Document:

NuVox, Inc. Form 10K - Exhibit 10.19

Exhibit 10.20

EMPLOYMENT AGREEMENT

               
This Employment Agreement ("Agreement") is made and entered into as of the 16th day of October,
2001, by and between NuVox, Inc. and Gabriel Communications Properties, Inc., Delaware corporations (the
"Company"), and Josephine Young ("Executive").

               
WHEREAS, Executive desires to continue to be employed by the Company, and the Company desires
to continue to employ Executive, upon the terms and conditions hereinafter set forth.

               
NOW, THEREFORE, in consideration of the compensation and other benefits of Executive's
employment by the Company and the recitals, mutual covenants and agreements hereinafter set forth, Executive and
the Company agree as follows:

               
1.          Employment Services.

               
            
(a)        During the Employment Period (as defined below), the Company agrees to
employ Executive, and Executive agrees to serve the Company, in Executive’s present capacity as
Senior Vice President - Chief Information Officer of the Company or in another executive capacity with responsibilities
substantially equivalent to Executive’s present responsibilities. Executive
will devote substantially her entire business time and best efforts during the
Employment Period to the performance of her duties, as now or hereafter
prescribed by the Company’s By-Laws or assigned by the Board of Directors
of the Company (the “Board”) or the Chief Executive Officer of the
Company, including service in her present offices or other offices with the
Company and its subsidiary and associated companies to which she is or hereafter
may be elected or appointed; provided, however, that without the consent of
Executive, Executive may not be required to regularly perform her duties at any
location that is more than twenty-five (25) miles from the present principal
executive offices of the Company. 

               
            
(b)        Executive shall not, during the Employment Period, become or serve as a
director, officer, employee
or member of any entity conducting, nor become an owner of any substantial
interest in any entity conducting, a business in substantial competition with
the Company’s business. 

               
2.          Term of Employment.       The term of this Employment Agreement (the "Employment Period")
shall be the two (2) year period from the date hereof to and including October 31, 2003 (the "Initial Period"),
and shall thereafter continue from year to year (each an "Annual Extension"), unless sooner terminated as
provided in the second sentence of  this Section 2 or in Section 4 hereof.  Unless sooner terminated as provided
in Section 4 hereof, the Employment Period may be terminated by either the Company or Executive, at the end of
the Initial Period or an Annual Extension, if a written notice of nonrenewal is delivered to the other party at
least six (6) months prior to the end of such Initial Period or Annual Extension, as the case may be.

               
3.          Compensation and Benefits.

               
            
(a)        Annual Base Salary.       During the Employment Period, the Company shall pay
Executive as compensation for her services an annual base salary in an amount determined by the
Compensation Committee of the Board. Such annual base salary shall be at the
annual rate of not less than One Hundred Seventy Five Thousand Dollars ($175,000)
from the Effective Date through December 31, 2001. Executive’s annual base
salary rate shall be reviewed at least annually for increase in the discretion
of the Compensation Committee; Executive’s annual base salary rate shall
not be subject to decrease at any time during the Employment Period other than
as a result of an across the board adjustment affecting all of the
Company’s most senior executives proportionately. Executive’s base
salary shall be payable in accordance with the Company’s usual practices. 

               
            
(b)        Annual Bonus.       During the Employment Period, Executive shall be eligible for
an annual bonus under a
bonus program to be established by the Compensation Committee of the Board and
approved by the Board. Under the bonus program, Executive’s annual bonus
will be tied to performance criteria and Executive is expected to be eligible
for a bonus of thirty to forty percent (30-40%) of her annual base salary. 

               
            
(c)        Benefits.       During the Employment Period, Executive shall also
(i)  be eligible
to participate in all
benefit programs from time to time maintained by the Company for the benefit of
its most senior executives including without limitation, its group medical,
dental and term life insurance coverages, 401 (k) Plan, the NuVox, Inc. 2001
Stock Incentive Plan (“Stock Plan”) and the NuVox, Inc. 2001
Performance Plan (the “Performance Plan”), in each case on and subject
to the terms and conditions of each of such programs as such programs apply to
the Company’s most senior executives, and (ii) be entitled to four (4)
weeks of paid vacation per year. Executive’s benefits shall include the
following which have been awarded as of the date of, and in connection with
Executive’s execution of, this Agreement: 

               
          2001 Performance Plan: Participation Grant - 2.75%

               
          2001 Stock Incentive Plan: Series F-1 Options - 375,000 shares @ $0.59 per share.

               
4.          Termination of Employment.       Prior to the expiration of the Employment Period, this
Agreement and Executive's employment may be terminated as follows:

               
            
(a)        Automatically upon Executive's death.

               
            
(b)        By the Company, upon thirty (30) day's prior written notice to Executive, in
the event the Board
believes that Executive, by reason of physical or mental illness, is unable to
perform a material portion of the services required of Executive hereunder for a
continuous one-hundred thirty-five (135) day period; in the event of a
disagreement concerning the existence of any such disability (in which event any
such termination shall not become effective until such disagreement shall have
been resolved), the matter shall be resolved by a disinterested licensed
physician chosen by the Company (such physician to be located within 50 miles of
Executive’s principal residence) and otherwise reasonably satisfactory to
the Executive or her legal representative. 

2

               
            
(c)        By the Company, for "Good Cause."  "Good Cause" shall mean:

	  
	                
          (1)
          The willful and continued failure of Executive to substantially
perform material duties assigned to Executive in accordance with Section 1(a) hereof
(other than any such failure resulting from incapacity due to physical or mental
illness);

	  
	                
          (2)
          A material breach of Section 1(b) of this Agreement by Executive; or

	  
	                
          (3)
          Executive's commission of fraud or willful conduct which
         significantly harms the Company or its subsidiaries or which significantly impairs Executive's ability
         to perform her duties.

	 	
For purposes of this definition, no act, or failure to act, shall be deemed
“willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that her action or omission was in the
best interest of the Company.

               
            
(d)        By the Company, without Good Cause, upon seven (7) days prior written notice
 to Executive. A termination
without Good Cause shall be deemed to exist upon any termination of Executive by
the Company other than as set forth in Sections 4(a), (b), (c) or (f) or upon
delivery by the Company of a notice of non-extension pursuant to Section 2. 

               
            
(e)        By Executive, following her determination that "Good Reason" for termination
exists.  "Good Reason" shall be deemed to exist if:

	  
	                
          (1)
          Executive's titles, duties, authorities or responsibilities are
         materially reduced or modified without Executive's consent, in her sole discretion, from those specified
         herein; or

	  
	                
          (2)
          A change in the location of the Company's executive offices to a
         location that is greater than 25 miles from its present location.

               
            
(f)        By the Company, following a Change of Control (as defined in the Stock Plan).

               
            
(g)        By Executive, upon ninety (90) days prior written notice to the
Company, for serious personal reasons that Executive believes makes it inadvisable for her to continue to perform
her services hereunder.

3

               
5.          Effect of Termination of Employment.     
  Upon termination of Executive's employment and
this Agreement, the rights and obligations of the parties pursuant to Sections 7 through 14 and Section 16 shall
be unaffected, but all other rights and obligations of the parties hereunder shall cease, except:

               
            
(a)        If this Agreement is terminated pursuant to Section 4(a) or (b), Executive (or
her estate) shall receive
her base salary and benefits (as applicable) accrued through the end of the
calendar month in which such termination occurs (including her then vested
Options and Participation Grants under the Stock Plan and the Performance Plan)
and her annual base salary and benefits (as applicable) for a period of twelve
(12) calendar months thereafter (according to the same payroll practices that
are in effect at the time of termination). In addition, Executive (or her
estate) shall receive a lump sum payment, within ten days of any such
termination, equal to the maximum bonus for which Executive was eligible in the
year in which such termination occurs, plus payment for her accrued but untaken
vacation for the portion of the year in which such termination occurs. Any
unvested Options and Participation Grants awarded granted to Executive under
terms of the terms of the Stock Plan and the Performance Plan shall be
forfeited. 

               
            
(b)        If this Agreement is terminated pursuant to Section 4(c) or 4(g), Executive
shall receive her base
salary and benefits accrued through the date of such termination of employment
(including her then vested Options and Participation Grants under the Stock Plan
and the Performance Plan). Any unvested Options and Participation Grants under
the terms of the Stock Plan and the Performance Plan shall be forfeited. 

               
            
(c)        If this Agreement is terminated pursuant to Section 4 (d), Executive shall
receive (i) her base salary
and benefits (as applicable) accrued through the end of the calendar month in
which such termination occurs, (ii) her base salary for a period of twelve (12)
calendar months thereafter (according to the same payroll practices that are in
effect at the time of termination), and (iii) her benefits (as applicable) for
the remainder of the Initial Period or for a period of twelve (12) months,
whichever is shorter, or for the remainder of the applicable Annual Extension,
as the case may be. In addition, Executive shall receive a lump sum payment for
her accrued but untaken vacation for the portion of the year in which such
termination occurs. Notwithstanding the terms of the Stock Plan and the
Performance Plan and any Options and Participation Grants awarded to Executive
thereunder and outstanding immediately prior to such termination, 1/36 of such
Options and Participation Grants shall become exercisable and fully vested for
each full month of continuous service with the Company subsequent to the date of
the grant thereof and for an additional twelve (12) full months thereafter (so
that, for example, if such termination occurs after eighteen months of
continuous service, 30/36 of such Options and Participation Grants would become
exercisable and fully vested), and the balance, if any, shall be forfeited. 

               
            
(d)        If this Agreement is
terminated pursuant to Section 4(e), Executive shall receive her base salary and
benefits (as applicable) for a period of twelve (12) calendar months after the
date of such termination (according to the same payroll practices that are in
effect at the time of termination). Any unvested Options and Participation
Grants under the terms of the Stock Plan and the Performance Plan shall be
forfeited. 

4

               
            
(e)        If this Agreement is
terminated pursuant to Section 4(f), Executive shall receive her base salary for
the remainder of the calendar year in which such termination occurs and benefits
(as applicable) for the remainder of the Initial Period or the applicable Annual
Extension, as the case may be. In addition, Executive shall receive a lump sum
payment equal to two times her then current annual base salary, plus two times
the maximum bonus for which Executive was eligible in the year in which such
termination occurs. Notwithstanding the terms of the Stock Plan and the
Performance Plan and any Options and Participation Grants awarded to Executive
thereunder, all such Options and Participation Grants outstanding thereunder
immediately prior to such termination shall immediately become exercisable and
fully vested. 

               
            
(f)        All shares of stock, options and warrants held by Executive at the time of
termination shall remain subject to the terms of the Stock Plan and the agreements pursuant to which they were
issued.

               
            
(g)        If Executive accepts alternative employment at any time during which payments
are being made and/or
benefits are being provided to Executive under Section 5(c) or 5(d), the Company
may (i) offset the amount of base salary paid to Executive by her new employer
against the amounts of base salary otherwise payable thereunder from and after
the effective date of such alternative employment and (ii) if Executive’s
new employer provides group medical, dental and/or life insurance coverages, the
Company’s obligation to provide such coverages hereunder shall cease upon
the effectiveness of her new coverages. 

               
6.          Provisions Relating to Taxation of Payments.

               
            
(a)        Gross-up Payment.      Anything in this Agreement to the contrary notwithstanding,
in the event it shall be
determined that any payment or distribution by the Company to or for the benefit
of Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended,
or any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such
that after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon such payment or distribution. 

               
            
(b)        Determination of Gross-Up.       Subject to the provisions of paragraph (c) of this
Section 6, all
determinations required to be made under this Section 6, including whether
a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by an accounting firm satisfactory to the Company and Executive
(“Accounting Firm”). The Accounting Firm shall make such determination
and provide detailed supporting calculations to both the Company and Executive
within fifteen (15) business days after it is requested to do so. The initial
Gross-Up Payment, if any, as determined pursuant to this paragraph (b) of this
Section 6, shall be paid to Executive within five (5) business days after
the Company’s receipt of the Accounting Firm’s determination. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that he has legal authority
satisfying the criteria set forth in Treasury Regulation Section 1.6661-3 or
similar successor provisions not to report any Excise Tax on her federal income
tax return. Any determination by the Accounting Firm shall be binding upon the
Company and Executive. 

5

               
            
(c)        Dispute of Tax Claim.       Executive shall notify the Company in writing of any
proposed assessment or
proposed adjustment by the Internal Revenue Service (“IRS”) pursuant
to an audit of Executive’s federal income tax return or otherwise, that, if
successful, would require the payment by the Company of a Gross-Up Payment
(hereinafter referred to as a “Claim”). Such notice shall be given as
soon as practicable but no later than ten (10) business days after the earlier
of (i) the receipt by Executive of a written notice of proposed adjustment from
the IRS or (ii) the receipt by Executive of a statutory notice of deficiency.
Such notice by Executive to the Company shall include (i) notice of the amount
of the proposed assessment or proposed adjustment which relates to the Claim and
the taxable year or years in which the Claim arises, (ii) the general nature of
the Claim and (iii) all relevant written reports of the examining agent relating
to the Claim. Within thirty (30) days of (i) the receipt by Executive of a final
assessment or (ii) the execution by Executive and the IRS of a closing
agreement, with respect to any tax year of Executive in which a Claim has been
raised, pursuant to which Executive is required to pay any amount with respect
to the Claim, Executive shall provide the Company and the Accounting Firm with a
copy of such assessment or agreement, together with supporting documents
sufficient to determine the amount of such tax liability that was attributable
to the Claim. The Accounting Firm shall determine the amount Gross-Up Payment
under this Agreement due to such tax liability and the Company will make such
Gross-Up Payment to Executive within five (5) business days after its receipt of
such determination. 

               
7.          Withholding.        All compensation paid to Executive shall be subject to customary
withholding taxes and other employment taxes as required with respect thereto.

               
8.          Non-Waiver of Rights.       The failure of either party to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other party of any of the provisions
hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this
Agreement, or any part hereof, or the right of either party thereafter to enforce each and every provision in
accordance with the terms of this Agreement.

               
9.          Severability and Interpretation.       In the event of a conflict between the terms of this
Agreement and any of the definitions or provisions in the Stock Plan and the Performance Plan, the terms of this
Agreement shall prevail.  Whenever possible, each provision of this Agreement and any portion hereof shall be
interpreted in such a manner as to be effective and valid under applicable law, rules and regulations.  If any
covenant or other provision of this Agreement (or portion thereof) shall be held to be invalid, illegal, or
incapable of being enforced, by reason of any rule of law, rule, regulation, administrative order, judicial
decision or public policy, all other conditions and provisions of this Agreement shall, nevertheless, remain in
full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or
provision (or portion) unless so expressed herein.  The parties hereto desire and consent that the court or other
body making such determination shall, to the extent necessary to avoid any unenforceability, so reform such
covenant or other provision or portions of this Agreement to the minimum extent necessary so as to render the
same enforceable in accordance with the intent herein expressed.

6

               
10.          Entire Agreement.       This Agreement represents the entire and integrated Employment
Agreement between Executive and the Company and supersedes all prior negotiations, representations and
agreements, either written or oral, with respect thereto.

               
11.          Notice.      All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party, by registered or certified mail,
return receipt requested, postage prepaid, or by overnight courier, addressed as
set forth in this Section 11 or to such other address as may hereafter be
notified by such party to the other party. Notices and communications shall be
effective at the time they are given in the foregoing manner (provided that
notice by mail shall be deemed given three business days after posting). 

	 	If to Executive:

                  Josephine Young

                  16367 C Lakefield Place Drive

                  Wildwood, MO  63040

	 	If to the Company:

                  NuVox, Inc.

                  16090 Swingley Ridge Road, Suite 500

                  Chesterfield, MO  63017

                  Attn:  Secretary

               
12.          Amendments and Waivers.       No modification, amendment or waiver of any of the provisions
of this Agreement shall be effective unless in writing specifically referring hereto, and signed by the parties
hereto.

               
13.          Assignments.       This Agreement shall inure to the benefit of, and be binding upon, the
Company, its successors and assigns and/or any other entity which shall succeed to the business presently being
conducted by the Company.  Being a contract for personal services, neither this Agreement nor any rights
hereunder shall be assigned by Executive.

               
14.          Choice of Forum and Governing Law.       The parties agree that:  (i) any litigation
involving any noncompliance with or breach of this Agreement, or regarding the interpretation, validity and/or
enforceability of this Agreement, shall be filed and conducted in the state or federal courts in St. Louis
County, Missouri; and (ii) this Agreement shall be interpreted in accordance with and governed by the laws of the
State of Missouri, without regard for any conflict of law principles.

7

               
15.          Headings.       Section headings are provided in this Agreement for convenience only and
shall not be deemed to substantively alter the content of such sections.

               
16.          Indemnification.       To the fullest extent permitted by the indemnification provisions of
the Certificate of Incorporation and By-laws of the Company in effect as of the date of this Agreement and the
indemnification provisions of the corporation statute of the jurisdiction of the Company's incorporation in
effect from time to time (collectively, the "Indemnification Provisions"), and in each case subject to the
conditions thereof, the Company shall (i) indemnify the Executive, as a director and officer of the Company or a
subsidiary of the Company or a trustee or fiduciary of an employee benefit plan of the Company or a subsidiary of
the Company, or, if the Executive shall be serving in such capacity at the Company's written request, as a
director or officer of any other corporation (other than a subsidiary of the Company) or as a trustee or
fiduciary of an employee benefit plan not sponsored by the Company or a subsidiary of the Company, against all
liabilities and reasonable expenses that may be incurred by the Executive in any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether
formal or informal, because the Executive is or was a director or officer of the Company, a director or officer
of such other corporation or a trustee or fiduciary of such employee benefit plan, and against which the
Executive may be indemnified by the Company, and (ii) pay for or reimburse the reasonable expenses incurred by
the Executive in the defense of any proceeding to which the Executive is a party because the Executive is or was
a director or officer of the Company, a director or officer of such other corporation or a trustee or fiduciary
of such employee benefit plan.  The rights of the Executive under the Indemnification Provisions shall survive
the termination of the employment of the Executive by the Company.

               
             IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first above written.

	 	

	 	Josephine Young

	 	NuVox, Inc. and

                                                     Gabriel Communications Properties, Inc.

	 	By:

	 	Name:   David L. Solomon

Title:     Chairman and Chief Executive Officer

8<PAGE>
                                                                    EXHIBIT 4.46

                      AGREEMENT AND PLAN OF REORGANIZATION

                                      AMONG

                            OUTBACK STEAKHOUSE, INC.,

                      OUTBACK STEAKHOUSE OF FLORIDA, INC.,

                             EMPIRE ASSOCIATES, INC.

                                       AND

                                STACY C. COFIELD

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
ARTICLE 1 - PLAN OF ACQUISITION.....................................................................1
1.1      The Merger.................................................................................1
1.2      Adjustments................................................................................2
1.3      Closing....................................................................................2
1.4      Execution and Delivery of Closing Documents................................................2
1.5      Execution and Filing of Merger Documents...................................................3
1.6      Effectiveness of Merger....................................................................3
1.7      Further Assurances.........................................................................3
1.8      Certificates...............................................................................3
1.9      Closing of Transfer Books..................................................................3
1.10     Fractional Shares..........................................................................3
1.11     Accounting Treatment.......................................................................4

ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF EMPIRE
         ASSOCIATES, INC. AND COFIELD...............................................................4
2.1      Organization and Good Standing.............................................................4
2.2      Power and Authority........................................................................4
2.3      Foreign Corporation........................................................................4
2.4      Authority and Validity.....................................................................4
2.5      Binding Effect.............................................................................4
2.6      Compliance with Other Instruments..........................................................5
2.7      Capitalization of EMPIRE ASSOCIATES, INC...................................................5
2.8      Absence of Certain Changes.................................................................5
2.9      Tax Liabilities............................................................................6
2.10     No Undisclosed Liabilities.................................................................7
2.11     Title to Properties........................................................................7
2.12     Contracts..................................................................................7
2.13     Litigation and Government Claims...........................................................8
2.14     No Violation of Any Instrument.............................................................8
2.15     Necessary Approvals and Consents...........................................................8
2.16     Compliance With Laws.......................................................................8
2.17     Accuracy of Information Furnished..........................................................8

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF COFIELD...............................................9
3.1      Authority and Validity.....................................................................9
3.2      Binding Effect.............................................................................9
3.3      Ownership..................................................................................9
3.4      Voting.....................................................................................9
3.5      Residency..................................................................................9
3.6      Compliance with Other Instruments..........................................................9
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF OSI AND OUTBACK......................................10
4.1      Organization and Good Standing............................................................10
4.2      Foreign Qualification.....................................................................10
4.3      Power and Authority.......................................................................10
4.4      Authority and Validity....................................................................10
4.5      Binding Effect............................................................................10
4.6      Compliance with Other Instruments.........................................................10
4.7      Capitalization of OSI.....................................................................11
4.8      SEC Reports...............................................................................11
4.9      Litigation and Government Claims..........................................................11
4.10     Necessary Approvals and Consents..........................................................11
4.11     Absence of Certain Changes or Events......................................................12

ARTICLE 5 - JOINT COVENANTS OF EMPIRE ASSOCIATES, INC., COFIELD, OSI
         AND OUTBACK...............................................................................12
5.1      Notice of any Material Change.............................................................12
5.2      Cooperation...............................................................................12
5.3      Post-Closing Adjustment...................................................................13
5.4      Distribution and Allocations..............................................................13
5.5      Additional Agreements.....................................................................13

ARTICLE 6 - COVENANTS OF EMPIRE ASSOCIATES, INC. AND COFIELD.......................................14
6.1      Securities Law Compliance.................................................................14
6.2      Payment of Liabilities....................................................................15
6.3      Pooling...................................................................................15

ARTICLE 7 - COVENANTS OF OSI AND OUTBACK...........................................................16
7.1      Employment Agreements.....................................................................16
7.2      Assumed Liabilities.......................................................................16

ARTICLE 8 - JOINT CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS......................................16
8.1      Consents to Transaction...................................................................16
8.2      Absence of Litigation.....................................................................16
8.3      Dissenter's Rights........................................................................17

ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS OF EMPIRE
         ASSOCIATES, INC...........................................................................17
9.1      Compliance................................................................................17
9.2      Representations and Warranties............................................................17
9.3      Material Adverse Changes..................................................................17

ARTICLE 10 - CONDITIONS PRECEDENT TO OBLIGATIONS OF OSI AND
         OUTBACK...................................................................................17
10.1     Compliance................................................................................17
10.2     Representations and Warranties............................................................17
10.3     Current Financial Status..................................................................18
10.4     Material Adverse Changes..................................................................18
10.5     Pooling...................................................................................18
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
ARTICLE 11 - INDEMNIFICATION.......................................................................18
11.1     Indemnification Based on Agreement........................................................18
11.2     Limitation................................................................................18
11.3     Cooperation...............................................................................19
11.4     Notice....................................................................................19

ARTICLE 12 - MISCELLANEOUS.........................................................................19
12.1     Termination...............................................................................19
12.2     Expenses..................................................................................20
12.3     Entire Agreement..........................................................................20
12.4     Survival of Representations and Warranties................................................20
12.5     Counterparts..............................................................................20
12.6     Notices...................................................................................20
12.7     Successors and Assigns....................................................................21
12.8     Governing Law.............................................................................21
12.9     Waiver and Other Action...................................................................21
12.10    Severability..............................................................................21
12.11    Headings..................................................................................21
12.12    Construction..............................................................................21
12.13    Jurisdiction and Venue....................................................................22
12.14    Enforcement...............................................................................22
12.15    Further Assurances........................................................................22
12.16    Equitable Remedies........................................................................22

EXHIBIT A

ARTICLES OF MERGER.................................................................................A-1

EXHIBIT B

DISCLOSURE SCHEDULES...............................................................................B-1
</TABLE>

                                       iii
<PAGE>

                      AGREEMENT AND PLAN OF REORGANIZATION

         THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and
entered effective as of December 12, 2000, by and among OUTBACK STEAKHOUSE,
INC., a Delaware corporation ("OSI"), OUTBACK STEAKHOUSE OF FLORIDA, INC., a
Florida corporation ("Outback"), EMPIRE ASSOCIATES, INC., a Florida corporation,
and STACY C. COFIELD, an individual residing in the State of New York
("COFIELD").

                              W I T N E S S E T H:

         WHEREAS, Outback is a wholly-owned subsidiary of OSI; and

         WHEREAS, COFIELD is the sole owner of the issued and outstanding common
stock of EMPIRE ASSOCIATES, INC., and COFIELD is the sole director, President
and is responsible for the day-to-day operations of EMPIRE ASSOCIATES, INC.; and

         WHEREAS, Outback and EMPIRE ASSOCIATES, INC. have entered into that
certain Florida limited partnership known as Outback/Empire-I, Limited
Partnership ("Partnership");

         WHEREAS, the Partnership operates Outback Steakhouse(R)restaurants in
the State of Florida; and

         WHEREAS, the Board of Directors of EMPIRE ASSOCIATES, INC. has approved
the merger of EMPIRE ASSOCIATES, INC. into Outback (the "Merger") upon the terms
and conditions set forth in this Agreement; and

         WHEREAS, for federal income tax purposes it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and

         WHEREAS, pursuant to the Merger, EMPIRE ASSOCIATES, INC. will be merged
with and into Outback and all of the outstanding shares of capital stock of
EMPIRE ASSOCIATES, INC. will be converted into shares of common stock, par value
$.01, of OSI (the "OSI Common Stock"); and

         WHEREAS, the parties hereto desire by this Agreement to set forth the
terms and conditions upon which they are willing to consummate the Merger.

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto covenant and agree
as follows:

                                   ARTICLE 1
                               PLAN OF ACQUISITION

         1.1      The Merger. Subject to and upon the terms and conditions
contained herein, EMPIRE ASSOCIATES, INC. shall be merged with and into Outback,
with Outback being the surviving corporation, in

                                       1
<PAGE>

accordance with the Articles of Merger substantially in the form attached to
this Agreement as EXHIBIT A (the "Merger Agreement"), which will be executed and
delivered by OSI, Outback, and EMPIRE ASSOCIATES, INC. prior to the Merger. As a
result of the Merger, each voting and nonvoting common share of EMPIRE
ASSOCIATES, INC. outstanding immediately before the Effective Date (as herein
defined) shall, by virtue of the Merger and without any further action being
required by the holders thereof, be converted into and exchanged for 67,377
shares of OSI Common Stock.

         1.2      Adjustments.

                  (a)      Except as otherwise provided in this SECTION 1.2, the
         total number of shares of OSI Common Stock to be issued pursuant to the
         Merger shall be 67,377.

                  (b)      If, between the date of this Agreement and the
         Closing Date or the Effective Date, as the case may be, (i) the
         outstanding shares of capital stock of EMPIRE ASSOCIATES, INC. shall
         have been changed into a different number of shares or a different
         class by reason of any reclassification, recapitalization, split-up,
         combination, exchange of shares, or readjustment, with a record date
         within such period, or a stock dividend thereon shall be declared with
         a record date within such period or (ii) EMPIRE ASSOCIATES, INC. shall
         have issued additional shares of its capital stock, the number of
         shares of OSI Common Stock received in exchange for each share of
         EMPIRE ASSOCIATES, INC.'s capital stock shall be adjusted so that the
         aggregate number of shares of OSI Common Stock received in exchange for
         all shares of EMPIRE ASSOCIATES, INC.'s capital stock (assuming no
         Dissenting Shares) remains at 67,377.

                  (c)      If, between the date of this Agreement and the
         Closing Date or the Effective Date, as the case may be, the outstanding
         shares of OSI Common Stock shall have been changed into a different
         number of shares or a different class by reason of any
         reclassification, recapitalization, split-up, combination, exchange of
         shares, or readjustment, with a record date within such period, or a
         stock dividend thereon shall be declared with a record date within such
         period, the number of shares of OSI Common Stock received in exchange
         for each share of capital stock of EMPIRE ASSOCIATES, INC. (as
         specified in SECTION 1.1 hereof) shall be adjusted to accurately
         reflect such change.

         1.3      Closing. The closing of the transactions contemplated by this
Agreement, including the Merger (the "Closing"), shall take place at 10:00 a.m.,
Tampa time, at the offices of Outback on December 12, 2000, or on such date and
at such other time and place as is agreed upon by the parties hereto. The day on
which the Closing occurs is herein referred to as the "Closing Date". If any of
the conditions to the obligations of the parties to this Agreement have not been
satisfied or waived by the Closing Date, then the party to this Agreement that
is unable to meet such condition or conditions shall be entitled to postpone the
Closing by written notice to the other parties until such condition shall have
been satisfied (which such party shall seek to cause to happen at the earliest
practicable date) or waived, but the Closing shall occur not later than June 30,
2001, unless further extended by written agreement of the parties to this
Agreement. The parties shall use their best efforts to effectuate a timely
closing as provided in this SECTION 1.3.

         1.4      Execution and Delivery of Closing Documents. Before the
Closing, each party shall cause to be prepared and at the Closing the parties
shall execute and deliver each agreement and instrument required by this
Agreement or the Merger Agreement to be so executed and delivered and not
theretofore accomplished. At the Closing, each party also shall execute and
deliver such other appropriate and customary documents as the other

                                       2
<PAGE>

parties reasonably may request for the purpose of consummating the transactions
contemplated by this Agreement and the Merger Agreement. All actions taken at
the Closing shall be deemed to have been taken simultaneously at the time the
last of any such actions is taken or completed.

         1.5      Execution and Filing of Merger Documents. At the time of
completion of the Closing, OSI, Outback, EMPIRE ASSOCIATES, INC. and COFIELD
agree to take the following actions:

                  (a)      to execute and deliver all documents and certificates
         relating to the Merger required to be executed by them that have not
         already been so executed and that are required under applicable
         federal, state and local laws to be filed in order validly to
         effectuate the Merger; and

                  (b)      to cause the Merger Agreement to be filed with the
         Secretary of State of the State of Florida and a Certificate of Merger
         to be issued by each such officer.

         1.6      Effectiveness of Merger. The Merger shall become effective
under the laws of Florida upon filing of the Merger Agreement with the Secretary
of State of the State of Florida (the "Effective Date"). Such Effective Date
shall be indicated on Certificates of Merger issued by the Secretary of State of
the State of Florida pursuant to the provisions of Sections 607.1101-607.1107 of
the Florida Business Corporation Act (the "Florida Act").

         1.7      Further Assurances. After the Closing, the parties hereto
shall execute and deliver such additional documents and take such additional
actions as may reasonably be deemed necessary or advisable by any party in order
to consummate the transactions contemplated by this Agreement and by the Merger
Agreement, and to vest more fully in Outback the ownership of and the rights to
the business and assets of EMPIRE ASSOCIATES, INC. as existed immediately before
the Effective Date.

         1.8      Certificates. As soon as practicable after the Effective Date,
OSI shall make available and each holder of capital stock of EMPIRE ASSOCIATES,
INC. shall be entitled to receive upon surrender of stock certificates of EMPIRE
ASSOCIATES, INC. representing EMPIRE ASSOCIATES, INC. capital stock for
cancellation, certificates representing the number of shares of OSI Common Stock
into which such shares are converted in the Merger as provided in Section 1.1
hereof. The OSI Common Stock into which such EMPIRE ASSOCIATES, INC. capital
stock is converted shall be deemed issued at the Effective Date.

         1.9      Closing of Transfer Books. At the Closing Date, the stock
transfer books of EMPIRE ASSOCIATES, INC. shall be closed and no transfer of
capital stock of EMPIRE ASSOCIATES, INC., shall thereafter be made.

         1.10     Fractional Shares. No fractional shares of OSI Common Stock
and no certificates or scrip therefor shall be issued. Instead, one whole share
of OSI Common Stock shall be issued for each fractional share of .5 or more of
one whole share and each fractional share of less than .5 of one whole share
shall be disregarded.

         1.11     Accounting Treatment. It is the intention of the parties
hereto that the Merger will be treated for financial reporting purposes as a
pooling of interests.

                                   ARTICLE 2
      REPRESENTATIONS AND WARRANTIES OF EMPIRE ASSOCIATES, INC. AND COFIELD

                                       3
<PAGE>

         Each of EMPIRE ASSOCIATES, INC. and COFIELD, jointly and severally,
represent and warrant to OSI and Outback as follows:

         2.1      Organization and Good Standing. EMPIRE ASSOCIATES, INC. is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida.

         2.2      Power and Authority. EMPIRE ASSOCIATES, INC. has the requisite
power and authority and all material licenses and permits required by
governmental authorities to own, lease and operate its properties and assets and
to carry on its businesses as currently being conducted.

         2.3      Foreign Corporation. EMPIRE ASSOCIATES, INC. is duly qualified
or licensed to do business and in good standing as a foreign corporation in
every jurisdiction where the failure to so qualify could have a material adverse
effect on its respective business, operations, assets or financial condition.

         2.4      Authority and Validity.

                  (a)      EMPIRE ASSOCIATES, INC. has the corporate power and
         authority to execute, deliver and perform its obligations under this
         Agreement, the Merger Agreement and the other documents executed or to
         be executed by EMPIRE ASSOCIATES, INC. in connection with this
         Agreement; and the execution, delivery and performance by EMPIRE
         ASSOCIATES, INC. of this Agreement, the Merger Agreement and the other
         documents executed or to be executed by EMPIRE ASSOCIATES, INC. in
         connection with this Agreement have been duly authorized by all
         necessary corporate action. The execution, delivery and performance by
         EMPIRE ASSOCIATES, INC. of this Agreement, the Merger Agreement and any
         other documents executed or to be executed in connection with this
         Agreement and the consummation of the transactions provided for herein
         have been duly authorized and approved by the board of directors and
         shareholders of EMPIRE ASSOCIATES, INC. as required under the laws of
         the State of Florida and EMPIRE ASSOCIATES, INC.'s corporate governance
         documents.

                  (b)      COFIELD has the power and authority to execute,
         deliver and perform his obligations under this Agreement and the other
         documents executed or to be executed by COFIELD in connection with this
         Agreement.

         2.5      Binding Effect. This Agreement, the Merger Agreement and the
other documents executed or to be executed by EMPIRE ASSOCIATES, INC. and
COFIELD in connection with this Agreement have been or will have been duly
executed and delivered by EMPIRE ASSOCIATES, INC. and COFIELD, and are or will
be, when executed and delivered, the legal, valid and binding obligations of
each of EMPIRE ASSOCIATES, INC. and COFIELD enforceable in accordance with their
terms except that:

                  (a)      enforceability may be limited by bankruptcy,
         insolvency or other similar laws affecting creditors' rights; and

                  (b)      the availability of equitable remedies may be limited
         by equitable principles of general applicability.

         2.6      Compliance with Other Instruments. Neither the execution and
delivery by EMPIRE ASSOCIATES, INC. nor COFIELD of this Agreement and the Merger
Agreement, nor the consummation by them of the transactions contemplated hereby
and thereby, will violate, breach, be in conflict with, or constitute a

                                       4
<PAGE>

default under, or permit the termination or the acceleration of maturity of, or
result in the imposition of any lien, claim or encumbrance upon any material
property or asset of EMPIRE ASSOCIATES, INC. or COFIELD pursuant to, its
certificate of incorporation, bylaws, partnership agreement, operating agreement
or other charter or governance document, or any note, bond, indenture, mortgage,
deed of trust, evidence of indebtedness, loan or lease agreement, other
agreement or instrument (including with customers), judgment, order, injunction
or decree by which EMPIRE ASSOCIATES, INC. or COFIELD is bound, to which either
of them is a party, or to which any assets of either of them are subject;
provided, however, this SECTION 2.5 shall not apply with respect to any of the
foregoing if EMPIRE ASSOCIATES, INC. is bound thereby, a party thereto, or its
assets subject, solely by reason of its status as a partner in the Partnership.

         2.7      Capitalization of EMPIRE ASSOCIATES, INC.

                  (a)      The authorized capital stock of EMPIRE ASSOCIATES,
         INC. consists of Fifty Thousand (50,000) common shares. There are one
         hundred (100) common shares issued and outstanding, all of which are
         owned by COFIELD. There are no other shareholders of EMPIRE ASSOCIATES,
         INC. and no other persons with rights or options to acquire capital
         stock of EMPIRE ASSOCIATES, INC. All of the issued and outstanding
         shares of capital stock of EMPIRE ASSOCIATES, INC. have been duly
         authorized and validly issued and are fully paid and nonassessable.
         There are no shares of capital stock of EMPIRE ASSOCIATES, INC. held in
         its treasury.

                  (b)      There are no voting trusts, shareholder agreements or
         other voting arrangements to which the shareholder of EMPIRE
         ASSOCIATES, INC. is a party.

                  (c)      There is no outstanding subscription, contract,
         convertible or exchangeable security, option, warrant, call or other
         right obligating EMPIRE ASSOCIATES, INC. to issue, sell, exchange or
         otherwise dispose of, or to purchase, redeem or otherwise acquire,
         shares of, or securities convertible into or exchangeable for, capital
         stock of EMPIRE ASSOCIATES, INC.

         2.8      Absence of Certain Changes. From December 31, 1999 to the
Closing Date, (except solely as a result of EMPIRE ASSOCIATES, INC.'s status as
a partner in the Partnership) EMPIRE ASSOCIATES, INC. has not:

                  (a)      suffered any material adverse change in its business,
         results of operations, working capital, assets, liabilities, or
         condition (financial or otherwise) or the manner of conducting its
         business;

                  (b)      suffered any material damage or destruction to or
         loss of its assets not covered by insurance, or any loss of suppliers
         or employees;

                  (c)      acquired or disposed of any asset, or incurred,
         assumed, guaranteed, endorsed, paid or discharged any indebtedness,
         liability or obligation, or subjected or permitted to be subjected any
         material amount of assets to any lien, claim or encumbrance of any
         kind, except in the ordinary course of business or pursuant to
         agreements in force at the date of this Agreement and identified in
         Item 2.8(c) of the Disclosure Schedules;

                  (d)      forgiven, compromised, canceled, released, waived or
         permitted to lapse any material rights or claims;

                                       5
<PAGE>

                  (e)      entered into or terminated any lease, agreement,
         commitment or transaction, or agreed to or made any changes in any
         leases or agreements, other than transactions and commitments entered
         into in the ordinary course of business;

                  (f)      written up, written down or written off the book
         value of any assets;

                  (g)      declared, paid or set aside for payment any dividend
         or distribution with respect to its capital stock;

                  (h)      redeemed, purchased or otherwise acquired, or sold,
         granted or otherwise disposed of, directly or indirectly, any of its
         capital stock or securities or any rights to acquire such capital stock
         or securities, or agreed to changes in the terms and conditions of any
         such rights outstanding as of the date of this Agreement;

                  (i)      except in the ordinary course of business, increased
         the compensation of any employee or paid any bonuses to any employee or
         contributed to any employee benefit plan;

                  (j)      entered into any employment, consulting, compensation
         or collective bargaining agreement with any person or group, except
         oral employment agreements which can be terminated at will; or

                  (k)      entered into, adopted or amended any employee benefit
         plan or severance agreements.

         2.9      Tax Liabilities. EMPIRE ASSOCIATES, INC. has filed all
federal, state, county, local and foreign tax returns and reports required to be
filed by them by the date hereof, including those with respect to income,
payroll, property, withholding, social security, unemployment, franchise, excise
and sales taxes; EMPIRE ASSOCIATES, INC. has either paid in full all taxes that
have become due as reflected on any return or report and any interest and
penalties with respect thereto or have fully accrued on their books or have
established adequate reserves for all taxes payable but not yet due; and have
made cash deposits with appropriate governmental authorities representing
estimated payments of taxes, including income taxes and employee withholding tax
obligations. No extension or waiver of any statute of limitations or time within
which to file any return has been granted to EMPIRE ASSOCIATES, INC. with
respect to any tax. No unsatisfied deficiency, delinquency or default for any
tax, assessment or governmental charge has been claimed, proposed or assessed
against EMPIRE ASSOCIATES, INC. nor has EMPIRE ASSOCIATES, INC. received notice
of any such deficiency, delinquency or default. EMPIRE ASSOCIATES, INC. has no
reason to believe that EMPIRE ASSOCIATES, INC. has or may have any tax
liabilities other than those reflected on the unaudited balance sheet of EMPIRE
ASSOCIATES, INC. as of December 31, 1999, with any notes thereto, and the
related unaudited statements of income for the twelve months ended December 31,
1999, together with supplemental information on EMPIRE ASSOCIATES, INC., each
prepared and attested to by the chief financial officer of EMPIRE ASSOCIATES,
INC. (the "Balance Sheets") and those arising in the ordinary course of business
since the date thereof. With regard to the foregoing, EMPIRE ASSOCIATES, INC.
has relied on the accuracy and completeness of the Schedule K-1 provided by the
Partnership.

         COFIELD shall have sole responsibility for filing all required tax
returns for EMPIRE ASSOCIATES, INC. OSI shall assist COFIELD in preparing income
tax returns and shall cooperate with COFIELD to the extent necessary therefor,
and COFIELD shall provide OSI with copies of all such returns at least fifteen
(15) days prior to filing.

                                       6
<PAGE>

         2.10     No Undisclosed Liabilities. There are no liabilities or
obligations of EMPIRE ASSOCIATES, INC. (other than material liabilities arising
solely by reason of EMPIRE ASSOCIATES, INC.'s status as a partner in the
Partnership) of any nature, whether absolute, accrued, contingent or otherwise,
other than liabilities or obligations indicated in Items 2.10(a) and 2.10(b) of
the Disclosure Schedules.

         2.11     Title to Properties. EMPIRE ASSOCIATES, INC. has good and
marketable title to the assets reflected in its books and records as being owned
by it, (except as they have since been affected by transactions in the ordinary
course of business and consistent with past practices) the real and personal
properties reflected in the Balance Sheets (except for assets subject to
financing leases required to be capitalized under generally accepted accounting
principles, all of which are so reflected in the Balance Sheet or notes thereto)
and all assets purchased by EMPIRE ASSOCIATES, INC. since the date of the
Balance Sheet, in each case free and clear of any lien, claim or encumbrance,
except as reflected in the Balance Sheet or notes thereto and in Item 2.11 of
the Disclosure Schedule and except for liens for taxes, assessments or other
governmental charges not yet due and payable.

         Except for those assets acquired since the date of the Balance Sheets,
all material properties and assets owned by EMPIRE ASSOCIATES, INC. are properly
reflected on the applicable Balance Sheets and notes thereto.

         2.12     Contracts. Excluding (i) contracts and commitments between
Outback or OSI and EMPIRE ASSOCIATES, INC. or the Partnership, (ii) contracts
and commitments entered into by the Partnership to which Outback or OSI is a
party, (iii) contracts and commitments entered into by EMPIRE ASSOCIATES, INC.
in the ordinary course of the Partnership's business without violation of the
provisions of the Partnership Agreement, and (iv) contracts and commitments
entered into with the written consent of OSI or Outback, Item 2.12 of the
Disclosure Schedule is a complete and accurate list of all of the contracts and
commitments (including summaries of oral contracts) to which EMPIRE ASSOCIATES,
INC. is a party or by which EMPIRE ASSOCIATES, INC. is bound:

         2.13     Litigation and Government Claims. Except as indicated in Item
2.13 of the Disclosure Schedule, there is no pending suit, claim, action or
litigation or administrative, arbitration or other proceeding or governmental
investigation or inquiry against EMPIRE ASSOCIATES, INC. or the Partnership or
to which any of their business or assets is subject. Except as indicated in Item
2.13 of the Disclosure Schedule, there are no such proceedings threatened or, to
the best knowledge of EMPIRE ASSOCIATES, INC. or COFIELD, contemplated or, to
the best knowledge of EMPIRE ASSOCIATES, INC. or COFIELD, any basis for any
unasserted claims (whether or not the potential claimant may be aware of the
claim) of any nature that might be asserted against EMPIRE ASSOCIATES, INC. or
the Partnership.

         2.14     No Violation of Any Instrument. Except as indicated in Item
2.14 of the Disclosure Schedule, EMPIRE ASSOCIATES, INC. is not in violation of
or default under nor has any event occurred that, with the lapse of time or the
giving of notice or both, would constitute a violation of or default under or
permit the termination or the acceleration of maturity of or result in the
imposition of a lien, claim or encumbrance upon any property or asset of EMPIRE
ASSOCIATES, INC. pursuant to, the articles or certificates of incorporation,
bylaws or other chartering or governance document of EMPIRE ASSOCIATES, INC. or
(excluding any of the following entered into by the Partnership and to which
Outback or OSI is a signatory or to which Outback or OSI consented in writing or
which were entered into by EMPIRE ASSOCIATES, INC. in the ordinary course of
business without violation of the provisions of the Partnership Agreement) any
note, bond, indenture, mortgage, deed of trust, evidence of indebtedness, loan
or lease agreement, other material agreement or instrument

                                       7
<PAGE>

(including with customers), judgment, order, injunction or decree to which
EMPIRE ASSOCIATES, INC. is a party, by which EMPIRE ASSOCIATES, INC. is bound or
to which any of the assets of EMPIRE ASSOCIATES, INC. are subject.

         2.15     Necessary Approvals and Consents. Other than (a) in connection
with or in compliance with the laws of the States of Florida with respect to
effectuating the Merger, (b) consents required to be obtained from applicable
liquor control authorities, (c) consents required to be obtained from lessors,
and (d) under the provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, or state securities or blue sky
laws, no authorization, consent, permit or license or approval of or
declaration, registration or filing with, any person or governmental or
regulatory authority or agency is necessary for the execution and delivery by
each of EMPIRE ASSOCIATES, INC. and COFIELD of this Agreement, the Merger
Agreement and the other agreements executed or to be executed by them in
connection with this Agreement, and the consummation by EMPIRE ASSOCIATES, INC.
and COFIELD of the transactions contemplated by this Agreement and the Merger
Agreement, and the ownership and operation by Outback of the respective
businesses and properties of EMPIRE ASSOCIATES, INC. after the Effective Date in
substantially the same manner as now operated.

         2.16     Compliance With Laws. COFIELD has no actual knowledge that
EMPIRE ASSOCIATES, INC. or the Partnership are not in compliance with any such
laws applicable to their respective business, where failure to so comply would
have a material adverse effect on their business, operations, properties, assets
or conditions.

         2.17     Accuracy of Information Furnished. No representation or
warranty by EMPIRE ASSOCIATES, INC. or COFIELD in this Agreement nor any
information in the Financial Statements or in the Disclosure Schedule contains
any untrue statement of a material fact or omits to state any material fact that
would make the statements herein or therein, in light of the circumstances under
which they were made, false or misleading. Each of EMPIRE ASSOCIATES, INC. and
COFIELD have disclosed to OSI and Outback all facts known to them that are
material to EMPIRE ASSOCIATES, INC.'s and the Partnership's respective
businesses, operations, financial condition or prospects.

                                   ARTICLE 3
                    REPRESENTATIONS AND WARRANTIES OF COFIELD

         In addition to the representations and warranties contained in ARTICLE
2, COFIELD represents and warrants to OSI and Outback as follows:

         3.1      Authority and Validity. He has the capacity and authority to
execute, deliver and perform this Agreement and all other agreements and
documents he is executing or will execute in connection herewith or therewith.

         3.2      Binding Effect. This Agreement and the other documents
executed or to be executed by COFIELD in connection with this Agreement have
been or will have been duly executed and delivered by him and are or will be,
when executed and delivered, his legal, valid and binding obligations
enforceable in accordance with their terms except that:

                  (a)      enforceability may be limited by bankruptcy,
         insolvency or other similar laws affecting creditors' rights; and

                                       8
<PAGE>

                  (b)      the availability of equitable remedies may be limited
         by equitable principles of general applicability.

         3.3      Ownership. COFIELD is the sole record and beneficial
shareholder of EMPIRE ASSOCIATES, INC. and no other person has any rights (in
any form) to acquire any capital stock of EMPIRE ASSOCIATES, INC.

         3.4      Voting. He acknowledges that in his individual capacity as
shareholder and director of EMPIRE ASSOCIATES, INC., he has voted in favor of
the execution and delivery of this Agreement and the Merger Agreement.

         3.5      Residency. COFIELD is, and has been at all times during the
one year period ending on the date hereof, a resident of the State of Florida.

         3.6      Compliance with Other Instruments. Neither the execution and
delivery by COFIELD of this Agreement and the Merger Agreement, nor the
consummation by him of the transactions contemplated hereby and thereby will
violate, breach, be in conflict with or constitute a default under or permit the
termination or the acceleration of maturity of or result in the imposition of
any lien, claim or encumbrance upon any material property or asset of COFIELD
pursuant to any note, bond, indenture, mortgage, deed of trust, evidence of
indebtedness, loan or lease agreement, other agreement or instrument (including
with customers), judgment order, injunction or decree by which COFIELD is bound,
to which he is a party or to which he is subject.

                                   ARTICLE 4
                REPRESENTATIONS AND WARRANTIES OF OSI AND OUTBACK

         OSI and Outback, jointly and severally, represent and warrant to EMPIRE
ASSOCIATES, INC. and COFIELD as follows:

         4.1      Organization and Good Standing. OSI and Outback are
corporations duly organized, validly existing and in good standing under the
laws of the States of Delaware and Florida, respectively.

         4.2      Foreign Qualification. Outback is duly qualified or licensed
to do business and in good standing as a foreign corporation in Florida and in
every other jurisdiction where the failure to so qualify could have a material
adverse effect on its respective business, operations, assets or financial
condition.

         4.3      Power and Authority. OSI and Outback each have the corporate
power and authority and all licenses and permits required by governmental
authorities to own, lease and operate their respective properties and assets and
to carry on their respective business as currently being conducted.

         4.4      Authority and Validity. OSI and Outback each have the
corporate power and authority to execute, deliver and perform their respective
obligations under this Agreement, the Merger Agreement and the other documents
executed or to be executed by OSI and Outback in connection with this Agreement
and the execution, delivery and performance by OSI and Outback of this
Agreement, the Merger Agreement and the other documents executed or to be
executed by OSI and Outback in connection with this Agreement have been duly
authorized by all necessary corporate action.

                                       9
<PAGE>

         4.5      Binding Effect. This Agreement, the Merger Agreement and the
other documents executed or to be executed by OSI and Outback in connection with
this Agreement have been or will have been duly executed and delivered by OSI
and Outback and are or will be, when executed and delivered, the legal, valid
and binding obligations of OSI and Outback, enforceable in accordance with their
terms except that:

                  (a)      enforceability may be limited by bankruptcy,
         insolvency or other similar laws affecting creditors' rights; and

                  (b)      the availability of equitable remedies may be limited
         by equitable principles of general applicability.

         4.6      Compliance with Other Instruments. Neither the execution and
delivery by OSI and/or Outback of this Agreement, the Merger Agreement, nor the
consummation by it of the transactions contemplated hereby and thereby will
violate, breach, be in conflict with or constitute a default under or permit the
termination or the acceleration of maturity of or result in the imposition of
any lien, claim or encumbrance upon any property or asset of OSI or Outback
pursuant to, the certificate of incorporation or bylaws of OSI or Outback or any
note, bond, indenture, mortgage, deed of trust, evidence of indebtedness, loan
or lease agreement, other agreement or instrument, judgment order, injunction or
decree by which OSI or Outback is bound, to which it is a party or to which its
assets are subject.

         4.7      Capitalization of OSI. The authorized capital stock of OSI
consists of Two Hundred Million (200,000,000) shares of Common Stock, $.01 par
value and Two Million (2,000,000) shares of Preferred Stock, $.01 par value, of
which approximately 78,353,322 outstanding shares of Common Stock and no shares
of Preferred Stock were issued and outstanding as of November 30, 2000. All of
the issued and outstanding shares of OSI Common Stock have been duly authorized
and validly issued and are fully paid and nonassessable. The shares of OSI
Common Stock to be issued in exchange for EMPIRE ASSOCIATES, INC.'s capital
stock at the Effective Date, when issued and delivered, will be duly authorized,
validly issued, fully paid and nonassessable. As of the date hereof, except for
(i) employee and director stock options to acquire shares of OSI Common Stock
and (ii) employee stock ownership plans, there are no options, warrants or other
rights, agreements or commitments outstanding obligating Outback or OSI to issue
shares of its capital stock. All of the outstanding shares of capital stock of
Outback are owned by OSI, free and clear of any lien or encumbrance.

         4.8      SEC Reports. OSI has delivered to EMPIRE ASSOCIATES, INC. and
COFIELD true and complete copies of its (i) Annual Report on Form 10-K for the
year ended December 31, 1999; (ii) Proxy Statement used in connection with its
2000 Annual Meeting of Shareholders; (iii) 1999 Annual Report to Shareholders;
(iv) all periodic reports, if any, on Form 8-K filed with the Securities and
Exchange Commission since December 31, 1999 to the date hereof; and (v) all
Forms 10-Q, if any, filed with the Securities and Exchange Commission since
December 31, 1999 to the date hereof. Such documents and reports did not on
their dates or the date of filing, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. OSI has filed all material documents required to be
filed by it with the SEC and all such documents complied as to form with the
applicable requirements of law. Copies of all other reports filed by OSI with
the SEC from the date hereof to and including the Effective Date have been or
will be delivered to EMPIRE ASSOCIATES, INC. and COFIELD. All financial
statements and schedules included in the documents referred to in this SECTION
4.8 were prepared in accordance with generally accepted accounting principles,
applied on a consistent basis except as noted therein and fairly present the
information purported to be shown therein.

                                       10
<PAGE>

         4.9      Litigation and Government Claims. There is no pending suit,
claim, action or litigation or administrative, arbitration or other proceeding
or governmental investigation or inquiry against OSI or Outback which would,
severally or in the aggregate, have a material adverse effect on the business,
results of operations, assets or the condition, financial or otherwise, of OSI
and its subsidiaries, taken as a whole. There are no such proceedings threatened
or, to the knowledge of OSI or Outback, contemplated or any unasserted claims
(whether or not the potential claimant may be aware of the claim), which might,
severally or in the aggregate have a material adverse effect on the business,
results of operations, assets or the condition, financial or otherwise, of OSI
and its subsidiaries, taken as a whole.

         4.10     Necessary Approvals and Consents. Other than (a) in connection
with or in compliance with the laws of the States of Florida with respect to
effectuating the Merger, (b) consents required to be obtained from applicable
liquor control authorities, (c) consents required to be obtained from lessors,
and (d) under the provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, or state securities or blue sky laws, no
authorization, consent, permit or license or approval of or declaration,
registration or filing with, any person or governmental or regulatory authority
or agency is necessary for the execution and delivery by OSI and Outback of this
Agreement, the Merger Agreement and the other agreements executed or to be
executed by either of them in connection with this Agreement and the
consummation by OSI and Outback of the transactions contemplated by this
Agreement and the Merger Agreement.

         4.11     Absence of Certain Changes or Events. Except as disclosed in
public filings by OSI with the Securities and Exchange Commission prior to the
date hereof and the Closing Date, since September 30, 2000, there has not been
any material adverse change in the financial condition, results of operations or
the business, properties, assets or liabilities of Outback or OSI.

                                   ARTICLE 5
      JOINT COVENANTS OF EMPIRE ASSOCIATES, INC., COFIELD, OSI AND OUTBACK

         EMPIRE ASSOCIATES, INC. and COFIELD, jointly and severally, on the one
hand, and OSI and Outback, jointly and severally, on the other hand, covenant
with each other as follows:

         5.1      Notice of any Material Change. Until the Effective Date, each
of EMPIRE ASSOCIATES, INC., COFIELD, OSI and Outback shall, promptly after the
first notice or occurrence thereof but prior to the Effective Date, advise the
others in writing of any event or the existence of any state of facts that:

                  (a)      would make any of its representations and warranties
         in this Agreement untrue in any material respect; or

                  (b)      would otherwise constitute a material adverse change
         in the business, results of operation, working capital, assets,
         liabilities or condition (financial or otherwise) of OSI, Outback or
         EMPIRE ASSOCIATES, INC. and their respective subsidiaries, taken as a
         whole. No supplement or amendment to any Disclosure Schedule shall have
         any effect for the purpose of determining the satisfaction of or
         compliance with the conditions to the obligations of the parties to
         consummate the Merger set forth elsewhere in this Agreement.

                                       11
<PAGE>

         5.2      Cooperation. Until the Effective Date, each of the parties
hereto shall and shall cause each of its affiliates to use its best efforts to:

                  (a)      proceed promptly to make or give the necessary
         applications, notices, requests and filings to obtain at the earliest
         practicable date and, in any event, before the Closing Date, the
         approvals, authorizations and consents necessary to consummate the
         transactions contemplated by this Agreement;

                  (b)      cooperate with and keep the other informed in
         connection with this Agreement; and

                  (c)      take such actions as the other parties may reasonably
         request to consummate the transactions contemplated by this Agreement
         and use its best efforts and diligently attempt to satisfy, to the
         extent within its control, all conditions precedent to the obligations
         to close this Agreement.

         5.3      Post-Closing Adjustment. As soon as practicable after the
Closing Date, but in no event more than forty-five (45) days thereafter, OSI
shall determine and report in writing to all parties hereto:

                  (a)      the amount of current assets of EMPIRE ASSOCIATES,
         INC. as of the Effective Date; and

                  (b)      the amount of all liabilities of EMPIRE ASSOCIATES,
         INC. (other than liabilities specified in Item 6.2 of the EMPIRE
         ASSOCIATES, INC. Disclosure Schedule to the extent assumed by Outback)
         which were not paid in full prior to the Effective Date.

         Upon receipt of such report, COFIELD (by notice to OSI as provided
herein) shall have a period of ten (10) days in which to object in writing to
any portion or item of such report. In the event no objection is timely made,
OSI's report shall be final and binding on all parties. If timely objection is
made, the chief financial officer of OSI and COFIELD (and at the expense of
COFIELD) shall meet and attempt to agree on the items to which objection was
made. If such persons cannot agree within thirty (30) days from the date of
written objection, the items on which agreement has not been reached shall be
submitted to the Tampa, Florida office of PricewaterhouseCoopers (or other
agreed upon independent "Big Five" accounting firm) for a resolution of such
items and whose decision shall be final and binding on all parties. The fees and
expenses of PricewaterhouseCoopers (or other accounting firm) shall be paid by
the non-prevailing party.

         If, as finally determined, the sum of Subsection (a) above exceeds the
sum of Subsection (b), OSI shall pay such excess to COFIELD within ten (10) days
of such final determination. If, as finally determined, the sum of Subsection
(b) exceeds the sum of Subsection (a), COFIELD shall pay such excess to OSI
within ten (10) days of the final determination.

         5.4      Distribution and Allocations. The parties acknowledge and
agree that notwithstanding the effective date of the Merger, Outback shall be
entitled to EMPIRE ASSOCIATES, INC.'s entire share of Partnership distributions
of cash flow, and shall be allocated EMPIRE ASSOCIATES, INC.'s shares of profit
and loss, from and after December 12, 2000.

         5.5      Additional Agreements.

                  (a)      Subject to the terms and conditions herein provided,
         each of the parties hereto agrees to use all reasonable efforts to take
         or cause to be taken, all actions and to do or cause to be done, all
         things

                                       12
<PAGE>

         necessary, proper or advisable under applicable laws and regulations to
         consummate and make effective the transactions contemplated by this
         Agreement, including using all reasonable efforts to obtain all
         necessary waivers, consents and approvals, to effect all necessary
         registrations and filings and to lift any injunction or other legal bar
         to the Merger (and, in such case, to proceed with the Merger as
         expeditiously as possible), subject, however, to the appropriate vote
         of the shareholders of EMPIRE ASSOCIATES, INC.

                  (b)      In case at any time after the Effective Date any
         further action is necessary or desirable to carry out the purposes of
         this Agreement, the proper officers and/or directors of OSI and Outback
         and COFIELD shall take all such necessary action.

                  (c)      Neither Outback, OSI, EMPIRE ASSOCIATES, INC. nor
         COFIELD shall take any action which would jeopardize the
         characterization of the Merger as a reorganization within the meaning
         of Section 368(a) of the Code or the treatment of the Merger for
         financial reporting purposes as a pooling of interests.

                                   ARTICLE 6
                COVENANTS OF EMPIRE ASSOCIATES, INC. AND COFIELD

         EMPIRE ASSOCIATES, INC. and COFIELD covenant and agree with OSI as
follows:

         6.1      Securities Law Compliance. COFIELD represents, warrants and
covenants to Outback and OSI that:

                  (a)      COFIELD has received all schedules and exhibits and
         the documents furnished to EMPIRE ASSOCIATES, INC. pursuant to SECTION
         4.8;

                  (b)      COFIELD has had the opportunity to ask questions of
         and receive answers from representatives of the management of OSI
         concerning the terms and conditions of the transactions contemplated
         hereby and to obtain all additional information that OSI possesses or
         could acquire without unreasonable expense that is necessary to verify
         the accuracy of information furnished to COFIELD.

                  (c)      OSI and Outback have furnished him with all
         information requested and full access to materials concerning OSI and
         Outback which COFIELD and/or his advisors deemed necessary to properly
         evaluate the Merger. Such information and access have been made
         available and utilized to the extent COFIELD considers necessary and
         advisable in making an informed investment decision, and COFIELD has
         consulted his own tax advisor and understands the evaluation of such
         materials may require the assistance of experts and COFIELD has
         utilized such experts to the extent deemed necessary.

                  (d)      COFIELD understands that the OSI Common Stock to be
         received is an investment of a speculative nature and COFIELD must bear
         the risks thereof for an indefinite period of time. COFIELD has
         adequate means for providing for his needs, is able to bear the
         economic risk of the investment and has no need for liquidity in the
         OSI Common Stock to be received in the Merger.

                  (e)      COFIELD and/or his representatives or advisors who
         have acted with or on behalf of COFIELD and who have advised COFIELD in
         this matter have such knowledge and experience in financial and
         business matters that COFIELD is capable of evaluating the merits and
         risks of the Merger for OSI Common Stock.

                                       13
<PAGE>

                  (f)      COFIELD is participating in the Merger solely for his
         account as a private investment, and COFIELD has no present agreement,
         understanding, arrangement or intention to sell or transfer all or any
         portion of the shares of OSI Common Stock to be issued in the Merger to
         any other person or persons. COFIELD does not presently intend to enter
         into any such agreement or undertaking and there are no present
         circumstances which will compel COFIELD to sell any OSI Common Stock so
         received. COFIELD will not sell or otherwise transfer the shares
         (except for de minimis gifts of shares) unless they are registered
         under the Securities Act and applicable state securities laws or, in
         the opinion of OSI and its counsel, an exemption from registration is
         available therefor.

                  (g)      The investment by COFIELD in OSI Common Stock
         pursuant to the Merger is a suitable investment for COFIELD given the
         investment goals and objectives of COFIELD.

                  (h)      COFIELD agrees to indemnify and hold OSI and Outback
         and each of their respective officers, directors and advisors harmless
         against all liability arising out of or in connection with any
         purchase, resale or distribution by COFIELD of any OSI Common Stock
         received hereby which is effected other than in strict compliance with
         the terms hereof and applicable law.

                  (i)      COFIELD understands that the shares of OSI Common
         Stock to be issued in the Merger will not be registered under the
         Securities Act, nor any state securities laws, and such OSI Common
         Stock may not be sold or transferred except in compliance with such
         laws. Neither OSI nor Outback will have any obligation to register any
         such OSI Common Stock.

                  (j)      COFIELD understands that OSI will place an
         appropriate legend on the certificate representing OSI Common Stock to
         be received restricting the transfer of the shares and stop-transfer
         instructions will be given to the transfer agent for the OSI Common
         Stock with respect to such certificates.

                  (k)      COFIELD is a natural person (i) whose net worth (the
         excess of total assets over total liabilities), individually or jointly
         with his spouse, exceeds $1,000,000 (inclusive of the value of home,
         home furnishings and automobiles); or (ii) who had an Individual Annual
         Adjusted Gross Income in excess of $200,000 in each of the two most
         recent tax years or joint income with COFIELD's spouse in excess of
         $300,000 in each of those years and reasonably expects to reach the
         same income level in the current tax year.

         6.2      Payment of Liabilities. EMPIRE ASSOCIATES, INC. and COFIELD
covenant and agree that all debts and liabilities of EMPIRE ASSOCIATES, INC.
relating to periods prior to the Closing Date shall be paid or satisfied in full
prior to the Effective Date, except only current liabilities and those debts and
liabilities of EMPIRE ASSOCIATES, INC. assumed by Outback as specified in Item
6.2 of the Disclosure Schedules.

         6.3      Pooling. COFIELD agrees that until such time as financial
results of OSI covering at least thirty (30) days of combined operations of OSI
and EMPIRE ASSOCIATES, INC. subsequent to the Effective Date have been
published, he will not sell or otherwise dispose of any shares of OSI Common
Stock held by him as of the Effective Date or any of such shares thereafter
acquired by him at any time or from time to time prior to the date of such
publication. OSI shall give instructions to its transfer agent and registrar,
Bank of New York, Inc.,

                                       14
<PAGE>

with respect to the shares of OSI Common Stock issued pursuant to the Merger, to
the effect that no transfer of such shares shall be effected until the date on
which the requisite financial results have been published and OSI and the
transfer agent may take any action, including placing an appropriate legend on
the certificates, they deem necessary to enforce this provision.

                                   ARTICLE 7
                          COVENANTS OF OSI AND OUTBACK

         OSI and Outback, jointly and severally, covenant and agree with EMPIRE
ASSOCIATES, INC. and COFIELD as follows:

         7.1      Employment Agreements. Solely with respect to the Merger, and
any consequential termination of any partnership by operation of law, Outback
agrees not to elect to terminate the Employment Agreements between the
Partnership, as employer, and the general managers of the Partnership's Outback
Steakhouse restaurants, as employees. Outback shall succeed to all rights and
obligations of the Partnership under such Employment Agreements. Nothing
contained herein shall be construed as in any way limiting Outback's right to
terminate any such Employment Agreement as a result of any circumstance or event
other than the Merger and consequential termination of the Partnership by
operation of law.

         7.2      Assumed Liabilities. OSI and Outback agree to assume and pay
the liabilities specified in Item 6.2 (subject to the amount limits specified in
Item 6.2 of the Disclosure Schedules) and to indemnify and hold harmless COFIELD
from any loss or liability therefor.

                                   ARTICLE 8
                JOINT CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS

         Except as may be waived by OSI, the obligations of EMPIRE ASSOCIATES,
INC., COFIELD, OSI and Outback to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each of the following conditions:

         8.1      Consents to Transaction. EMPIRE ASSOCIATES, INC., Outback and
OSI shall have received all consents or approvals and made all applications,
requests, notices and filings with, any person, governmental authority or
governmental agency required to be obtained or made in connection with the
consummation of the transactions contemplated by this Agreement. There shall
have been obtained from all state and local governments and governmental
agencies all approvals and consents necessary to enable EMPIRE ASSOCIATES, INC.
and/or the Partnership, as applicable, to transfer their liquor licenses and
permits to Outback, to enable Outback to assume such licenses and permits or to
enable Outback to operate restaurants (of the kind and quality customarily
operated by Outback) using such permits or licenses. Copies of all consents and
approvals received by any party pursuant to this SECTION 8.1 shall be furnished
to the other party.

         8.2      Absence of Litigation. No governmental agency or authority
shall have instituted or threatened in writing to institute, any action or
proceeding seeking to delay, restrain, enjoin or prohibit the consummation of
the transactions contemplated by this Agreement and no order, judgment or decree
by any court or governmental agency or authority shall be in effect that
enjoins, restrains or prohibits the same or otherwise would materially

                                       15
<PAGE>

interfere with the operation of the assets and business of EMPIRE ASSOCIATES,
INC. or the Partnership or OSI and its subsidiaries, including the surviving
corporation in the Merger, after the Closing Date.

         8.3      Dissenter's Rights. The number of shares of capital stock of
EMPIRE ASSOCIATES, INC. for which shareholders have exercised appraisal or
dissenters' rights under applicable law shall be a number which, in the sole and
absolute discretion of OSI, does not jeopardize the financial reporting and
accounting treatment of the Merger specified in SECTION 1.11 or is otherwise not
contrary to the best interests of Outback or OSI.

                                   ARTICLE 9
         CONDITIONS PRECEDENT TO OBLIGATIONS OF EMPIRE ASSOCIATES, INC.

         The obligations of EMPIRE ASSOCIATES, INC. and COFIELD to consummate
the transactions contemplated by this Agreement shall be subject to the
satisfaction on or before the Closing Date of each of the following conditions:

         9.1      Compliance. OSI and Outback shall have, or shall have caused
to be, satisfied or complied with and performed in all material respects all
terms, covenants and conditions of this Agreement to be complied with or
performed by OSI and Outback on or before the Closing Date.

         9.2      Representations and Warranties. All of the representations and
warranties made by OSI and Outback in this Agreement, and in all certificates
and other documents delivered by OSI and Outback to EMPIRE ASSOCIATES, INC. and
COFIELD pursuant hereto or in connection with the transactions contemplated
hereby, shall have been true and correct in all material respects as of the date
hereof and shall be true and correct in all material respects at the Closing
Date with the same force and effect as if such representations and warranties
had been made at and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.

         9.3      Material Adverse Changes. Since the date of OSI's most recent
10-Q, as filed with the Securities and Exchange Commission, through the date
hereof, there shall have occurred no material adverse change in the business,
properties, assets, liabilities, results of operations or condition, financial
or otherwise, of OSI and Outback, taken as a whole.

                                   ARTICLE 10
             CONDITIONS PRECEDENT TO OBLIGATIONS OF OSI AND OUTBACK

         Except as may be waived by OSI and Outback, the obligations of OSI and
Outback to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:

         10.1     Compliance. EMPIRE ASSOCIATES, INC. and COFIELD shall have or
shall have caused to be satisfied or complied with and performed in all material
respects all terms, covenants and conditions of this Agreement to be complied
with or performed by any of them on or before the Closing Date.

         10.2     Representations and Warranties. All of the representations and
warranties made by EMPIRE ASSOCIATES, INC. and/or COFIELD in this Agreement, the
Disclosure Schedule, and in all certificates and other documents delivered by
EMPIRE ASSOCIATES, INC. or COFIELD pursuant hereto or in connection with the
transactions contemplated hereby, shall have been true and correct in all
material respects as of the date hereof and shall be true and correct in all
material respects at the Closing Date with the same force and effect as if such

                                       16
<PAGE>

representations and warranties had been made at and as of the Closing Date,
except for changes permitted or contemplated by this Agreement.

         10.3     Current Financial Status. OSI shall have received the
unaudited financial statements of EMPIRE ASSOCIATES, INC. as of November 30,
2000, for the month then ended.

         10.4     Material Adverse Changes. Since November 30, 2000, there shall
have occurred no material adverse change in the business, properties, assets,
liabilities, results of operations or condition, financial or otherwise, of
EMPIRE ASSOCIATES, INC. or the Partnership.

                                   ARTICLE 11
                                 INDEMNIFICATION

         COFIELD, on the one hand, and OSI and Outback, jointly and severally,
on the other hand, agree as follows:

         11.1     Indemnification Based on Agreement. Subject to the limitations
contained in SECTION 11.2 hereof, COFIELD shall indemnify and hold harmless OSI,
Outback and EMPIRE ASSOCIATES, INC., and OSI, Outback and EMPIRE ASSOCIATES,
INC., jointly and severally, shall indemnify and hold harmless COFIELD, against
any losses, claims, damages or liabilities to which such indemnified party may
become subject, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any facts or
circumstances that would constitute a breach by the other of any representation,
warranty or covenant contained herein or in any agreement executed pursuant
hereto and will reimburse any legal or other expenses reasonably incurred by any
indemnified party in connection with investigating or defending any such loss,
claim, damage, liability or action.

         In addition to the above, COFIELD shall indemnify OSI, Outback and
EMPIRE ASSOCIATES, INC., as provided in the first paragraph of this SECTION
11.1, against any loss, claim, damage or liability arising out of (i) any tax
liability of EMPIRE ASSOCIATES, INC. for any period prior to and including the
Effective Date and (ii) any debt of EMPIRE ASSOCIATES, INC. (other than the
debts specified in Item 6.2 of the Disclosure Schedule to the extent assumed by
Outback), and (iii) all claims, obligations, causes of action and liabilities,
of whatever kind or character, of any of EMPIRE ASSOCIATES, INC. which arise out
of or are based upon events first occurring on or before the Effective Date,
except only the liabilities assumed by Outback as specified in Item 6.2 of the
Disclosure Schedule.

         11.2     Limitation. COFIELD shall have no obligation under SECTION
11.1 to indemnify OSI, Outback or EMPIRE ASSOCIATES, INC. for any liability,
loss, claim or damage arising out of or based upon facts or actions first
occurring after the Effective Date. All obligations of indemnity (other than
those relating to tax obligations of EMPIRE ASSOCIATES, INC. under SECTION 11.1
above which shall continue for the period specified in SECTION 12.4(B) hereof)
shall terminate two (2) years from the Effective Date; provided, however, the
obligations of indemnity shall not terminate with respect to any matter for
which indemnification is claimed within two (2) years from the Effective Date.

         11.3     Cooperation. If any claim, demand, action, suit, proceeding or
investigation arising out of or pertaining to this Agreement or the transactions
contemplated hereby is begun or asserted, whether begun or

                                       17
<PAGE>

asserted before or after the Closing Date, the parties hereto will cooperate and
use their best efforts to defend against and respond thereto.

         11.4     Notice. An indemnified party shall give notice to the
indemnifying party or parties within ten (10) business days after actual receipt
of service or summons to appear in any action begun in respect of which
indemnity may be sought hereunder. Failure to so notify the indemnifying party
or parties shall cause the indemnified party to be liable for any damage caused
by failure to give timely notice. The indemnifying party or parties may
participate at their own expense and with their counsel in the defense of such
action. If the indemnifying party or parties so elect within a reasonable time
after receipt of such notice, they may assume the defense of such action with
counsel chosen by the indemnifying party or parties and approved by the
indemnified party in such action, unless the indemnified party reasonably
objects to such assumption on the ground that its counsel has advised it that
there may be legal defenses available to it that are different from or in
addition to those available to the indemnifying party or parties, in which case
the indemnified party shall have the right to employ counsel approved by the
indemnifying party or parties. If the indemnifying party or parties assume the
defense of such action, the indemnifying party or parties shall not be liable
for fees and expenses of counsel for the indemnified party incurred thereafter
in connection with such action. In no event shall the indemnifying party or
parties be liable for the fees and expenses of more than one counsel for the
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances unless, in the reasonable opinion of such counsel,
there is, under applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more indemnified parties.

                                   ARTICLE 12
                                  MISCELLANEOUS

         12.1     Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time on or before the Closing Date
(notwithstanding approval by the shareholders of EMPIRE ASSOCIATES, INC.):

                  (a)      by mutual consent of EMPIRE ASSOCIATES, INC. and OSI;

                  (b)      by OSI if there has been a material misrepresentation
         or breach of warranty in the representations and warranties of EMPIRE
         ASSOCIATES, INC. or COFIELD set forth herein or if there has been any
         material failure on the part of EMPIRE ASSOCIATES, INC. or COFIELD to
         comply with their obligations hereunder;

                  (c)      by EMPIRE ASSOCIATES, INC. if there has been a
         material misrepresentation or breach of warranty in the representations
         and warranties of OSI or Outback set forth herein or if there has been
         any material failure on the part of OSI or Outback to comply with their
         obligations hereunder;

                  (d)      by either OSI, EMPIRE ASSOCIATES, INC. or COFIELD, if
         the transactions contemplated by this Agreement have not been
         consummated by June 30, 2001, unless such failure of consummation is
         due to the failure of the terminating party to perform or observe the
         covenants, agreements and conditions hereof to be performed or observed
         by it at or before the Closing Date;

                                       18
<PAGE>

                  (e)      by either OSI or EMPIRE ASSOCIATES, INC. if the
         conditions precedent to its obligations to close this Agreement have
         not been satisfied or waived by it at or before the Closing Date; or

                  (f)      by either EMPIRE ASSOCIATES, INC. or OSI if the
         transactions contemplated hereby violate any nonappealable final order,
         decree or judgment of any court or governmental body or agency having
         competent jurisdiction.

         12.2     Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby.

         12.3     Entire Agreement. This Agreement and the exhibits and
Disclosure Schedule hereto constitute and contain the complete agreement among
the parties with respect to the transactions contemplated hereby and supersede
all prior agreements and understandings among the parties with respect to such
transactions. The parties hereto have not made any representation or warranty
except as expressly set forth in this Agreement, the Merger Agreement or in any
certificate or schedule delivered pursuant hereto. The obligations of any party
under any agreement executed pursuant to this Agreement shall not be affected by
this SECTION 12.3.

         12.4     Survival of Representations and Warranties.

                  (a)      The representations, warranties and indemnification
         obligations of OSI and Outback contained herein or in any exhibit,
         certificate, document or instrument delivered pursuant to this
         Agreement shall survive for a period of two years from the Effective
         Date; provided, however, that the obligations of OSI and Outback under
         ARTICLE 11 hereof shall survive for the periods provided therein.

                  (b)      Except where otherwise specifically provided in this
         Agreement, the representations, warranties and indemnification
         obligations of COFIELD contained herein or in any exhibit, schedule,
         certificate, document or instrument delivered pursuant to this
         Agreement shall survive the Closing for a period of three years from
         the Effective Date; provided, however, the representations and
         warranties contained in SECTION 2.9 (TAX LIABILITIES) shall survive the
         Closing for a period ending four years after the filing of EMPIRE
         ASSOCIATES, INC.'s federal income tax return for the period including
         the Effective Date.

         12.5     Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which when so executed and delivered shall be
deemed an original and such counterparts together shall constitute only one
original.

         12.6     Notices. All notices, demands, requests or other
communications that may be or are required to be given, served or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by registered or certified mail, return receipt requested,
postage prepaid or transmitted by hand delivery or recognized national overnight
delivery service addressed as follows:

                                       19
<PAGE>

         If to EMPIRE ASSOCIATES, INC. or COFIELD:
                                     EMPIRE ASSOCIATES, INC.
                                     45 Knollwood Drive
                                     Pittsford, NY 14618
                                     Attention: STACY C. COFIELD

         If to OSI or Outback:       OUTBACK STEAKHOUSE, INC.
                                     2202 North Westshore Boulevard, 5th Floor
                                     Tampa, Florida 33607
                                     Attention: Joseph J. Kadow, General Counsel

         Each party may designate by notice in writing a new address to which
any notice, demand, request or communication may thereafter be so given, served
or sent. Each notice, demand, request or communication that is mailed, delivered
or transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, the affidavit of
messenger or at such time as delivery is refused by the addressee upon
presentation.

         12.7     Successors and Assigns. This Agreement and the rights,
interests and obligations hereunder shall be binding upon and shall inure to the
benefit of the parties hereto and, except as otherwise specifically provided for
herein, their respective successors and assigns.

         12.8     Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Florida without giving effect to
principles of comity or conflicts of law thereof.

         12.9     Waiver and Other Action. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the parties
against which enforcement of the amendment, modification or supplement is
sought.

         12.10    Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.

         12.11    Headings. All headings and captions in this Agreement are
intended solely for the convenience of the parties and none shall be deemed to
affect the meaning or construction of any provision hereof.

         12.12    Construction. All references herein to the masculine, neuter
or singular shall be construed to include the masculine, feminine, neuter or
plural, where applicable.

         12.13    Jurisdiction and Venue. The parties agree that any action
brought by either party against the other in any court, whether federal or
state, shall be brought within the State of Florida in the judicial circuit in
which OSI has its principal place of business. Each party hereby agrees to
submit to the personal jurisdiction of such courts and hereby waives all
questions of personal jurisdiction or venue for the purpose of carrying out this

                                       20
<PAGE>

provision, including, without limitation, the claim or defense therein that such
courts constitute an inconvenient forum.

         12.14    Enforcement. In the event it is necessary for any party to
retain legal counsel or institute legal proceedings to enforce the terms of this
Agreement, including, without limitation, obligations upon expiration or
termination, the prevailing party shall be entitled to receive from the
non-prevailing party, in addition to all other remedies, all costs of such
enforcement including, without limitation, attorney's fees and court costs and
including appellate proceedings.

         12.15    Further Assurances. Each party covenants and agrees to execute
and deliver, prior to or after the Merger, such further documents as may
reasonably be requested by another party to fully effectuate the transactions
provided for herein.

         12.16    Equitable Remedies. The parties hereto acknowledge that a
refusal by a party to consummate the transactions contemplated hereby will cause
irreparable harm to the other parties, for which there may be no adequate remedy
at law. A party not in default at the time of such refusal shall be entitled, in
addition to other remedies at law or in equity, to specific performance of this
Agreement by the party that refused to consummate the transactions contemplated
hereby.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                          "OSI"

Attest:                                   OUTBACK STEAKHOUSE, INC.,
                                          a Delaware corporation

By:  /s/ Joseph J. Kadow                  By:  /s/ Robert D. Basham
   ----------------------------------         ---------------------------------
    JOSEPH J. KADOW, Secretary                ROBERT D. BASHAM, President

                                          "Outback"

Attest:                                   OUTBACK STEAKHOUSE OF FLORIDA, INC.,
                                          a Florida corporation

By:  /s/ Joseph J. Kadow                  By:  /s/ Robert D. Basham
   ----------------------------------         ---------------------------------
    JOSEPH J. KADOW, Secretary                ROBERT D. BASHAM, Chief Operating
                                              Officer

                                       21
<PAGE>

Attest:                                   EMPIRE ASSOCIATES, INC.,
                                          a Florida corporation

By:  /s/ Stacy C. Cofield                 By:  /s/ Stacy C. Cofield
   ----------------------------------         ---------------------------------
    STACY C. COFIELD, Secretary               STACY C. COFIELD, President

Witness:                                  "COFIELD"

                                           /s/ Stacy C. Cofield
-------------------------------------     -------------------------------------
                                          STACY C. COFIELD
-------------------------------------

                                       22

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