CONVERTIBLE SECURED NOTE

$________________________                                    Date:______________

     1. FOR VALUE RECEIVED,  ___________________,  a ________  corporation  (the
"Company"),  promises to pay to the order of Harvest Restaurants,  Inc., a Texas
corporation ("Harvest"),  pursuant to the Secured Loan Agreement (as hereinafter
defined),  at such place as Harvest may from time to time  designate in writing,
in lawful  money of the United  States of America and in  immediately  available
funds, the principal sum of  ___________________Dollars  ($____________) and any
interest  thereon  or, if less,  the  aggregate  unpaid  amount of the Loan made
pursuant to Section 1.1 of the Loan Agreement and any interest thereon.

     2. This Note  evidences  the Loan made under and is executed and  delivered
pursuant to a Secured Loan  Agreement  dated of even date  herewith  between the
Company and Harvest (the "Secured Loan Agreement"), to which reference is hereby
made for a statement  of the terms and  conditions  under which this Note may be
repaid and  accelerated  and for a description  of the  collateral  and security
securing this Note.  Capitalized  terms not otherwise  defined herein shall have
the meanings described to them in the Secured Loan Agreement.

     3. Interest shall accrue on the aggregate  outstanding principal balance of
the Loan,  for the  period  commencing  on the date an Advance is made until the
Loan is paid in full,  at a per annum  rate equal to the rate  announced  by the
Frost National Bank, or its successor in interest (the "Bank") from time to time
as its "Prime  Rate" in effect at its office in San  Antonio,  Texas,  plus four
percent  (4%).  The interest  rate shall be adjusted,  from time to time, on the
same day on which  the Bank  adjusts  its  "Prime  Rate." As of the date of this
Agreement,  the  Bank's  Prime  Rate  is  _____%.  Interest  on the  outstanding
principal  amount of the Loan shall be payable on the dates set forth herein and
at maturity (whether at stated maturity, by acceleration or otherwise). Interest
shall be computed on the basis of a 360-day  year and the actual  number of days
elapsed.

     4.  From  the date of the  first  Advance  to and  through  the  Draw  Loan
Termination  Date,______________,  the Company shall pay to Harvest  interest on
the  outstanding  principal  balance of the Loan on the first day of each Retail
Period (hereinafter  defined),  commencing on the first day of the Retail Period
immediately  following the Retail Period in which the Company initially draws on
the Loan under this Agreement.

     5.  From the  close of  business  on the Draw Loan  Termination  Date,  the
outstanding  principal amount of the Loan and all accrued interest thereon shall
be payable as  follows:  the  principal  balance of the Loan shall be payable to
Harvest  in  sixty-five  (65)  installments  of  principal  (the  amount of each
periodic principal  installment shall be determined by dividing the loan balance
by one hundred thirty [130]) plus accrued interest,  on the first day of each of
Harvest's  thirteen  (13)  consecutive  four-week  accounting  periods  used for
accounting  purposes (each such four- week period shall be referred to herein as
a "Retail Period"), commencing on the first day of the Retail Period immediately
following  the  Draw  Loan  Termination  Date  and  continuing   thereafter  for
sixty-five (65) Retail Periods,  when the entire remaining  principal balance of
the Loan and all interest accrued thereon shall be due and payable.




CONVERTIBLE SECURED NOTE                                                  PAGE 1


<PAGE>



     6. Any principal  payment due under this Note not paid when due, whether at
stated maturity, by notice of repayment, by acceleration or otherwise, shall, to
the extent permitted by applicable law,  thereafter bear interest at the maximum
rate  allowed by law until  such  unpaid  amount has been paid in full  (whether
before or after judgment).

     7. This  Note may not be  prepaid  at any time  without  the prior  written
consent of Harvest,  which consent may be withheld in its sole  discretion.  All
payments  made  hereunder  shall  be  applied  first  to  interest  and  then to
outstanding principal.

     8. If payment  hereunder  becomes due and payable on a Saturday,  Sunday or
legal  holiday,  the due date thereof  shall be extended to the next  succeeding
business day.

     9. Harvest,  in its sole discretion and without obligation on Harvest to do
so, may  advance  and pay sums on behalf and for the  benefit of the Company for
costs  necessary for the  protection  and  preservation  of the  collateral  (as
described  in the  Security  Agreement  of even date  herewith  executed  by the
Company for the benefit of Harvest)  securing this Note and other costs that may
be  appropriate,  in Harvest's  sole  discretion,  including but not limited to,
insurance premiums, ad valorem taxes, and attorneys' fees. Any sums which may be
so paid out by Harvest including all sums paid for insurance premiums, or costs,
expenses,  and attorneys'  fees paid in any suit  affecting the collateral  when
necessary to protect the lien hereof shall bear  interest from the dates of such
payments at the  interest  rate  applied to the  matured and past due  principal
balance of this Note and shall be paid by Company to Harvest upon demand, at the
same place at which this Note is payable, and shall be deemed a part of the debt
and recoverable as such in all aspects.

     10. Any assumption by any other person, partnership,  corporation,  limited
liability  company,  organization  or any other entity of the obligations of the
Company shall only be effective upon the written consent of Harvest and any such
assumption with Harvest's consent shall not release the liability of the Company
for payment of the Note unless expressly released by Harvest.

     11.  Payment of this Note is secured by a Security  Agreement  of even date
executed by the Company  covering the rights and properties more fully described
therein.

     12. Company and all sureties, endorsers, guarantors and any other party now
or  hereafter  liable for the payment of this Note in whole or in party,  hereby
severally:  (i)  expressly  waive all demands  for  payment,  presentations  for
payment, notices of intention to accelerate maturity, notices of acceleration of
maturity, protests, notices of protest, diligence, notice of dishonor and all of
the notice,  filing of suit and diligence in  collecting  this Note or enforcing
any of the  security  herefor,  (ii) agree to any  substitution,  subordination,
exchange or release of any such  security or the release of any party  primarily
or secondarily liable hereon,  (iii) agree that Harvest shall not be required to
first institute suit or exhaust its remedies hereon against the Company or other
liable or to become liable  hereon or to enforce its rights  against them or any
security  herefor,  and (iv) consent to any extension or postponement of time of
payment of this Note and to any other  indulgence  with respect  hereto  without
notice to any of them.




CONVERTIBLE SECURED NOTE                                                  PAGE 2


<PAGE>



     13. In the event all or any part of the Collateral  secured by this Note or
all or any  part of the  stock  or  partnership  interests  or  other  ownership
interests in the Company are sold,  conveyed,  or otherwise  disposed of without
the prior written  consent of Harvest,  the maturity of this Note, at the option
of Harvest,  shall be accelerated and Harvest may immediately  demand payment of
the then outstanding principal sum together with all accrued and unpaid interest
due thereon.

     14. If default is made in the  payment of any  installment  hereof,  either
principal  or  interest,  or in the  payment  of any  other  sum due  hereunder,
promptly  when the same shall be due and payable  hereunder,  or if there is any
default under any instrument  which secures the payment of this Note or which is
executed in connection  with the Loan evidenced by this Note,  then Harvest,  in
addition  to its  other  remedies  hereunder  and  the  Loan  Agreement  and any
instrument which secures the payment of this Note or at law or in equity,  shall
have the right and  option,  without  notice or demand,  to  declare  the unpaid
balance of principal  and interest and all other sums owing on this Note at once
due and payable.  If this Note is not paid at its  maturity,  regardless  of how
such maturity may be brought about, Harvest may foreclose the liens and security
interests  securing payment hereof or exercise any of its other rights hereunder
or the Loan Agreement or under any instrument which securest the payment of this
Note,  or at law or in equity.  Failure to exercise any such rights upon default
shall not constitute a waiver of the right to exercise any of them at any time.

     15. If there is any default under this Note, and this Note is placed in the
hands  of an  attorney  for  collection,  or is  collected  through  any  court,
including  any  bankruptcy  court,  the Company and all parties now or hereafter
liable hereon agree to and promise to pay to the order of the holder hereof such
holder's  reasonable  attorneys'  fees and court costs incurred in collecting or
attempting to collect or securing or attempting to secure this Note or enforcing
the holder's  rights with respect to the Collateral to the extent allowed by the
laws of the  State of Texas or any state in which any  Collateral  is  situated,
including reasonable  attorneys' fees of not less than 10% of the unpaid amounts
and all other costs incurred by Harvest.

     16. THE COMPANY AND ANY GUARANTOR  AGREE TO GIVE HARVEST  WRITTEN NOTICE OF
ANY  ACTION OR  INACTION  BY  HARVEST  OR ANY AGENT OR  ATTORNEY  OF  HARVEST IN
CONNECTION WITH THIS NOTE OR THE LOAN THAT MAY BE ACTIONABLE  AGAINST HARVEST OR
ANY AGENT OR  ATTORNEY  OF  HARVEST  OF A DEFENSE TO PAYMENT OF THE LOAN FOR ANY
REASON,  INCLUDING, BUT NOT LIMITED TO, COMMISSION OF A TORT OF VIOLATION OF ANY
CONTRACTUAL  DUTY OR DUTY  IMPLIED BY LAW.  THE COMPANY  AGREES THAT UNLESS SUCH
NOTICE IS DULY GIVEN AS PROMPTLY AS POSSIBLE  (AND IN ANY EVENT  WITHIN TEN (10)
CALENDAR  DAYS) AFTER THE COMPANY  AND/OR  GUARANTOR  HAS  KNOWLEDGE OR WITH THE
EXERCISE OF REASONABLE DILIGENCE SHOULD HAVE HAD KNOWLEDGE OF ANY SUCH ACTION OR
INACTION,  THE  COMPANY  AND  GUARANTOR  SHALL NOT  ASSERT,  AND THE COMPANY AND
GUARANTOR  SHALL  BE  DEEMED  TO HAVE  WAIVED,  ANY  CLAIM  OR  DEFENSE  ARISING
THEREFROM.

     17. This Loan shall be governed by and construed in  accordance  with Texas
law and applicable federal law. The parties hereto intend to conform strictly to
the applicable usury laws. In no event, whether by reason of acceleration of the




CONVERTIBLE SECURED NOTE                                                  PAGE 3


<PAGE>


maturity  hereof or  otherwise,  shall the  amount  paid or agreed to be paid to
Harvest for the use,  forbearance  or detention of money  hereunder or otherwise
exceed the maximum amount  permissible  under  applicable law. If fulfillment of
any  provision  hereof  or of any  note  or  other  document  now  or  hereafter
evidencing,  securing or pertaining to the indebtedness evidenced hereby, at the
time performance of such provision shall be due, would involve  transcending the
limit of validity  prescribed by law, then the obligation to be fulfilled  shall
be reduced  automatically  to the limit of such validity.  If Harvest shall ever
receive  anything of value  deemed  interest  under  applicable  law which would
exceed  interest at the highest lawful rate, an amount equal to any amount which
would have been  excessive  interest  shall be applied to the  reduction  of the
unpaid principal amount owing hereunder in the inverse order of its maturity and
not to the  payment  of  interest,  or if such  amount  which  would  have  been
excessive  interest exceeds the unpaid balance of principal hereof,  such excess
shall be refunded to the Company.  All sums paid or agreed to be paid to Harvest
for the use,  forbearance or detention of the indebtedness of Company to Harvest
shall,  to the extent  permitted  by  applicable  law, be  amortized,  prorated,
allocated,  and spread  throughout the full stated term of such  indebtedness so
that the amount of interest on account of such  indebtedness does not exceed the
maximum  permitted by applicable  law. The  provisions of this  paragraph  shall
control all existing and future agreements between the Company and Harvest.

     18. THIS NOTE HAS BEEN  DELIVERED  IN, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED  THEREIN  WITHOUT  REGARD TO THE CONFLICTS OF LAW PROVISIONS
THEREOF. IN THE EVENT ANY ITEM, TERMS OR PROVISIONS CONTAINED IN THIS INSTRUMENT
ARE IN  CONFLICT  WITH THE LAWS OF THE  STATE OF TEXAS,  OR  FEDERAL  LAW,  THIS
INSTRUMENT  SHALL BE AFFECTED ONLY AS TO ITS APPLICATION TO SUCH ITEM,  TERMS OR
PROVISIONS, AND SHALL IN ALL OTHER RESPECTS REMAIN IN FULL FORCE AND EFFECT.

          19.1  Harvest  or any  subsequent  holder of this  Note  (collectively
referred to in this section as "Holder")  shall have the right, at such Holder's
option,  at any time  after  the  earlier  of any  acceleration  of this Note or
______________  and up to the date on which the Company has properly  repaid the
outstanding  principal  balance of the Loan and all accrued  interest thereon in
full,  subject to the terms and provisions of this Note and the Loan  Agreement,
to convert all or any portion of the outstanding  principal balance of this Note
into shares of common stock of the Company (the "Common  Stock"),  at an initial
price per share of $___________ , subject to price adjustment as provided herein
and the Loan Agreement (the  "Conversion  Price").  After the Company has opened
____ Restaurants  under the Company's Area  Development  Agreement with Harvest,
the price per share which  Holder  shall pay for the common stock of the Company
pursuant to this  conversion  right shall  increase from the initial  Conversion
Price per share every time the Company opens an additional  Restaurant under the
Company's  Area  Development  Agreement  with  Harvest by fifty cents ($.50) per
share beginning with the ____ Restaurant up to and through the ___ Restaurant to
a maximum Conversion Price per share of $_______.

          19.2  Conversion of any portion of the  principal  balance of the Loan
shall not relieve the  Company of its  obligation  to pay any accrued but unpaid
interest through the date of conversion on the portion of the principal  balance
of the Loan so converted.  In no event shall interest be convertible into shares




CONVERTIBLE SECURED NOTE                                                  PAGE 4


<PAGE>


of common stock in the Company. Upon such conversion,  that portion of principal
so converted  shall be deemed to be paid in full upon the delivery to the holder
of the Note of a certificate or certificates  representing  the proper number of
shares of common  stock of the  Company  to be issued to the  holder of the Note
upon  such  conversion.  To the  extent  that any  portion  of this  Note is not
converted into shares of Common Stock,  such portion shall remain a secured debt
of the Company  payable in accordance  with the terms of the Loan  Agreement and
this Note.  In the event this Note is to be converted in part only,  the Company
shall upon surrender of this Note, execute and deliver to the Holder thereof, at
the expense of the  Company,  a new Note in the  principal  amount  equal to the
unconverted portion of this Note.

          19.3 Holder may exercise this right of conversion by first  submitting
to the Company a written notice of its election to convert ("Conversion Notice")
the  specified  portion  of the  outstanding  principal  of this  Note  into the
specified  number of shares to be issues to the  specified  name or names (along
with their  addresses)  in which the  certificate(s)  evidencing  such shares of
Common Stock shall be issued.  Holder's  conversion  right and Conversion  Price
shall be fixed upon delivery of such written notice, delivery being deemed given
upon actual delivery or on the second day after the notice is deposited with the
United States Post Office,  postage  prepaid,  certified  mail,  return  receipt
requested.  As soon as practical after delivery of the Conversion  Notice to the
Company  but in no event  more than  ______  (___) days  after  delivery  of the
Conversion  Notice,  the Company and Holder shall close on the conversion by the
Holder  delivering  this  Note  properly  endorsed  for  the  conversion  of the
specified  principal  amount  to  the  Company  and  the  Company  delivering  a
certificate  or  certificates  representing  the number of fully paid  shares of
Common Stock and a new Note for any unconverted  portion of the principal amount
hereof. Such conversion shall be deemed to have been made immediately before the
close of  business  on the date that this Note shall have been  surrendered  for
conversion,  so that the rights of the Holder of this Note as a noteholder shall
cease at such time and the person or persons  entitled  to receive the shares of
Common Stock upon  conversion  of this Note shall be treated for all purposes as
having  become the record  holder or holders of such  shares of Common  Stock at
such time. If the last day for the exercise of the conversion right shall not be
a  business  day,  then  such  conversion  right  may be  exercised  on the next
succeeding business day.


          19.4 In case of any  reclassification  or change of outstanding shares
of  Common  Stock  issuable  upon  conversion  of this  Note,  or in case of any
consolidation   or  merger  of  the  Company  with  or  into  any   partnership,
corporation,  or other  entity  (other than a merger in which the Company is the
surviving  corporation  and which  does not  result in any  reclassification  or
change of outstanding  shares of Common Stock,  other than a change in number of
shares  issuable  upon  conversion  of this  Note)  or in  case  of any  sale or
conveyance to any partnership,  corporation,  or other entity of the property of
the Company as an entirety or substantially  as an entirety,  then the holder of
this Note shall have the right thereafter to convert this Note into the kind and
amount of shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale, or conveyance by a holder
of the number of shares of Common Stock of the Company  issuable upon conversion
of this Note immediately prior to such reclassification,  change, consolidation,
merger,  sale, or conveyance,  subject to  adjustments  which shall be as nearly
equivalent as may be practicable to the adjustments provided for herein.




CONVERTIBLE SECURED NOTE                                                  PAGE 5


<PAGE>



          19.5 The  Conversion  Price shall be adjusted in the event the Company
shall at any time (i) make a  subdivision  of or combine  shares of Common Stock
outstanding or (ii) pay a dividend or make a  distribution  in cash, in kind, or
in  securities  of any kind.  In the event the Company  makes a  subdivision  of
shares of Common Stock or pays a dividend or makes a  distribution  in cash,  in
kind, or in securities of any kind, the Conversion  Price in effect  immediately
prior to such  action  shall be  appropriately  decreased,  and in the event the
Company  shall at any time combine the shares of Common Stock  outstanding,  the
Conversion  Price  in  effect  immediately  prior to such  combination  shall be
appropriately increased. An adjustment made pursuant to this Section 19.5 shall,
in the event of a subdivision or  combination,  become  effective  retroactively
immediately  after the  effective  date  thereof,  and shall,  in the event of a
dividend or distribution,  become effective retroactively  immediately after the
record date for the determination of stockholders entitled thereto. Whenever the
Conversion  Price is adjusted,  pursuant to this Section 19.5, the Company shall
promptly  cause a notice to be given to the Holder of this Note which will state
the adjusted Conversion Price.

          19.6 The Company  covenants that it will at all times reserve and keep
available out of its authorized  Common Stock solely for the purpose of issuance
upon conversion of this Note as herein provided, such number of shares of Common
Stock as shall be issuable upon the conversion of the entire  Maximum  Principal
Balance of the Loan. The Company covenants that all shares of Common Stock which
shall be so  issuable  shall be duly  and  validly  issued  and  fully-paid  and
non-assessable.

          19.7 The Company  covenants  that if any shares of Common  Stock to be
issued upon conversion of this Note require registration with or approval of any
governmental  authority under any federal or state law before such shares may be
issued upon conversion, the Company will, at its expense and as expeditiously as
possible,  cause such shares to be duly registered or approved,  as the case may
be.

          19.8 The issuance of certificates  for shares of Common Stock upon the
conversion  of  this  Note  shall  be  made  without  charge  to the  converting
Noteholder for any tax in respect of the issuance of such certificates, and such
certificates  shall be issued in the names as may be  directed  by the Holder of
this Note; provided,  however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the Holder of this
Note,  and  the  Company  shall  not  be  required  to  issue  or  deliver  such
certificates  unless  and until the person or parsons  requesting  the  issuance
thereof  shall  have paid to the  Company  the  amount of such tax or shall have
established to the reasonable satisfaction of the Company that such tax has been
paid.

     20. The Company and Harvest further agree as follows:

          20.1 Any and all controversies between the parties shall be settled by
arbitration,   in  accordance  with  the  commercial   arbitration  rules,  then
obtaining,  of the American Arbitration  Association.  Any arbitration hereunder
shall be  before  at  least  three  arbitrators  associated  with  the  American
Arbitration   Association   and  selected  in  accordance  with  the  commercial
arbitration  rules of the  American  Arbitration  Association.  The award of the
arbitrators,  or of a majority of them,  shall be final,  and judgment  upon the
award  rendered  may  be  entered  in  any  court,  state  or  federal,   having
jurisdiction.



CONVERTIBLE SECURED NOTE                                                  PAGE 6


<PAGE>




          20.2 Arbitrable  Disputes include any and all  controversies or claims
between the parties, of whatsoever type or manner,  including any claim based on
contract, tort, or statute, and including without limitation,  any claim arising
out of or relating to this  agreement or any other  proposed or actual loan, all
past, present,  and/or future agreements involving the parties, any transactions
between or  involving  the  parties  and/or  any aspect of the past,  present or
future  relationship  of the  parties,  whether  related  to  lending  funds  or
otherwise, specifically including any alleged tort committed by either party.

          20.3  Depositions  may be taken and other  discovery  obtained  in any
arbitration  under  this  agreement.  Within  thirty  (30)  days  of the  date a
responsive  pleading  is  filed in any  arbitration  proceeding  hereunder,  all
parties  shall  serve on all other  parties  in initial  disclosure  as would be
required by rule 26, federal rules of civil procedure.


          20.4 For purposes of this provision,  "the parties" means the Company,
Harvest, any guarantor,  beneficiary, trustee, successor or assigns, all persons
and entities signing this or any other agreements,  security instruments, and/or
guarantees,  executed  heretofore or  contemporaneously  with and as part of the
same  transaction  with  this  agreement.   "The  parties"  shall  also  include
individual partners, shareholders, officers, directors, employees, agents and/or
representatives  of any party of those  documents,  and shall  include any other
owner and holder of the loan documents.

          20.5 The  parties  shall have the right to invoke  self-help  remedies
(such as set-off, notification of account debtors, seizure and/or foreclosure of
collateral,  and  non-judicial  sale of  personal  property  and  real  property
collateral) before,  during or after any arbitration and/or to request ancillary
or provisional  judicial  remedies (such as  garnishment,  attachment,  specific
performance,  receiver,  injunction or  restraining  order,  and  sequestration)
before or after any  arbitration.  The parties need not await the outcome of the
arbitration  before  using  self-help  remedies.  Use of  self-help or ancillary
and/or  provisional  remedies  shall not  operate as a waiver of either  party's
right to compel arbitration.

          20.6 The  parties  agree that any  action  regarding  any  controversy
between the parties shall either be brought by arbitration, as described herein,
or by judicial proceedings, but shall not be pursued simultaneously in different
or alternative  forums.  This  provision  shall not operate to limit the parties
from the pursuing self-help remedies before,  during or after any arbitration is
described  in  paragraph  20.5  above.  A timely  written  notice  of  intent to
arbitrate  pursuant to this agreement  stays and/or abates all action in a trial
court,  save and except a hearing on a motion to compel  arbitration  and/or the
entry  of an  order  compelling  arbitration  and  staying  and/or  abating  the
litigation pending the filing of the final award of the arbitrators.

          20.7 Any  aggrieved  party shall  serve a written  notice of intent to
arbitrate  to any and all  opposing  parties  within 360 days after  dispute has
arisen.  A dispute  is defined to have  arisen  only upon  receipt of service of




CONVERTIBLE SECURED NOTE                                                  PAGE 7


<PAGE>


judicial  process or of a complaint in  arbitration.  Failure to serve a written
notice of intent to arbitrate within the time specified above shall be deemed. A
waiver of the aggrieved  party's right to compel  arbitration of such claim. The
issue of waiver pursuant to this agreement is an arbitrable dispute.

          20.8 Active  participation  in pending  litigation  during the 360 day
notice period,  whether as plaintiff or defendant,  is not a waiver of the right
to compel  arbitration.  All discovery obtained in the pending litigation may be
used in any subsequent arbitration proceeding.

          20.9 Any  arbitrator  selected shall be  knowledgeable  in the subject
matter of the  dispute.  Qualified  retired  judges  shall be selected  whenever
possible through panels maintained by the american arbitration association. Each
of the parties  shall pay an equal share of the  arbitration  costs,  fees,  and
expenses, and of the arbitrators' costs, fees, and expenses.

          20.10 All statutes of limitations  which would otherwise be applicable
shall apply to any arbitration  proceeding hereunder and the commencement of any
arbitration proceeding tolls such limitations.

          20.11 In any arbitration proceedings subject to these provisions,  the
arbitrators,  or a majority of them, are  specifically  empowered to decided (by
documents  only,  or  with a  hearing,  at  the  arbitrators'  sole  discretion)
pre-hearing  motions which are substantially  similar to pre-hearing  motions to
dismiss and motions for summary adjudication.

          20.12 The  provisions of this section  shall survive any  termination,
amendment,  or  expiration  of the agreement in which this section is contained,
unless all the parties otherwise expressly agree in writing.

          20.13  The  parties   acknowledge  that  this  agreement  evidences  a
transaction involving interstate commerce in that funds which may be advanced or
committed under this agreement are derived from interstate and/or  international
financial markets.  The federal arbitration act shall govern the interpretation,
enforcement,  and  proceedings  pursuant  to  the  arbitration  clause  in  this
agreement.

          20.14 The  arbitrators,  or a majority of them, shall award attorney's
fees and costs to the prevailing party pursuant to the terms of this agreement.

          20.15 Venue of any arbitration  proceeding  hereunder will be in Bexar
County, Texas.

     21. THIS NOTE IS PAYABLE IN FULL AT MATURITY.  AT MATURITY THE COMPANY MUST
REPAY THE ENTIRE  PRINCIPAL  BALANCE OF THIS NOTE AND UNPAID  INTEREST THEN DUE.
HARVEST IS UNDER NO  OBLIGATION  TO  REFINANCE  THIS NOTE AT THAT TIME.  COMPANY
WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS THE COMPANY MAY
OWN, OR COMPANY  WILL HAVE TO FIND A LENDER,  WHICH MAY BE  HARVEST,  WILLING TO
LEND COMPANY THE MONEY. IF COMPANY REFINANCES THIS NOTE AT MATURITY, COMPANY MAY
HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATES WITH A NEW LOAN
EVEN IF THE COMPANY OBTAINS REFINANCING FROM HARVEST.



CONVERTIBLE SECURED NOTE                                                  PAGE 8


<PAGE>



     IN WITNESS WHEREOF,  the Company has caused this Note to be executed in its
corporate name by its undersigned duly authorized  officer on  _________________
to be effective



                                           



                                           By:__________________________________
                                           Name: _______________________________

Title:________________________________






CONVERTIBLE SECURED NOTE                                                  PAGE 9