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                                                                   EXHIBIT 4.35

                      AGREEMENT AND PLAN OF REORGANIZATION

                                     AMONG

                           OUTBACK STEAKHOUSE, INC.,

                      OUTBACK STEAKHOUSE OF FLORIDA, INC.,

                                  ROWELL, INC.

                                      AND

                                KEVIN A. ROWELL
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                               TABLE OF CONTENTS
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         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 ROWELL, INC. AND ROWELL..............................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 ROWELL, 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..........................................................7
         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 ROWELL...............................................8
         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

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         ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF OSI AND OUTBACK......................................9
         4.1      ORGANIZATION AND GOOD STANDING............................................................9
         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.....................................................................10
         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......................................................11

         ARTICLE 5 - JOINT COVENANTS OF ROWELL, INC., ROWELL, OSI AND OUTBACK...............................12
         5.1      NOTICE OF ANY MATERIAL CHANGE.............................................................12
         5.2      COOPERATION...............................................................................12
         5.3      POST-CLOSING ADJUSTMENT...................................................................12
         5.4      DISTRIBUTION AND ALLOCATIONS..............................................................13
         5.5      ADDITIONAL AGREEMENTS.....................................................................13

         ARTICLE 6 - COVENANTS OF ROWELL, INC. AND ROWELL...................................................13
         6.1      SECURITIES LAW COMPLIANCE.................................................................14
         6.2      PAYMENT OF LIABILITIES....................................................................15
         6.3      POOLING...................................................................................15

         ARTICLE 7 - COVENANTS OF OSI AND OUTBACK...........................................................15
         7.1      EMPLOYMENT AGREEMENTS.....................................................................15
         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........................................................................16

         ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS OF ROWELL, 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..................................................................17
         10.4     MATERIAL ADVERSE CHANGES..................................................................18
         10.5     POOLING...................................................................................18

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         ARTICLE 11 - INDEMNIFICATION.......................................................................18
         11.1     INDEMNIFICATION BASED ON AGREEMENT........................................................18
         11.2     LIMITATION................................................................................18
         11.3     COOPERATION...............................................................................18
         11.4     NOTICE....................................................................................19

         ARTICLE 12 - MISCELLANEOUS.........................................................................19
         12.1     TERMINATION...............................................................................19
         12.2     EXPENSES..................................................................................19
         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....................................................................20
         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....................................................................21
         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

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                      AGREEMENT AND PLAN OF REORGANIZATION

         THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
and entered effective as of June 1, 2000, by and among OUTBACK STEAKHOUSE,
INC., a Delaware corporation ("OSI"), OUTBACK STEAKHOUSE OF FLORIDA, INC., a
Florida corporation ("Outback"), ROWELL, INC., a Virginia corporation ("ROWELL,
INC."), and KEVIN A. ROWELL, an individual residing in the State of Virginia
("ROWELL").

                              W I T N E S S E T H:

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

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

         WHEREAS, Outback and ROWELL, INC. have entered into that certain
Florida limited partnership known as Outback/Shenandoah-II, Limited Partnership
("Partnership");

         WHEREAS, the Partnership operates Outback Steakhouse restaurants in
the State of Virginia; and

         WHEREAS, the Board of Directors of ROWELL, INC. has approved the
merger of ROWELL, 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, ROWELL, INC. will be merged with and
into Outback and all of the outstanding shares of capital stock of ROWELL, 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, ROWELL, INC. shall be merged with and into Outback, with Outback being
the surviving corporation, in accordance with the Articles of Merger

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substantially in the form attached to this Agreement as EXHIBIT A (the "Merger
Agreement"), which will be executed and delivered by OSI, Outback, and ROWELL,
INC. prior to the Merger. As a result of the Merger, each voting and nonvoting
common share of ROWELL, 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 456.93 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 Forty-five Thousand Six Hundred Ninety-three
         (45,693).

                  (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 ROWELL, 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) ROWELL, 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 ROWELL, 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 ROWELL, INC.'s capital
         stock (assuming no Dissenting Shares) remains at Forty-five Thousand
         Six Hundred Ninety-three (45,693).

                  (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 ROWELL, 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 June 1, 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 December 31, 2000, 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

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accomplished. At the Closing, each party also shall execute and deliver such
other appropriate and customary documents as the other 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, ROWELL, INC. and ROWELL 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 Articles of Merger to be filed with the
         Secretary of State of the State of Florida and the Secretary of State
         of the State of Virginia 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 Articles of Merger with the Secretary of
State of the State of Florida and the Secretary of State of the State of
Virginia (the "Effective Date"). Such Effective Date shall be indicated on
Certificates of Merger issued by the Secretary of State of the State of Florida
and by the Secretary of State of the State of Virginia pursuant to the
provisions of Sections 607.1101-607.1107 of the Florida Business Corporation
Act (the "Florida Act") and the laws of the State of Virginia ("Virginia Law").

         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 ROWELL, 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 ROWELL, INC. shall be
entitled to receive upon surrender of stock certificates of ROWELL, INC.
representing ROWELL, 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 ROWELL, 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 ROWELL, INC. shall be closed and no transfer of capital stock of
ROWELL, 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.

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         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 ROWELL, INC. AND ROWELL

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

         2.1 ORGANIZATION AND GOOD STANDING. ROWELL, INC. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Virginia.

         2.2 POWER AND AUTHORITY. ROWELL, 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. ROWELL, 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) ROWELL, 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
         ROWELL, INC. in connection with this Agreement; and the execution,
         delivery and performance by ROWELL, INC. of this Agreement, the Merger
         Agreement and the other documents executed or to be executed by
         ROWELL, INC. in connection with this Agreement have been duly
         authorized by all necessary corporate action. The execution, delivery
         and performance by ROWELL, 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 ROWELL, INC. as
         required under the laws of the State of Virginia and ROWELL, INC.'s
         corporate governance documents.

                  (b) ROWELL 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 ROWELL in connection with this
         Agreement.

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

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

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                  (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 ROWELL, INC. nor ROWELL 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 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 ROWELL, INC. or ROWELL 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 ROWELL, INC. or ROWELL 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 ROWELL,
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 ROWELL, INC.

                  (a) The authorized capital stock of ROWELL, INC. consists of
         authorized Five Thousand (5,000) common shares. There are One Hundred
         (100) common shares issued and outstanding, all of which are owned by
         ROWELL. There are no other shareholders of ROWELL, INC. and no other
         persons with rights or options to acquire capital stock of ROWELL,
         INC. All of the issued and outstanding shares of capital stock of
         ROWELL, INC. have been duly authorized and validly issued and are
         fully paid and nonassessable. There are no shares of capital stock of
         ROWELL, INC. held in its treasury.

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

                  (c) There is no outstanding subscription, contract,
         convertible or exchangeable security, option, warrant, call or other
         right obligating ROWELL, 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
         ROWELL, INC.

         2.8 ABSENCE OF CERTAIN CHANGES. From December 31, 1999 to the Closing
Date, (except solely as a result of ROWELL, INC.'s status as a partner in the
Partnership) ROWELL, 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;

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                  (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;

                  (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. ROWELL, 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;
ROWELL, 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 ROWELL, 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 ROWELL, INC.

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nor has ROWELL, INC. received notice of any such deficiency, delinquency or
default. ROWELL, INC. has no reason to believe that ROWELL, INC. has or may
have any tax liabilities other than those reflected on the unaudited balance
sheet of ROWELL, 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 ROWELL, INC., each prepared and
attested to by the chief financial officer of ROWELL, INC. (the "Balance
Sheets") and those arising in the ordinary course of business since the date
thereof. With regard to the foregoing, ROWELL, INC. has relied on the accuracy
and completeness of the Schedule K-1 provided by the Partnership.

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

         2.10 NO UNDISCLOSED LIABILITIES. There are no liabilities or
obligations of ROWELL, INC. (other than material liabilities arising solely by
reason of ROWELL, 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. ROWELL, 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 ROWELL, 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 ROWELL, 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 ROWELL, 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 ROWELL, 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 ROWELL, INC. is a party or by which
ROWELL, 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 ROWELL, 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 ROWELL, INC. or ROWELL, contemplated or, to the best
knowledge of ROWELL, INC. or ROWELL, 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 ROWELL, INC. or the Partnership.

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         2.14 NO VIOLATION OF ANY INSTRUMENT. Except as indicated in Item 2.14
of the Disclosure Schedule, ROWELL, 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 ROWELL, INC. pursuant
to, the articles or certificates of incorporation, bylaws or other chartering
or governance document of ROWELL, 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
ROWELL, 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 (including with customers), judgment, order,
injunction or decree to which ROWELL, INC. is a party, by which ROWELL, INC. is
bound or to which any of the assets of ROWELL, 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 and Virginia 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 ROWELL, INC. and ROWELL 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 ROWELL, INC. and ROWELL 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 ROWELL,
INC. after the Effective Date in substantially the same manner as now operated.

         2.16 COMPLIANCE WITH LAWS. ROWELL has no actual knowledge that ROWELL,
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 ROWELL, INC. or ROWELL 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 ROWELL, INC. and ROWELL have
disclosed to OSI and Outback all facts known to them that are material to
ROWELL, INC.'s and the Partnership's respective businesses, operations,
financial condition or prospects.

                                   ARTICLE 3

                    REPRESENTATIONS AND WARRANTIES OF ROWELL

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

                                       8
<PAGE>   13

         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 ROWELL 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

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

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

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

         3.5 RESIDENCY. ROWELL is, and has been at all times during the one
year period ending on the date hereof, a resident of the State of Virginia.

         3.6 COMPLIANCE WITH OTHER INSTRUMENTS. Neither the execution and
delivery by ROWELL 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 ROWELL
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 ROWELL 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 ROWELL,
INC. and ROWELL 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 Virginia and Florida, respectively.

                                       9
<PAGE>   14

         4.2 FOREIGN QUALIFICATION. Outback is duly qualified or licensed to do
business and in good standing as a foreign corporation in Virginia 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.

         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 78,118,843 outstanding shares of Common Stock and no shares
of Preferred Stock were issued and outstanding as of June 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 ROWELL, 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)

                                      10
<PAGE>   15

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 ROWELL, INC. and ROWELL 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 1999 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 ROWELL, INC. and ROWELL. 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.

         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 and Virginia 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 December 31, 1999, 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.

                                      11
<PAGE>   16

                                   ARTICLE 5

            JOINT COVENANTS OF ROWELL, INC., ROWELL, OSI AND OUTBACK

         ROWELL, INC. and ROWELL, 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
ROWELL, INC., ROWELL, 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
         ROWELL, 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.

         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 ROWELL, INC. as of the
         Effective Date; and

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

                                      12
<PAGE>   17

         Upon receipt of such report, ROWELL (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 ROWELL (and at the expense of
ROWELL) 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 Subsections (b) and (c), OSI shall pay such excess to ROWELL within ten
(10) days of such final determination. If, as finally determined, the sum of
Subsections (b) and (c) exceeds the sum of Subsection (a), ROWELL 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 ROWELL, INC.'s entire share of Partnership distributions of cash
flow, and shall be allocated ROWELL, INC.'s shares of profit and loss, from and
after June 1, 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 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 ROWELL, 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
         ROWELL shall take all such necessary action.

                  (c) Neither Outback, OSI, ROWELL, INC. nor ROWELL 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 ROWELL, INC. AND ROWELL

         ROWELL, INC. and ROWELL covenant and agree with OSI as follows:

                                      13
<PAGE>   18

         6.1 SECURITIES LAW COMPLIANCE. ROWELL represents and warrants, and
covenants to Outback and OSI that:

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

                  (b) ROWELL 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 ROWELL.

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

                  (d) ROWELL understands that the OSI Common Stock to be
         received is an investment of a speculative nature and ROWELL must bear
         the risks thereof for an indefinite period of time. ROWELL 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) ROWELL and/or his representatives or advisors who have
         acted with or on behalf of ROWELL and who have advised ROWELL in this
         matter have such knowledge and experience in financial and business
         matters that ROWELL is capable of evaluating the merits and risks of
         the Merger for OSI Common Stock.

                  (f) ROWELL is participating in the Merger solely for his
         account as a private investment, and ROWELL 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. ROWELL does not presently intend to
         enter into any such agreement or undertaking and there are no present
         circumstances which will compel ROWELL to sell any OSI Common Stock so
         received. ROWELL 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 ROWELL in OSI Common Stock pursuant to
         the Merger is a suitable investment for ROWELL given the investment
         goals and objectives of ROWELL.

                  (h) ROWELL 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 ROWELL of any OSI Common Stock

                                      14
<PAGE>   19

         received hereby which is effected other than in strict compliance with
         the terms hereof and applicable law.

                  (i) ROWELL 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) ROWELL 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) ROWELL 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 ROWELL'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. ROWELL, INC. and ROWELL covenant and agree
that all debts and liabilities of ROWELL, 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 ROWELL, INC.
assumed by Outback as specified in Item 6.2 of the Disclosure Schedules.

         6.3 POOLING. ROWELL agrees that until such time as financial results
of OSI covering at least thirty (30) days of combined operations of OSI and
ROWELL, 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., 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
ROWELL, INC. and ROWELL 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

                                      15
<PAGE>   20

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 ROWELL
from any loss or liability therefor.

                                   ARTICLE 8

               JOINT CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS

         Except as may be waived by OSI, the obligations of ROWELL, INC.,
ROWELL, 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. ROWELL, 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 ROWELL, 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 interfere with
the operation of the assets and business of ROWELL, 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
ROWELL, 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.

                                      16
<PAGE>   21

                                   ARTICLE 9

              CONDITIONS PRECEDENT TO OBLIGATIONS OF ROWELL, INC.

         The obligations of ROWELL, INC. and ROWELL 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 ROWELL, INC. and ROWELL
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. ROWELL, INC. and ROWELL 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 ROWELL, INC. and/or ROWELL in this Agreement, the Disclosure
Schedule, and in all certificates and other documents delivered by ROWELL, INC.
or ROWELL 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.

         10.3 CURRENT FINANCIAL STATUS. OSI shall have received the unaudited
financial statements of ROWELL, INC. as of June 30, 2000, for the month then
ended.

                                      17
<PAGE>   22

         10.4 MATERIAL ADVERSE CHANGES. Since December 31, 1999, there shall
have occurred no material adverse change in the business, properties, assets,
liabilities, results of operations or condition, financial or otherwise, of
ROWELL, INC. or the Partnership.

         10.5 POOLING. OSI shall have received a letter from
PricewaterhouseCoopers, in form and substance satisfactory to OSI and dated not
more than five days prior to the Closing Date, to the effect that the Merger
shall qualify as a pooling of interests for financial reporting purposes.

                                  ARTICLE 11

                                INDEMNIFICATION

         ROWELL, 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, ROWELL shall indemnify and hold harmless OSI,
Outback and ROWELL, INC., and OSI, Outback and ROWELL, INC., jointly and
severally, shall indemnify and hold harmless ROWELL, 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, ROWELL shall indemnify OSI, Outback and
ROWELL, 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
ROWELL, INC. for any period prior to and including the Effective Date and (ii)
any debt of ROWELL, 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 ROWELL, 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. ROWELL shall have no obligation under SECTION 11.1 to
indemnify OSI, Outback or ROWELL, 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 ROWELL, 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 Closing 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 Closing 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
asserted before or after the Closing Date, the parties hereto will cooperate
and use their best efforts to defend against and respond thereto.

                                      18
<PAGE>   23

         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 ROWELL, INC.):

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

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

                  (c) by ROWELL, 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, ROWELL, INC. or ROWELL, if the
         transactions contemplated by this Agreement have not been consummated
         by December 31, 2000, 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;

                  (e) by either OSI, or ROWELL, 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; and

                                      19
<PAGE>   24

                  (f) by either ROWELL, 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 the Closing for a period of two years;
         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 ROWELL 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 ROWELL,
         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, recognized national overnight delivery service,
telegram or telex, addressed as follows:

         If to ROWELL, INC. or ROWELL:      ROWELL, INC.
                                            361 Southport Circle #260
                                            Virginia Beach, Virginia 23452
                                            Attention: KEVIN A. ROWELL

                                      20
<PAGE>   25

         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 (with respect to a telex) the answer
back being deemed conclusive evidence of such delivery) 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 provision, including, without limitation, the claim or defense therein
that such courts constitute an inconvenient forum.

                                      21
<PAGE>   26

         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:                                    By:
   ----------------------------           ------------------------------------
    JOSEPH J. KADOW, Secretary             ROBERT D. BASHAM, President

                                       "Outback"

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

By:                                    By:
   ----------------------------           ------------------------------------
    JOSEPH J. KADOW, Secretary             ROBERT D. BASHAM, Chief Operating
                                           Officer

                                      22
<PAGE>   27

                                       "ROWELL, INC."

Attest:                                ROWELL, INC.,
                                       a Virginia corporation

By:                                    By:
   ----------------------------           ------------------------------------
   KEVIN A. ROWELL, Secretary             KEVIN A. ROWELL, President

Witness:                               "ROWELL"

-------------------------------           ------------------------------------
                                          KEVIN A. ROWELL

-------------------------------

                                      23<PAGE>   1
                                                                   EXHIBIT 4.36

                      AGREEMENT AND PLAN OF REORGANIZATION

                                     AMONG

                           OUTBACK STEAKHOUSE, INC.,

                      OUTBACK STEAKHOUSE OF FLORIDA, INC.,

                         MCMAHON RESTAURANT GROUP, INC.

                                      AND

                               MATTHEW J. MCMAHON

<PAGE>   2

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                           PAGE
                                                                                                           ----
<S>      <C>                                                                                               <C>
         ARTICLE 1 - PLAN OF ACQUISITION....................................................................2
         1.1      The Merger................................................................................2
         1.2      Adjustments...............................................................................2
         1.3      Closing...................................................................................2
         1.4      Execution and Delivery of Closing Documents...............................................3
         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.................................................................4
         1.10     Fractional Shares.........................................................................4
         1.11     Accounting Treatment......................................................................4

         ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF MCMAHON RESTAURANT GROUP, INC. AND MCMAHON...........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............................................................................5
         2.6      Compliance with Other Instruments.........................................................5
         2.7      Capitalization of McMAHON RESTAURANT GROUP, INC...........................................5
         2.8      Absence of Certain Changes................................................................6
         2.9      Tax Liabilities...........................................................................7
         2.10     No Undisclosed Liabilities................................................................7
         2.11     Title to Properties.......................................................................7
         2.12     Contracts.................................................................................8
         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......................................................................9
         2.17     Accuracy of Information Furnished.........................................................9

         ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF McMAHON..............................................9
         3.1      Authority and Validity....................................................................9
         3.2      Binding Effect............................................................................9
         3.3      Ownership.................................................................................10
         3.4      Voting....................................................................................10
         3.5      Residency.................................................................................10
         3.6      Compliance with Other Instruments.........................................................10

</TABLE>

                                       i
<PAGE>   3

TABLE OF CONTENTS (CONTINUED)
<TABLE>
<CAPTION>

                                                                                                           PAGE
                                                                                                           ----
<S>      <C>                                                                                               <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............................................................................11
         4.6      Compliance with Other Instruments.........................................................11
         4.7      Capitalization of OSI.....................................................................11
         4.8      SEC Reports...............................................................................11
         4.9      Litigation and Government Claims..........................................................12
         4.10     Necessary Approvals and Consents..........................................................12
         4.11     Absence of Certain Changes or Events......................................................12

         ARTICLE 5 - JOINT COVENANTS OF MCMAHON RESTAURANT GROUP, INC., MCMAHON, OSI AND OUTBACK............12
         5.1      Notice of any Material Change.............................................................12
         5.2      Cooperation...............................................................................13
         5.3      Post-Closing Adjustment...................................................................13
         5.4      Distribution and Allocations..............................................................14
         5.5      Additional Agreements.....................................................................14

         ARTICLE 6 - COVENANTS OF MCMAHON RESTAURANT GROUP, INC. AND MCMAHON................................14
         6.1      Securities Law Compliance.................................................................14
         6.2      Payment of Liabilities....................................................................16
         6.3      Pooling...................................................................................16

         ARTICLE 7 - COVENANTS OF OSI AND OUTBACK...........................................................16
         7.1      Employment Agreements.....................................................................16
         7.2      Assumed Liabilities.......................................................................17

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

         ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS OF MCMAHON RESTAURANT GROUP, INC...................17
         9.1      Compliance................................................................................18
         9.2      Representations and Warranties............................................................18
         9.3      Material Adverse Changes..................................................................18

         ARTICLE 10 - CONDITIONS PRECEDENT TO OBLIGATIONS OF OSI AND
                  OUTBACK...................................................................................18
         10.1     Compliance................................................................................18
         10.2     Representations and Warranties............................................................18
         10.3     Current Financial Status..................................................................18
         10.4     Material Adverse Changes..................................................................18

</TABLE>

                                      ii
<PAGE>   4

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                           PAGE
                                                                                                           ----
<S>      <C>                                                                                               <C>

         ARTICLE 11 - INDEMNIFICATION.......................................................................19
         11.1     Indemnification Based on Agreement........................................................19
         11.2     Limitation................................................................................19
         11.3     Cooperation...............................................................................19
         11.4     Notice....................................................................................19

         ARTICLE 12 - MISCELLANEOUS.........................................................................20
         12.1     Termination...............................................................................20
         12.2     Expenses..................................................................................21
         12.3     Entire Agreement..........................................................................21
         12.4     Survival of Representations and Warranties................................................21
         12.5     Counterparts..............................................................................21
         12.6     Notices...................................................................................21
         12.7     Successors and Assigns....................................................................22
         12.8     Governing Law.............................................................................22
         12.9     Waiver and Other Action...................................................................22
         12.10    Severability..............................................................................22
         12.11    Headings..................................................................................22
         12.12    Construction..............................................................................22
         12.13    Jurisdiction and Venue....................................................................22
         12.14    Enforcement...............................................................................23
         12.15    Further Assurances........................................................................23
         12.16    Equitable Remedies........................................................................23

         EXHIBIT A

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

         EXHIBIT B

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

                                      iii

<PAGE>   5

                      AGREEMENT AND PLAN OF REORGANIZATION

         THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
and entered effective as of June 27, 2000, by and among OUTBACK STEAKHOUSE,
INC., a Delaware corporation ("OSI"), OUTBACK STEAKHOUSE OF FLORIDA, INC., a
Florida corporation ("Outback"), McMAHON RESTAURANT GROUP, INC., an Arizona
corporation ("McMAHON RESTAURANT GROUP, INC."), and MATTHEW J. McMAHON, an
individual residing in the State of Arizona ("McMahon").

                              W I T N E S S E T H:

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

         WHEREAS, McMahon is the sole owner of the issued and outstanding
common stock of McMAHON RESTAURANT GROUP, INC., and McMahon is the sole
director, President and is responsible for the day-to-day operations of McMAHON
RESTAURANT GROUP, INC.; and

         WHEREAS, Outback and McMAHON RESTAURANT GROUP, INC. have entered into
that certain Florida limited partnership known as Outback/Phoenix-II, Limited
Partnership ("Partnership");

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

         WHEREAS, the Board of Directors of McMAHON RESTAURANT GROUP, INC. has
approved the merger of McMAHON RESTAURANT GROUP, 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, McMAHON RESTAURANT GROUP, INC. will
be merged with and into Outback and all of the outstanding shares of capital
stock of McMAHON RESTAURANT GROUP, 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:

                                       1
<PAGE>   6

                                   ARTICLE 1

                              PLAN OF ACQUISITION

         1.1 THE MERGER. Subject to and upon the terms and conditions contained
herein, McMAHON RESTAURANT GROUP, INC. shall be merged with and into Outback,
with Outback being the surviving corporation, in 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 McMAHON RESTAURANT GROUP, INC. prior to the Merger. As a result of the
Merger, each voting and nonvoting common share of McMAHON RESTAURANT GROUP,
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 Seven Hundred Forty
and 04/00 (740.04) 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 Seventy-four Thousand Four (74,004).

                  (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 McMAHON RESTAURANT GROUP, 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) McMAHON RESTAURANT GROUP,
         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 McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP,
         INC.'s capital stock (assuming no Dissenting Shares) remains at
         Seventy-four Thousand Four (74,004).

                  (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 McMAHON RESTAURANT GROUP, 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 June 27, 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

                                       2
<PAGE>   7

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 December 31, 2000, 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 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, McMAHON RESTAURANT GROUP, INC. and
McMahon 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 Articles of Merger to be filed with the
         Secretary of State of the State of Florida and the Secretary of State
         of the State of Arizona 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 Articles of Merger with the Secretary of
State of the State of Florida and the Secretary of State of the State of
Arizona (the "Effective Date"). Such Effective Date shall be indicated on
Certificates of Merger issued by the Secretary of State of the State of Florida
and by the Secretary of State of the State of Arizona pursuant to the
provisions of Sections 607.1101-607.1107 of the Florida Business Corporation
Act (the "Florida Act") and the laws of the State of Arizona ("Arizona Law").

         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 McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT
GROUP, INC. shall be entitled to receive upon surrender of stock certificates
of McMAHON RESTAURANT GROUP, INC. representing McMAHON RESTAURANT GROUP, 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 McMAHON
RESTAURANT GROUP, INC. capital stock is converted shall be deemed issued at the
Effective Date.

                                       3
<PAGE>   8

         1.9 CLOSING OF TRANSFER BOOKS. At the Closing Date, the stock transfer
books of McMAHON RESTAURANT GROUP, INC. shall be closed and no transfer of
capital stock of McMAHON RESTAURANT GROUP, 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 MCMAHON RESTAURANT GROUP, INC. AND MCMAHON

         Each of McMAHON RESTAURANT GROUP, INC. and McMahon, jointly and
severally, represent and warrant to OSI and Outback as follows:

         2.1 ORGANIZATION AND GOOD STANDING. McMAHON RESTAURANT GROUP, INC. is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Arizona.

         2.2 POWER AND AUTHORITY. McMAHON RESTAURANT GROUP, 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. McMAHON RESTAURANT GROUP, 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) McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, INC. in connection with
         this Agreement; and the execution, delivery and performance by McMAHON
         RESTAURANT GROUP, INC. of this Agreement, the Merger Agreement and the
         other documents executed or to be executed by McMAHON RESTAURANT
         GROUP, INC. in connection with this Agreement have been duly
         authorized by all necessary corporate action. The execution, delivery

                                       4
<PAGE>   9

         and performance by McMAHON RESTAURANT GROUP, 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 McMAHON
         RESTAURANT GROUP, INC. as required under the laws of the State of
         Arizona and McMAHON RESTAURANT GROUP, INC.'s corporate governance
         documents.

                  (b) McMahon 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 McMahon in connection with
         this Agreement.

         2.5 BINDING EFFECT. This Agreement, the Merger Agreement and the other
documents executed or to be executed by McMAHON RESTAURANT GROUP, INC. and
McMahon in connection with this Agreement have been or will have been duly
executed and delivered by McMAHON RESTAURANT GROUP, INC. and McMahon, and are
or will be, when executed and delivered, the legal, valid and binding
obligations of each of McMAHON RESTAURANT GROUP, INC. and McMahon 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 McMAHON RESTAURANT GROUP, INC. nor McMahon 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 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 McMAHON RESTAURANT GROUP, INC. or McMahon
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 McMAHON RESTAURANT GROUP, INC. or McMahon
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 McMAHON RESTAURANT GROUP, 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 MCMAHON RESTAURANT GROUP, INC.

                  (a) The authorized capital stock of McMAHON RESTAURANT GROUP,
         INC. consists of One Hundred (100) common shares. There are One
         Hundred (100) common shares issued and outstanding, all of which are
         owned by McMahon. There are no other shareholders of McMAHON
         RESTAURANT GROUP, INC. and no other persons with rights or options to
         acquire capital stock of McMAHON RESTAURANT GROUP, INC. All of the
         issued and outstanding shares of capital stock of McMAHON RESTAURANT
         GROUP, INC. have been duly authorized and validly issued and are fully
         paid and nonassessable. There are no shares of capital stock of
         McMAHON RESTAURANT GROUP, INC. held in its treasury.

                                       5
<PAGE>   10

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

                  (c) There is no outstanding subscription, contract,
         convertible or exchangeable security, option, warrant, call or other
         right obligating McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, INC.

         2.8 ABSENCE OF CERTAIN CHANGES. From December 31, 1999 to the Closing
Date, (except solely as a result of McMAHON RESTAURANT GROUP, INC.'s status as
a partner in the Partnership) McMAHON RESTAURANT GROUP, 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;

                  (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;

                                       6
<PAGE>   11

                  (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. McMAHON RESTAURANT GROUP, 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; McMAHON RESTAURANT GROUP, 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 McMAHON
RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, INC. nor has
McMAHON RESTAURANT GROUP, INC. received notice of any such deficiency,
delinquency or default. McMAHON RESTAURANT GROUP, INC. has no reason to believe
that McMAHON RESTAURANT GROUP, INC. has or may have any tax liabilities other
than those reflected on the unaudited balance sheet of McMAHON RESTAURANT
GROUP, 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 McMAHON RESTAURANT GROUP, INC., each
prepared and attested to by the chief financial officer of McMAHON RESTAURANT
GROUP, INC. (the "Balance Sheets") and those arising in the ordinary course of
business since the date thereof. With regard to the foregoing, McMAHON
RESTAURANT GROUP, INC. has relied on the accuracy and completeness of the
Schedule K-1 provided by the Partnership.

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

         2.10 NO UNDISCLOSED LIABILITIES. There are no liabilities or
obligations of McMAHON RESTAURANT GROUP, INC. (other than material liabilities
arising solely by reason of McMAHON RESTAURANT GROUP, 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. McMAHON RESTAURANT GROUP, 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

                                       7
<PAGE>   12

notes thereto) and all assets purchased by McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, 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 McMAHON
RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, INC. is a party or by which McMAHON
RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP,
INC. or McMahon, contemplated or, to the best knowledge of McMAHON RESTAURANT
GROUP, INC. or McMahon, 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 McMAHON RESTAURANT GROUP, INC. or the Partnership.

         2.14 NO VIOLATION OF ANY INSTRUMENT. Except as indicated in Item 2.14
of the Disclosure Schedule, McMAHON RESTAURANT GROUP, 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
McMAHON RESTAURANT GROUP, INC. pursuant to, the articles or certificates of
incorporation, bylaws or other chartering or governance document of McMAHON
RESTAURANT GROUP, 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 McMAHON RESTAURANT
GROUP, 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 (including with customers), judgment, order,
injunction or decree to which McMAHON RESTAURANT GROUP, INC. is a party, by
which McMAHON RESTAURANT GROUP, INC. is bound or to which any of the assets of
McMAHON RESTAURANT GROUP, 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 and Arizona with
respect to effectuating the Merger, (b) consents required to be obtained from

                                       8
<PAGE>   13

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 McMAHON RESTAURANT GROUP, INC. and McMahon 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 McMAHON RESTAURANT
GROUP, INC. and McMahon 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 McMAHON RESTAURANT GROUP, INC. after
the Effective Date in substantially the same manner as now operated.

         2.16 COMPLIANCE WITH LAWS. McMahon has no actual knowledge that
McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, INC. or McMahon 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 McMAHON RESTAURANT
GROUP, INC. and McMahon have disclosed to OSI and Outback all facts known to
them that are material to McMAHON RESTAURANT GROUP, INC.'s and the
Partnership's respective businesses, operations, financial condition or
prospects.

                                   ARTICLE 3

                   REPRESENTATIONS AND WARRANTIES OF MCMAHON

         In addition to the representations and warranties contained in ARTICLE
2, McMahon 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 McMahon 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

                                       9
<PAGE>   14

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

         3.3 OWNERSHIP. McMahon is the sole record and beneficial shareholder
of McMAHON RESTAURANT GROUP, INC. and no other person has any rights (in any
form) to acquire any capital stock of McMAHON RESTAURANT GROUP, INC.

         3.4 VOTING. He acknowledges that in his individual capacity as
shareholder and director of McMAHON RESTAURANT GROUP, INC., he has voted in
favor of the execution and delivery of this Agreement and the Merger Agreement.

         3.5 RESIDENCY. McMahon is, and has been at all times during the one
year period ending on the date hereof, a resident of the State of Arizona.

         3.6 COMPLIANCE WITH OTHER INSTRUMENTS. Neither the execution and
delivery by McMahon 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
McMahon 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 McMahon 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
McMAHON RESTAURANT GROUP, INC. and McMahon 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 Arizona 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

                                      10
<PAGE>   15

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.

         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 78,118,843 outstanding shares of Common Stock and no shares
of Preferred Stock were issued and outstanding as of June 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 McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, INC.
and McMahon 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

                                      11
<PAGE>   16

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 McMAHON
RESTAURANT GROUP, INC. and McMahon. 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.

         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 and Arizona 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 December 31, 1999, 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 MCMAHON RESTAURANT GROUP, INC., MCMAHON, OSI AND OUTBACK

         McMAHON RESTAURANT GROUP, INC. and McMahon, 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
McMAHON RESTAURANT GROUP, INC., McMahon, 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:

                                      12
<PAGE>   17

                  (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
         McMAHON RESTAURANT GROUP, 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.

         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 McMAHON RESTAURANT GROUP,
         INC. as of the Effective Date; and

                  (b) the amount of all liabilities of McMAHON RESTAURANT
         GROUP, INC. (other than liabilities specified in Item 6.2 of the
         McMAHON RESTAURANT GROUP, 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, McMahon (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 McMahon (and at the expense of
McMahon) 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.

                                      13
<PAGE>   18

         If, as finally determined, the sum of Subsection (a) above exceeds the
sum of Subsections (b) and (c), OSI shall pay such excess to McMahon within ten
(10) days of such final determination. If, as finally determined, the sum of
Subsections (b) and (c) exceeds the sum of Subsection (a), McMahon 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 McMAHON RESTAURANT GROUP, INC.'s entire share of Partnership
distributions of cash flow, and shall be allocated McMAHON RESTAURANT GROUP,
INC.'s shares of profit and loss, from and after June 27, 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 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 McMAHON RESTAURANT GROUP, 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
         McMahon shall take all such necessary action.

                  (c) Neither Outback, OSI, McMAHON RESTAURANT GROUP, INC. nor
         McMahon 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 MCMAHON RESTAURANT GROUP, INC. AND MCMAHON

         McMAHON RESTAURANT GROUP, INC. and McMahon covenant and agree with OSI
as follows:

         6.1 SECURITIES LAW COMPLIANCE. McMahon represents, warrants and
covenants to Outback and OSI that:

                  (a) McMahon has received all schedules and exhibits and the
         documents furnished to McMAHON RESTAURANT GROUP, INC. pursuant to
         SECTION 4.8;

                  (b) McMahon 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

                                      14
<PAGE>   19

         could acquire without unreasonable expense that is necessary to verify
         the accuracy of information furnished to McMahon.

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

                  (d) McMahon understands that the OSI Common Stock to be
         received is an investment of a speculative nature and McMahon must
         bear the risks thereof for an indefinite period of time. McMahon 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) McMahon and/or his representatives or advisors who have
         acted with or on behalf of McMahon and who have advised McMahon in
         this matter have such knowledge and experience in financial and
         business matters that McMahon is capable of evaluating the merits and
         risks of the Merger for OSI Common Stock.

                  (f) McMahon is participating in the Merger solely for his
         account as a private investment, and McMahon 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. McMahon does not presently intend to
         enter into any such agreement or undertaking and there are no present
         circumstances which will compel McMahon to sell any OSI Common Stock
         so received. McMahon 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 McMahon in OSI Common Stock pursuant to
         the Merger is a suitable investment for McMahon given the investment
         goals and objectives of McMahon.

                  (h) McMahon 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 McMahon of any OSI Common Stock
         received hereby which is effected other than in strict compliance with
         the terms hereof and applicable law.

                  (i) McMahon 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.

                                      15
<PAGE>   20

                  (j) McMahon 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) McMahon 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 McMahon'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. McMAHON RESTAURANT GROUP, INC. and McMahon
covenant and agree that all debts and liabilities of McMAHON RESTAURANT GROUP,
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 McMAHON RESTAURANT GROUP, INC. assumed by Outback as
specified in Item 6.2 of the Disclosure Schedules.

         6.3 POOLING. McMahon agrees that until such time as financial results
of OSI covering at least thirty (30) days of combined operations of OSI and
McMAHON RESTAURANT GROUP, 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., 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
McMAHON RESTAURANT GROUP, INC. and McMahon 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.

                                      16
<PAGE>   21

         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
McMahon from any loss or liability therefor.

                                   ARTICLE 8

               JOINT CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS

         Except as may be waived by OSI, the obligations of McMAHON RESTAURANT
GROUP, INC., McMahon, 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. McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT
GROUP, 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 interfere with
the operation of the assets and business of McMAHON RESTAURANT GROUP, 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
McMAHON RESTAURANT GROUP, 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 MCMAHON RESTAURANT GROUP, INC.

         The obligations of McMAHON RESTAURANT GROUP, INC. and McMahon 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:

                                      17
<PAGE>   22

         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 McMAHON RESTAURANT GROUP,
INC. and McMahon 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. McMAHON RESTAURANT GROUP, INC. and McMahon 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 McMAHON RESTAURANT GROUP, INC. and/or McMahon in this
Agreement, the Disclosure Schedule, and in all certificates and other documents
delivered by McMAHON RESTAURANT GROUP, INC. or McMahon 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.

         10.3 CURRENT FINANCIAL STATUS. OSI shall have received the unaudited
financial statements of McMAHON RESTAURANT GROUP, INC. as of June 27, 2000, for
the month then ended.

         10.4 MATERIAL ADVERSE CHANGES. Since December 31, 1999, there shall
have occurred no material adverse change in the business, properties, assets,
liabilities, results of operations or condition, financial or otherwise, of
McMAHON RESTAURANT GROUP, INC. or the Partnership.

                                      18
<PAGE>   23

                                  ARTICLE 11

                                INDEMNIFICATION

         McMahon, 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, McMahon shall indemnify and hold harmless
OSI, Outback and McMAHON RESTAURANT GROUP, INC., and OSI, Outback and McMAHON
RESTAURANT GROUP, INC., jointly and severally, shall indemnify and hold
harmless McMahon, 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, McMahon shall indemnify OSI, Outback and
McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, INC. for any period prior to and
including the Effective Date and (ii) any debt of McMAHON RESTAURANT GROUP,
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 McMAHON
RESTAURANT GROUP, 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. McMahon shall have no obligation under SECTION 11.1
to indemnify OSI, Outback or McMAHON RESTAURANT GROUP, 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 McMAHON RESTAURANT GROUP, 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 Closing 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
Closing 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
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

                                      19
<PAGE>   24

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 McMAHON RESTAURANT GROUP,
INC.):

                  (a) by mutual consent of McMAHON RESTAURANT GROUP, INC. and
         OSI;

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

                  (c) by McMAHON RESTAURANT GROUP, 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, McMAHON RESTAURANT GROUP, INC. or McMahon,
         if the transactions contemplated by this Agreement have not been
         consummated by December 31, 2000, 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;

                  (e) by either OSI, McMAHON RESTAURANT GROUP, INC. or McMahon,
         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;
         and

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

                                      20
<PAGE>   25

         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 the Closing for a period of two years;
         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 McMahon 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 McMAHON
         RESTAURANT GROUP, 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, recognized national overnight delivery service,
telegram or telex, addressed as follows:

         If to McMAHON RESTAURANT GROUP, INC.
         or McMahon:                         McMAHON RESTAURANT GROUP, INC.
                                             26604 N. 71st Place
                                             Cave Creek, Arizona 85331
                                             Attention: Matthew J. McMahon

                                      21
<PAGE>   26

         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 (with respect to a telex) the answer
back being deemed conclusive evidence of such delivery) 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 provision, including, without limitation, the claim or defense therein
that such courts constitute an inconvenient forum.

                                      22
<PAGE>   27

         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:                                  By:
  -----------------------------         --------------------------------------
    JOSEPH J. KADOW, Secretary           ROBERT D. BASHAM, President

                                     "Outback"

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

By:                                  By:
  -----------------------------         --------------------------------------
    JOSEPH J. KADOW, Secretary           ROBERT D. BASHAM, Chief Operating
                                         Officer

                                      23
<PAGE>   28

                                     "McMAHON RESTAURANT GROUP, INC."

Attest:                              McMAHON RESTAURANT GROUP, INC.,
                                     an Arizona corporation

By:                                  By:
  -----------------------------         --------------------------------------
  MATTHEW J. McMAHON, Secretary         MATTHEW J. McMAHON, President

Witness:                             "McMahon"

-------------------------------       ----------------------------------------
                                      MATTHEW J. McMAHON

-------------------------------

                                      24

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