i) unless otherwise consented to in writing by Harvest, it shall
conduct its affairs solely in the ordinary  course of business  consistent  with
past practice and shall not materially  change its policies and practices;  (ii)
shall  not issue or  caused  to be  issued  by Surf  City any  capital  stock or
security   convertible  into  capital  stock,  except  pursuant  to  outstanding
warrants, convertible preferred stock, stock options and convertible debentures,
or grant any options or rights to acquire capital stock, or otherwise alter Surf
City's  capital  structure;  (iii) shall not repurchase any of its securities or
pay any dividend or make any  distribution  with respect to its securities other
than  normal  cash  dividends;  (iv)  shall  not  enter  into  any  contract  or
arrangement  other than in the ordinary  course of  business;  and (v) shall not
amend its charter documents or bylaws.




                                       12



<PAGE>



     6.02. No  Solicitation.  Unless and until the Effective  Date occurs,  Surf
City shall not (i)  solicit  any offer to acquire all or any part of Surf City's
business,  assets or other  properties  or  capital  stock,  whether  by merger,
purchase of assets, tender offer or otherwise or (ii) except as required by law,
disclose,  directly or indirectly,  any information not customarily disclosed to
any person or entity  concerning Surf City's  business or properties,  afford to
any other person or entity access to Surf City's properties, books or records or
otherwise assist or encourage any person or entity in connection with any of the
foregoing.

                                  ARTICLE VII.
                    HARVEST'S REPRESENTATIONS AND WARRANTIES

     7.01. Harvest's Representations and Warranties. Harvest makes the following
representations  and  warranties  to  Surf  City  and  Kootenay  as  a  material
inducement for Surf City and Kootenay to enter into this Agreement  subject only
to such  disclaimers as disclosures and exceptions as are expressly set forth in
the attachments hereto. These  representations and warranties are limited to the
best actual  knowledge of Harvest  Directors and officers.  Further,  immaterial
breaches of these  representations and warranties are specifically agreed to not
comprise actionable breaches.

          7.01.1 Capitalization.

               7.01.1.1  Authorized  Stock.  The  authorized  capital  stock  of
Harvest consists of 20,000,000  shares of Harvest Common Stock,  $0.01 par value
per share,  3,000,000  Series A,  Preferred  Stock,  and 1,000 shares of Harvest
Series B Preferred Stock, $1.00 par value per share.

               7.01.1.2.  Issued  Common Stock.  There are  2,699,030  shares of
Harvest Common Stock issued and outstanding, all of which are owned beneficially
and of record by the listed shareholders. All such issued and outstanding shares
of Harvest  Common Stock are duly  authorized,  validly  issued,  fully paid and
non-assessable,  were not  issued in  violation  of the  terms of any  contract,
agreement or commitment  binding upon Harvest or any preemptive rights or rights
of first  refusal,  and  were  issued  in  compliance  with  all of its  charter
documents and applicable law.

               7.01.1.3  Issued  Preferred  Stock.  There are 515,000  shares of
Harvest  Series A preferred  Stock and 150 shares of Harvest  Series B Preferred
Stock issued and outstanding,  all of which are owned beneficially and of record
by the listed  shareholders.  All such issued and outstanding  shares of Harvest
Preferred  Stock  are  duly   authorized,   validly   issued,   fully  paid  and
non-assessable,  were not  issued in  violation  of the  terms of any  contract,
agreement or commitment  binding upon Harvest or any preemptive rights or rights
of first  refusal,  and  were  issued  in  compliance  with  all of its  charter
documents and applicable law.




                                       13



<PAGE>



          7.01.2 Organization, Standing and Power. Harvest is a corporation duly
organized,  validly existing and in good standing under the laws of the State of
Texas and is qualified to do business where the failure to be so qualified would
materially and adversely affect its condition, properties, assets or operations.
Harvest  has all  requisite  corporate  power and  authority  to enter  into and
perform and consummate the  transactions  contemplated  by this  Agreement.  The
copies of the charter documents of Harvest and all amendments thereto and of its
bylaws as amended to date which have  heretofore  been furnished or delivered to
the Surf City are correct and complete.

          7.01.3 Subsidiaries. Harvest has no subsidiaries.

          7.01.4 Title to Assets. Harvest has good, valid and indefeasible title
to its  assets,  free and clear of all  security  interests,  mortgages,  liens,
encumbrances,  title  retention or security  agreements,  claims,  restrictions,
leases,  options,  rights of first offer or first  refusal,  confidentiality  or
secrecy  agreements,  non-competition  agreements,  defects  of  title  or other
encumbrances  or rights of others.  The execution and delivery of this Agreement
and the consummation of the transaction  contemplated hereby will not constitute
a violation of, nor be in conflict  with,  nor  constitute a default,  under any
terms or provisions of any contract,  lease, mortgage,  indenture,  or any other
document  whatsoever  to which Harvest may be a party or to which Harvest may be
bound on each Closing Date.

          7.01.5 Other Relationships. No affiliate, director, officer, principal
executive, or employee of or consultant to Harvest owns, directly or indirectly,
in whole or in part,  any  property,  asset or  right,  tangible  or  intangible
relating to or affecting Harvest.

          7.01.6  Other  Transactions  Etc.  No  affiliate,  director,  officer,
principal executive or employee of Harvest, has, directly or indirectly, engaged
in any transaction with Harvest outside of the ordinary course of business.

          7.01.7 Undisclosed  Liabilities.  Harvest has no debts, liabilities or
obligations of any nature, whether accrued,  absolute,  contingent or otherwise,
whether due or to become due,  including,  but not  limited to,  liabilities  or
obligations  on account of known fraud by any merchant  customer,  taxes,  other
governmental  charges,  duties,   penalties,   interest,  fines,  vacation  pay,
workmen's compensation claims, or pension plan obligations and there is no known
basis for the assertion against Harvest.

          7.01.8 Absence of Certain  Changes or Events.  The business of Harvest
has been  operated  only in the usual and ordinary  course of business and there
has not been any occurrence,  event or condition  outside of the ordinary course
of business.

          7.01.9  Condition  of  Assets.  The  assets  of  Harvest  are in  good
operating  condition for the purposes of  conducting  the business of Harvest on




                                       14



<PAGE>


the Effective Date as such business has been or is being conducted.  Harvest has
good and marketable  title to all of the Assets subject to no mortgage,  pledge,
lien, conditional sales agreement,  encumbrance, security interest, encumbrance,
or charge of any nature whatsoever, except as herein provided.

          7.01.10 No Violation of Law. Neither Harvest, nor any of its assets or
property of Harvest or the ownership,  leasing,  occupancy or operation thereof,
is in  violation of any  applicable  law,  code,  rule,  regulation,  ordinance,
license or permit,  including,  but not limited to,  those  related to building,
zoning,  environmental matters or employee health and safety, and no notice from
any  governmental  body or other person has been served upon Harvest occupied or
operated by Harvest claiming any such violation.

          7.01.11 Contracts. All of Harvest' contracts, agreements, customer and
supplier purchase order and other  commitments are legal,  valid and binding and
in full force and  effect,  and there are no  defaults  thereunder.  None of the
rights  of  Harvest  thereunder  will be  impaired  by the  consummation  of the
transactions  contemplated by this  Agreement,  and all of the rights of Harvest
thereunder will be enforceable by Surf City after the Merger without the consent
or agreement of any other party except for the agreements specifically listed in
attachments hereto which contracts require consent to assignment.  Copies of the
all such  contracts have  heretofore  been delivered to Surf City by Harvest and
are true and complete and include all  amendments  and  supplements  thereto and
modifications thereof.

          7.01.12 Permits, Licenses, Consents, Etc. Harvest has all governmental
leases, licenses, permits, consents, approvals,  authorizations,  qualifications
and orders  necessary to conduct its business and to operate its  properties and
assets, and such leases, licenses, permits, consents, approvals, authorizations,
qualifications  and orders are in full force and effect.  No  notification to or
approval of any  governmental  agency is required for all  governmental  leases,
licenses,  permits,  consents,  approvals,  authorizations,  qualifications  and
orders to remain in full force and effect after the closing. No violations exist
or have been recorded in respect of any  governmental  lease,  license,  permit,
consent,  approval,  authorization,   qualification  or  order  of  Harvest.  No
proceeding is pending or, to the best of Harvest' knowledge,  threatened looking
toward the  revocation or limitation of any such  governmental  lease,  license,
permit, consent, approval, authorization, qualification or order and there is no
basis or grounds for any such revocation or limitation.  Harvest has complied in
all material  respects with all present and, to the best of Harvest'  knowledge,
enacted  but  not  yet  effective,   federal,   state  and  local  laws,  rules,
regulations,  ordinances, codes, orders, licenses and permits relating to any of
its properties or applicable to its business.

          7.01.13  Absence of Defaults.  Harvest is not nor is it alleged to be,
in  default  under,  or in breach of any term or  provision  of,  any  contract,
agreement,  lease,  license,  commitment,   instrument  or  fiduciary  or  other
obligation.  No  other  party  to  any  contract,   agreement,  lease,  license,
commitment,  instrument  or fiduciary or other  obligation  to which  Harvest is



                                       15



<PAGE>


party is in default  thereunder  or in breach of any term or provision  thereof.
There exists no condition or event which, after notice or lapse of time or both,
would constitute a default by any party to any such contract,  agreement, lease,
license, commitment, instrument or fiduciary or other obligation.

          7.01.14  Litigation.  There is (i) no suit,  action or claim,  (ii)_no
investigation or inquiry by any administrative  agency or governmental body, and
(iii) no legal, administrative or arbitration proceeding pending or, to the best
of Harvest'  knowledge,  threatened  against  Harvest or any of the  properties,
assets,  business or prospects of Harvest or to which Harvest is or might become
a party, and to the best of Harvest' knowledge, there is no basis or grounds for
any such suit, action, claim,  investigation,  inquiry or proceeding,  including
but not limited to,  labor,  equal  employment  opportunity,  safety and health,
environmental  and  antitrust  laws.  There  is  no  outstanding   order,  writ,
injunction or decree of any court, administrative agency or governmental body or
arbitration tribunal against or affecting or relating to Harvest.

          7.01.15 No Breach or Violation of Law. The  execution  and delivery of
this Agreement by Harvest and the consummation of the transactions  contemplated
hereby will not (i) conflict  with,  or result in the breach of any of the terms
or conditions of, or constitute a default under,  or result in the  acceleration
of any obligation  under, or require any consent,  approval or notice under, the
charter  documents or the bylaws or any  resolution  of Harvest or any contract,
agreement,  commitment,  indenture,  mortgage,  deed  of  trust,  lease,  pledge
agreement,  note,  bond,  license or other  instrument  or  obligation  to which
Harvest is now a party or by which Harvest or any of the properties or assets of
Harvest  may be bound  or  affected,  or (ii)  violate  any law,  or any rule or
regulation  of any  administrative  agency or  governmental  body, or any order,
writ,  injunction or decree of any court,  administrative agency or governmental
body.

          7.01.16  Validity  and  Authorization.  This  Agreement  has been duly
authorized  by all  necessary  corporate  and  shareholder  action  and duly and
validly  executed and delivered by Harvest and is legally  binding on Harvest in
accordance with its terms.

          7.01.17  Completeness;  No  Misrepresentations.   The  copies  of  all
instruments,  agreements, and written information,  including without limitation
the  Schedules  hereto,  delivered  pursuant  to  this  Agreement  or  otherwise
furnished or made available to Surf City by Harvest,  or any  representatives of
either  of  them  are  complete   and  correct  as  of  the  date  hereof.   The
representations  and  warranties  made by  Harvest  or the  Shareholder  in this
Agreement or in any Schedule or other document furnished in connection with this
Agreement  do not contain any untrue  statement of a material  fact,  or omit to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading.  The fact that Surf City and its representatives have
conducted an  investigation  of Harvest prior to the execution of this Agreement
shall not affect the representations and warranties contained in this Article VI
or the extent of the  obligations  or  liabilities  of Harvest in the event of a
breach of any such representation or warranty.




                                       16



<PAGE>



          7.01.18 Tax  Matters.  Harvest  has duly and timely  filed all returns
with respect to any taxes required to be filed by it or for which it may be held
responsible,  and has paid, or will pay on a timely basis, all taxes shown to be
due and payable on such returns,  all  deficiencies  and  assessments  of taxes,
notice of which has been  received  by it,  and all other  taxes  payable by it.
Harvest  is not aware of any basis  upon  which any  assessment  for a  material
amount of additional taxes could be made.

          7.01.20 Financial Statements. It is understood that Harvest' financial
statements are not audited unless  indicated as such on the delivered  financial
documents.  The year-end financial  statements and interim financial  statements
delivered by Harvest to the  Purchaser  have been  prepared in  accordance  with
generally  accepted  accounting  principles  and  present  fairly the  financial
position of Harvest as of  December  31,  1998,  and as of  February  28,  1998,
respectively,  and the  statement  of income  presents  fairly  the  results  of
operations  and changes in financial  position of Harvest for the periods  ended
December 31, 1998,  and February 28, 1998,  respectively,  and sales reports for
the period  commencing  January 1, 1997,  through the calendar month immediately
proceeding the date of submittal of the same,  all in conformity  with generally
accepted accounting  principles applied on a basis consistent with that of prior
periods, except that the interim financial statements are not audited and do not
contain footnotes and are subject to audit adjustments.  Other than as disclosed
in the Financial  Statements,  or elsewhere herein,  as supplemented,  as of the
Closing Date, Harvest has no outstanding  liabilities as of the closing Date and
Harvest has no knowledge of any  threatened  claims,  actions or  investigations
which would result in the  incurrence of any  additional  liabilities by Harvest
which will result in Surf City or Kootenay  being  liable to any third party due
to Buyer's  purchase of the  Transferred  Assets.  Harvest has no  indebtedness,
liability or  obligation or any  character  whatsoever,  whether or not accrued,
whether known or unknown,  fixed or unfixed,  choate or inchoate,  liquidated or
unliquidated,  contingent or otherwise, including without limitation liabilities
for  taxes,  other  governmental  charges or  pending  lawsuits,  other than (i)
liabilities   reflected  in  the  Financial   Statements  or  Interim  Financial
Statements,  or  elsewhere  herein,  or (ii)  liabilities  since the date of the
Interim Financial Statements as disclosed in writing to Surf City and Kootenay.

          7.01.21  Full  Disclosure.  Harvest  has  disclosed  to Surf  City and
Kootenay all material  facts  relating to Harvest and its operations and has not
omitted to disclose to Surf City any material fact  relating to Harvest,  or its
operations necessary to make the statements made herein not misleading.

          7.01.22  Financing.  Harvest  has  been  negotiating  for  debt/equity
financing  which is in process and is  anticipated  to close by the end of March
1998.

     7.02.    Survival   of   Representations,    Warranties,    Covenants   and
Indemnification.  All covenants,  agreements,  representations and warranties of




                                       17



<PAGE>


Harvest  under this  Agreement  shall survive  indefinitely  and shall be deemed
material and relied upon by the other parties,  regardless of any  investigation
made by or on behalf of the other parties.

     7.03.  Disclosures.  All of Harvest' warranties and representations  herein
are modified to the extent needed to take into account Harvest'  disclosures set
forth or identified in the attachment hereto entitled Harvest Disclosures.

                                  ARTICLE VIII.
                               HARVEST'S COVENANTS

     8.01.  Continuation of Business.  Harvest  covenants and agrees as follows:
between the date hereof and the Effective Date,(i) unless otherwise consented to
in writing by Surf City and Kootenay, it shall conduct its affairs solely in the
ordinary  course  of  business  consistent  with  past  practice  and  shall not
materially change its policies and practices;  (ii) shall not issue or caused to
be issued by Harvest any  capital  stock or security  convertible  into  capital
stock,  except pursuant to outstanding  warrants,  convertible  preferred stock,
stock  options  and  convertible  debentures,  or grant any options or rights to
acquire capital stock, or otherwise alter  Harvest's  capital  structure;  (iii)
shall not  repurchase  any of its  securities  or pay any  dividend  or make any
distribution  with respect to its securities  other than normal cash  dividends;
(iv) shall not enter into any contract or arrangement other than in the ordinary
course of business; and (v) shall not amend its charter documents or bylaws

     8.02. No Solicitation.  Unless and until the Effective Date occurs, Harvest
shall  not (i)  solicit  any  offer  to  acquire  all or any  part of  Harvest's
business,  assets or other  properties  or  capital  stock,  whether  by merger,
purchase of assets, tender offer or otherwise or (ii) except as required by law,
disclose,  directly or indirectly,  any information not customarily disclosed to
any person or entity concerning Harvest's business or properties,  afford to any
other  person or entity  access to  Harvest's  properties,  books or  records or
otherwise assist or encourage any person or entity in connection with any of the
foregoing.

                                   ARTICLE IX.
                       CONDITIONS TO THE EXCHANGE OF STOCK

     9.01.  Conditions  Precedent to Performance by Harvest.  The obligations of
Harvest under this  Agreement are subject to the  satisfaction  of the following
conditions  (any or all of which may be waived by Harvest in its sole discretion
to the extent permitted by law):

          9.01.1  Board and  Stockholder  Approval.  The Merger  shall have been
effectively  adopted and approved at or prior to the Effective Date by the Board
of  Directors  and  stockholders  of Surf City and the  members of  Kootenay  in
accordance with applicable law.




                                       18



<PAGE>



          9.01.2  Representations  True Representations and Covenants Performed.
The  representations  and warranties of Surf City set forth herein shall be true
and correct in all material  respects  immediately  prior to the Effective  Date
with the same effect as if made at that time. Surf City shall have performed all
obligations  and complied  with all covenants  required by this  Agreement to be
performed  or  complied  with by them on or prior  to the  Effective  Date.  The
President  of Surf City shall have  delivered to Harvest a  certificate  to such
effect.

          9.01.3 No Litigation  Affecting Merger. No judgment,  decree, order or
ruling of any court or  regulatory  or  governmental  authority  shall have been
issued or entered against Surf City which would be violated by the completion of
the Merger, and no person or entity which is not a party to this Agreement shall
have commenced any litigation against Surf City seeking to restrain or prohibit,
or to obtain  substantial  damages in  connection  with,  this  Agreement or the
transactions contemplated hereby.

          9.01.4 Securities Laws. All approvals,  consents, permits, licenses or
qualifications from authorities  administering the securities or "blue-sky" laws
of any state having  jurisdiction  required for the  consummation  of the Merger
shall have been obtained and shall be effective.

          9.01.5 Regulatory Compliance,  Approvals and Consents. Surf City shall
have  complied  with all legal  provisions  applicable  to the  Merger,  and all
approvals  required under any legal  provision to carry out the Merger,  and all
consents required to be obtained in connection with the Merger in order to avoid
a default under any contract, agreement, commitment, lease, mortgage, instrument
or other  document  to or by which  any of Surf City is a party or may be bound,
shall have been obtained on terms reasonably satisfactory to Harvest.

          9.01.6 Filings.  A duly certified,  executed and acknowledged  copy of
articles  of merger  with  respect to the Merger  shall have been filed with the
appropriate  Secretary in accordance  with  applicable law and a duly certified,
executed and  acknowledged  copy of this  Agreement,  or a certificate of merger
with respect  thereto,  shall have been filed with the appropriate  Secretary in
accordance with applicable law.

     90.02. Conditions Precedent to Performance by Surf City. The obligations of
Surf City under this Agreement are subject to the  satisfaction of the following
conditions  (any or all of  which  may be  waived  by Surf  City in  their  sole
discretion to the extent permitted by law):

          9.02.1  Board and  Stockholder  Approval.  The Merger  shall have been
effectively  adopted and approved at or prior to the Effective Date by the Board
of  Directors  of  Harvest  and  stockholders  of  Harvest  in  accordance  with
applicable law and Harvest shall have delivered such certificate and evidence of
the same as reasonably requested by Surf City.




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          9.02.2    Representations   True   and   Covenants   Performed.    The
representations  and  warranties  of Harvest set forth  herein shall be true and
correct in all material  respects  immediately  prior to the Effective Date with
the same  effect as if made at that  time.  Harvest  shall  have  performed  all
obligations  and complied  with all covenants  required by this  Agreement to be
performed  or  complied  with by them on or prior  to the  Effective  Date.  The
President  of  Harvest  shall  have  delivered  to  Surf  City  and  Kootenay  a
certificate to such effect.

          9.02.3 No Litigation  Affecting Merger. No judgment,  decree, order or
ruling of any court or  regulatory  or  governmental  authority  shall have been
issued or entered  against  Harvest which would be violated by the completion of
the Merger, and no person or entity which is not a party to this Agreement shall
have commenced any litigation  against  Harvest seeking to restrain or prohibit,
or to obtain  substantial  damages in  connection  with,  this  Agreement or the
transactions contemplated hereby.

          9.02.4 Securities Laws. All approvals,  consents, permits, licenses or
qualifications from authorities  administering the securities or "blue-sky" laws
of any state having  jurisdiction  required for the  consummation  of the Merger
shall have been obtained and shall be effective.

          9.02.5 Regulatory Compliance,  Approvals and Consents. Surf City shall
have  complied  with all legal  provisions  applicable  to the  Merger,  and all
approvals  required under any Legal Provisions to carry out the Merger,  and all
consents required to be obtained in connection with the Merger in order to avoid
a default under any contract, agreement, commitment, lease, mortgage, instrument
or other document to or by which Harvest is a party or may be bound,  shall have
been obtained on terms reasonably satisfactory to Surf City and Kootenay.

          9.02.6 Filings.  A duly certified,  executed and acknowledged  copy of
this Agreement, or a certificate of merger with respect thereto, shall have been
filed with the appropriate state Secretary in accordance with applicable law and
a duly  certified,  executed  and  acknowledged  copy of articles of merger with
respect to the Merger  shall have been filed with the  appropriate  Secretary in
accordance with applicable law.

                                   ARTICLE X.
                                     NOTICES

     10.01  Notices.  All notices,  requests,  demands and other  communications
required or permitted to be given  hereunder or with respect  hereto shall be in
writing, and may be given by (a) personal service, (b) first-class United States
mail postage prepaid,  (c) overnight  delivery  service,  charges prepaid or (d)
telecopy or other means of electronic transmission, if confirmed promptly by any



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of the methods specified in clauses (a) (c) of this sentence, and will be deemed
to have  been  duly  given  or  made  when  delivered  personally,  when  mailed
first-class, postage prepaid, registered or certified mail when delivered to the
telegraph company, charges prepaid or when sent by electronic  transmission,  to
the respective parties, as follows:

                 If to Harvest:

                 Harvest Restaurant Group, Inc.
                 1250 N.E. Loop 410, Suite 335
                 San Antonio, Texas  78209
                 Attention:  William J. Gallagher

                 If to Kootenay Holdings, L.L.C. or Surf City Squeeze, Inc.

                 Surf City Squeeze, Inc.
                 c/o Suite B-252 Scotsdale Centre
                 7373 North Scottsdale Road
                 Scottsdale, Arizona  85253-3527

     10.02 Change of Address.  Any of the parties  hereto may change the address
to which such  communications  are to be directed to it or him by giving written
notice to the other parties in the manner provided in Section_10.01

                                   ARTICLE XI.
                                     GENERAL

     11.01 Governing Law. This Agreement and the performance of the transactions
contemplated  hereby  shall  be  governed  by  and  construed  and  enforced  in
accordance with the laws of Texas,  notwithstanding any contrary  application of
conflicts of laws principles.

     11.02 Press Releases. The parties hereto agree to use their best efforts to
coordinate  the  preparation  of and making of any public  announcements  of the
transactions   contemplated  by  this  Agreement.  No  such  release  or  public
announcement  pertaining to the transactions  contemplated by this Agreement may
be made by either party  without the prior  consent of the other  party,  unless
such release or announcement is required by law.

     11.03 Entire  Agreement.  This  Agreement and the Schedules  hereto and the
agreements,  documents and instruments  referred to herein, set forth the entire
agreement  and  understanding  of the  parties in  respect  of the  transactions
contemplated  hereby  and  supersede  all  prior  agreements,  arrangements  and
understandings  relating to the subject matter hereof,  whether oral or written.
The  parties  hereto  have  not  relied  upon  any  promises,   representations,
warranties,  agreements,  covenants or undertakings,  other than those expressly
set forth or referred to herein.




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     11.04 Successors. All of the terms, covenants, representations,  warranties
and conditions of this Agreement shall be binding upon, and inure to the benefit
of and be enforceable  by, the parties hereto and their  respective  successors,
heirs,  and other legal  representatives,  but this Agreement and the rights and
obligations  hereunder shall not be assigned,  except that Harvest may assign or
transfer any of its rights and  obligations  hereunder to any of its  affiliates
without Surf City's or the Shareholder's consent.

     11.05 Modification.  No amendment,  modification or attempt to supersede or
cancel any of the terms,  covenants,  representations,  warranties or conditions
hereof shall be effective  unless such  amendment,  modification or direction to
supersede or cancel such term, covenant,  representation,  warranty or condition
is in writing executed by Harvest, Surf City, or, in the case of a waiver, by or
on  behalf  of the  party  waiving  compliance.  No  waiver  by any party of any
condition,  or of any breach of any term,  covenant,  representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
a further or  continuing  waiver of any such  condition or breach or a waiver of
any other condition or of any breach of any other term, covenant, representation
or warranty.

     11.06 Counterparts. This Agreement and any amendment or modification hereof
may be executed simultaneously in two or more counterparts,  each of which shall
be deemed an original,  but all of which taken together shall constitute one and
the same instrument.

     11.07 Signatures by Facsimile.  Any facsimile signature of any party hereto
shall constitute a legal, valid and binding execution hereof by such party.

     11.08  Arbitration.  In the event of a dispute  between the parties arising
under this Agreement,  the parties shall submit to binding  arbitration before a
single  arbitrator in a neutral city, under the Commercial  Arbitration Rules of
the American  Arbitration  Association.  The decision of the arbitrator shall be
final and binding with respect to the dispute  subject to arbitration  and shall
be enforceable in any court of competent jurisdiction. Each party shall bear its
own expenses and costs incurred in such  arbitration.  Nothing in this paragraph
shall  derogate  from the rights of the parties to seek  preliminary  injunctive
relief to preserve the status quo.


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     IN WITNESS  WHEREOF,  the parties  hereto have duly executed this Agreement
and Plan of Merger as of the date first above written.

HARVEST RESTAURANT GROUP, INC.             SURF CITY ACQUISITION
                                           CORPORATION II, INC.



By:_____________________________
Title: Chairman & Chief Executive Officer  By:  William J. Gallagher    
                                           Title:  President

                                           KOOTENAY HOLDINGS, L.L.C.


                                           By:__________________________________

                                           Title: ______________________________







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