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Initial Public Offering And Split-off Agreement - BLOCKBUSTER INC - 11-15-1999

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Initial Public Offering And Split-off Agreement - BLOCKBUSTER INC - 11-15-1999 Powered By Docstoc
					EXHIBIT 10.1 INITIAL PUBLIC OFFERING AND SPLIT-OFF AGREEMENT DATED AS OF AUGUST 16, 1999 AMONG VIACOM INC. VIACOM INTERNATIONAL INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.01. Definitions.................................................. 1 ARTICLE II THE IPO AND THE SPLIT-OFF Section Section Section Section Section 2.01. 2.02. 2.03. 2.04. 2.05. The IPO and Other Primary Offerings.......................... The Split-Off................................................ Certain Stockholder Matters.................................. Prior Relationship........................................... Further Assurances Regarding the Split-Off................... ARTICLE III EXPENSES Section 3.01. Section 3.02. Section 3.03. General...................................................... 9 Certain Expenses Relating to the IPO and any Other Primary Offerings by Blockbuster............................. 9 Certain Expenses Relating to the Split-Off................... 9 ARTICLE IV ACCESS TO INFORMATION Section Section Section Section 4.01. 4.02. 4.03. 4.04. Restrictions on Disclosure of Information....................10 Legally Required Disclosure of Confidential Information......10 Access to Information........................................11 Record Retention.............................................11 ARTICLE V COVENANTS Section 5.01. Section 5.02. Section 5.03. Financial and Other Information..............................12 No Violations................................................18 Other Agreements.............................................18 7 7 7 8 8

Page ---ARTICLE VI ASSIGNMENT AND ASSUMPTION

TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.01. Definitions.................................................. 1 ARTICLE II THE IPO AND THE SPLIT-OFF Section Section Section Section Section 2.01. 2.02. 2.03. 2.04. 2.05. The IPO and Other Primary Offerings.......................... The Split-Off................................................ Certain Stockholder Matters.................................. Prior Relationship........................................... Further Assurances Regarding the Split-Off................... ARTICLE III EXPENSES Section 3.01. Section 3.02. Section 3.03. General...................................................... 9 Certain Expenses Relating to the IPO and any Other Primary Offerings by Blockbuster............................. 9 Certain Expenses Relating to the Split-Off................... 9 ARTICLE IV ACCESS TO INFORMATION Section Section Section Section 4.01. 4.02. 4.03. 4.04. Restrictions on Disclosure of Information....................10 Legally Required Disclosure of Confidential Information......10 Access to Information........................................11 Record Retention.............................................11 ARTICLE V COVENANTS Section 5.01. Section 5.02. Section 5.03. Financial and Other Information..............................12 No Violations................................................18 Other Agreements.............................................18 7 7 7 8 8

Page ---ARTICLE VI ASSIGNMENT AND ASSUMPTION Section Section Section Section 6.01. 6.02. 6.03. 6.04. Assignment Assumption Assignment Assumption of of of of Obligations....................................19 Obligations....................................19 Certain Employment Agreements..................19 Certain Employment Agreements..................19 ARTICLE VII OPTIONS Section Section Section Section Section Section 7.01. 7.02. 7.03. 7.04. 7.05. 7.06. Options......................................................19 Notice.......................................................20 Option Exercise and Payment..................................20 Effect of Failure to Exercise................................21 IPO..........................................................21 Termination of Options.......................................21 ARTICLE VIII INDEMNIFICATION Section 8.01. Indemnification Procedures...................................21

ARTICLE IX CONDITION TO CONSUMMATION OF TRANSACTIONS; TERMINATION Section 9.01. Section 9.02. Condition....................................................23 Termination..................................................23

Page ---ARTICLE VI ASSIGNMENT AND ASSUMPTION Section Section Section Section 6.01. 6.02. 6.03. 6.04. Assignment Assumption Assignment Assumption of of of of Obligations....................................19 Obligations....................................19 Certain Employment Agreements..................19 Certain Employment Agreements..................19 ARTICLE VII OPTIONS Section Section Section Section Section Section 7.01. 7.02. 7.03. 7.04. 7.05. 7.06. Options......................................................19 Notice.......................................................20 Option Exercise and Payment..................................20 Effect of Failure to Exercise................................21 IPO..........................................................21 Termination of Options.......................................21 ARTICLE VIII INDEMNIFICATION Section 8.01. Indemnification Procedures...................................21

ARTICLE IX CONDITION TO CONSUMMATION OF TRANSACTIONS; TERMINATION Section 9.01. Section 9.02. Condition....................................................23 Termination..................................................23 ARTICLE X MISCELLANEOUS Section Section Section Section Section Section Section Section Section Section Section 10.01. 10.02. 10.03. 10.04. 10.05. 10.06. 10.07. 10.08. 10.09. 10.10. 10.11. Limitation of Liability......................................23 Further Assurances...........................................23 Waiver.......................................................23 Remedies.....................................................24 Performance..................................................24 References; Construction.....................................24 Amendments...................................................24 Successors and Assignment....................................24 Severability.................................................24 Entire Agreement.............................................25 Notices......................................................25 ii

Section 10.12. Section 10.13. EXHIBITS Exhibit Exhibit Exhibit Exhibit A B C D

Governing Law................................................25 Counterparts.................................................26

Form Form Form Form

of of of of

Release and Indemnification Agreement Transition Services Agreement Registration Rights Agreement Tax Matters Agreement

iii INITIAL PUBLIC OFFERING AND SPLIT-OFF AGREEMENT INITIAL PUBLIC OFFERING AND SPLIT-OFF AGREEMENT (this "Agreement") dated as of August 16, 1999, among Viacom Inc., a Delaware corporation ("Viacom"), Viacom International Inc., a Delaware corporation and a wholly owned subsidiary of Viacom

Section 10.12. Section 10.13. EXHIBITS Exhibit Exhibit Exhibit Exhibit A B C D

Governing Law................................................25 Counterparts.................................................26

Form Form Form Form

of of of of

Release and Indemnification Agreement Transition Services Agreement Registration Rights Agreement Tax Matters Agreement

iii INITIAL PUBLIC OFFERING AND SPLIT-OFF AGREEMENT INITIAL PUBLIC OFFERING AND SPLIT-OFF AGREEMENT (this "Agreement") dated as of August 16, 1999, among Viacom Inc., a Delaware corporation ("Viacom"), Viacom International Inc., a Delaware corporation and a wholly owned subsidiary of Viacom ("Viacom International"), and Blockbuster Inc., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). Certain capitalized terms used herein are defined in Article I of this Agreement. RECITALS WHEREAS, since September 29, 1994, Viacom has owned and operated the businesses and operations related to Blockbuster; WHEREAS, Viacom presently intends to split off Blockbuster in a tax- free transaction; WHEREAS, prior to such split-off, Blockbuster proposes to issue shares of its common stock in an initial public offering registered under the Securities Act of 1933, as amended; and WHEREAS, the parties intend in this Agreement, including the Exhibits attached hereto, to set forth the principal arrangements between them regarding such initial public offering and such split-off. NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. As used in this Agreement, the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described: "Affiliates" means, with respect to any specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such specified Person; provided, however, that prior to the Split-Off, Affiliates of Blockbuster or Viacom shall only include Persons who would be affiliates of Blockbuster or Viacom, respectively, assuming that the Split-Off had occurred immediately prior to the determination as to whether such Person was an affiliate of Blockbuster or Viacom, respectively. "Agreement" has the meaning ascribed thereto in the Preamble. "Ancillary Agreements" means the Registration Rights Agreement, Transition Services Agreement, the Release and Indemnification Agreement and the Tax Matters Agreement. "Annual Financial Statements" has the meaning ascribed thereto in Section 5.01(v). "Applicable Stock" means at any time the (i) shares of Blockbuster Common Stock owned by Viacom and its

INITIAL PUBLIC OFFERING AND SPLIT-OFF AGREEMENT INITIAL PUBLIC OFFERING AND SPLIT-OFF AGREEMENT (this "Agreement") dated as of August 16, 1999, among Viacom Inc., a Delaware corporation ("Viacom"), Viacom International Inc., a Delaware corporation and a wholly owned subsidiary of Viacom ("Viacom International"), and Blockbuster Inc., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). Certain capitalized terms used herein are defined in Article I of this Agreement. RECITALS WHEREAS, since September 29, 1994, Viacom has owned and operated the businesses and operations related to Blockbuster; WHEREAS, Viacom presently intends to split off Blockbuster in a tax- free transaction; WHEREAS, prior to such split-off, Blockbuster proposes to issue shares of its common stock in an initial public offering registered under the Securities Act of 1933, as amended; and WHEREAS, the parties intend in this Agreement, including the Exhibits attached hereto, to set forth the principal arrangements between them regarding such initial public offering and such split-off. NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. As used in this Agreement, the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described: "Affiliates" means, with respect to any specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such specified Person; provided, however, that prior to the Split-Off, Affiliates of Blockbuster or Viacom shall only include Persons who would be affiliates of Blockbuster or Viacom, respectively, assuming that the Split-Off had occurred immediately prior to the determination as to whether such Person was an affiliate of Blockbuster or Viacom, respectively. "Agreement" has the meaning ascribed thereto in the Preamble. "Ancillary Agreements" means the Registration Rights Agreement, Transition Services Agreement, the Release and Indemnification Agreement and the Tax Matters Agreement. "Annual Financial Statements" has the meaning ascribed thereto in Section 5.01(v). "Applicable Stock" means at any time the (i) shares of Blockbuster Common Stock owned by Viacom and its Affiliates that were owned on the date hereof, plus (ii) shares of Blockbuster Class B Common Stock purchased by Viacom and its Affiliates pursuant to Article VII, plus (iii) shares of Blockbuster Common Stock that were issued to Viacom and its Affiliates in respect of shares described in either clause (i) or clause (ii) in any reclassification, share combination, share subdivision, share dividend, share exchange, merger, consolidation or similar transaction or event. "Blockbuster" has the meaning ascribed thereto in the Preamble. "Blockbuster Business" has the meaning ascribed thereto in Section 2.01(a)(i) of the Release and

"Agreement" has the meaning ascribed thereto in the Preamble. "Ancillary Agreements" means the Registration Rights Agreement, Transition Services Agreement, the Release and Indemnification Agreement and the Tax Matters Agreement. "Annual Financial Statements" has the meaning ascribed thereto in Section 5.01(v). "Applicable Stock" means at any time the (i) shares of Blockbuster Common Stock owned by Viacom and its Affiliates that were owned on the date hereof, plus (ii) shares of Blockbuster Class B Common Stock purchased by Viacom and its Affiliates pursuant to Article VII, plus (iii) shares of Blockbuster Common Stock that were issued to Viacom and its Affiliates in respect of shares described in either clause (i) or clause (ii) in any reclassification, share combination, share subdivision, share dividend, share exchange, merger, consolidation or similar transaction or event. "Blockbuster" has the meaning ascribed thereto in the Preamble. "Blockbuster Business" has the meaning ascribed thereto in Section 2.01(a)(i) of the Release and Indemnification Agreement. "Blockbuster Class A Common Stock" means the class A common stock, par value $0.01 per share of Blockbuster. "Blockbuster Class B Common Stock" means the class B common stock, par value $0.01 per share of Blockbuster. "Blockbuster Class B Common Stock Option" has the meaning ascribed thereto in Section 7.01(a). "Blockbuster Class B Common Stock Option Notice" has the meaning ascribed thereto in Section 7.02. "Blockbuster Common Stock" means the Blockbuster Class B Common Stock, the Blockbuster Class A Common Stock, any other class of Blockbuster's capital stock representing the right to vote generally for the election of directors and, for so long as Blockbuster continues to be a subsidiary corporation includible in a consolidated federal income tax return of the Viacom Group, any other security of Blockbuster treated as stock for purposes of Section 1504 of the Code. "Blockbuster Public Documents" has the meaning ascribed thereto in Section 5.01(viii). 2 "Blockbuster Public Filings" has the meaning ascribed thereto in Section 5.01(xii). "Blockbuster Transfer Agent" means the company designated by Blockbuster as the transfer agent and registrar for the Blockbuster Class A Common Stock and the Blockbuster Class B Common Stock. "Blockbuster's Auditors" has the meaning ascribed thereto in Section 5.01(xiii). "Business" means the Blockbuster Business or the Viacom Business, as the case may be. "Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions located in the State of New York are authorized or obligated by law or executive order to close. "Code" means the Internal Revenue Code of 1986, as amended from time to time, together with the rules and regulations promulgated thereunder. "Confidential Information" means, with respect to any party hereto,

"Blockbuster Public Filings" has the meaning ascribed thereto in Section 5.01(xii). "Blockbuster Transfer Agent" means the company designated by Blockbuster as the transfer agent and registrar for the Blockbuster Class A Common Stock and the Blockbuster Class B Common Stock. "Blockbuster's Auditors" has the meaning ascribed thereto in Section 5.01(xiii). "Business" means the Blockbuster Business or the Viacom Business, as the case may be. "Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions located in the State of New York are authorized or obligated by law or executive order to close. "Code" means the Internal Revenue Code of 1986, as amended from time to time, together with the rules and regulations promulgated thereunder. "Confidential Information" means, with respect to any party hereto, (i) any Information concerning such party, its business or any of its Affiliates that was obtained by another party hereto, (ii) any Information concerning such party that is obtained by another party under Section 4.03, or (iii) any other Information obtained by, or furnished to, another party hereto. "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, together with the rules and regulations promulgated thereunder. "Indemnified Party" means any Person who is entitled to received payment or defense from an Indemnifying Party pursuant to this Agreement. "Indemnifying Party" means any party who is required to pay or defend any other Person pursuant to this Agreement. "Information" means all records, books, contracts, instruments, computer data and other data. "IPO" means the initial public offering by Blockbuster of shares of Blockbuster Class A Common Stock as contemplated by the IPO Registration Statement. 3 "IPO Effective Date" means the date on which the IPO Registration Statement is declared effective by the SEC. "IPO Registration Statement" means the Registration Statement on Form S-1, Registration No. 333-77899, of Blockbuster, including all exhibits thereto and as supplemented and amended from time to time. "Issuance Event" has the meaning ascribed thereto in Section 7.02. "Issuance Event Date" has the meaning ascribed thereto in Section 7.02. "Losses" has the meaning ascribed thereto in Section 2.01(a) of the Release and Indemnification Agreement. "Market Price" of any shares of Blockbuster Class A Common Stock on any date means (i) the average of the last sale price of such shares on each of the five trading days immediately preceding such date on the New York Stock Exchange, Inc. or, if such shares are not listed thereon, on the principal national securities exchange or automated interdealer quotation system on which such shares are traded or (ii) if such sale prices are unavailable or such shares are not so traded, the value of such shares on such date determined in accordance with agreedupon procedures reasonably satisfactory to Blockbuster and Viacom.

"IPO Effective Date" means the date on which the IPO Registration Statement is declared effective by the SEC. "IPO Registration Statement" means the Registration Statement on Form S-1, Registration No. 333-77899, of Blockbuster, including all exhibits thereto and as supplemented and amended from time to time. "Issuance Event" has the meaning ascribed thereto in Section 7.02. "Issuance Event Date" has the meaning ascribed thereto in Section 7.02. "Losses" has the meaning ascribed thereto in Section 2.01(a) of the Release and Indemnification Agreement. "Market Price" of any shares of Blockbuster Class A Common Stock on any date means (i) the average of the last sale price of such shares on each of the five trading days immediately preceding such date on the New York Stock Exchange, Inc. or, if such shares are not listed thereon, on the principal national securities exchange or automated interdealer quotation system on which such shares are traded or (ii) if such sale prices are unavailable or such shares are not so traded, the value of such shares on such date determined in accordance with agreedupon procedures reasonably satisfactory to Blockbuster and Viacom. "Nonvoting Stock" means any class of Blockbuster' capital stock not representing the right to vote generally for the election of directors. "Nonvoting Stock Option" has the meaning ascribed thereto in Section 7.01(c). "Nonvoting Stock Option Notice" has the meaning ascribed thereto in Section 7.02. "Ownership Percentage" means, at any time, the fraction, expressed as a percentage and rounded to the next highest thousandth of a percent, whose numerator is the aggregate Value of the Applicable Stock and whose denominator is the sum of the aggregate Value of the outstanding shares of Blockbuster Common Stock; provided, however, that any shares of Blockbuster Common Stock issued by Blockbuster in violation of its obligations under Article VII of this Agreement shall not be deemed outstanding for the purpose of determining the Ownership Percentage. For purposes of this definition, "Value" means, with respect to any share of stock, the value of such share determined by Viacom under principles applicable for purposes of Section 1504 of the Code. "Owning Party" has the meaning ascribed thereto in Section 4.02. 4 "Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture association, joint stock company, trust unincorporated organization or government or any agency or political subdivision thereof. "Prior Relationship" means the ownership relationship between Viacom and Blockbuster at any time prior to the Split-Off Date. "Public Filings" has the meaning ascribed thereto in Section 5.01(xii). "Quarterly Financial Statements" has the meaning ascribed thereto in Section 5.01(iv). "Registration Rights Agreement" means the Registration Rights Agreement to be entered into on or before the IPO Effective Date between Viacom and Blockbuster, in substantially the form attached hereto as Exhibit C. "Regulation S-K" means Regulation S-K of the General Rules and Regulations promulgated by the SEC. "Regulation S-X" means Regulation S-X of the General Rules and Regulations promulgated by the SEC. "Related Parties" has the meaning ascribed thereto in Section 4.03. "Release and Indemnification Agreement" means the Release and Indemnification Agreement to be entered into on or before the IPO Effective Date between Viacom and Blockbuster, in substantially the form attached hereto

"Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture association, joint stock company, trust unincorporated organization or government or any agency or political subdivision thereof. "Prior Relationship" means the ownership relationship between Viacom and Blockbuster at any time prior to the Split-Off Date. "Public Filings" has the meaning ascribed thereto in Section 5.01(xii). "Quarterly Financial Statements" has the meaning ascribed thereto in Section 5.01(iv). "Registration Rights Agreement" means the Registration Rights Agreement to be entered into on or before the IPO Effective Date between Viacom and Blockbuster, in substantially the form attached hereto as Exhibit C. "Regulation S-K" means Regulation S-K of the General Rules and Regulations promulgated by the SEC. "Regulation S-X" means Regulation S-X of the General Rules and Regulations promulgated by the SEC. "Related Parties" has the meaning ascribed thereto in Section 4.03. "Release and Indemnification Agreement" means the Release and Indemnification Agreement to be entered into on or before the IPO Effective Date between Viacom and Blockbuster, in substantially the form attached hereto as Exhibit A. "Representatives" means directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives. "Requestor" has the meaning ascribed thereto in Section 4.03. "Retention Period" has the meaning ascribed thereto in Section 4.04. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended from time to time, together with the rules and regulations promulgated thereunder. "Split-Off" means the distribution of Blockbuster Common Stock by Viacom in one or more transactions occurring after the IPO that collectively have the effect that all or a 5

substantial part of the shares of Blockbuster Common Stock held by Viacom are distributed to all or some of the stockholders of Viacom, whenever such transaction(s) shall occur. "Split-Off Date" is the date upon which the Split-Off is consummated. "Subsidiary" means, with respect to any Person, any other Person a majority of the equity ownership or voting stock of which is at the time owned, directly or indirectly, by such Person and/or one or more other Subsidiaries of such Person; provided, however, that prior to the Split-Off, a Subsidiary of Viacom shall only include Persons who would be a Subsidiary of Viacom assuming the Split-Off has occurred immediately prior to the determination as to whether such Person were a Subsidiary of Viacom. "Tax Matters Agreement" means the Tax Matters Agreement to be entered into on or before the IPO Effective Date between Viacom and Blockbuster, in substantially the form as attached hereto as Exhibit D. "Third Party Claim" has the meaning ascribed thereto in Section 8.01(b). "Transition Services Agreement" means the Transition Services Agreement to be entered into on or before the

substantial part of the shares of Blockbuster Common Stock held by Viacom are distributed to all or some of the stockholders of Viacom, whenever such transaction(s) shall occur. "Split-Off Date" is the date upon which the Split-Off is consummated. "Subsidiary" means, with respect to any Person, any other Person a majority of the equity ownership or voting stock of which is at the time owned, directly or indirectly, by such Person and/or one or more other Subsidiaries of such Person; provided, however, that prior to the Split-Off, a Subsidiary of Viacom shall only include Persons who would be a Subsidiary of Viacom assuming the Split-Off has occurred immediately prior to the determination as to whether such Person were a Subsidiary of Viacom. "Tax Matters Agreement" means the Tax Matters Agreement to be entered into on or before the IPO Effective Date between Viacom and Blockbuster, in substantially the form as attached hereto as Exhibit D. "Third Party Claim" has the meaning ascribed thereto in Section 8.01(b). "Transition Services Agreement" means the Transition Services Agreement to be entered into on or before the IPO Effective Date between Viacom and Blockbuster, in substantially the form attached hereto as Exhibit B. "Underwriting Agreement" means the Underwriting Agreement is between Blockbuster and the underwriters relating to the IPO, as amended from time to time. "Viacom" has the meaning ascribed thereto in the Preamble. "Viacom Annual Statements" has the meaning ascribed thereto in Section 5.01(xiv). "Viacom Business" means any assets, business or operations of Viacom or any of its Affiliates other than the Blockbuster Business. "Viacom Class A Common Stock" means the class A common stock, par value $0.01 per share, of Viacom. "Viacom Class B Common Stock" means the class B common stock, par value $0.01 per share, of Viacom. "Viacom Common Stock" means the Viacom Class A Common Stock and the Viacom Class B Common Stock. 6 "Viacom Group" includes for federal income tax purposes, Viacom, its Affiliates, Blockbuster and its Affiliates. "Viacom International" has the meaning ascribed thereto in the Preamble. "Viacom Public Filings" has the meaning ascribed thereto in Section 5.01(xii). "Viacom's Auditors" has the meaning ascribed thereto in Section 5.01(xiv). "Viacom Transfer Agent" means the company designated by Viacom as the transfer agent and registrar for the Viacom Common Stock. "Wherehouse Stock Purchase Agreement" means the Stock Purchase Agreement, dated as of August 10, 1998, between Viacom International and Wherehouse Entertainment, Inc. ARTICLE II THE IPO AND THE SPLIT-OFF Section 2.01. The IPO and Other Primary Offerings. Until the Split- Off Date, Blockbuster shall consult with, and cooperate in all respects with, Viacom in connection with any primary offering of the Blockbuster Common

"Viacom Group" includes for federal income tax purposes, Viacom, its Affiliates, Blockbuster and its Affiliates. "Viacom International" has the meaning ascribed thereto in the Preamble. "Viacom Public Filings" has the meaning ascribed thereto in Section 5.01(xii). "Viacom's Auditors" has the meaning ascribed thereto in Section 5.01(xiv). "Viacom Transfer Agent" means the company designated by Viacom as the transfer agent and registrar for the Viacom Common Stock. "Wherehouse Stock Purchase Agreement" means the Stock Purchase Agreement, dated as of August 10, 1998, between Viacom International and Wherehouse Entertainment, Inc. ARTICLE II THE IPO AND THE SPLIT-OFF Section 2.01. The IPO and Other Primary Offerings. Until the Split- Off Date, Blockbuster shall consult with, and cooperate in all respects with, Viacom in connection with any primary offering of the Blockbuster Common Stock or any other securities of Blockbuster and shall, at Viacom's direction, promptly take any and all actions necessary or desirable to consummate such transactions. Section 2.02. The Split-Off. Viacom currently intends, following the consummation of the IPO, to complete the Split-Off at a date after September 29, 1999. Viacom shall, in its sole and absolute discretion, determine whether to proceed with all or part of the Split-Off and all terms of the Split-Off, including, without limitation, the form, structure and terms of any transaction(s) and/or offering(s) to effect the Split-Off and the timing of and conditions to the consummation of the Split-Off. In addition, Viacom may at any time and from time to time until the completion of the Split-Off abandon, modify or change any or all of the terms of the Split-Off, including, without limitation, by accelerating or delaying the timing of the consummation of all or part of the Split-Off. Blockbuster shall cooperate with Viacom in all commercially reasonable respects to accomplish the Split-Off and shall, at Viacom's direction, promptly take any and all actions necessary or desirable to effect the Split-Off, including, without limitation, the registration under the Securities Act of Blockbuster Common Stock on an appropriate registration form or forms to be designated by Viacom. Viacom shall select any investment banker(s) and manager(s) in connection with the Split-Off, as well as any other institutions providing services in connection with the Split-Off. Section 2.03. Certain Stockholder Matters. From and after the distribution of Blockbuster Common Stock in connection with any transaction(s) included as part of the 7

Split-Off and until such Blockbuster Common Stock is duly transferred in accordance with applicable law, Blockbuster shall regard the Persons receiving Blockbuster Common Stock in such transaction(s) as record holders of Blockbuster Common Stock in accordance with the terms of such transaction(s) without requiring any action on the part of such Persons. Blockbuster agrees that, subject to any transfers of such stock, (a) each such holder shall be entitled to receive all dividends payable on, and exercise voting rights and all other rights and privileges with respect to, the shares of Blockbuster Common Stock then held by such holder and (b) each such holder shall be entitled, without any action on the part of such holder, to receive one or more certificates representing, or other evidence of ownership of, the shares of Blockbuster Common Stock then held by such holder. Viacom shall cooperate, and shall instruct the Viacom Transfer Agent to cooperate, with Blockbuster and the Blockbuster Transfer Agent, and Blockbuster shall cooperate, and shall instruct the Blockbuster Transfer Agent to cooperate, with Viacom and the Viacom Transfer Agent, in connection with all aspects of the Split-Off and all other matters relating to the issuance and delivery of certificates representing, or other evidence of ownership of, the shares of Blockbuster Common Stock distributed to the holders of Viacom Common Stock in connection with any transaction(s) included as part of the Split-Off. Following the Split-Off, Viacom shall promptly, but in no event no later than two business days thereafter, instruct the Viacom Transfer Agent to deliver to the Blockbuster Transfer Agent true, correct and complete copies of the stock and transfer records reflecting

Split-Off and until such Blockbuster Common Stock is duly transferred in accordance with applicable law, Blockbuster shall regard the Persons receiving Blockbuster Common Stock in such transaction(s) as record holders of Blockbuster Common Stock in accordance with the terms of such transaction(s) without requiring any action on the part of such Persons. Blockbuster agrees that, subject to any transfers of such stock, (a) each such holder shall be entitled to receive all dividends payable on, and exercise voting rights and all other rights and privileges with respect to, the shares of Blockbuster Common Stock then held by such holder and (b) each such holder shall be entitled, without any action on the part of such holder, to receive one or more certificates representing, or other evidence of ownership of, the shares of Blockbuster Common Stock then held by such holder. Viacom shall cooperate, and shall instruct the Viacom Transfer Agent to cooperate, with Blockbuster and the Blockbuster Transfer Agent, and Blockbuster shall cooperate, and shall instruct the Blockbuster Transfer Agent to cooperate, with Viacom and the Viacom Transfer Agent, in connection with all aspects of the Split-Off and all other matters relating to the issuance and delivery of certificates representing, or other evidence of ownership of, the shares of Blockbuster Common Stock distributed to the holders of Viacom Common Stock in connection with any transaction(s) included as part of the Split-Off. Following the Split-Off, Viacom shall promptly, but in no event no later than two business days thereafter, instruct the Viacom Transfer Agent to deliver to the Blockbuster Transfer Agent true, correct and complete copies of the stock and transfer records reflecting the holders of Viacom Common Stock receiving shares of Blockbuster Common Stock in connection with any transaction(s) included as part of the Split-Off. Section 2.04. Prior Relationship. Blockbuster, with respect to Blockbuster and its Affiliates, and Viacom, with respect to Viacom and its Affiliates, agree to take all commercially reasonable action to discontinue their respective uses as promptly as is commercially reasonable of any printed material that indicates an ownership or other relationship between or among Viacom and Blockbuster or any of their respective Affiliates that has changed as a result of the IPO, the Split-Off or any other transactions contemplated hereby; provided that this Section 2.04 shall not prohibit the use of printed material containing appropriate and accurate references to such relationship. Section 2.05. Further Assurances Regarding the Split-Off. In addition to the actions specifically provided for elsewhere in this Agreement, Blockbuster shall, at Viacom's direction, use all commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things commercially reasonably necessary, proper or expeditious under applicable laws, regulations and agreements in order to consummate and make effective the Split-Off as promptly as reasonably practicable. Without limiting the generality of the foregoing, Blockbuster shall, at Viacom's direction, cooperate with Viacom, and execute and deliver, or use all commercially reasonable efforts to cause to have executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all consents, approvals or authorizations of, any domestic or foreign governmental or regulatory authority requested by Viacom in order to consummate and make effective the Split-Off. 8

ARTICLE III EXPENSES Section 3.01. General. Except as otherwise provided in this Agreement, the Ancillary Agreements or any other agreement between the parties relating to the IPO or the Split-Off, all costs and expenses of either party hereto in connection with the IPO and the Split-Off shall be paid by the party that incurs such costs and expenses. Section 3.02. Certain Expenses Relating to the IPO and any Other Primary Offerings by Blockbuster. Except for the fees and disbursements related to Viacom's counsel, accountants and other advisors, Blockbuster shall pay or cause to be paid all third party expenses relating to the IPO or any other primary offering by Blockbuster prior to the Split-Off Date, including (i) the preparation, printing and filing of the IPO Registration Statement (including financial statements and exhibits) as originally filed and of each amendment thereto or any other registration statements, (ii) the preparation, printing and delivery to any underwriters of any underwriting agreement, any agreement among underwriters and any other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Blockbuster Common Stock or any other securities of Blockbuster, (iii) the preparation, issuance and delivery of the certificates for the Blockbuster Common Stock or any other securities of Blockbuster to any underwriters or any other purchasers, including any stock or other transfer taxes

ARTICLE III EXPENSES Section 3.01. General. Except as otherwise provided in this Agreement, the Ancillary Agreements or any other agreement between the parties relating to the IPO or the Split-Off, all costs and expenses of either party hereto in connection with the IPO and the Split-Off shall be paid by the party that incurs such costs and expenses. Section 3.02. Certain Expenses Relating to the IPO and any Other Primary Offerings by Blockbuster. Except for the fees and disbursements related to Viacom's counsel, accountants and other advisors, Blockbuster shall pay or cause to be paid all third party expenses relating to the IPO or any other primary offering by Blockbuster prior to the Split-Off Date, including (i) the preparation, printing and filing of the IPO Registration Statement (including financial statements and exhibits) as originally filed and of each amendment thereto or any other registration statements, (ii) the preparation, printing and delivery to any underwriters of any underwriting agreement, any agreement among underwriters and any other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Blockbuster Common Stock or any other securities of Blockbuster, (iii) the preparation, issuance and delivery of the certificates for the Blockbuster Common Stock or any other securities of Blockbuster to any underwriters or any other purchasers, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Blockbuster Common Stock or any other securities of Blockbuster to any underwriters or any other securities, (iv) the qualification of the Blockbuster Common Stock or any other securities of Blockbuster under the securities laws in accordance with any state (Blue Sky laws), including filing fees and the reasonable fees and disbursements of counsel for any underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (v) the printing and delivery to any underwriters of copies of each preliminary prospectus, any term sheets and of the final prospectus and any amendments or supplements thereto, (vi) the preparation, printing and delivery to any underwriters of copies of the Blue Sky Survey and any supplement thereto, (vii) the fees and expenses of any transfer agent or registrar for the Blockbuster Common Stock or any other securities of Blockbuster, (viii) the filing fees incident to, and the reasonable fees and disbursements of counsel to any underwriters in connection with, the review by the National Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Blockbuster Common Stock or any other securities of Blockbuster and (ix) the fees and expenses incurred in connection with the listing of the Blockbuster Common Stock or any other securities of Blockbuster on the New York Stock Exchange, any other national securities exchange or any national over the counter quotation system. Section 3.03. Certain Expenses Relating to the Split-Off. Except for the fees and disbursements related to Blockbuster's counsel, accountants and other advisors, Viacom shall pay or cause to be paid all third party expenses relating to the Split-Off, including (i) the fees and expenses of the underwriter or dealer-manager, (ii) the preparation, printing, filing (including under federal and state securities laws), mailing and publishing of the offering materials relating 9

to the Blockbuster Common Stock, (iii) the preparation, printing and delivery of any certificates or documents entered into in connection with the Split-Off, (iv) the fees and expenses of any exchange agent, information agent, transfer agent or registrar for the Blockbuster Common Stock, (v) the fees and expenses incurred in connection with the listing of the Blockbuster Common Stock with the NASD or the New York Stock Exchange, any other national securities exchange or any national over the counter quotation system, if applicable and (vi) any other fees incurred in connection with the Split-Off. ARTICLE IV ACCESS TO INFORMATION Section 4.01. Restrictions on Disclosure of Information. (a) Without limiting any rights or obligations under any other agreement between or among the parties hereto and/or any of their respective Affiliates relating to confidentiality, for a period of three years following the date hereof, each of the parties hereto agrees that it shall not, and shall not permit any of its Affiliates or Representatives to, disclose any Confidential Information to any Person, other than to such Affiliates or Representatives on a need-to-know basis in connection with the purpose

to the Blockbuster Common Stock, (iii) the preparation, printing and delivery of any certificates or documents entered into in connection with the Split-Off, (iv) the fees and expenses of any exchange agent, information agent, transfer agent or registrar for the Blockbuster Common Stock, (v) the fees and expenses incurred in connection with the listing of the Blockbuster Common Stock with the NASD or the New York Stock Exchange, any other national securities exchange or any national over the counter quotation system, if applicable and (vi) any other fees incurred in connection with the Split-Off. ARTICLE IV ACCESS TO INFORMATION Section 4.01. Restrictions on Disclosure of Information. (a) Without limiting any rights or obligations under any other agreement between or among the parties hereto and/or any of their respective Affiliates relating to confidentiality, for a period of three years following the date hereof, each of the parties hereto agrees that it shall not, and shall not permit any of its Affiliates or Representatives to, disclose any Confidential Information to any Person, other than to such Affiliates or Representatives on a need-to-know basis in connection with the purpose for which the Confidential Information was originally disclosed. Such Information shall no longer be deemed Confidential Information, to the extent that it is or was (i) in the public domain other than by the breach of this Agreement or by breach of any other agreement between or among the parties hereto and/or any of their respective Affiliates, (ii) available to such party outside the context of the Prior Relationship on a nonconfidential basis prior to its disclosure by the other party, (iii) lawfully acquired outside the context of the Prior Relationship on a nonconfidential basis or independently developed by, or on behalf of, such party by Persons who do not have access to, or descriptions of, any such Confidential Information, (iv) required to be disclosed by law, governmental order or the rules and regulations of the SEC, or (v) mutually agreed to by the parties. (b) Each of the parties hereto shall maintain, and shall cause its respective Affiliates to maintain, policies and procedures, and develop such further policies and procedures as shall from time to time become necessary or appropriate, to ensure compliance with this Section 4.01. Section 4.02. Legally Required Disclosure of Confidential Information. If any of the parties to this Agreement or any of their respective Affiliates or Representatives become legally required to disclose any Confidential Information, such disclosing party shall promptly notify the party owning the Confidential Information (the "Owning Party") and shall use all commercially reasonable efforts to cooperate with the Owning Party so that the Owning Party may seek a protective order or other appropriate remedy and/or waive compliance with this Section 4.02. All expenses reasonably incurred in seeking a protective order or other remedy shall be borne by the Owning Party. If such protective order or other remedy is not obtained, or if the Owning Party waives compliance with this Section 4.02, the disclosing party or its Affiliate or Representative, as applicable, shall (a) disclose only that portion of the Confidential 10

Information it is compelled by law to disclose, (b) use all commercially reasonable efforts to obtain reliable assurance requested by the Owning Party that confidential treatment will be accorded such Confidential Information, and (c) promptly provide the Owning Party with a copy of the Confidential Information so disclosed, in the same form and format so disclosed, together with a description of all Persons to whom such Confidential Information was disclosed. Section 4.03. Access to Information. (a) During the Retention Period, each of the parties hereto shall cooperate with and afford, and shall cause their respective Affiliates, Representatives, Subsidiaries, successors and/or assignees, and shall use reasonable efforts to cause joint ventures that are not Affiliates (collectively, "Related Parties") to cooperate with, and afford to the other party, reasonable access upon reasonable advance written request to all information (other than information created after the Split-Off Date (i) the disclosure of which would have the effect of waiving a legal privilege, or (ii) which is the subject of a confidentiality agreement between such party and a third party which prohibits disclosure to the other party,

Information it is compelled by law to disclose, (b) use all commercially reasonable efforts to obtain reliable assurance requested by the Owning Party that confidential treatment will be accorded such Confidential Information, and (c) promptly provide the Owning Party with a copy of the Confidential Information so disclosed, in the same form and format so disclosed, together with a description of all Persons to whom such Confidential Information was disclosed. Section 4.03. Access to Information. (a) During the Retention Period, each of the parties hereto shall cooperate with and afford, and shall cause their respective Affiliates, Representatives, Subsidiaries, successors and/or assignees, and shall use reasonable efforts to cause joint ventures that are not Affiliates (collectively, "Related Parties") to cooperate with, and afford to the other party, reasonable access upon reasonable advance written request to all information (other than information created after the Split-Off Date (i) the disclosure of which would have the effect of waiving a legal privilege, or (ii) which is the subject of a confidentiality agreement between such party and a third party which prohibits disclosure to the other party, provided that such party shall use all commercially reasonable efforts to obtain such third party's consent to disclosure of such information) within such party's or any Related Party's possession. Access to the requested information shall be provided so long as it relates to the requesting party's (the "Requestor") assets, business and operations, and access is reasonably required by the Requestor as a result of the parties' Prior Relationship for purposes of auditing, accounting, claims or litigation (except for claims or litigation between the parties hereto), employee benefits, regulatory or tax purposes or fulfilling disclosure or reporting obligations including, without limitation, information reasonably necessary for the preparation of reports required by or filed under the Securities Act or the Exchange Act with respect to any period entirely or partially prior to the Split-Off Date or any other reasonable purpose. (b) Each party agrees to cooperate fully to allow access to each others employees (i) to the extent that they are reasonably necessary to discuss and explain all requested Information with and to the requesting party and (ii) with respect to any claims brought against the other involving the conduct of the Blockbuster Business prior to the Split-Off Date. Section 4.04. Record Retention. (a) Books and Records. Viacom and Blockbuster shall preserve and keep all of their respective books and records in the possession of such party or its Related Parties, whether in electronic form or otherwise, for no less than the later of (i) the record retention policy of Viacom and Blockbuster as in effect as of the Split-Off Date or (ii) any period as may be required by any laws, regulations or rulings promulgated thereunder of any jurisdiction (or of any political subdivision or taxing authority thereof) (the "Retention Period"), at such party's sole cost and expense. Viacom shall deliver to Blockbuster on the Split-Off Date any and all original corporate organization books that Viacom has in its possession relating solely to the Blockbuster Business, copies of which Viacom may retain at its own expense. Upon reasonable prior written request, Viacom and Blockbuster shall deliver to the other copies of any and all books and records that Viacom or Blockbuster, as the case may be, has in its possession relating to the Blockbuster Business. 11

ARTICLE V COVENANTS Section 5.01. Financial and Other Information. Blockbuster (and Viacom with respect to clause (xii) below) agrees that, for so long as Viacom is required to consolidate Blockbuster's results of operations and financial position (determined in accordance with generally accepted accounting principles consistently applied): (i) Blockbuster shall, and shall cause each of its Subsidiaries to, maintain a system of internal accounting controls in accordance with generally accepted accounting principles and SEC and tax related requirements that will provide reasonable assurance that Blockbuster's and such Subsidiaries' books, records and accounts fairly reflect all transactions and dispositions of assets. (ii) Blockbuster shall, and shall cause each of its Subsidiaries to, maintain a fiscal year which commences and

ARTICLE V COVENANTS Section 5.01. Financial and Other Information. Blockbuster (and Viacom with respect to clause (xii) below) agrees that, for so long as Viacom is required to consolidate Blockbuster's results of operations and financial position (determined in accordance with generally accepted accounting principles consistently applied): (i) Blockbuster shall, and shall cause each of its Subsidiaries to, maintain a system of internal accounting controls in accordance with generally accepted accounting principles and SEC and tax related requirements that will provide reasonable assurance that Blockbuster's and such Subsidiaries' books, records and accounts fairly reflect all transactions and dispositions of assets. (ii) Blockbuster shall, and shall cause each of its Subsidiaries to, maintain a fiscal year which commences and ends on the same dates as does Viacom's fiscal year of each calendar year. (iii) As soon as practicable, and in any event within ten Business Days after the end of each month in each fiscal year of Blockbuster, Blockbuster shall deliver to Viacom (a) a monthly consolidated income statement and related schedules for Blockbuster and its Subsidiaries and (b) a year-to-date consolidated income statement and related schedules for Blockbuster and its Subsidiaries. As soon as practicable, and in any event within 20 Business Days (x) after the end of each of the first three quarters in each fiscal year of Blockbuster, and (y) after the end of each such fiscal year, Blockbuster shall deliver to Viacom a consolidated balance sheet and related schedules and statement of cash flows and related schedules for Blockbuster and its Subsidiaries for such fiscal quarter or year end, as the case may be. (iv) As soon as practicable, and in any event within 35 days after the end of each of the first three quarters in each fiscal year of Blockbuster and no later than ten days before Blockbuster intends to file its Quarterly Financial Statements (as defined below) with the SEC, Blockbuster shall deliver to Viacom drafts of (A) the consolidated financial statements of Blockbuster and its Subsidiaries (and notes thereto) for such periods and for the period from the beginning of the current fiscal year to the end of such quarter, setting forth in each case in comparative form for each such fiscal quarter of Blockbuster the consolidated figures (and notes thereto) for the corresponding quarter and periods of the previous fiscal year and all in reasonable detail and prepared in accordance with Article 10 of Regulation S-X, and (B) a discussion and analysis by management of Blockbuster's and its Subsidiaries' financial condition and results of operations for such fiscal period, including, without limitation, an explanation of any material adverse change, all in reasonable detail and prepared in accordance with Item 303(b) of Regulation S-K. The information set forth in subsections (A) and (B) above is herein referred to as the 12 "Quarterly Financial Statements." No later than the earlier of (x) two Business Days prior to the date Blockbuster publicly files the Quarterly Financial Statements with the SEC or otherwise makes such Quarterly Financial Statements publicly available or (y) two Business Days prior to the date on which Viacom has notified Blockbuster that it intends to file its quarterly financial statements with the SEC, Blockbuster shall deliver to Viacom the substantially final form of the Quarterly Financial Statements certified by the chief financial officer of Blockbuster as presenting fairly, in all material respects, the financial condition and results of operations of Blockbuster and its Subsidiaries; provided that Blockbuster and Viacom shall actively consult with each other regarding any changes (whether or not substantive) which Blockbuster may consider making to its Quarterly Financial Statements and related disclosures prior to the filing with the SEC. In addition to the foregoing, no (a) Quarterly Financial Statement or (b) any other document which refers, or contains information with respect, to the ownership of Blockbuster by Viacom, the separation of Blockbuster from Viacom or the Split-Off shall be filed with the SEC or otherwise made public by Blockbuster or any of its Subsidiaries without the prior consent of Viacom which shall not be unreasonably withheld. In any event, Blockbuster shall deliver to Viacom its final Quarterly Report on Form 10-Q no later than 45 days after the end of each of the first three quarters in each fiscal year of Blockbuster. If the time period required by the SEC for Blockbuster to file its Quarterly Report on Form 10-Q is changed, Blockbuster and Viacom shall renegotiate in good faith to set more appropriate time periods relating to the dates as set forth in this Section 5.01(iv). As soon as practicable but in no event two Business Days prior to issuance, Blockbuster shall deliver to Viacom copies of substantially final drafts of all of its quarterly earnings releases. In addition, within such two day period, Blockbuster shall actively consult with

"Quarterly Financial Statements." No later than the earlier of (x) two Business Days prior to the date Blockbuster publicly files the Quarterly Financial Statements with the SEC or otherwise makes such Quarterly Financial Statements publicly available or (y) two Business Days prior to the date on which Viacom has notified Blockbuster that it intends to file its quarterly financial statements with the SEC, Blockbuster shall deliver to Viacom the substantially final form of the Quarterly Financial Statements certified by the chief financial officer of Blockbuster as presenting fairly, in all material respects, the financial condition and results of operations of Blockbuster and its Subsidiaries; provided that Blockbuster and Viacom shall actively consult with each other regarding any changes (whether or not substantive) which Blockbuster may consider making to its Quarterly Financial Statements and related disclosures prior to the filing with the SEC. In addition to the foregoing, no (a) Quarterly Financial Statement or (b) any other document which refers, or contains information with respect, to the ownership of Blockbuster by Viacom, the separation of Blockbuster from Viacom or the Split-Off shall be filed with the SEC or otherwise made public by Blockbuster or any of its Subsidiaries without the prior consent of Viacom which shall not be unreasonably withheld. In any event, Blockbuster shall deliver to Viacom its final Quarterly Report on Form 10-Q no later than 45 days after the end of each of the first three quarters in each fiscal year of Blockbuster. If the time period required by the SEC for Blockbuster to file its Quarterly Report on Form 10-Q is changed, Blockbuster and Viacom shall renegotiate in good faith to set more appropriate time periods relating to the dates as set forth in this Section 5.01(iv). As soon as practicable but in no event two Business Days prior to issuance, Blockbuster shall deliver to Viacom copies of substantially final drafts of all of its quarterly earnings releases. In addition, within such two day period, Blockbuster shall actively consult with Viacom regarding any changes (other than typographical or other similar minor changes) to such substantially final drafts. Immediately following the issuance thereof, Blockbuster shall deliver to Viacom final copies of such earnings releases. Viacom shall determine, in its sole discretion, the timing of Blockbuster's quarterly earnings releases, provided that Blockbuster and Viacom will consult with each other on such timing if the senior management of Blockbuster notifies Viacom that Blockbuster is required by law as advised by its counsel not to release its earnings at such time as initially determined by Viacom. (v) Blockbuster shall deliver to Viacom as soon as practicable, and in any event within 60 days after the end of each fiscal year of Blockbuster and no later than 15 days before Blockbuster intends to file its Annual Financial Statements with the SEC, (A) drafts of the consolidated financial statements of Blockbuster (and notes thereto) for such year, setting forth in each case in comparative form the consolidated figures (and notes thereto) for the previous fiscal year and all in reasonable detail and prepared in accordance with Regulation S-X and (B) a discussion and analysis by management of Blockbuster's and its Subsidiaries' financial condition and results of operations for such year, including, without limitation, an explanation of any material adverse change, all in reasonable detail and prepared in accordance with Item 303(a) of Regulation S-K. The information set forth in (A) and (B) above is herein referred to as the "Annual Financial 13 Statements." Blockbuster shall deliver to Viacom all material revisions to such drafts as soon as any such revisions are prepared or made. No later than the earlier of (x) five Business Days prior to the date Blockbuster publicly files the Annual Financial Statements with the SEC or otherwise makes such Annual Financial Statements publicly available or (y) five Business Days prior to the date on which Viacom has notified Blockbuster that it intends to file its annual financial statements with the SEC, Blockbuster shall deliver to Viacom the final form of the Annual Financial Statements certified by the chief financial officer of Blockbuster as presenting fairly, in all material respects, the financial condition and results of operations of Blockbuster and its Subsidiaries; provided that Blockbuster and Viacom shall actively consult with each other regarding any changes (whether or not substantive) which Blockbuster may consider making to its Annual Financial Statements and related disclosures prior to the filing with the SEC. In addition to the foregoing, no (a) Annual Financial Statement or (b) any other document which refers, or contains information with respect, to the ownership of Blockbuster by Viacom, the separation of Blockbuster from Viacom or the Split-Off shall be filed with the SEC or otherwise made public by Blockbuster or any of its Subsidiaries without the prior consent of Viacom which shall not be unreasonably withheld. In any event, Blockbuster shall deliver to Viacom its final Annual Report on Form 10-K no later than 90 days after the end of each fiscal year of Blockbuster. If the time period required by the SEC for Blockbuster to file its Annual Report on Form 10-K is changed, Blockbuster and Viacom shall renegotiate in good faith to set more appropriate time periods relating to the dates as set forth in this Section 5.01(v). As soon as practicable but in no event two Business Days prior to issuance, Blockbuster shall deliver to Viacom copies of substantially final drafts of its annual earnings releases. In addition, within such two day period, Blockbuster shall actively consult with Viacom regarding any changes (other than typographical or other similar minor changes) to such substantially final drafts. Immediately following the issuance thereof, Blockbuster shall deliver to Viacom final copies of the

Statements." Blockbuster shall deliver to Viacom all material revisions to such drafts as soon as any such revisions are prepared or made. No later than the earlier of (x) five Business Days prior to the date Blockbuster publicly files the Annual Financial Statements with the SEC or otherwise makes such Annual Financial Statements publicly available or (y) five Business Days prior to the date on which Viacom has notified Blockbuster that it intends to file its annual financial statements with the SEC, Blockbuster shall deliver to Viacom the final form of the Annual Financial Statements certified by the chief financial officer of Blockbuster as presenting fairly, in all material respects, the financial condition and results of operations of Blockbuster and its Subsidiaries; provided that Blockbuster and Viacom shall actively consult with each other regarding any changes (whether or not substantive) which Blockbuster may consider making to its Annual Financial Statements and related disclosures prior to the filing with the SEC. In addition to the foregoing, no (a) Annual Financial Statement or (b) any other document which refers, or contains information with respect, to the ownership of Blockbuster by Viacom, the separation of Blockbuster from Viacom or the Split-Off shall be filed with the SEC or otherwise made public by Blockbuster or any of its Subsidiaries without the prior consent of Viacom which shall not be unreasonably withheld. In any event, Blockbuster shall deliver to Viacom its final Annual Report on Form 10-K no later than 90 days after the end of each fiscal year of Blockbuster. If the time period required by the SEC for Blockbuster to file its Annual Report on Form 10-K is changed, Blockbuster and Viacom shall renegotiate in good faith to set more appropriate time periods relating to the dates as set forth in this Section 5.01(v). As soon as practicable but in no event two Business Days prior to issuance, Blockbuster shall deliver to Viacom copies of substantially final drafts of its annual earnings releases. In addition, within such two day period, Blockbuster shall actively consult with Viacom regarding any changes (other than typographical or other similar minor changes) to such substantially final drafts. Immediately following the issuance thereof, Blockbuster shall deliver to Viacom final copies of the earnings release. Viacom shall determine, in its sole discretion, the timing of Blockbuster's annual earnings release, provided, that Blockbuster and Viacom will consult with each other on such timing if the senior management of Blockbuster notifies Viacom that Blockbuster is required by law as advised by its counsel not to release its earnings at such time as initially determined by Viacom. (vi) Blockbuster shall deliver to Viacom all Quarterly and Annual Financial Statements of each Subsidiary of Blockbuster which is itself required to file financial statements with the SEC or otherwise make such financial statements publicly available, with such financial statements to be provided in the same manner and detail and on the same time schedule as those financial statements of Blockbuster required to be delivered to Viacom pursuant to this Section 5.01. (vii) All information provided by Blockbuster or any of its Subsidiaries to Viacom pursuant to Sections 5.01(iii) through (vi) inclusive shall be consistent in terms of format and detail and otherwise with the procedures in effect on the date hereof with 14

respect to the provision of such financial information by the Blockbuster Business and/or Blockbuster and its Subsidiaries, as applicable, to Viacom (and, where appropriate, as presently presented in financial reports to Viacom's Board of Directors), with such changes therein as may be requested by Viacom from time to time consistent with changes in reporting by sectors and Subsidiaries of Viacom in accordance with generally accepted accounting principles. (viii) Blockbuster and each of its Subsidiaries which files information with the SEC shall deliver to Viacom: (A) as soon as the same are prepared, substantially final drafts of (x) all reports, notices and proxy and information statements to be sent or made available by Blockbuster or any of its Subsidiaries to their security holders, (y) all regular, periodic and other reports to be filed under Sections 13, 14 and 15 of the Exchange Act (including current reports on Form 8-K and annual reports to stockholders), and (z) all registration statements and prospectuses to be filed by Blockbuster or any of its Subsidiaries with the SEC or any securities exchange pursuant to the listed company manual (or similar requirements) of such exchange (collectively, the documents identified in clauses (x), (y) and (z) are referred to herein as "Blockbuster Public Documents"); and (B) as soon as practicable, but in no event later than four Business Days prior to the date the same are printed, sent or filed, whichever is earliest, substantially final drafts of all such Blockbuster Public Documents; provided that Blockbuster and Viacom shall actively consult with each other regarding any changes (whether or not substantive) which Blockbuster may consider making to any of its Blockbuster Public Documents and related disclosures prior to any anticipated filing with the SEC. In addition to the foregoing, no (a) Blockbuster Public Document or (b) any other document which refers, or contains information with respect, to the ownership of Blockbuster by

respect to the provision of such financial information by the Blockbuster Business and/or Blockbuster and its Subsidiaries, as applicable, to Viacom (and, where appropriate, as presently presented in financial reports to Viacom's Board of Directors), with such changes therein as may be requested by Viacom from time to time consistent with changes in reporting by sectors and Subsidiaries of Viacom in accordance with generally accepted accounting principles. (viii) Blockbuster and each of its Subsidiaries which files information with the SEC shall deliver to Viacom: (A) as soon as the same are prepared, substantially final drafts of (x) all reports, notices and proxy and information statements to be sent or made available by Blockbuster or any of its Subsidiaries to their security holders, (y) all regular, periodic and other reports to be filed under Sections 13, 14 and 15 of the Exchange Act (including current reports on Form 8-K and annual reports to stockholders), and (z) all registration statements and prospectuses to be filed by Blockbuster or any of its Subsidiaries with the SEC or any securities exchange pursuant to the listed company manual (or similar requirements) of such exchange (collectively, the documents identified in clauses (x), (y) and (z) are referred to herein as "Blockbuster Public Documents"); and (B) as soon as practicable, but in no event later than four Business Days prior to the date the same are printed, sent or filed, whichever is earliest, substantially final drafts of all such Blockbuster Public Documents; provided that Blockbuster and Viacom shall actively consult with each other regarding any changes (whether or not substantive) which Blockbuster may consider making to any of its Blockbuster Public Documents and related disclosures prior to any anticipated filing with the SEC. In addition to the foregoing, no (a) Blockbuster Public Document or (b) any other document which refers, or contains information with respect, to the ownership of Blockbuster by Viacom, the separation of Blockbuster from Viacom or the Split-Off shall be filed with the SEC or otherwise made public by Blockbuster or any of its Subsidiaries without the prior consent of Viacom which consent shall not unreasonably be withheld. (ix) Blockbuster shall, as promptly as practicable, deliver to Viacom copies of all annual and other budgets and financial projections (consistent in terms of format and detail and otherwise with the procedures in effect on the date hereof) relating to Blockbuster or any of its Subsidiaries and shall provide Viacom an opportunity to meet with management of Blockbuster to discuss such budgets and projections. (x) With reasonable promptness, Blockbuster shall deliver to Viacom such additional financial and other information and data with respect to Blockbuster and its Subsidiaries and their business, properties, financial positions, results of operations and prospects as from time to time may be reasonably requested by Viacom. (xi) Except with respect to Blockbuster's quarterly and annual earnings releases, Blockbuster shall deliver to Viacom as soon as practicable but in no event two Business Days prior to issuance, copies of substantially final drafts of all press releases 15

and other statements to be made available by Blockbuster or any of its Subsidiaries to employees of Blockbuster or any of its Subsidiaries or to the public concerning material developments in the business, properties, earnings, results of operations, financial condition or prospects of Blockbuster or any of its Subsidiaries or the relationship between (A) Blockbuster or any of its Subsidiaries and (B) Viacom or any of its Affiliates. In addition, within such two day period, prior to the issuance of any such press release or public statement, Blockbuster shall actively consult with Viacom regarding any changes (other than typographical or other similar minor changes) to such substantially final drafts. Immediately following the issuance thereof, Blockbuster shall deliver to Viacom copies of final drafts of all press releases and other public statements. (xii) Viacom and Blockbuster shall cooperate fully, and cause their respective accountants to cooperate fully, to the extent requested by the other party in the preparation of the other party's public earnings releases, annual reports on Form 10-K, quarterly reports on Form 10-Q, any current reports on Form 8-K and any other proxy, information and registration statements, reports, notices, prospectuses and any other filings made by Viacom or Blockbuster with the SEC, any national securities exchange or otherwise made publicly available (collectively, "Viacom Public Filings" and the "Blockbuster Public Filings" and together, the "Public Filings"). Viacom and Blockbuster agree to provide to each other all information that the other party reasonably requests in connection with any Public Filings or that, in the judgment of either party's, is required to be disclosed or incorporated by reference therein under any law, rule or regulation. Such information shall be provided by such

and other statements to be made available by Blockbuster or any of its Subsidiaries to employees of Blockbuster or any of its Subsidiaries or to the public concerning material developments in the business, properties, earnings, results of operations, financial condition or prospects of Blockbuster or any of its Subsidiaries or the relationship between (A) Blockbuster or any of its Subsidiaries and (B) Viacom or any of its Affiliates. In addition, within such two day period, prior to the issuance of any such press release or public statement, Blockbuster shall actively consult with Viacom regarding any changes (other than typographical or other similar minor changes) to such substantially final drafts. Immediately following the issuance thereof, Blockbuster shall deliver to Viacom copies of final drafts of all press releases and other public statements. (xii) Viacom and Blockbuster shall cooperate fully, and cause their respective accountants to cooperate fully, to the extent requested by the other party in the preparation of the other party's public earnings releases, annual reports on Form 10-K, quarterly reports on Form 10-Q, any current reports on Form 8-K and any other proxy, information and registration statements, reports, notices, prospectuses and any other filings made by Viacom or Blockbuster with the SEC, any national securities exchange or otherwise made publicly available (collectively, "Viacom Public Filings" and the "Blockbuster Public Filings" and together, the "Public Filings"). Viacom and Blockbuster agree to provide to each other all information that the other party reasonably requests in connection with any Public Filings or that, in the judgment of either party's, is required to be disclosed or incorporated by reference therein under any law, rule or regulation. Such information shall be provided by such party in a timely manner on the dates requested by the other party (which may be earlier than the dates on which such party otherwise would be required hereunder to have such information available) to enable the other party to prepare, print and release all Public Filings on such dates as such party shall determine. Viacom and Blockbuster shall use its reasonable best efforts to cause their respective accountants to consent to any reference to them as experts in any Public Filing required under any law, rule or regulation. If and to the extent requested by either party, the other party shall diligently and promptly review all drafts of such Public Filing and prepare in a diligent and timely fashion any portion of such Public Filing pertaining to that party. Prior to any printing or public release of any Public Filing, an appropriate executive officer of Viacom or Blockbuster shall, if requested by the other party, certify that the information provided by such party relating to such party, its Affiliates or its business in such Public Filing is accurate, true and correct in all material respects. Unless required by law, rule, regulation or generally accepted accounted principle, Blockbuster shall not publicly release any financial or other information which significantly conflicts with the information with respect to Blockbuster, any of its Affiliates or the Blockbuster Business that is included in any Viacom Public Filing without Viacom's prior written consent. Prior to the release or filing thereof, Viacom and Blockbuster shall provide each other with a draft of any portion of a Public Filing containing information relating to the other party and its Subsidiaries and shall give such party an opportunity to review such 16 information and comment thereon; provided that the other party shall determine in its sole discretion the final form and content of all Public Filings. (xiii) Blockbuster shall not change its independent certified public accountants ("Blockbuster's Auditors") without Viacom's prior consent. (xiv) Blockbuster shall use its reasonable best efforts to enable the Blockbuster Auditors to complete their audit such that they will date their opinion on Blockbuster's audited annual financial statements on the same date that Viacom's independent certified public accountants ("Viacom's Auditors") date their opinion on Viacom's audited annual financial statements (the "Viacom Annual Statements"), and to enable Viacom to meet its timetable for the printing, filing and public dissemination of the Viacom Annual Statements. (xv) Blockbuster shall authorize Blockbuster's Auditors to make available to Viacom's Auditors both the personnel who performed or are performing the annual audit of Blockbuster and work papers related to the annual audit of Blockbuster, in all cases within a reasonable time prior to Blockbuster's Auditors' opinion date, so that Viacom's Auditors are able to perform the procedures they consider necessary to take responsibility for the work of Blockbuster's Auditors as it relates to Viacom's Auditors' report on Viacom's statements, all within sufficient time to enable Viacom to meet its timetable for the printing, filing and public dissemination of the Viacom Annual Statements. (xvi) Blockbuster shall provide Viacom's internal auditors access to Blockbuster's and its Subsidiaries, books and

information and comment thereon; provided that the other party shall determine in its sole discretion the final form and content of all Public Filings. (xiii) Blockbuster shall not change its independent certified public accountants ("Blockbuster's Auditors") without Viacom's prior consent. (xiv) Blockbuster shall use its reasonable best efforts to enable the Blockbuster Auditors to complete their audit such that they will date their opinion on Blockbuster's audited annual financial statements on the same date that Viacom's independent certified public accountants ("Viacom's Auditors") date their opinion on Viacom's audited annual financial statements (the "Viacom Annual Statements"), and to enable Viacom to meet its timetable for the printing, filing and public dissemination of the Viacom Annual Statements. (xv) Blockbuster shall authorize Blockbuster's Auditors to make available to Viacom's Auditors both the personnel who performed or are performing the annual audit of Blockbuster and work papers related to the annual audit of Blockbuster, in all cases within a reasonable time prior to Blockbuster's Auditors' opinion date, so that Viacom's Auditors are able to perform the procedures they consider necessary to take responsibility for the work of Blockbuster's Auditors as it relates to Viacom's Auditors' report on Viacom's statements, all within sufficient time to enable Viacom to meet its timetable for the printing, filing and public dissemination of the Viacom Annual Statements. (xvi) Blockbuster shall provide Viacom's internal auditors access to Blockbuster's and its Subsidiaries, books and records so that Viacom may conduct reasonable audits relating to the financial statements provided by Blockbuster pursuant hereto as well as to the internal accounting controls and operations of Blockbuster and its Subsidiaries. (xvii) Blockbuster shall give Viacom as much prior notice as is reasonably practical of any proposed determination of, or any changes in, its accounting estimates or accounting principles from those in effect on the date hereof. Blockbuster will consult with Viacom and, if requested by Viacom, Blockbuster will consult with Viacom's independent public accountants with respect thereto. Blockbuster will not make such determination or changes without Viacom's prior consent, which shall not be unreasonably withheld. (xviii) Notwithstanding clause (xvii) above, Blockbuster shall make any changes in its accounting estimates or accounting principles that are requested by Viacom in order for Blockbuster's accounting estimates and principles to be consistent with those of Viacom. 17 Nothing in this Section 5.01 shall require Blockbuster to violate any agreement with any of its customers, suppliers or other third parties regarding the confidentiality of commercially sensitive information relating to that customer, suppliers or other third parties or its business; provided that in the event that Blockbuster is required under this Section 5.01 to disclose any such information, Blockbuster shall use all commercially reasonable efforts to seek to obtain such customer's, suppliers' or other third parties, consent to the disclosure of such information. For the purposes of these covenants, Viacom and Blockbuster understand and appreciate that their mutual interests will be best served by effecting a rapid and fair resolution of any claims or disputes which may arise out of this Section 5.01. Therefore, each party agrees to use its reasonable best efforts to resolve all such disputes as rapidly as possible on a fair and equitable basis. Toward this end, each party agrees to develop and follow a process for presenting, rapidly assessing, and settling claims and other disputes on a fair and equitable basis. If any dispute or claim arising under this Section 5.01 cannot be readily resolved by the parties, the parties agree to refer the matter to the chief financial officers of each party who shall meet and attempt to resolve the dispute within fifteen days from the date the dispute was brought before their attention. If any dispute or claim arising under this Section 5.01 cannot be resolved by chief financial officers, the parties agree to refer the matter to a senior auditing partner of a nationally recognized accounting firm not currently providing services to either party. Section 5.02. No Violations. (a) For so long as the Ownership Percentage is equal to or greater than 50%, Blockbuster covenants and agrees that it will not take any action or enter into any commitment or agreement which may reasonably be anticipated to result, with or without notice and with or without lapse of time or otherwise, in a contravention or event of default by any of its Affiliates of (i) any provisions of applicable law or

Nothing in this Section 5.01 shall require Blockbuster to violate any agreement with any of its customers, suppliers or other third parties regarding the confidentiality of commercially sensitive information relating to that customer, suppliers or other third parties or its business; provided that in the event that Blockbuster is required under this Section 5.01 to disclose any such information, Blockbuster shall use all commercially reasonable efforts to seek to obtain such customer's, suppliers' or other third parties, consent to the disclosure of such information. For the purposes of these covenants, Viacom and Blockbuster understand and appreciate that their mutual interests will be best served by effecting a rapid and fair resolution of any claims or disputes which may arise out of this Section 5.01. Therefore, each party agrees to use its reasonable best efforts to resolve all such disputes as rapidly as possible on a fair and equitable basis. Toward this end, each party agrees to develop and follow a process for presenting, rapidly assessing, and settling claims and other disputes on a fair and equitable basis. If any dispute or claim arising under this Section 5.01 cannot be readily resolved by the parties, the parties agree to refer the matter to the chief financial officers of each party who shall meet and attempt to resolve the dispute within fifteen days from the date the dispute was brought before their attention. If any dispute or claim arising under this Section 5.01 cannot be resolved by chief financial officers, the parties agree to refer the matter to a senior auditing partner of a nationally recognized accounting firm not currently providing services to either party. Section 5.02. No Violations. (a) For so long as the Ownership Percentage is equal to or greater than 50%, Blockbuster covenants and agrees that it will not take any action or enter into any commitment or agreement which may reasonably be anticipated to result, with or without notice and with or without lapse of time or otherwise, in a contravention or event of default by any of its Affiliates of (i) any provisions of applicable law or regulation, including but not limited to provisions pertaining to the Code or the Employee Retirement Income Security Act of 1974, as amended, (ii) any provision of Viacom's certificate of incorporation or bylaws, (iii) any credit agreement or other material agreements (including agreements relating to covenants not to compete) binding upon Viacom or (iv) any judgment, order or decree of any governmental body, agency or court having jurisdiction over Viacom or any of its respective assets. (b) Blockbuster and Viacom agree to provide to the other any information and documentation requested by the other for the purpose of evaluating and ensuring compliance with Section 5.02(a) hereof. (c) Notwithstanding the foregoing Section 5.01, nothing in this Agreement is intended to limit or restrict in any way Viacom's right's as a stockholder of Blockbuster. Section 5.03. Other Agreements. On or prior to the consummation of the IPO, Viacom and Blockbuster shall have executed and delivered to each other each of the Ancillary Agreements. 18

ARTICLE VI ASSIGNMENT AND ASSUMPTION Section 6.01. Assignment of Obligations. Pursuant to the assignment provision of Section 10.07 of the Wherehouse Stock Purchase Agreement, Viacom International hereby transfers, conveys, sets over and assigns to Blockbuster any and all rights under the Wherehouse Stock Purchase Agreement and any ancillary agreements executed in connection therewith. Section 6.02. Assumption of Obligations. Blockbuster hereby undertakes, assumes and agrees to perform all of the duties, obligations and liabilities of Viacom International under the Wherehouse Stock Purchase Agreement and any ancillary agreements executed in connection therewith. Section 6.03. Assignment of Certain Employment Agreements. On or about the Split-Off Date, Viacom will transfer, convey, set over and assign to Blockbuster any and all employment agreements between "Blockbuster Entertainment Group, a business unit of Viacom," and the employees who are a party to such employment agreements. Section 6.04. Assumption of Certain Employment Agreements. On or about the Split-Off Date, Blockbuster will undertake, assume and agree to perform all of the duties, obligations and liabilities of "Blockbuster Entertainment

ARTICLE VI ASSIGNMENT AND ASSUMPTION Section 6.01. Assignment of Obligations. Pursuant to the assignment provision of Section 10.07 of the Wherehouse Stock Purchase Agreement, Viacom International hereby transfers, conveys, sets over and assigns to Blockbuster any and all rights under the Wherehouse Stock Purchase Agreement and any ancillary agreements executed in connection therewith. Section 6.02. Assumption of Obligations. Blockbuster hereby undertakes, assumes and agrees to perform all of the duties, obligations and liabilities of Viacom International under the Wherehouse Stock Purchase Agreement and any ancillary agreements executed in connection therewith. Section 6.03. Assignment of Certain Employment Agreements. On or about the Split-Off Date, Viacom will transfer, convey, set over and assign to Blockbuster any and all employment agreements between "Blockbuster Entertainment Group, a business unit of Viacom," and the employees who are a party to such employment agreements. Section 6.04. Assumption of Certain Employment Agreements. On or about the Split-Off Date, Blockbuster will undertake, assume and agree to perform all of the duties, obligations and liabilities of "Blockbuster Entertainment Group, a business unit of Viacom," under the employment agreements referred to in Section 6.03 herein. ARTICLE VII OPTIONS Section 7.01. Options. (a) Blockbuster hereby grants to Viacom International, on the terms and conditions set forth herein, a continuing right (the "Blockbuster Class B Common Stock Option") to purchase from Blockbuster, at the times set forth herein, such number of shares of Blockbuster Class B Common Stock as is necessary to allow the Viacom International to maintain the Ownership Percentage. The exercise price for the shares of Blockbuster Class B Common Stock purchased pursuant to the Blockbuster Class B Common Stock Option shall be the Market Price of the Blockbuster Class A Common Stock as of the date of first delivery of notice of exercise of the Blockbuster Class B Common Stock Option by Viacom International to Blockbuster. (b) The provisions of Section 7.01(a) hereof notwithstanding, the Blockbuster Class B Common Stock Option granted pursuant to Section 7.01(a) shall not apply and shall not be exercisable in connection with the issuance by Blockbuster of any shares of Blockbuster Common Stock pursuant to any stock option or other executive or employee benefit or compensation plan maintained by Blockbuster, so long as, from and after the date hereof and prior to the issuance of such shares, Blockbuster or Viacom International has repurchased from 19

shareholders and Blockbuster has not subsequently reissued a number of shares equal or greater to the number of shares to be issued in any such issuance. (c) Blockbuster hereby grants to Viacom International, on the terms and conditions set forth herein, a continuing right (the "Nonvoting Stock Option" and, together with the Blockbuster Class B Common Stock Option, the "Options") to purchase from Blockbuster, at the times set forth herein, such number of shares of Nonvoting Stock as is necessary to allow the Viacom International to own 80 percent of each class of outstanding Nonvoting Stock. The exercise price for the shares of Nonvoting Stock purchased pursuant to the Nonvoting Stock Option shall be the price at which such Nonvoting Stock is then being sold to third parties, or, if no Nonvoting Stock is being sold, the fair market value thereof as determined in good faith by an independent investment advisor. Section 7.02. Notice. At least two business days prior to the issuance of any shares of Blockbuster Common Stock (other than in connection with the IPO, including the full exercise of all underwriters' over-allotment options granted in connection therewith and other than issuances of Blockbuster Common Stock Viacom International) or the first date on which any event could occur that, in the absence of a full or partial exercise of the Blockbuster Class B Common Stock Option, would result in a reduction in the Ownership Percentage, Blockbuster will notify

shareholders and Blockbuster has not subsequently reissued a number of shares equal or greater to the number of shares to be issued in any such issuance. (c) Blockbuster hereby grants to Viacom International, on the terms and conditions set forth herein, a continuing right (the "Nonvoting Stock Option" and, together with the Blockbuster Class B Common Stock Option, the "Options") to purchase from Blockbuster, at the times set forth herein, such number of shares of Nonvoting Stock as is necessary to allow the Viacom International to own 80 percent of each class of outstanding Nonvoting Stock. The exercise price for the shares of Nonvoting Stock purchased pursuant to the Nonvoting Stock Option shall be the price at which such Nonvoting Stock is then being sold to third parties, or, if no Nonvoting Stock is being sold, the fair market value thereof as determined in good faith by an independent investment advisor. Section 7.02. Notice. At least two business days prior to the issuance of any shares of Blockbuster Common Stock (other than in connection with the IPO, including the full exercise of all underwriters' over-allotment options granted in connection therewith and other than issuances of Blockbuster Common Stock Viacom International) or the first date on which any event could occur that, in the absence of a full or partial exercise of the Blockbuster Class B Common Stock Option, would result in a reduction in the Ownership Percentage, Blockbuster will notify Viacom International in writing (a "Blockbuster Class B Common Stock Option Notice") of any plans it has to issue such shares or the date on which such event could first occur. At least two business days prior to the issuance of any shares of Nonvoting Stock (other than issuances of Nonvoting Stock to Viacom International) or the first date on which any event could occur that, in the absence of a full or partial exercise of the Nonvoting Stock Option, would result in the Viacom International owning less than 80 percent of each class of outstanding Nonvoting Stock, Blockbuster will notify Viacom International in writing (a "Nonvoting Stock Option Notice" and, together with a Blockbuster Class B Common Stock Option Notice, an "Option Notice") of any plans it has to issue such shares or the date on which such event could first occur. Each Option Notice must specify the date on which Blockbuster intends to issue such additional shares or on which such event could first occur (such issuance or event being referred to herein as an "Issuance Event" and the date of such issuance or event as an "Issuance Event Date"), the number of shares Blockbuster intends to issue or may issue and the other terms and conditions of such Issuance Event. Section 7.03. Option Exercise and Payment. The Blockbuster Class B Common Stock Option may be exercised by Viacom International for a number of shares equal to or less than the number of shares that are necessary for the Viacom International to maintain, in the aggregate, the then-current Ownership Percentage. The Nonvoting Stock Option may be exercised by Viacom International for a number of shares equal to or less than the number of shares that are necessary for the Viacom International to own, in the aggregate, 80 percent of each class of outstanding Nonvoting Stock. Each Option may be exercised at any time after receipt of an applicable Option Notice and prior to the applicable Issuance Event Date by the delivery to Blockbuster of a written notice to such effect specifying (i) the number of shares of 20

Blockbuster Class B Common Stock or Nonvoting Stock, as the case may be, to be purchased by Viacom International and (ii) a calculation of the exercise price for such shares. Upon any such exercise of either Option, Blockbuster will, prior to the applicable Issuance Event Date, deliver to Viacom International, against payment therefor, certificates (issued in the name of Viacom International) representing the shares of Blockbuster Class B Common Stock or Nonvoting Stock, as the case may be, being purchased upon such exercise. Payment for such shares shall be made by wire transfer or intrabank transfer of immediately-available funds to such account as shall be specified by Blockbuster, for the full purchase price for such shares. Section 7.04. Effect of Failure to Exercise. Except as provided in Section 7.06, any failure by Viacom International to exercise either Option, or any exercise for less than all shares purchasable under either Option, in connection with any particular Issuance Event shall not affect Viacom International's right to exercise the relevant Option in connection with any subsequent Issuance Event. Section 7.05. IPO. Notwithstanding the foregoing, Viacom

Blockbuster Class B Common Stock or Nonvoting Stock, as the case may be, to be purchased by Viacom International and (ii) a calculation of the exercise price for such shares. Upon any such exercise of either Option, Blockbuster will, prior to the applicable Issuance Event Date, deliver to Viacom International, against payment therefor, certificates (issued in the name of Viacom International) representing the shares of Blockbuster Class B Common Stock or Nonvoting Stock, as the case may be, being purchased upon such exercise. Payment for such shares shall be made by wire transfer or intrabank transfer of immediately-available funds to such account as shall be specified by Blockbuster, for the full purchase price for such shares. Section 7.04. Effect of Failure to Exercise. Except as provided in Section 7.06, any failure by Viacom International to exercise either Option, or any exercise for less than all shares purchasable under either Option, in connection with any particular Issuance Event shall not affect Viacom International's right to exercise the relevant Option in connection with any subsequent Issuance Event. Section 7.05. IPO. Notwithstanding the foregoing, Viacom International shall not be entitled to exercise the Blockbuster Class B Common Stock Option in connection with the IPO of the Blockbuster Class A Common Stock if, upon the completion of the IPO, including the full exercise of all underwriters' over-allotment options granted in connection therewith, the Ownership Percentage would be greater than 80%. Section 7.06. Termination of Options. The Options shall terminate upon the occurrence of any Issuance Event that, after considering Viacom International's response thereto and to any other Issuance Events, results in the Ownership Percentage being less than 45%, other than any Issuance Event in violation of this Agreement. ARTICLE VIII INDEMNIFICATION Section 8.01. Indemnification Procedures. (a) The indemnification procedures set forth in Section 8.01(b) herein are applicable to any indemnity granted pursuant to the Ancillary Agreements (other than the Tax Matters Agreement). (b) If a claim or demand is made against an Indemnified Party by any Person who is not a party to the Ancillary Agreements (a "Third Party Claim") as to which such Indemnified Party is entitled to indemnification pursuant to the Ancillary Agreements, such Indemnified Party shall give the Indemnifying Party notice of such Third Party Claim, as promptly as practicable, but in any event no later than 15 days of the receipt by the Indemnified Party of such notice; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under the Ancillary Agreements except to the extent the Indemnifying Party is materially prejudiced by such failure and shall not relieve the Indemnifying Party from any other obligation or liability that it may have to any Indemnified Party otherwise than under the Ancillary Agreements. If the Indemnifying Party acknowledges in 21 writing its obligations to indemnify the Indemnified Party hereunder against any Losses that may result from such Third Party Claim, then such Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice, subject to the approval of the Indemnified Party (which approval shall not be unreasonably withheld or delayed), if it gives notice of its intention to do so to the Indemnified Party within 15 business days of the receipt of such notice from the Indemnified Party; provided, however, that if there exists or is reasonably likely to exist a conflict of interest that would make it inappropriate in the reasonable judgment of the Indemnified Party for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel, in each jurisdiction for which the Indemnified Party determines counsel is required to participate in such defense, at the expense of the Indemnifying Party. In the event the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses, pertinent records, materials and information in the Indemnified Party's possession or under the Indemnified Party's control relating thereto as is reasonably required by the Indemnifying Party, subject to

writing its obligations to indemnify the Indemnified Party hereunder against any Losses that may result from such Third Party Claim, then such Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice, subject to the approval of the Indemnified Party (which approval shall not be unreasonably withheld or delayed), if it gives notice of its intention to do so to the Indemnified Party within 15 business days of the receipt of such notice from the Indemnified Party; provided, however, that if there exists or is reasonably likely to exist a conflict of interest that would make it inappropriate in the reasonable judgment of the Indemnified Party for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel, in each jurisdiction for which the Indemnified Party determines counsel is required to participate in such defense, at the expense of the Indemnifying Party. In the event the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses, pertinent records, materials and information in the Indemnified Party's possession or under the Indemnified Party's control relating thereto as is reasonably required by the Indemnifying Party, subject to reimbursement of reasonable out-of-pocket expenses. Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party all such witnesses, records, materials and information in the Indemnifying Party's possession or under the Indemnifying Party's control relating thereto as is reasonably required by the Indemnified Party, subject to reimbursement of reasonable out-of-pocket expenses. No such Third Party Claim may be settled by the Indemnifying Party without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed) unless such settlement is solely for money and includes an unconditional release of each Indemnified Party from any and all Losses arising out of such action, claim, suit or proceeding and would not otherwise adversely affect the Indemnified Party. No such Third Party Claim may be settled by the Indemnified Party without the prior written consent of the Indemnifying Party which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim and shall be liable for the fees and expenses of counsel incurred by the Indemnified Party in defending such Third Party Claim if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Party which the Indemnified Party reasonably determines, after conferring with its counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. 22

ARTICLE IX CONDITION TO CONSUMMATION OF TRANSACTIONS; TERMINATION Section 9.01. Condition. Consummation of the transactions provided for in this Agreement and the Ancillary Agreements is conditioned upon, and shall only be effected upon or after (i) the final approval of the IPO by the Board of Directors of Blockbuster and Viacom, (ii) the final approval of the Split-Off by the Board of Directors of Viacom and (iii) the closing of the IPO. Section 9.02. Termination. This Agreement may be terminated and the IPO and Split-Off abandoned by the Board of Directors of Viacom in its sole discretion, without the approval of Blockbuster at any time prior to the IPO Effective Date or Split-Off Date, as applicable. In the event of any such termination, no party shall have any liability of any kind to the other party. ARTICLE X MISCELLANEOUS Section 10.01. Limitation of Liability. Neither Viacom nor Blockbuster shall be liable to the other for any special, indirect, incidental or consequential damages of the other arising in connection with this Agreement. Section 10.02. Further Assurances. Each party agrees to execute, acknowledge, deliver, file, record and publish such further certificates, amendments to certificates, instruments and documents, and do all such other acts and things as may be required by law, or as may be required to carry out the intent and purposes of this Agreement

ARTICLE IX CONDITION TO CONSUMMATION OF TRANSACTIONS; TERMINATION Section 9.01. Condition. Consummation of the transactions provided for in this Agreement and the Ancillary Agreements is conditioned upon, and shall only be effected upon or after (i) the final approval of the IPO by the Board of Directors of Blockbuster and Viacom, (ii) the final approval of the Split-Off by the Board of Directors of Viacom and (iii) the closing of the IPO. Section 9.02. Termination. This Agreement may be terminated and the IPO and Split-Off abandoned by the Board of Directors of Viacom in its sole discretion, without the approval of Blockbuster at any time prior to the IPO Effective Date or Split-Off Date, as applicable. In the event of any such termination, no party shall have any liability of any kind to the other party. ARTICLE X MISCELLANEOUS Section 10.01. Limitation of Liability. Neither Viacom nor Blockbuster shall be liable to the other for any special, indirect, incidental or consequential damages of the other arising in connection with this Agreement. Section 10.02. Further Assurances. Each party agrees to execute, acknowledge, deliver, file, record and publish such further certificates, amendments to certificates, instruments and documents, and do all such other acts and things as may be required by law, or as may be required to carry out the intent and purposes of this Agreement and the Ancillary Agreements and the translations contemplated thereby. Section 10.03. Waiver. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the party entitled to enforce such term, but such waiver shall be effective only if it is in writing signed by a duly authorized officer of the party against which such waiver is to be asserted. Unless other expressly provided in this Agreement, no delay or omission on the part of any party in exercising any right or privilege under this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right or privilege under this Agreement operates as a waiver of any other right or privilege under this Agreement nor shall any single or partial exercise of any right or privilege preclude any other or future exercise thereof or the exercise of any other right or privilege under this Agreement. No failure by either party to take any action or assert any right or privilege hereunder shall be deemed to be a waiver of such right or privilege in the event of the continuation or repetition of the circumstances giving rise to such right unless expressly waived in writing by the party against whom the existence of such waiver is asserted. 23 Section 10.04. Remedies. Each of Viacom and Blockbuster acknowledges and agrees that under certain circumstances the breach by Viacom or any of its Affiliates or Blockbuster or any of its Affiliates of a term or provision of this Agreement will materially and irreparably harm the other party, that money damages will accordingly not be an adequate remedy for such breach and that the non-defaulting party, in its sole discretion and in addition to its rights under this Agreement and any other remedies it may have at law or in equity, may apply to any court of law or equity of competent jurisdiction for specific performance and/or other injunctive relief in order to enforce or prevent any breach of the provisions of this Agreement. Section 10.05. Performance. Each of the parties hereto shall use all commercially reasonable efforts to cause to be performed all actions, agreements and obligations set forth herein to be performed by any Affiliate of such party. Section 10.06. References; Construction. The table of contents and the section and other headings and subheadings contained in this Agreement and the exhibits hereto are solely for the purpose of reference, are not part of the agreement of the parties hereto, and shall not in any way affect the meaning or interpretation of this Agreement or any exhibit hereto. All references to days or months shall be deemed references to calendar days or months. Unless the context otherwise requires, any reference to a "Section" or an "Exhibit" shall be deemed to refer to a section of this Agreement or an exhibit to this Agreement, as applicable. The words "hereof," "herein" and "hereunder" and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. This Agreement shall be construed without regard to any

Section 10.04. Remedies. Each of Viacom and Blockbuster acknowledges and agrees that under certain circumstances the breach by Viacom or any of its Affiliates or Blockbuster or any of its Affiliates of a term or provision of this Agreement will materially and irreparably harm the other party, that money damages will accordingly not be an adequate remedy for such breach and that the non-defaulting party, in its sole discretion and in addition to its rights under this Agreement and any other remedies it may have at law or in equity, may apply to any court of law or equity of competent jurisdiction for specific performance and/or other injunctive relief in order to enforce or prevent any breach of the provisions of this Agreement. Section 10.05. Performance. Each of the parties hereto shall use all commercially reasonable efforts to cause to be performed all actions, agreements and obligations set forth herein to be performed by any Affiliate of such party. Section 10.06. References; Construction. The table of contents and the section and other headings and subheadings contained in this Agreement and the exhibits hereto are solely for the purpose of reference, are not part of the agreement of the parties hereto, and shall not in any way affect the meaning or interpretation of this Agreement or any exhibit hereto. All references to days or months shall be deemed references to calendar days or months. Unless the context otherwise requires, any reference to a "Section" or an "Exhibit" shall be deemed to refer to a section of this Agreement or an exhibit to this Agreement, as applicable. The words "hereof," "herein" and "hereunder" and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing the document to be drafted. Section 10.07. Amendments. This Agreement shall not be supplemented, amended or modified in any manner whatsoever (including without limitation by course of dealing or of performance or usage of trade) except in writing signed by the parties. Section 10.08. Successors and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Except as set forth below, this Agreement may not be assigned by any party by operation of law or otherwise without the express written consent of the other party (which consent may be granted or withheld). The Option granted to Viacom International pursuant to Article VII hereof may be assigned to Viacom or any Subsidiary of Viacom. Section 10.09. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any portion of this Agreement is declared invalid for any reason in any jurisdiction, such declaration shall have no effect upon the remaining portions of this Agreement, which shall continue in full force and effect as if this Agreement had been executed with the invalid portions thereof deleted; provided that the entirety of this Agreement shall continue in full force and effect in all other jurisdictions. 24 Section 10.10. Entire Agreement. Other than the Ancillary Agreements, this Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements, including Article 7 of the Asset Purchase Agreement dated June 7, 1999 between Viacom Entertainment Canada Inc. and Blockbuster Canada Inc., and undertakings, both written and oral, between the parties with respect to the subject matter hereof and thereof. Section 10.11. Notices. All notices, consents, requests, approvals, and other communications provided for or required herein, and all legal process in regard thereto, must be in writing and shall be deemed validly given, made or served, (a) when delivered personally or sent by telecopy to the facsimile number indicated below with a required confirmation copy sent in accordance with subsection (c) below; or (b) on the next business day after delivery to a nationally-recognized express delivery service with instructions and payment for overnight delivery; or (c) on the fifth (5th) day after deposited in any depository regularly maintained by the United States postal service, postage prepaid, certified or registered mail, return receipt requested, addressed to the following addresses or to such other address as the party to be notified shall have specified to the other party in accordance with this section: If to Viacom:

Section 10.10. Entire Agreement. Other than the Ancillary Agreements, this Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements, including Article 7 of the Asset Purchase Agreement dated June 7, 1999 between Viacom Entertainment Canada Inc. and Blockbuster Canada Inc., and undertakings, both written and oral, between the parties with respect to the subject matter hereof and thereof. Section 10.11. Notices. All notices, consents, requests, approvals, and other communications provided for or required herein, and all legal process in regard thereto, must be in writing and shall be deemed validly given, made or served, (a) when delivered personally or sent by telecopy to the facsimile number indicated below with a required confirmation copy sent in accordance with subsection (c) below; or (b) on the next business day after delivery to a nationally-recognized express delivery service with instructions and payment for overnight delivery; or (c) on the fifth (5th) day after deposited in any depository regularly maintained by the United States postal service, postage prepaid, certified or registered mail, return receipt requested, addressed to the following addresses or to such other address as the party to be notified shall have specified to the other party in accordance with this section: If to Viacom: Viacom Inc. 1515 Broadway New York New York 10036 Attention: Michael D. Fricklas, General Counsel Phone Number: 212-258-6070 Fax Number: 212-258-6099 If to Blockbuster: Blockbuster Inc. 1201 Elm Street Dallas, Texas 75270 Attention: Ed Stead, General Counsel Phone Number: 214-854-3499 Fax Number: 214-854-3677 Section 10.12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties hereto agrees that any dispute relating to or arising from this Agreement or the transactions contemplated hereby shall be resolved only in the court of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and the appellate court having jurisdiction of appeals in such courts. In that context, and without 25

limiting the generality of the foregoing, each of the parties hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal suit, action or proceeding relating to this Agreement or any transaction contemplated hereby, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and appellate court having jurisdiction of appeals in such courts, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such suit, action, or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such federal court; (b) consents that any such suit, action or proceeding may and shall be brought in such courts and waives any objection that it may now or hereafter have to the venue or jurisdiction or any such action or proceeding in such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party in its address as provided in Section 10.11 hereof; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by

limiting the generality of the foregoing, each of the parties hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal suit, action or proceeding relating to this Agreement or any transaction contemplated hereby, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and appellate court having jurisdiction of appeals in such courts, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such suit, action, or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such federal court; (b) consents that any such suit, action or proceeding may and shall be brought in such courts and waives any objection that it may now or hereafter have to the venue or jurisdiction or any such action or proceeding in such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party in its address as provided in Section 10.11 hereof; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by New York law; and (e) agrees that this Agreement has been entered into in the State of New York and performed in part in the State of New York. Section 10.13. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same instrument. 26

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date and year first written above. VIACOM INC.
By: /s/ MICHAEL D. FRICKLAS ---------------------------------------Name: Michael D. Fricklas Title: Sr. Vice President, General Counsel and Secretary

VIACOM INTERNATIONAL INC.
By: /s/ MICHAEL D. FRICKLAS ---------------------------------------Name: Michael D. Fricklas Title: Sr. Vice President and General Counsel

BLOCKBUSTER INC.
By: /s/ EDWARD B. STEAD ---------------------------------------Name: Edward B. Stead Title: Exec. Vice President, General Counsel and Secretary

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date and year first written above. VIACOM INC.
By: /s/ MICHAEL D. FRICKLAS ---------------------------------------Name: Michael D. Fricklas Title: Sr. Vice President, General Counsel and Secretary

VIACOM INTERNATIONAL INC.
By: /s/ MICHAEL D. FRICKLAS ---------------------------------------Name: Michael D. Fricklas Title: Sr. Vice President and General Counsel

BLOCKBUSTER INC.
By: /s/ EDWARD B. STEAD ---------------------------------------Name: Edward B. Stead Title: Exec. Vice President, General Counsel and Secretary

Exhibit A Form of Release and Indemnification Agreement [Filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q]

Exhibit B Form of Transition Services Agreement [Filed as Exhibit 10.3 to this Quarterly Report on Form 10-Q]

Exhibit C Form of Registration Rights Agreement [Filed as Exhibit 10.4 to this Quarterly Report on Form 10-Q]

Exhibit D Form of Tax Matters Agreement [Filed as Exhibit 10.5 to this Quarterly Report on Form 10-Q]

Exhibit A Form of Release and Indemnification Agreement [Filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q]

Exhibit B Form of Transition Services Agreement [Filed as Exhibit 10.3 to this Quarterly Report on Form 10-Q]

Exhibit C Form of Registration Rights Agreement [Filed as Exhibit 10.4 to this Quarterly Report on Form 10-Q]

Exhibit D Form of Tax Matters Agreement [Filed as Exhibit 10.5 to this Quarterly Report on Form 10-Q]

EXHIBIT 10.2 RELEASE AND INDEMNIFICATION AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS

Page ----

ARTICLE I DEFINITIONS

Section 1.01.

Definitions.........................................1 ARTICLE II INDEMNIFICATION

Section 2.01.

Indemnification by Blockbuster......................4

Exhibit B Form of Transition Services Agreement [Filed as Exhibit 10.3 to this Quarterly Report on Form 10-Q]

Exhibit C Form of Registration Rights Agreement [Filed as Exhibit 10.4 to this Quarterly Report on Form 10-Q]

Exhibit D Form of Tax Matters Agreement [Filed as Exhibit 10.5 to this Quarterly Report on Form 10-Q]

EXHIBIT 10.2 RELEASE AND INDEMNIFICATION AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS

Page ----

ARTICLE I DEFINITIONS

Section 1.01.

Definitions.........................................1 ARTICLE II INDEMNIFICATION

Section Section Section Section Section Section Section

2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07.

Indemnification by Blockbuster......................4 Indemnification by Viacom...........................5 Certain Tax Matters.................................5 Registration Indemnification........................5 Calculation of Indemnification Payments.............7 Indemnification Procedures..........................8 Remedies Cumulative.................................8 ARTICLE III RELEASE

Exhibit C Form of Registration Rights Agreement [Filed as Exhibit 10.4 to this Quarterly Report on Form 10-Q]

Exhibit D Form of Tax Matters Agreement [Filed as Exhibit 10.5 to this Quarterly Report on Form 10-Q]

EXHIBIT 10.2 RELEASE AND INDEMNIFICATION AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS

Page ----

ARTICLE I DEFINITIONS

Section 1.01.

Definitions.........................................1 ARTICLE II INDEMNIFICATION

Section Section Section Section Section Section Section

2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07.

Indemnification by Blockbuster......................4 Indemnification by Viacom...........................5 Certain Tax Matters.................................5 Registration Indemnification........................5 Calculation of Indemnification Payments.............7 Indemnification Procedures..........................8 Remedies Cumulative.................................8 ARTICLE III RELEASE

Section 3.01.

General Release.....................................8 ARTICLE IV MISCELLANEOUS

Section 4.01. Section 4.02. Section 4.03.

Further Agreements..................................9 Amendments..........................................9 Successors and Assignment...........................9

Exhibit D Form of Tax Matters Agreement [Filed as Exhibit 10.5 to this Quarterly Report on Form 10-Q]

EXHIBIT 10.2 RELEASE AND INDEMNIFICATION AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS

Page ----

ARTICLE I DEFINITIONS

Section 1.01.

Definitions.........................................1 ARTICLE II INDEMNIFICATION

Section Section Section Section Section Section Section

2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07.

Indemnification by Blockbuster......................4 Indemnification by Viacom...........................5 Certain Tax Matters.................................5 Registration Indemnification........................5 Calculation of Indemnification Payments.............7 Indemnification Procedures..........................8 Remedies Cumulative.................................8 ARTICLE III RELEASE

Section 3.01.

General Release.....................................8 ARTICLE IV MISCELLANEOUS

Section Section Section Section Section Section Section Section Section

4.01. 4.02. 4.03. 4.04. 4.05. 4.06. 4.07. 4.08. 4.09.

Further Agreements..................................9 Amendments..........................................9 Successors and Assignment...........................9 Consolidation, Merger and Sale of Assets............9 Severability.......................................10 Entire Agreement...................................10 Notices............................................10 Governing Law......................................11 Counterparts.......................................12

EXHIBIT 10.2 RELEASE AND INDEMNIFICATION AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS

Page ----

ARTICLE I DEFINITIONS

Section 1.01.

Definitions.........................................1 ARTICLE II INDEMNIFICATION

Section Section Section Section Section Section Section

2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07.

Indemnification by Blockbuster......................4 Indemnification by Viacom...........................5 Certain Tax Matters.................................5 Registration Indemnification........................5 Calculation of Indemnification Payments.............7 Indemnification Procedures..........................8 Remedies Cumulative.................................8 ARTICLE III RELEASE

Section 3.01.

General Release.....................................8 ARTICLE IV MISCELLANEOUS

Section Section Section Section Section Section Section Section Section

4.01. 4.02. 4.03. 4.04. 4.05. 4.06. 4.07. 4.08. 4.09.

Further Agreements..................................9 Amendments..........................................9 Successors and Assignment...........................9 Consolidation, Merger and Sale of Assets............9 Severability.......................................10 Entire Agreement...................................10 Notices............................................10 Governing Law......................................11 Counterparts.......................................12

RELEASE AND INDEMNIFICATION AGREEMENT RELEASE AND INDEMNIFICATION AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom") and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster").

TABLE OF CONTENTS

Page ----

ARTICLE I DEFINITIONS

Section 1.01.

Definitions.........................................1 ARTICLE II INDEMNIFICATION

Section Section Section Section Section Section Section

2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07.

Indemnification by Blockbuster......................4 Indemnification by Viacom...........................5 Certain Tax Matters.................................5 Registration Indemnification........................5 Calculation of Indemnification Payments.............7 Indemnification Procedures..........................8 Remedies Cumulative.................................8 ARTICLE III RELEASE

Section 3.01.

General Release.....................................8 ARTICLE IV MISCELLANEOUS

Section Section Section Section Section Section Section Section Section

4.01. 4.02. 4.03. 4.04. 4.05. 4.06. 4.07. 4.08. 4.09.

Further Agreements..................................9 Amendments..........................................9 Successors and Assignment...........................9 Consolidation, Merger and Sale of Assets............9 Severability.......................................10 Entire Agreement...................................10 Notices............................................10 Governing Law......................................11 Counterparts.......................................12

RELEASE AND INDEMNIFICATION AGREEMENT RELEASE AND INDEMNIFICATION AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom") and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). RECITALS WHEREAS, on September 29, 1994, Viacom acquired the businesses and operations of Blockbuster Entertainment Corporation, a Delaware Corporation
("BEC") ----through a merger of BEC with and into Viacom (the "Merger"); -----WHEREAS, since the Merger, Viacom has owned and operated the acquired

businesses and operations of BEC and other related businesses and operations and has made significant improvements and contributions thereto and has transferred certain of the assets, businesses and operations acquired in the Merger and certain other related assets, businesses and operations to Blockbuster and its Subsidiaries (collectively, the "Asset Transfers"); WHEREAS, Viacom presently intends to split-off Blockbuster in a tax- free transaction;

RELEASE AND INDEMNIFICATION AGREEMENT RELEASE AND INDEMNIFICATION AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom") and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). RECITALS WHEREAS, on September 29, 1994, Viacom acquired the businesses and operations of Blockbuster Entertainment Corporation, a Delaware Corporation
("BEC") ----through a merger of BEC with and into Viacom (the "Merger"); -----WHEREAS, since the Merger, Viacom has owned and operated the acquired

businesses and operations of BEC and other related businesses and operations and has made significant improvements and contributions thereto and has transferred certain of the assets, businesses and operations acquired in the Merger and certain other related assets, businesses and operations to Blockbuster and its Subsidiaries (collectively, the "Asset Transfers"); WHEREAS, Viacom presently intends to split-off Blockbuster in a tax- free transaction; WHEREAS, prior to such split-off, Blockbuster proposes to issue shares of its common stock in an initial public offering registered under the Securities Act of 1933, as amended; WHEREAS, in consideration of the foregoing and as a condition to the willingness of the parties to proceed with the initial public offering, Blockbuster has agreed to release and indemnify Viacom, and Viacom has agreed to release and indemnify Blockbuster, as more fully described below; and NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. As used in this Agreement, the following terms shall have the following meanings: "Affiliates" means, with respect to any specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such specified Person; provided, however, that prior to the Split-Off,

Affiliates of Blockbuster or Viacom shall only include Persons who would be affiliates of Blockbuster or Viacom, respectively, assuming that the Split-Off had occurred immediately prior to the determination as to whether such Person was an affiliate of Blockbuster or Viacom, respectively. "Agreement" has the meaning ascribed thereto in the Preamble. "Asset Transfers" has the meaning ascribed thereto in the Recitals. "BEC" has the meaning ascribed thereto in the Recitals. "Blockbuster" has the meaning ascribed thereto in the Preamble. "Blockbuster Business" has the meaning ascribed thereto in Section 2.01(a)(i). "Blockbuster Registration Statement" means any registration statement (or any preliminary or final prospectus

Affiliates of Blockbuster or Viacom shall only include Persons who would be affiliates of Blockbuster or Viacom, respectively, assuming that the Split-Off had occurred immediately prior to the determination as to whether such Person was an affiliate of Blockbuster or Viacom, respectively. "Agreement" has the meaning ascribed thereto in the Preamble. "Asset Transfers" has the meaning ascribed thereto in the Recitals. "BEC" has the meaning ascribed thereto in the Recitals. "Blockbuster" has the meaning ascribed thereto in the Preamble. "Blockbuster Business" has the meaning ascribed thereto in Section 2.01(a)(i). "Blockbuster Registration Statement" means any registration statement (or any preliminary or final prospectus included therein), information memorandum or other offering document relating to a primary offer and sale of securities of Blockbuster prepared by Blockbuster or at its direction, in each case including all exhibits thereto and as supplemented and amended from time to time. "Blockbuster Subsidiary Obligors" means, collectively, any direct or indirect Subsidiary of Blockbuster that is or becomes an obligor on, guarantees, or otherwise becomes directly or indirectly liable with respect to any Senior Indebtedness of Blockbuster. "Indemnified Party" means any Person who is entitled to received payment or defense from an Indemnifying Party pursuant to this Agreement. "Indemnifying Party" means any party who is required to pay or defend any other Person pursuant to this Agreement. "IPO" means the initial public offering by Blockbuster of shares of Blockbuster Class A Common Stock as contemplated by the IPO Registration Statement. "IPO and Split-Off Agreement" means Initial Public Offering and Split- Off Agreement date as of the dated hereof among Viacom, Viacom International Inc. and Blockbuster. "IPO Registration Statement" means the Registration Statement on Form S-1, Registration No. 333-77899, of Blockbuster, including all exhibits thereto and as supplemented and amended from time to time. 2 "Intercompany Agreements" means this Agreement, the IPO and Split-Off Agreement and the Transition Services Agreement, the Registration Rights Agreement and the Tax Matters Agreement, each dated the date hereof by and between the parties. "Losses" has the meaning ascribed thereto in Section 2.01(a). "Merger" has the meaning ascribed thereto in the Recitals. "Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture association, joint stock company, trust unincorporated organization or government or any agency or political subdivision thereof. "Representatives" means directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives. "Securities Act" means the Securities Act of 1933, as amended from time to time, together with the rules and regulations promulgated thereunder.

"Intercompany Agreements" means this Agreement, the IPO and Split-Off Agreement and the Transition Services Agreement, the Registration Rights Agreement and the Tax Matters Agreement, each dated the date hereof by and between the parties. "Losses" has the meaning ascribed thereto in Section 2.01(a). "Merger" has the meaning ascribed thereto in the Recitals. "Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture association, joint stock company, trust unincorporated organization or government or any agency or political subdivision thereof. "Representatives" means directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives. "Securities Act" means the Securities Act of 1933, as amended from time to time, together with the rules and regulations promulgated thereunder. "Senior Indebtedness" means, with respect to a Person, (i) all senior indebtedness of such Person for borrowed money, (ii) all senior obligations of such Person evidenced by bonds, debentures, notes or other similar instruments and (iii) all senior indebtedness of others secured by a lien on any property of such person. "Split-Off" means the distribution of Blockbuster Common Stock by Viacom in one or more transactions occurring after the IPO that collectively have the effect that all or a substantial part of shares of Blockbuster Common Stock held by Viacom are distributed to all or some of the stockholders of Viacom, whenever such transaction(s) shall occur. "Split-Off Registration Statement" means any registration statement (or any preliminary or final prospectus included therein), information memorandum or other offering document relating to the Split-Off, in each case including all exhibits thereto and as supplemented and amended from time to time. "Subsidiary" means with respect to any Person, any other Person a majority of the equity ownership or voting stock of which is at the time owned, directly or indirectly, by such Person and/or one or more other Subsidiaries of such Person; provided, however, that prior to the Split-Off, a Subsidiary of Viacom shall only include Persons who would be a Subsidiary of Viacom assuming the Split-Off has occurred immediately prior to the determination as to whether such Person was a Subsidiary of Viacom. "Transfer Costs" means any payments, costs or expenses paid to a third party associated with the Asset Transfers. 3 "Viacom" has the meaning ascribed thereto in the Preamble. "Viacom Business" has the meaning ascribed thereto in Section 2.02. "Viacom Guarantees" means guarantees of Viacom and its Subsidiaries with respect to obligations arising out of or relating to the Blockbuster Business, including without limitation guarantees or other obligations under leases or other agreements relating to video and music stores, offices, warehouses and equipment. ARTICLE II INDEMNIFICATION Section 2.01. Indemnification by Blockbuster. (a) Blockbuster and any Blockbuster Subsidiary Obligor jointly and severally agree to indemnify and hold harmless Viacom and its past, present or future Subsidiaries and Affiliates and any of their past, present or future Representatives, heirs, executors and any of their successors and assigns against any and all payments, losses, liabilities, damages, claims, and expenses (including without limitation, attorney's fees and expenses incurred in good faith) and costs whatsoever

"Viacom" has the meaning ascribed thereto in the Preamble. "Viacom Business" has the meaning ascribed thereto in Section 2.02. "Viacom Guarantees" means guarantees of Viacom and its Subsidiaries with respect to obligations arising out of or relating to the Blockbuster Business, including without limitation guarantees or other obligations under leases or other agreements relating to video and music stores, offices, warehouses and equipment. ARTICLE II INDEMNIFICATION Section 2.01. Indemnification by Blockbuster. (a) Blockbuster and any Blockbuster Subsidiary Obligor jointly and severally agree to indemnify and hold harmless Viacom and its past, present or future Subsidiaries and Affiliates and any of their past, present or future Representatives, heirs, executors and any of their successors and assigns against any and all payments, losses, liabilities, damages, claims, and expenses (including without limitation, attorney's fees and expenses incurred in good faith) and costs whatsoever ("Losses"), as incurred, arising out of or relating to: (i) all assets, businesses and operations conducted, operated, managed or owned, in whole or in part, by (A) BEC or any Person that was any at time a Subsidiary or Affiliate of BEC, (B) Viacom or any Person that was any at time a Subsidiary or Affiliate of Viacom that were the responsibility of the chief executive officer of the Blockbuster Entertainment operating unit of Viacom, (C) Blockbuster or any Person that was at any time a Subsidiary or Affiliate of Blockbuster, or (D) any successor, assign or Representative of any of the foregoing at any time, whether before, at or after the IPO (including without limitation any assets, businesses or operations that were purchased, newly started, discontinued or sold) or any transaction related thereto or causes of action arising therefrom (collectively, the "Blockbuster Business"); and (ii) the Transfer Costs; provided that, in case of clause (i) above, assets, businesses and operations referred to therein shall (A) include, without limitation, home video retailing (whether videocassette, laserdisc, digital versatile disc, digital video express or otherwise and whether rental or sale or in a physical store or over the Internet), video game retailing (whether rental or sale), music retailing, the operation of children and adult entertainment centers (but this indemnification shall not apply to assets, businesses and operations conducted by Paramount Parks) and the development, marketing, sale and management of franchises related to the foregoing assets, businesses and operations and the Viacom Guarantees and (B) exclude all assets, businesses and operations of Spelling Entertainment Group Inc. and its Subsidiaries (including Republic Entertainment Inc. 4

and WorldVision Inc.), Showtime Networks Inc.,Virgin Interactive Entertainment Limited and Virgin Interactive Entertainment Inc. (b) To the extent that a Subsidiary of Blockbuster becomes a Blockbuster Subsidiary Obligor, Blockbuster shall cause such Subsidiary to become a party to this Agreement through an amendment hereto pursuant to which such Blockbuster Subsidiary Obligor will expressly assume all of the obligations, and acquire all of the rights, of Blockbuster under this Agreement. Such assumption of obligations and acquisition of rights shall in no way discharge Blockbuster from any of its obligations hereunder or diminish any of Blockbuster's rights hereunder, as the case may be. Such amendment shall be (i) executed and delivered to Viacom (and shall become effective) simultaneously with the execution and delivery by such Blockbuster Subsidiary Obligor (and the effectiveness) of the documentation pursuant to which it became a Blockbuster Subsidiary Obligor and (ii) contain provisions reasonably satisfactory to Viacom to maximize the likelihood that such amendment would not be subject to attack under applicable fraudulent conveyance or similar laws. (c) The obligations of the parties under this Section 2.01 shall be in addition to any liability which any party may have to the other party.

and WorldVision Inc.), Showtime Networks Inc.,Virgin Interactive Entertainment Limited and Virgin Interactive Entertainment Inc. (b) To the extent that a Subsidiary of Blockbuster becomes a Blockbuster Subsidiary Obligor, Blockbuster shall cause such Subsidiary to become a party to this Agreement through an amendment hereto pursuant to which such Blockbuster Subsidiary Obligor will expressly assume all of the obligations, and acquire all of the rights, of Blockbuster under this Agreement. Such assumption of obligations and acquisition of rights shall in no way discharge Blockbuster from any of its obligations hereunder or diminish any of Blockbuster's rights hereunder, as the case may be. Such amendment shall be (i) executed and delivered to Viacom (and shall become effective) simultaneously with the execution and delivery by such Blockbuster Subsidiary Obligor (and the effectiveness) of the documentation pursuant to which it became a Blockbuster Subsidiary Obligor and (ii) contain provisions reasonably satisfactory to Viacom to maximize the likelihood that such amendment would not be subject to attack under applicable fraudulent conveyance or similar laws. (c) The obligations of the parties under this Section 2.01 shall be in addition to any liability which any party may have to the other party. Section 2.02. Indemnification by Viacom. (a) Viacom agrees to indemnify and hold harmless Blockbuster and its past, present or future Subsidiaries and Affiliates and any of their past, present or future Representatives, heirs and any of their executors, successors and assigns against any and all Losses, as incurred, arising out of or relating to all assets, businesses and operations conducted, operated, managed or owned, in whole or in part, by Viacom or any Person that was at any time a Subsidiary or Affiliate of Viacom or any predecessor, successor, assign or Representative of any of the foregoing at any time whether before, at or after the IPO (including, without limitation, any assets, businesses or operations that were purchased, newly started, discontinued or sold) or any transaction related thereto or causes of action arising therefrom other than the Blockbuster Business and Transfer Costs which Blockbuster and any Blockbuster Subsidiary Obligor agree to indemnify Viacom pursuant to Section 1.01) (the "Viacom Business"). (b) The obligations of the parties under this Section 2.02 shall be in addition to any liability which any party may have to the other party. Section 2.03. Certain Tax Matters. Notwithstanding anything to the contrary herein, the rights and obligations of the parties with respect to indemnification for the tax matters that are the subject matter of the Tax Matters Agreement dated as of the date hereof between the parties thereto shall be governed solely by such agreement. Section 2.04. Registration Indemnification. (a) Blockbuster and any Blockbuster Subsidiary Obligor jointly and severally agree to indemnify and hold harmless Viacom and each Person, if any, who controls Viacom within the meaning of the Securities Act 5

and Affiliates and Representatives of each of the foregoing from and against any and all Losses (including, without limitation, any legal or other expenses incurred in connection with defending or investigating any such action or claim), as incurred, arising out of or relating to any untrue statement or alleged untrue statement of a material fact contained in, or incorporated by reference into (i) any Blockbuster Registration Statement filed at or prior to the date of the Split-Off, including, without limitation, the IPO Registration Statement and (ii) any Split-Off Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except that Blockbuster and any Blockbuster Subsidiary Obligor shall not be liable in any such case to the extent that any such Losses are arising out of or relating to any such untrue statement or omission or alleged untrue statement or omission based upon information relating to Viacom furnished to Blockbuster in writing by Viacom expressly for use therein. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of Viacom and shall survive the transfer of such securities. In the case of an offering with respect to which Viacom has designated the lead or managing underwriters (or Viacom is offering securities of Blockbuster directly, without an underwriter), this indemnity does not apply to any Loss arising out of or relating to any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or Viacom) to

and Affiliates and Representatives of each of the foregoing from and against any and all Losses (including, without limitation, any legal or other expenses incurred in connection with defending or investigating any such action or claim), as incurred, arising out of or relating to any untrue statement or alleged untrue statement of a material fact contained in, or incorporated by reference into (i) any Blockbuster Registration Statement filed at or prior to the date of the Split-Off, including, without limitation, the IPO Registration Statement and (ii) any Split-Off Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except that Blockbuster and any Blockbuster Subsidiary Obligor shall not be liable in any such case to the extent that any such Losses are arising out of or relating to any such untrue statement or omission or alleged untrue statement or omission based upon information relating to Viacom furnished to Blockbuster in writing by Viacom expressly for use therein. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of Viacom and shall survive the transfer of such securities. In the case of an offering with respect to which Viacom has designated the lead or managing underwriters (or Viacom is offering securities of Blockbuster directly, without an underwriter), this indemnity does not apply to any Loss arising out of or relating to any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or Viacom) to such Person asserting such Loss at or prior to the written confirmation of the sale of the securities of Blockbuster as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum. (b) Viacom agrees to indemnify and hold harmless Blockbuster and each Person, if any, who controls Blockbuster within the meaning of the Securities Act and Affiliates and Representatives of each of the foregoing from and against any and all Losses (including, without limitation, any legal or other expenses incurred in connection with defending or investigating any such action or claim), as incurred, arising out of or relating to any untrue statement or alleged untrue statement of a material fact contained in, or incorporated by reference into, (i) any Blockbuster Registration Statement filed at or prior to the date of the Split-Off, including, without limitation, the IPO Registration Statement, (ii) and any Split-Off Registration Statement, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to Losses arising out of or relating to any untrue statement or omission or alleged untrue statement or omission based on information relating to Viacom furnished to Blockbuster in writing by Viacom expressly for use therein. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of Blockbuster and shall survive the transfer of such securities. In the case of an offering with respect to which Blockbuster has designated the lead or managing underwriters (or Blockbuster is offering securities of Blockbuster directly, without an underwriter), this indemnity does not apply to any Loss arising out of or relating to any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or Blockbuster) to such 6

Person asserting such Loss at or prior to the written confirmation of the sale of the securities of Blockbuster as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum. (c) If the indemnification provided for in this Section 2.04 shall for any reason be unavailable (other than in accordance with its terms) to an Indemnified Party in respect of any Loss referred to therein, then each Indemnifying Party shall, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such Loss as between Blockbuster on the one hand and Viacom on the other, in such proportion as is appropriate to reflect the relative fault of Blockbuster and of Viacom in connection with such statements or omissions which resulted in such Loss as well as any other relevant equitable considerations. The relative fault of Blockbuster on the one hand and of Viacom on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, but not by reference to Viacom's stock ownership in Blockbuster. The amount paid or payable by an Indemnified Party as a result of the Loss in respect thereof, referred to above in this paragraph (c) shall be deemed to include, for purposes of this paragraph (c), any legal or other expenses reasonably incurred by such

Person asserting such Loss at or prior to the written confirmation of the sale of the securities of Blockbuster as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum. (c) If the indemnification provided for in this Section 2.04 shall for any reason be unavailable (other than in accordance with its terms) to an Indemnified Party in respect of any Loss referred to therein, then each Indemnifying Party shall, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such Loss as between Blockbuster on the one hand and Viacom on the other, in such proportion as is appropriate to reflect the relative fault of Blockbuster and of Viacom in connection with such statements or omissions which resulted in such Loss as well as any other relevant equitable considerations. The relative fault of Blockbuster on the one hand and of Viacom on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, but not by reference to Viacom's stock ownership in Blockbuster. The amount paid or payable by an Indemnified Party as a result of the Loss in respect thereof, referred to above in this paragraph (c) shall be deemed to include, for purposes of this paragraph (c), any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Blockbuster and Viacom agree that it would not be just and equitable if contribution pursuant to this Section 2.04 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. Notwithstanding any other provisions of this Section 2.04, Viacom shall not be required to contribute any amount in excess of the amount by which the total price at which the securities of Blockbuster were offered by Viacom to the public exceeds the amount of any damages which Viacom has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any party who was not guilty of such fraudulent misrepresentation. (d) Indemnification and contribution similar to that specified in the preceding paragraphs of this Section 2.04 (with appropriate modifications) shall be given by Blockbuster and Viacom with respect to any required registration or other qualification of securities under any state law or regulation or governmental authority. (e) The obligations of the parties under this Section 2.04 shall be in addition to any liability which any party may otherwise have to the other party. Section 2.05. Calculation of Indemnification Payments. (a) The amount which any Indemnifying Party is required to pay to any Indemnified Party pursuant to this Agreement shall be reduced (including, but not limited to, retroactively) by any recovery, judgment, settlement or other amounts actually recovered, including insurance proceeds, by such 7

Indemnified Party with respect to such Losses. If an Indemnified Party shall have received payment with respect to Losses and shall subsequently actually receive a recovery, judgment, settlement or other amount with respect to such Losses, then such Indemnified Party shall promptly, but in no event later than 15 business days after such recovery, judgment, settlement or other amount actually received, pay to such Indemnifying Party a sum equal to the lesser of (i) the amount of such recovery, judgment, settlement or other amount actually received or (ii) the amount of payments actually received previously in respect of such Loss. (b) All amounts which any Indemnifying Party is required to pay to any Indemnified Party pursuant to this Agreement shall be calculated on an after-tax basis, taking into account the net present value of any tax cost and/or tax benefit to the Indemnified Party in connection with such indemnification payment and the applicable Loss. Section 2.06. Indemnification Procedures. The indemnification procedures set forth in Section 8.01(b) of the IPO

Indemnified Party with respect to such Losses. If an Indemnified Party shall have received payment with respect to Losses and shall subsequently actually receive a recovery, judgment, settlement or other amount with respect to such Losses, then such Indemnified Party shall promptly, but in no event later than 15 business days after such recovery, judgment, settlement or other amount actually received, pay to such Indemnifying Party a sum equal to the lesser of (i) the amount of such recovery, judgment, settlement or other amount actually received or (ii) the amount of payments actually received previously in respect of such Loss. (b) All amounts which any Indemnifying Party is required to pay to any Indemnified Party pursuant to this Agreement shall be calculated on an after-tax basis, taking into account the net present value of any tax cost and/or tax benefit to the Indemnified Party in connection with such indemnification payment and the applicable Loss. Section 2.06. Indemnification Procedures. The indemnification procedures set forth in Section 8.01(b) of the IPO and Split-Off Agreement are incorporated herein and made a part hereof for all purposes as if fully set forth herein and shall govern the parties' rights and obligations with respect thereto. Section 2.07. Remedies Cumulative. The remedies provided in this Agreement shall be cumulative and shall not preclude assertion by any Indemnified Party of any other rights or the seeking of any and all other remedies against any Indemnifying Party. ARTICLE III RELEASE Section 3.01. General Release. (a) Blockbuster for itself and on behalf of its Subsidiaries hereby releases, remises and forever discharges each of Viacom and its Subsidiaries or Affiliates and any of their Representatives from any losses, obligation or responsibility for any and all past actions or failures to take action, including any actions which may be deemed to have been negligent or grossly negligent, relating to, resulting from or arising out of the operation or conduct of any assets, businesses and operations managed or operated by, or operationally related or ancillary to, directly or indirectly, the Blockbuster Business and the Viacom Business, except for any Losses, obligation or responsibility for any willful or intentional misconduct in the operation or conduct of the Blockbuster Business or the Viacom Business prior to the date hereof. (b) Viacom for itself and on behalf of its Subsidiaries hereby releases, remises and forever discharges each of Blockbuster and its Subsidiaries or Affiliates and any of their Representatives from any losses, obligation or responsibility for any and all past actions or failures to take action, including any actions which may be deemed to have been negligent or grossly negligent, relating or ancillary to, resulting from or arising out of the operation or conduct of any assets, businesses and operations managed or operated by, or operationally related to, directly or indirectly, the Blockbuster Business and the Viacom Business, except for any Losses, 8

obligation or responsibility for any willful or intentional misconduct in the operation or conduct of the Blockbuster Business or the Viacom Business prior to the date hereof. (c) Nothing set forth in subsections (a) and (b) shall limit or otherwise affect any party's rights or obligations pursuant to, or contemplated by the Intercompany Agreements. ARTICLE IV MISCELLANEOUS Section 4.01. Further Agreements. (a) Blockbuster agrees, and Blockbuster will cause its Subsidiaries, to do all things necessary to (i) maintain and conduct its business and operations, in a commercially reasonable manner, including without limitation (x) paying, on a timely basis, principal and interest in respect to its debt and rent in respect to leases and (y) complying with its obligations under any credit agreement, indenture, lease, guarantee or other agreement or document, and (ii) minimize any obligation Viacom or any of its Subsidiaries (other than Blockbuster and its Subsidiaries) may have under any standby, letter of credit, guarantee or otherwise.

obligation or responsibility for any willful or intentional misconduct in the operation or conduct of the Blockbuster Business or the Viacom Business prior to the date hereof. (c) Nothing set forth in subsections (a) and (b) shall limit or otherwise affect any party's rights or obligations pursuant to, or contemplated by the Intercompany Agreements. ARTICLE IV MISCELLANEOUS Section 4.01. Further Agreements. (a) Blockbuster agrees, and Blockbuster will cause its Subsidiaries, to do all things necessary to (i) maintain and conduct its business and operations, in a commercially reasonable manner, including without limitation (x) paying, on a timely basis, principal and interest in respect to its debt and rent in respect to leases and (y) complying with its obligations under any credit agreement, indenture, lease, guarantee or other agreement or document, and (ii) minimize any obligation Viacom or any of its Subsidiaries (other than Blockbuster and its Subsidiaries) may have under any standby, letter of credit, guarantee or otherwise. (b) Viacom agrees, and Viacom will cause its Subsidiaries, to do all things necessary to (i) maintain and conduct its business and operations, in a commercially reasonable manner, including without limitation (x) paying, on a timely basis, principal and interest in respect to its debt and (y) complying with its obligations under any credit agreement, indenture, lease, guarantee or other agreement or document, and (ii) minimize any obligation Blockbuster or any of its Subsidiaries may have under any standby, letter of credit, guarantee or otherwise. Section 4.02. Amendments. This Agreement shall not be supplemented, amended or modified in any manner whatsoever (including without limitation by course of dealing or of performance or usage of trade) except in writing signed by the parties. Section 4.03. Successors and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Except as set forth in Section 4.04 hereof, this Agreement may not be assigned by either party without the express written consent of the other party (which consent shall not be unreasonably withheld). Section 4.04. Consolidation, Merger and Sale of Assets. Until seven (7) years after the date hereof, in the event that Blockbuster consolidates, merges, sells assets or engages in any other similar transaction and Blockbuster is required, pursuant to an anti-consolidation, merger and/or sale of assets covenant or other similar covenant contained in the then existing credit agreement of Blockbuster, as it may be amended, restated, supplemented, refinanced, extended or otherwise modified from time to time, to obtain the consent of the banks who are parties thereto and, in obtaining such consent, such banks receive a guarantee, security interest or protective covenant, Blockbuster shall give the same guarantee, security interest or protective 9 covenant pari passu (if applicable) to Viacom; provided that if (x) there is no anti-consolidation, merger and/or sale of assets covenant or other similar covenant contained in such credit agreement at such time or (y) there is no such credit agreement existing at such time, the anti-consolidation, merger and/or sale of assets covenant or other similar covenant contained in the latest credit agreement that contained such covenants will be incorporated by reference herein and, if consent is required under such covenant, Blockbuster must obtain Viacom's written consent prior to any consolidation, merger, sale of assets or similar transaction, provided, that Viacom's consent shall not be required if the surviving corporation of the consolidation or merger or the acquiror of assets agrees to assume all of the obligations of Blockbuster hereunder (without release of any assignor); provided, however, that this Section 4.04 does not apply if the Split-Off (or other transaction whereby Blockbuster ceases to be a Subsidiary of Viacom) has not been consummated. Section 4.05. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any portion of this Agreement is declared invalid for any reason in any jurisdiction, such declaration shall have no effect upon the remaining portions of this Agreement, which shall continue in full force and effect as if this Agreement had been executed with the invalid portions thereof deleted; provided, that the entirety of this Agreement shall continue in full force and effect in all other jurisdictions.

covenant pari passu (if applicable) to Viacom; provided that if (x) there is no anti-consolidation, merger and/or sale of assets covenant or other similar covenant contained in such credit agreement at such time or (y) there is no such credit agreement existing at such time, the anti-consolidation, merger and/or sale of assets covenant or other similar covenant contained in the latest credit agreement that contained such covenants will be incorporated by reference herein and, if consent is required under such covenant, Blockbuster must obtain Viacom's written consent prior to any consolidation, merger, sale of assets or similar transaction, provided, that Viacom's consent shall not be required if the surviving corporation of the consolidation or merger or the acquiror of assets agrees to assume all of the obligations of Blockbuster hereunder (without release of any assignor); provided, however, that this Section 4.04 does not apply if the Split-Off (or other transaction whereby Blockbuster ceases to be a Subsidiary of Viacom) has not been consummated. Section 4.05. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any portion of this Agreement is declared invalid for any reason in any jurisdiction, such declaration shall have no effect upon the remaining portions of this Agreement, which shall continue in full force and effect as if this Agreement had been executed with the invalid portions thereof deleted; provided, that the entirety of this Agreement shall continue in full force and effect in all other jurisdictions. Section 4.06. Entire Agreement. Other then the other Intercompany Agreements, this Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof and thereof. Section 4.07. Notices. All notices, consents, requests, approvals, and other communications provided for or required herein, and all legal process in regard thereto, must be in writing and shall be deemed validly given, made or served, (a) when delivered personally or sent by telecopy to the facsimile number indicated below with a required confirmation copy sent in accordance with subsection (c) below; or (b) on the next business day after delivery to a nationally-recognized express delivery service with instructions and payment for overnight delivery; or (c) on the fifth (5th) day after deposited in any depository regularly maintained by the United States postal service, postage prepaid, certified or registered mail, return receipt requested, addressed to the following addresses or to such other address as the party to be notified shall have specified to the other party in accordance with this section: If to Viacom: Viacom Inc. 1515 Broadway New York New York 10036 Attention: Michael D. Fricklas, General Counsel 10

Phone Number: 212-258-6070 Fax Number: 212-258-6099 If to Blockbuster: Blockbuster Inc. 1201 Elm Street Dallas, Texas 75270 Attention: Ed Stead, General Counsel Phone Number: 214-854-3499 Fax Number: 214-854-3677 Section 4.08. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties hereto agrees that any dispute relating to or arising from this Agreement or the transactions contemplated hereby shall be resolved only in the court of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and the appellate court having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, each of the parties hereby irrevocably and unconditionally:

Phone Number: 212-258-6070 Fax Number: 212-258-6099 If to Blockbuster: Blockbuster Inc. 1201 Elm Street Dallas, Texas 75270 Attention: Ed Stead, General Counsel Phone Number: 214-854-3499 Fax Number: 214-854-3677 Section 4.08. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties hereto agrees that any dispute relating to or arising from this Agreement or the transactions contemplated hereby shall be resolved only in the court of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and the appellate court having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, each of the parties hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal suit, action or proceeding relating to this Agreement or any transaction contemplated hereby, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and appellate court having jurisdiction of appeals in such courts, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such suit, action, or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such federal court; (b) consents that any such suit, action or proceeding may and shall be brought in such courts and waives any objection that it may now or hereafter have to the venue or jurisdiction or any such action or proceeding in such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party in its address as provided in Section 4.07 hereof; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by New York law; and 11

(e) agrees that this Agreement has been entered into in the State of New York and performed in part in the State of New York. Section 4.09. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same instrument. 12

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. VIACOM INC. By: MICHAEL D. FRICKLAS Name: Michael D. Fricklas Title: Sr. Vice President, General Counsel and Secretary BLOCKBUSTER INC. By: EDWARD B. STEAD Name: Edward B. Stead Title: Exec. Vice President, General Counsel and Secretary

EXHIBIT 10.3 TRANSITION SERVICES AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS Page ---ARTICLE I FEES AND TERM Section 1.01. Section 1.02. Price and Payment...............................................1 Term............................................................2 ARTICLE IISERVICES Services........................................................2 ARTICLE III LIMITATION OF LIABILITY AND INDEMNIFICATION Section 3.01. Section 3.02. Section 3.03. Transitional Services...........................................3 Indemnity by Service Receiver...................................3 Indemnification Procedures......................................4 ARTICLE IV

Section 2.01.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. VIACOM INC. By: MICHAEL D. FRICKLAS Name: Michael D. Fricklas Title: Sr. Vice President, General Counsel and Secretary BLOCKBUSTER INC. By: EDWARD B. STEAD Name: Edward B. Stead Title: Exec. Vice President, General Counsel and Secretary

EXHIBIT 10.3 TRANSITION SERVICES AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS Page ---ARTICLE I FEES AND TERM Section 1.01. Section 1.02. Price and Payment...............................................1 Term............................................................2 ARTICLE IISERVICES Services........................................................2 ARTICLE III LIMITATION OF LIABILITY AND INDEMNIFICATION Section 3.01. Section 3.02. Section 3.03. Transitional Services...........................................3 Indemnity by Service Receiver...................................3 Indemnification Procedures......................................4 ARTICLE IV MISCELLANEOUS Section Section Section Section Section Section Section Section Section Section 4.01. 4.02. 4.03. 4.04. 4.05. 4.06. 4.07. 4.08. 4.09. 4.10. Limitation of Liability.........................................4 Relationship of the Parties.....................................4 Force Majeure...................................................4 Amendments......................................................5 Successors and Assignment.......................................5 Severability....................................................5 Entire Agreement................................................5 Notices.........................................................5 Governing Law...................................................6 Counterparts....................................................7

Section 2.01.

EXHIBIT 10.3 TRANSITION SERVICES AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS Page ---ARTICLE I FEES AND TERM Section 1.01. Section 1.02. Price and Payment...............................................1 Term............................................................2 ARTICLE IISERVICES Services........................................................2 ARTICLE III LIMITATION OF LIABILITY AND INDEMNIFICATION Section 3.01. Section 3.02. Section 3.03. Transitional Services...........................................3 Indemnity by Service Receiver...................................3 Indemnification Procedures......................................4 ARTICLE IV MISCELLANEOUS Section Section Section Section Section Section Section Section Section Section 4.01. 4.02. 4.03. 4.04. 4.05. 4.06. 4.07. 4.08. 4.09. 4.10. Limitation of Liability.........................................4 Relationship of the Parties.....................................4 Force Majeure...................................................4 Amendments......................................................5 Successors and Assignment.......................................5 Severability....................................................5 Entire Agreement................................................5 Notices.........................................................5 Governing Law...................................................6 Counterparts....................................................7

Section 2.01.

TRANSITION SERVICES AGREEMENT TRANSITION SERVICES AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom") and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). RECITALS WHEREAS, since September 29, 1994, Viacom has owned and operated the businesses and operations related to Blockbuster; WHEREAS, Viacom presently intends to split-off Blockbuster in a tax- free transaction;

TABLE OF CONTENTS Page ---ARTICLE I FEES AND TERM Section 1.01. Section 1.02. Price and Payment...............................................1 Term............................................................2 ARTICLE IISERVICES Services........................................................2 ARTICLE III LIMITATION OF LIABILITY AND INDEMNIFICATION Section 3.01. Section 3.02. Section 3.03. Transitional Services...........................................3 Indemnity by Service Receiver...................................3 Indemnification Procedures......................................4 ARTICLE IV MISCELLANEOUS Section Section Section Section Section Section Section Section Section Section 4.01. 4.02. 4.03. 4.04. 4.05. 4.06. 4.07. 4.08. 4.09. 4.10. Limitation of Liability.........................................4 Relationship of the Parties.....................................4 Force Majeure...................................................4 Amendments......................................................5 Successors and Assignment.......................................5 Severability....................................................5 Entire Agreement................................................5 Notices.........................................................5 Governing Law...................................................6 Counterparts....................................................7

Section 2.01.

TRANSITION SERVICES AGREEMENT TRANSITION SERVICES AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom") and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). RECITALS WHEREAS, since September 29, 1994, Viacom has owned and operated the businesses and operations related to Blockbuster; WHEREAS, Viacom presently intends to split-off Blockbuster in a tax- free transaction; WHEREAS, prior to such split-off, Blockbuster proposes to issue shares of its common stock in an initial public offering registered under the Securities Act of 1933, as amended; WHEREAS, prior to the initial public offering of Blockbuster, Viacom has heretofore provided certain services to Blockbuster; WHEREAS, Blockbuster has requested from Viacom that certain such services continue for a limited period of time pursuant to this Agreement; and WHEREAS, Viacom agreed to provide and Blockbuster agreed to be provided with these services on terms and conditions set forth herein (Viacom as such provider of transitional services referred to herein as the "Service Provider" and Blockbuster as such receiver of transitional services referred to herein as the "Service Receiver"). NOW, THEREFORE, in consideration of the above premises and the mutual covenants contained herein, it is agreed by and between the parties as follows:

TRANSITION SERVICES AGREEMENT TRANSITION SERVICES AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom") and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). RECITALS WHEREAS, since September 29, 1994, Viacom has owned and operated the businesses and operations related to Blockbuster; WHEREAS, Viacom presently intends to split-off Blockbuster in a tax- free transaction; WHEREAS, prior to such split-off, Blockbuster proposes to issue shares of its common stock in an initial public offering registered under the Securities Act of 1933, as amended; WHEREAS, prior to the initial public offering of Blockbuster, Viacom has heretofore provided certain services to Blockbuster; WHEREAS, Blockbuster has requested from Viacom that certain such services continue for a limited period of time pursuant to this Agreement; and WHEREAS, Viacom agreed to provide and Blockbuster agreed to be provided with these services on terms and conditions set forth herein (Viacom as such provider of transitional services referred to herein as the "Service Provider" and Blockbuster as such receiver of transitional services referred to herein as the "Service Receiver"). NOW, THEREFORE, in consideration of the above premises and the mutual covenants contained herein, it is agreed by and between the parties as follows: Capitalized terms not otherwise defined herein have the meaning given to them in the Initial Public Offering and Split-Off Agreement dated as of the dated hereof among Viacom, Viacom International Inc. and Blockbuster. ARTICLE I FEES AND TERM Section 1.01. Price and Payment. (a) As consideration for the transitional services to be provided to Blockbuster by Viacom under the terms of this Agreement, Blockbuster shall initially pay to Viacom a services fee (the "Blockbuster Services Fee") of Dollars ($150,000) per month, which is based upon Viacom's cost in providing these services. The Blockbuster Services Fee only represents payment with respect to the transitional services and not for other payments, costs expenses related to the underlying transitional services themselves. The

Blockbuster Services Fee shall be payable by Blockbuster to Viacom in arrears 15 days after the close of each month (prorated for any partial month) during the term of this Agreement. Any transitional services provided by Viacom to Blockbuster beyond the transitional services covered by the Blockbuster Services Fee shall be billed to Blockbuster on a cost basis, or on such other basis as the parties may agree from time to time. The Blockbuster Services Fee shall be reviewed and either increased or reduced from time to time to account for Viacom's cost of providing the transitional services hereunder. (b) In addition to the Blockbuster Services Fee, Blockbuster shall promptly pay or reimburse Viacom for any out-of-pocket payments, costs or expenses incurred in good faith associated with, or related to, the underlying transitional services provided by Viacom hereunder. Section 1.02. Term. The term of this Agreement (the "Term") shall commence on the date hereof and shall expire on the closing of the Split-Off. ARTICLE II SERVICES

Blockbuster Services Fee shall be payable by Blockbuster to Viacom in arrears 15 days after the close of each month (prorated for any partial month) during the term of this Agreement. Any transitional services provided by Viacom to Blockbuster beyond the transitional services covered by the Blockbuster Services Fee shall be billed to Blockbuster on a cost basis, or on such other basis as the parties may agree from time to time. The Blockbuster Services Fee shall be reviewed and either increased or reduced from time to time to account for Viacom's cost of providing the transitional services hereunder. (b) In addition to the Blockbuster Services Fee, Blockbuster shall promptly pay or reimburse Viacom for any out-of-pocket payments, costs or expenses incurred in good faith associated with, or related to, the underlying transitional services provided by Viacom hereunder. Section 1.02. Term. The term of this Agreement (the "Term") shall commence on the date hereof and shall expire on the closing of the Split-Off. ARTICLE II SERVICES Section 2.01. Services. (a) Viacom agrees to, or will cause one of its Subsidiaries to, provide the following transitional services (subject to such modification or adjustment as may be mutually agreed upon by the parties) to Blockbuster and its Subsidiaries or Affiliates during the Term: (i) Certain Cash Management Services: Viacom shall assist Blockbuster with certain of its treasury and cash management needs, including foreign currency and certain hedging activities, consistent with past practice. (ii) Certain Employee Benefit Plans Administration: Viacom shall assist in the administration to certain employees of Blockbuster and its Subsidiaries all benefit plans and a 401(k) plan consistent with past practice. (iii) Insurance Administration: Viacom shall administer insurance coverage on behalf of Blockbuster and its Subsidiaries and Affiliates under Viacom's insurance policies against certain risks and in amounts consistent with past practice. To the extent any loss is incurred by Blockbuster and its Subsidiaries or Affiliates, such entity shall be responsible for the payment of any deductible amounts related thereto and any amounts in excess of applicable coverage limits. In the event that the "aggregate stop loss" deductible is exceeded in any insurance period, Blockbuster and its Subsidiaries and Affiliates, on one hand, and Viacom and its Subsidiaries 2 and Affiliates, on the other hand, shall be responsible for their pro rata portion of such deductible based upon the losses of such parties submitted to Viacom's insurance carrier(s) in such period. To the extent that one party is allocated more than its pro rata portion of the such deductible due to the timing of losses submitted to Viacom's insurance carrier(s), the other party shall promptly pay the first party an amount so that each party has been properly allocated its pro rata portion of the aggregate stop loss deductible. (iv) Certain Accounting and Financial Services: Viacom shall provide to Blockbuster internal audit supervision and shall assist Blockbuster with its periodic and public reporting requirements pursuant to the U.S. securities laws. (v) Tax Department: Viacom shall provide to Blockbuster tax compliance, reporting and planning services for international, U.S. federal, state and local tax matters consistent with past practice and in compliance with the Tax Matters Agreement. (vi) Certain Legal Services: Viacom shall provide to Blockbuster certain legal services consistent with past practice. (vii) Certain Management Information System Services. Viacom shall provide to Blockbuster certain management

and Affiliates, on the other hand, shall be responsible for their pro rata portion of such deductible based upon the losses of such parties submitted to Viacom's insurance carrier(s) in such period. To the extent that one party is allocated more than its pro rata portion of the such deductible due to the timing of losses submitted to Viacom's insurance carrier(s), the other party shall promptly pay the first party an amount so that each party has been properly allocated its pro rata portion of the aggregate stop loss deductible. (iv) Certain Accounting and Financial Services: Viacom shall provide to Blockbuster internal audit supervision and shall assist Blockbuster with its periodic and public reporting requirements pursuant to the U.S. securities laws. (v) Tax Department: Viacom shall provide to Blockbuster tax compliance, reporting and planning services for international, U.S. federal, state and local tax matters consistent with past practice and in compliance with the Tax Matters Agreement. (vi) Certain Legal Services: Viacom shall provide to Blockbuster certain legal services consistent with past practice. (vii) Certain Management Information System Services. Viacom shall provide to Blockbuster certain management information system services consistent with past practice. ARTICLE III LIMITATION OF LIABILITY AND INDEMNIFICATION Section 3.01. Transitional Services. (a) In the absence of gross negligence or reckless or willful misconduct on Service Provider's part, and whether or not it is negligent, Service Provider shall not be liable for any claims, liabilities, damages, losses, costs, expenses (including, but not limited to, settlements, judgments, court costs and reasonable attorneys' fees), fines and penalties, arising out of or relating to any actual or alleged injury, loss or damage of any nature whatsoever in providing or failing to provide the transitional services to Service Receiver. (b) Service Provider's liability for damages to Service Receiver for any cause whatsoever, and regardless of the form of action, whether in contract or in tort, including gross negligence or willful misconduct, shall be limited to the Blockbuster Services Fee. Section 3.02. Indemnity by Service Receiver. (a) Service Receiver shall indemnify, defend and hold Service Provider harmless against any and all claims, liabilities, 3 damages, losses, costs, expenses (including, but not limited to, settlements, judgments, court costs and reasonable attorneys' fees) and any loss or damage of any nature whatsoever (including, without limitation, loss of or damage to property, or damage to the environment) ("Losses") arising out of or relating to the providing or failing to provide the transitional services by such Service Provider except for Losses which are the direct and sole result of gross negligence or willful misconduct of the personnel of Service Provider. (b) Any claim for indemnity under this Article must be made by written notice to the indemnifying party within one (1) year after the discovery thereof. Notwithstanding the foregoing, the indemnities contained in this Article shall survive for a period of three (3) years after the Term. Section 3.03. Indemnification Procedures. The indemnification procedures set forth in Section 8.01(b) of the IPO and Split-Off Agreement are incorporated herein and made a part hereof for all purposes as if fully set forth herein and shall govern the parties' rights and obligations with respect thereto. ARTICLE IV MISCELLANEOUS

damages, losses, costs, expenses (including, but not limited to, settlements, judgments, court costs and reasonable attorneys' fees) and any loss or damage of any nature whatsoever (including, without limitation, loss of or damage to property, or damage to the environment) ("Losses") arising out of or relating to the providing or failing to provide the transitional services by such Service Provider except for Losses which are the direct and sole result of gross negligence or willful misconduct of the personnel of Service Provider. (b) Any claim for indemnity under this Article must be made by written notice to the indemnifying party within one (1) year after the discovery thereof. Notwithstanding the foregoing, the indemnities contained in this Article shall survive for a period of three (3) years after the Term. Section 3.03. Indemnification Procedures. The indemnification procedures set forth in Section 8.01(b) of the IPO and Split-Off Agreement are incorporated herein and made a part hereof for all purposes as if fully set forth herein and shall govern the parties' rights and obligations with respect thereto. ARTICLE IV MISCELLANEOUS Section 4.01. Limitation of Liability. Neither Viacom nor Blockbuster shall be liable to the other for any special, indirect, incidental or consequential damages of the other arising in connection with this Agreement. Section 4.02. Relationship of the Parties. It is expressly understood and agreed that in rendering the transitional services hereunder, Viacom is acting as an independent contractor and that this Agreement does not constitute Viacom as an employee, agent or other representative of Blockbuster for any purpose whatsoever. Viacom does not have the right or authority to enter into any contract, warranty, guarantee or other undertaking in the name or for the account of Blockbuster, or to assume or create any obligation or liability of any kind, express or implied, on behalf of Blockbuster, or to bind Blockbuster in any manner whatsoever, or to hold itself out as having any right, power or authority to create any such obligation or liability on behalf of Blockbuster or to bind Blockbuster in any manner whatsoever (except as to any actions taken by Viacom at the express written request and direction of Blockbuster). Section 4.03. Force Majeure. In the event that Viacom is prevented from performing, or is unable to perform, any of its obligations under this Agreement due to any act of God, fire, casualty, flood, war, strike, lock out, failure of public utilities, injunction or any act, exercise, assertion or requirement of governmental authority, epidemic, destruction of production facilities, insurrection, inability to procure materials, labor, equipment, transportation or energy sufficient to meet manufacturing needs, or any other cause beyond the reasonable control of Viacom, and if Viacom shall have used its reasonable best efforts to avoid such occurrence and 4

minimize its duration and has given prompt written notice to Blockbuster, then Viacom's performance for the period of delay or inability to perform due to such occurrence shall be suspended. Should Viacom fail to perform hereunder and shall have provided proper notice to Blockbuster that it is unable to perform on account of one or more reasons set forth in this section, Blockbuster may obtain replacement services from a third party for the duration of such delay or inability to perform, or for such longer period as Blockbuster shall be reasonably required to commit to in order to obtain such replacement services and the Blockbuster Services Fee shall be reduced accordingly. Section 4.04. Amendments. This Agreement shall not be supplemented, amended or modified in any manner whatsoever (including without limitation by course of dealing or of performance or usage of trade) except in writing signed by the parties. Section 4.05. Successors and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. This Agreement may not be assigned by any party by operation of law or otherwise without the express written consent of the other party (which consent may be granted or withheld by such party). Section 4.06. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any portion of this Agreement is declared invalid for

minimize its duration and has given prompt written notice to Blockbuster, then Viacom's performance for the period of delay or inability to perform due to such occurrence shall be suspended. Should Viacom fail to perform hereunder and shall have provided proper notice to Blockbuster that it is unable to perform on account of one or more reasons set forth in this section, Blockbuster may obtain replacement services from a third party for the duration of such delay or inability to perform, or for such longer period as Blockbuster shall be reasonably required to commit to in order to obtain such replacement services and the Blockbuster Services Fee shall be reduced accordingly. Section 4.04. Amendments. This Agreement shall not be supplemented, amended or modified in any manner whatsoever (including without limitation by course of dealing or of performance or usage of trade) except in writing signed by the parties. Section 4.05. Successors and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. This Agreement may not be assigned by any party by operation of law or otherwise without the express written consent of the other party (which consent may be granted or withheld by such party). Section 4.06. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any portion of this Agreement is declared invalid for any reason in any jurisdiction, such declaration shall have no effect upon the remaining portions of this Agreement, which shall continue in full force and effect as if this Agreement had been executed with the invalid portions thereof deleted; provided that the entirety of this Agreement shall continue in full force and effect in all other jurisdictions. Section 4.07. Entire Agreement. Other than the IPO and Split-Off Agreement, the Release and Indemnification Agreement, the Registration Rights Agreement and the Tax Matters Agreement, this Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersedes all prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof and thereof. Section 4.08. Notices. All notices, consents, requests, approvals, and other communications provided for or required herein, and all legal process in regard thereto, must be in writing and shall be deemed validly given, made or served, (a) when delivered personally or sent by telecopy to the facsimile number indicated below with a required confirmation copy sent in accordance with subsection (c) below; or (b) on the next business day after delivery to a nationally recognized express delivery service with instructions and payment for overnight delivery; or (c) on the fifth (5th) day after deposited in any depository regularly maintained by the United States postal service, postage prepaid, certified or registered mail, return receipt 5

requested, addressed to the following addresses or to such other address as the party to be notified shall have specified to the other party in accordance with this section: If to Viacom: Viacom Inc. 1515 Broadway New York New York 10036 Attention: Michael D. Fricklas, General Counsel Phone Number: 212-258-6070 Fax Number: 212-258-6099 If to Blockbuster: Blockbuster Inc. 1201 Elm Street Dallas, Texas 75270 Attention: Ed Stead, General Counsel Phone Number: 214-854-3499 Fax Number: 214-854-3677

requested, addressed to the following addresses or to such other address as the party to be notified shall have specified to the other party in accordance with this section: If to Viacom: Viacom Inc. 1515 Broadway New York New York 10036 Attention: Michael D. Fricklas, General Counsel Phone Number: 212-258-6070 Fax Number: 212-258-6099 If to Blockbuster: Blockbuster Inc. 1201 Elm Street Dallas, Texas 75270 Attention: Ed Stead, General Counsel Phone Number: 214-854-3499 Fax Number: 214-854-3677 Section 4.09. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties hereto agrees that any dispute relating to or arising from this Agreement or the transactions contemplated hereby shall be resolved only in the Court of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, each of the parties hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal suit, action or proceeding relating to this Agreement or transaction contemplated hereby, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the Courts of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and appellate courts having jurisdiction of appeals in such courts, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such suit, action, or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such federal court; (b) consents that any such suit, action or proceeding may and shall be brought in such courts and waives any objection that it may now or hereafter have to the venue or jurisdiction or any such action or proceeding in such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same; 6

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party in its address as provided in Section 4.08 hereof; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by New York law; and (e) agrees that this Agreement has been entered into in the State of New York and performed in part in the State of New York. Section 4.10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same instrument. 7

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party in its address as provided in Section 4.08 hereof; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by New York law; and (e) agrees that this Agreement has been entered into in the State of New York and performed in part in the State of New York. Section 4.10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same instrument. 7

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. VIACOM INC.
By: /s/ MICHAEL D. FRICKLAS ----------------------------------Name: Michael D. Fricklas Title: Sr. Vice President, General Counsel and Secretary

BLOCKBUSTER INC.
By: /s/ EDWARD B. STEAD ----------------------------------Name: Edward B. Stead Title: Exec. Vice President, General Counsel and Secretary

EXHIBIT 10.4 REGISTRATION RIGHTS AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS Page ---ARTICLE I DEFINITIONS

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. VIACOM INC.
By: /s/ MICHAEL D. FRICKLAS ----------------------------------Name: Michael D. Fricklas Title: Sr. Vice President, General Counsel and Secretary

BLOCKBUSTER INC.
By: /s/ EDWARD B. STEAD ----------------------------------Name: Edward B. Stead Title: Exec. Vice President, General Counsel and Secretary

EXHIBIT 10.4 REGISTRATION RIGHTS AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS Page ---ARTICLE I DEFINITIONS Section 1.01. Section 1.02. Definitions.....................................................2 Internal References.............................................5 ARTICLE II REGISTRATION RIGHTS Section Section Section Section Section Section Section Section Section Section 2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07. 2.08. 2.09. 2.10. Demand Registration - Registrable Securities....................5 Piggyback Registration..........................................7 Expenses.......................................................10 Registration and Qualification.................................10 Conversion of Other Securities, Etc............................12 Underwriting; Due Diligence....................................12 Indemnification and Contribution...............................13 Rule 144 and Form S-3..........................................16 Transfer of Registration Rights................................16 Holdback Agreement.............................................17 ARTICLE III MISCELLANEOUS

EXHIBIT 10.4 REGISTRATION RIGHTS AGREEMENT DATED AS OF AUGUST 16, 1999 BY AND BETWEEN VIACOM INC. AND BLOCKBUSTER INC.

TABLE OF CONTENTS Page ---ARTICLE I DEFINITIONS Section 1.01. Section 1.02. Definitions.....................................................2 Internal References.............................................5 ARTICLE II REGISTRATION RIGHTS Section Section Section Section Section Section Section Section Section Section 2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07. 2.08. 2.09. 2.10. Demand Registration - Registrable Securities....................5 Piggyback Registration..........................................7 Expenses.......................................................10 Registration and Qualification.................................10 Conversion of Other Securities, Etc............................12 Underwriting; Due Diligence....................................12 Indemnification and Contribution...............................13 Rule 144 and Form S-3..........................................16 Transfer of Registration Rights................................16 Holdback Agreement.............................................17 ARTICLE III MISCELLANEOUS Section Section Section Section Section Section Section Section Section Section Section Section 3.01. 3.02. 3.03. 3.04. 3.05. 3.06. 3.07. 3.08. 3.09. 3.10. 3.11. 3.12. Limitation of Liability........................................17 Subsidiaries...................................................17 Term...........................................................17 Further Assurances.............................................17 Specific Performance...........................................17 Amendments.....................................................18 Successors and Assigns.........................................18 Severability...................................................18 Entire Agreement...............................................18 Notices........................................................18 Governing Law..................................................19 Counterparts...................................................20

REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom"), and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). RECITALS WHEREAS, since September 29, 1994, Viacom has owned and operated the businesses and operations related

TABLE OF CONTENTS Page ---ARTICLE I DEFINITIONS Section 1.01. Section 1.02. Definitions.....................................................2 Internal References.............................................5 ARTICLE II REGISTRATION RIGHTS Section Section Section Section Section Section Section Section Section Section 2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07. 2.08. 2.09. 2.10. Demand Registration - Registrable Securities....................5 Piggyback Registration..........................................7 Expenses.......................................................10 Registration and Qualification.................................10 Conversion of Other Securities, Etc............................12 Underwriting; Due Diligence....................................12 Indemnification and Contribution...............................13 Rule 144 and Form S-3..........................................16 Transfer of Registration Rights................................16 Holdback Agreement.............................................17 ARTICLE III MISCELLANEOUS Section Section Section Section Section Section Section Section Section Section Section Section 3.01. 3.02. 3.03. 3.04. 3.05. 3.06. 3.07. 3.08. 3.09. 3.10. 3.11. 3.12. Limitation of Liability........................................17 Subsidiaries...................................................17 Term...........................................................17 Further Assurances.............................................17 Specific Performance...........................................17 Amendments.....................................................18 Successors and Assigns.........................................18 Severability...................................................18 Entire Agreement...............................................18 Notices........................................................18 Governing Law..................................................19 Counterparts...................................................20

REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom"), and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). RECITALS WHEREAS, since September 29, 1994, Viacom has owned and operated the businesses and operations related to Blockbuster; WHEREAS, Viacom presently intends to split-off Blockbuster in a tax- free transaction; WHEREAS, prior to such split-off, Blockbuster proposes to issue shares of its common stock in an initial public offering registered under the Securities Act of 1933, as amended; WHEREAS, Viacom beneficially owns all of the issued and outstanding class B common stock, par value $0.01 per share, of Blockbuster (the "Blockbuster Class B Common Stock"); and WHEREAS, the parties desire to enter into this Agreement to set forth their agreement regarding certain registration rights with respect to Blockbuster Class B Common Stock (and any other securities issued in respect thereof or in exchange therefor). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Viacom and Blockbuster, for themselves, their successors, and assigns, hereby agree as follows:

REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of August 16, 1999 by and between VIACOM INC., a Delaware corporation ("Viacom"), and BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned subsidiary of Viacom ("Blockbuster"). RECITALS WHEREAS, since September 29, 1994, Viacom has owned and operated the businesses and operations related to Blockbuster; WHEREAS, Viacom presently intends to split-off Blockbuster in a tax- free transaction; WHEREAS, prior to such split-off, Blockbuster proposes to issue shares of its common stock in an initial public offering registered under the Securities Act of 1933, as amended; WHEREAS, Viacom beneficially owns all of the issued and outstanding class B common stock, par value $0.01 per share, of Blockbuster (the "Blockbuster Class B Common Stock"); and WHEREAS, the parties desire to enter into this Agreement to set forth their agreement regarding certain registration rights with respect to Blockbuster Class B Common Stock (and any other securities issued in respect thereof or in exchange therefor). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Viacom and Blockbuster, for themselves, their successors, and assigns, hereby agree as follows: Capitalized terms not otherwise defined herein have the meaning given to them in the IPO and Split-Off Agreement dated , 1999 among Viacom, Viacom International and Blockbuster. ARTICLE I DEFINITIONS Section 1.01. Definitions. As used in this Agreement, the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described: "Affiliates" means, with respect to any specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such specified Person; provided, however, that prior to the Split-Off, Affiliates of Blockbuster or Viacom shall only include Persons who would be affiliates of Blockbuster or Viacom, respectively, assuming that the Split-Off had occurred immediately prior to the determination as to whether such Person was an affiliate of Blockbuster or Viacom, respectively. "Agreement" has the meaning ascribed thereto in the Preamble. "Applicable Stock" means at any time the (i) shares of Blockbuster Common Stock owned by Viacom and its Affiliates that were owned on the date hereof, plus (ii) shares of Blockbuster Class B Common Stock purchased by Viacom and its Affiliates pursuant to Article VII of the Initial Public Offering and Split-Off Agreement, plus (iii) shares of Blockbuster Common Stock that were issued to Viacom and its Affiliates in respect of shares described in either clause (i) or clause (ii) in any reclassification, share combination, share subdivision, share dividend, share exchange, merger, consolidation or similar transaction or event. "Blockbuster" has the meaning ascribed thereto in the Preamble. "Blockbuster Class A Common Stock" means the class A common stock, par value $.01 per share of Blockbuster.

"Affiliates" means, with respect to any specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such specified Person; provided, however, that prior to the Split-Off, Affiliates of Blockbuster or Viacom shall only include Persons who would be affiliates of Blockbuster or Viacom, respectively, assuming that the Split-Off had occurred immediately prior to the determination as to whether such Person was an affiliate of Blockbuster or Viacom, respectively. "Agreement" has the meaning ascribed thereto in the Preamble. "Applicable Stock" means at any time the (i) shares of Blockbuster Common Stock owned by Viacom and its Affiliates that were owned on the date hereof, plus (ii) shares of Blockbuster Class B Common Stock purchased by Viacom and its Affiliates pursuant to Article VII of the Initial Public Offering and Split-Off Agreement, plus (iii) shares of Blockbuster Common Stock that were issued to Viacom and its Affiliates in respect of shares described in either clause (i) or clause (ii) in any reclassification, share combination, share subdivision, share dividend, share exchange, merger, consolidation or similar transaction or event. "Blockbuster" has the meaning ascribed thereto in the Preamble. "Blockbuster Class A Common Stock" means the class A common stock, par value $.01 per share of Blockbuster. "Blockbuster Class B Common Stock" has the meaning ascribed thereto in the Recitals. "Blockbuster Common Stock" means the Blockbuster Class B Common Stock, the Blockbuster Class A Common Stock, any other class of Blockbuster's capital stock representing the right to vote generally for the election of directors and, for so long as Blockbuster continues to be a subsidiary corporation includable in a consolidated federal income tax return of the Viacom Group, any other security of Blockbuster treated as stock for purposes of Section 1504 of the Internal Revenue Code of 1986, as amended. "Company Securities" has the meaning ascribed thereto in Section 2.02(b). "Disadvantageous Condition" has the meaning ascribed thereto in Section 2.01(a). "Holder" means Viacom, its Affiliates and any Transferee. "Holder Securities" has the meaning ascribed thereto in Section 2.02(b). "IPO" means the initial public offering by Blockbuster of shares of Blockbuster Class A Common Stock as contemplated by the IPO Registration Statement. 2 "IPO and Split-Off Agreement" means the Initial Public Offering and Split-Off Agreement dated as of the dated hereof among Viacom, Viacom International and Blockbuster. "IPO Date" means the date of completion of the initial sale of Blockbuster Class A Common Stock in the IPO. "Losses" has the meaning ascribed thereto in Section 2.01(a) of the Release and Indemnification Agreement. "Other Holders" has the meaning ascribed thereto in Section 2.02(c). "Other Securities" has the meaning ascribed thereto in Section 2.02. "Ownership Percentage" means, at any time, the fraction, expressed as a percentage and rounded to the next

"IPO and Split-Off Agreement" means the Initial Public Offering and Split-Off Agreement dated as of the dated hereof among Viacom, Viacom International and Blockbuster. "IPO Date" means the date of completion of the initial sale of Blockbuster Class A Common Stock in the IPO. "Losses" has the meaning ascribed thereto in Section 2.01(a) of the Release and Indemnification Agreement. "Other Holders" has the meaning ascribed thereto in Section 2.02(c). "Other Securities" has the meaning ascribed thereto in Section 2.02. "Ownership Percentage" means, at any time, the fraction, expressed as a percentage and rounded to the next highest thousandth of a percent, whose numerator is the aggregate Value of the Applicable Stock and whose denominator is the sum of the aggregate Value of the outstanding shares of Blockbuster Common Stock; provided, however, that any shares of Blockbuster Common Stock issued by Blockbuster in violation of its obligations under Article VII of the IPO and Split-Off Agreement shall not be deemed outstanding for the purpose of determining the Ownership Percentage. For purposes of this definition, "Value" means, with respect to any share of stock, the value of such share determined by Viacom under principles applicable for purposes of Section 1504 of the Internal Revenue Code of 1986, as amended. "Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture association, joint stock company, trust unincorporated organization or government or any agency or political subdivision thereof. "Registrable Securities" means shares of Blockbuster Common Stock and any stock or other securities into which or for which such Blockbuster Common Stock may hereafter be changed, converted or exchanged and any other shares or securities issued to Holders of such Blockbuster Common Stock (or such shares or other securities into which or for which such shares are so changed, converted or exchanged) upon any reclassification, share combination, share subdivision, share dividend, share exchange, merger, consolidation or similar transaction or event or pursuant to the Nonvoting Stock Option. As to any particular Registrable Securities, such Registrable Securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale by the Holder thereof shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) they shall have been distributed to the public in accordance with Rule 144, (iii) they shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by Blockbuster and subsequent disposition of them shall not require registration or qualification of them under the Securities Act 3

or any state securities or blue sky law then in effect or (iv) they shall have ceased to be outstanding. "Registration Expenses" means any and all reasonable expenses incident to performance of or compliance with any registration of securities pursuant to Article II, including, without limitation, (i) all expenses, including filing fees, in connection with the preparation, printing and filing of the registration statement, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto and the mailing and delivering of copies thereof to any underwriters and dealers; (ii) the cost of printing or producing any agreements among underwriters, underwriting agreements, and blue sky or legal investment memoranda, any selling agreements and any other documents in connection with the offering, sale or delivery of the securities to be disposed of; (iii) all expenses in connection with the qualification of the securities to be disposed of for offering and sale under state securities laws, including the fees and disbursements of counsel for the underwriters of securities in connection with such qualification and in connection with any blue sky and legal investment surveys; (iv) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the securities to be disposed of; (v) transfer agents' and registrars' fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering; (vi) all security engraving and security printing expenses; (vii) all fees and expenses payable in connection with the listing of the securities on any securities exchange or automated interdealer quotation system or the rating of such securities and (ix) any other fees and disbursements of underwriters customarily paid by issuers of securities.

or any state securities or blue sky law then in effect or (iv) they shall have ceased to be outstanding. "Registration Expenses" means any and all reasonable expenses incident to performance of or compliance with any registration of securities pursuant to Article II, including, without limitation, (i) all expenses, including filing fees, in connection with the preparation, printing and filing of the registration statement, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto and the mailing and delivering of copies thereof to any underwriters and dealers; (ii) the cost of printing or producing any agreements among underwriters, underwriting agreements, and blue sky or legal investment memoranda, any selling agreements and any other documents in connection with the offering, sale or delivery of the securities to be disposed of; (iii) all expenses in connection with the qualification of the securities to be disposed of for offering and sale under state securities laws, including the fees and disbursements of counsel for the underwriters of securities in connection with such qualification and in connection with any blue sky and legal investment surveys; (iv) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the securities to be disposed of; (v) transfer agents' and registrars' fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering; (vi) all security engraving and security printing expenses; (vii) all fees and expenses payable in connection with the listing of the securities on any securities exchange or automated interdealer quotation system or the rating of such securities and (ix) any other fees and disbursements of underwriters customarily paid by issuers of securities. "Rule 144" means Rule 144 (or any successor rule to similar effect) promulgated under the Securities Act. "Rule 415 Offering" means an offering on a delayed or continuous basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated under the Securities Act. "SEC" means the U.S. Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended from time to time, together with the rules and regulations promulgated thereunder. "Selling Holder" has the meaning ascribed thereto in Section 2.04(e). "Split-Off" means the distribution of Blockbuster Common Stock by Viacom in one or more transactions occurring after the IPO that collectively have the effect that all or a substantial part of the shares of Blockbuster Common Stock held by Viacom are distributed to all or some of the stockholders of Viacom, whenever such transaction(s) shall occur. "Subsidiary" means with respect to any Person, any other Person a majority of the equity ownership or voting stock of which is at the time owned, directly or indirectly, by such 4 Person and/or one or more other Subsidiaries of such Person; provided, however, that prior to the Split-Off, a Subsidiary of Viacom shall only include Persons who would be a Subsidiary of Viacom assuming the Split-Off has occurred immediately prior to the determination as to whether such Person were a Subsidiary of Viacom. "Transferee" has the meaning ascribed thereto in Section 2.09. "Viacom" has the meaning ascribed thereto in the Preamble. "Viacom Group" means Viacom and its Affiliates and Blockbuster and its Affiliates. "Viacom International" is Viacom International Inc., a Delaware corporation and a wholly owned subsidiary of Viacom. "Viacom Ownership Reduction" means any decrease at any time in the Ownership Percentage to less than 45%. "Viacom Transferee" has the meaning ascribed thereto in Section 2.09(a).

Person and/or one or more other Subsidiaries of such Person; provided, however, that prior to the Split-Off, a Subsidiary of Viacom shall only include Persons who would be a Subsidiary of Viacom assuming the Split-Off has occurred immediately prior to the determination as to whether such Person were a Subsidiary of Viacom. "Transferee" has the meaning ascribed thereto in Section 2.09. "Viacom" has the meaning ascribed thereto in the Preamble. "Viacom Group" means Viacom and its Affiliates and Blockbuster and its Affiliates. "Viacom International" is Viacom International Inc., a Delaware corporation and a wholly owned subsidiary of Viacom. "Viacom Ownership Reduction" means any decrease at any time in the Ownership Percentage to less than 45%. "Viacom Transferee" has the meaning ascribed thereto in Section 2.09(a). Section 1.02. Internal References. Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement and references to the parties shall mean the parties to this Agreement. ARTICLE II REGISTRATION RIGHTS Section 2.01. Demand Registration - Registrable Securities. (a) Upon written notice provided at any time after the IPO Date from any Holder of Registrable Securities requesting that Blockbuster effect the registration under the Securities Act of any or all of the Registrable Securities held by such Holder, which notice shall specify the intended method or methods of disposition of such Registrable Securities, Blockbuster shall use its reasonable best efforts to effect the registration under the Securities Act and applicable state securities laws of such Registrable Securities for disposition in accordance with the intended method or methods of disposition stated in such request (including in a Rule 415 Offering, if Blockbuster is then eligible to register such Registrable Securities on Form S-3 (or a successor form) for such offering); provided that: (i) with respect to any registration statement filed, or to be filed, pursuant to this Section 2.01, if Blockbuster shall furnish to the Holders of Registrable Securities that have made such request a certified resolution of the Board of Directors of Blockbuster (adopted by the affirmative vote of a majority of the directors not designated by Viacom 5 or its Affiliates) stating that in the Board of Directors' good faith judgment it would (because of the existence of, or in anticipation of, any acquisition or financing activity, or the unavailability for reasons beyond Blockbuster' reasonable control of any required financial statements, or any other event or condition of similar significance to Blockbuster) be significantly disadvantageous (a "Disadvantageous Condition") to Blockbuster for such a registration statement to be maintained effective, or to be filed and become effective, and setting forth the general reasons for such judgment, Blockbuster shall be entitled to cause such registration statement to be withdrawn and the effectiveness of such registration statement terminated, or, in the event no registration statement has yet been filed, shall be entitled not to file any such registration statement, until such Disadvantageous Condition no longer exists (notice of which Blockbuster shall promptly deliver to such Holders). Upon receipt of any such notice of a Disadvantageous Condition, such Holders shall forthwith discontinue use of the prospectus contained in such registration statement and, if so directed by Blockbuster, each such Holder will deliver to Blockbuster all copies, other than permanent file copies then in such Holder's possession, of the prospectus then covering such Registrable Securities current at the time of receipt of such notice; provided that the filing of any such registration statement may not be delayed for a period in excess of 90 days due to the occurrence of any particular Disadvantageous Condition; (ii) after any Viacom Ownership Reduction, the Holders of Registrable Securities may collectively exercise their rights under this Section 2.01 on not more than three occasions (it being acknowledged that prior to any Viacom Ownership Reduction, there shall be no limit to the number of occasions on which such Holders (other than any

or its Affiliates) stating that in the Board of Directors' good faith judgment it would (because of the existence of, or in anticipation of, any acquisition or financing activity, or the unavailability for reasons beyond Blockbuster' reasonable control of any required financial statements, or any other event or condition of similar significance to Blockbuster) be significantly disadvantageous (a "Disadvantageous Condition") to Blockbuster for such a registration statement to be maintained effective, or to be filed and become effective, and setting forth the general reasons for such judgment, Blockbuster shall be entitled to cause such registration statement to be withdrawn and the effectiveness of such registration statement terminated, or, in the event no registration statement has yet been filed, shall be entitled not to file any such registration statement, until such Disadvantageous Condition no longer exists (notice of which Blockbuster shall promptly deliver to such Holders). Upon receipt of any such notice of a Disadvantageous Condition, such Holders shall forthwith discontinue use of the prospectus contained in such registration statement and, if so directed by Blockbuster, each such Holder will deliver to Blockbuster all copies, other than permanent file copies then in such Holder's possession, of the prospectus then covering such Registrable Securities current at the time of receipt of such notice; provided that the filing of any such registration statement may not be delayed for a period in excess of 90 days due to the occurrence of any particular Disadvantageous Condition; (ii) after any Viacom Ownership Reduction, the Holders of Registrable Securities may collectively exercise their rights under this Section 2.01 on not more than three occasions (it being acknowledged that prior to any Viacom Ownership Reduction, there shall be no limit to the number of occasions on which such Holders (other than any Viacom Transferees and their Affiliates (other than Viacom or its Affiliates)) may exercise such rights); and (iii) The Holders of Registrable Securities shall not have the right to exercise registration rights pursuant to this Section 2.01 within the 180-day period following the registration and sale of Registrable Securities effected pursuant to a prior exercise of the registration rights provided in this Section 2.01. (b) Notwithstanding any other provision of this Agreement to the contrary, a registration requested by a Holder of Registrable Securities pursuant to this Section 2.01 shall not be deemed to have been effected (and, therefore, not requested for purposes of paragraph (a) above), (i) unless it has become effective, (ii) if after it has become effective such registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court for any reason other than a misrepresentation or an omission by such Holder and, as a result thereof, the Registrable Securities requested to be registered cannot be completely distributed in accordance with the plan of distribution set forth in the related registration statement or (iii) if the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied or waived other than by reason of some act or omission by such Holder of Registrable Securities. 6

(c) In the event that any registration pursuant to this Section 2.01 shall involve, in whole or in part, an underwritten offering, the Holders of a majority of the Registrable Securities to be registered shall have the right to designate an underwriter or underwriters as the lead or managing underwriters of such underwritten offering reasonably acceptable to Blockbuster and, in connection with each registration pursuant to this Section 2.01, such Holders may select one counsel to represent all such Holders. (d) Blockbuster shall have the right to cause the registration of additional equity securities for sale for the account of any Person (including, without limitation, Blockbuster, and any existing or former directors, officers or employees of Blockbuster and its Affiliates) in any registration of Registrable Securities requested by the Holders pursuant to paragraph (a) above; provided, however, that if such Holders are advised in writing (with a copy to Blockbuster) by a nationally recognized investment banking firm selected by such Holders reasonably acceptable to Blockbuster (which shall be the lead underwriter or a managing underwriter in the case of an underwritten offering) that, in such firm's good faith view, all or a part of such additional equity securities cannot be sold and the inclusion of such additional equity securities in such registration would be likely to have an adverse effect on the price, timing or distribution of the offering and sale of the Registrable Securities then contemplated by any Holder, the registration of such additional equity securities or part thereof shall not be permitted. The Holders of the Registrable Securities to be offered may require that any such additional equity securities be included in the offering proposed by such Holders on the same conditions as the Registrable Securities that are included therein. In the event that the number of Registrable Securities requested to be included in a registration statement by the Holders thereof exceeds the number which, in the good faith view of such investment banking firm, can be sold

(c) In the event that any registration pursuant to this Section 2.01 shall involve, in whole or in part, an underwritten offering, the Holders of a majority of the Registrable Securities to be registered shall have the right to designate an underwriter or underwriters as the lead or managing underwriters of such underwritten offering reasonably acceptable to Blockbuster and, in connection with each registration pursuant to this Section 2.01, such Holders may select one counsel to represent all such Holders. (d) Blockbuster shall have the right to cause the registration of additional equity securities for sale for the account of any Person (including, without limitation, Blockbuster, and any existing or former directors, officers or employees of Blockbuster and its Affiliates) in any registration of Registrable Securities requested by the Holders pursuant to paragraph (a) above; provided, however, that if such Holders are advised in writing (with a copy to Blockbuster) by a nationally recognized investment banking firm selected by such Holders reasonably acceptable to Blockbuster (which shall be the lead underwriter or a managing underwriter in the case of an underwritten offering) that, in such firm's good faith view, all or a part of such additional equity securities cannot be sold and the inclusion of such additional equity securities in such registration would be likely to have an adverse effect on the price, timing or distribution of the offering and sale of the Registrable Securities then contemplated by any Holder, the registration of such additional equity securities or part thereof shall not be permitted. The Holders of the Registrable Securities to be offered may require that any such additional equity securities be included in the offering proposed by such Holders on the same conditions as the Registrable Securities that are included therein. In the event that the number of Registrable Securities requested to be included in a registration statement by the Holders thereof exceeds the number which, in the good faith view of such investment banking firm, can be sold without adversely affecting the price, timing, distribution or sale of securities in the offering, the number shall be allocated pro rata among the requesting Holders on the basis of the relative number of Registrable Securities then held by each such Holder (provided that any number in excess of a Holder's request may be reallocated among the remaining requesting Holders in a like manner). Section 2.02. Piggyback Registration. In the event that Blockbuster at any time after the IPO Date proposes to register any of its Blockbuster Common Stock, any other of its equity securities or securities convertible into or exchangeable for its equity securities (collectively, including Blockbuster Common Stock, "Other Securities") under the Securities Act, whether or not for sale for its own account, in a manner that would permit registration of Registrable Securities for sale for cash to the public under the Securities Act, it shall at each such time give prompt written notice to each Holder of Registrable Securities of its intention to do so and of the rights of such Holder under this Section 2.02. Subject to the terms and conditions hereof, such notice shall offer each such Holder the opportunity to include in such registration statement such number of Registrable Securities as such Holder may request. Upon the written request of any such Holder made within 15 days after the receipt of Blockbuster' notice (which request shall specify the number of Registrable Securities intended to be disposed of and the intended method of disposition thereof), Blockbuster shall use its reasonable best efforts to effect, in connection with the registration of the Other Securities, the registration under the 7 Securities Act of all Registrable Securities which Blockbuster has been so requested to register, to the extent required to permit the disposition (in accordance with such intended method of disposition thereof) of the Registrable Securities so requested to be registered; provided that: (a) if, at any time after giving such written notice of its intention to register any Other Securities and prior to the effective date of the registration statement filed in connection with such registration, Blockbuster shall determine for any reason not to register the Other Securities, Blockbuster may, at its election, give written notice of such determination to such Holders and thereupon Blockbuster shall be relieved of its obligation to register such Registrable Securities in connection with the registration of such Other Securities, without prejudice, however, to the rights of the Holders of Registrable Securities immediately to request that such registration be effected as a registration under Section 2.01 to the extent permitted thereunder; (b) if the registration referred to in the first sentence of this Section 2.02 is to be an underwritten registration on behalf of Blockbuster, and a nationally recognized investment banking firm selected by Blockbuster advises Blockbuster in writing that, in such firm's good faith view, the inclusion of all or a part of such Registrable Securities in such registration would be likely to have an adverse effect upon the price, timing or distribution of the offering and sale of the Other Securities then contemplated, Blockbuster shall include in such registration: (i) first, all Other Securities Blockbuster proposes to

Securities Act of all Registrable Securities which Blockbuster has been so requested to register, to the extent required to permit the disposition (in accordance with such intended method of disposition thereof) of the Registrable Securities so requested to be registered; provided that: (a) if, at any time after giving such written notice of its intention to register any Other Securities and prior to the effective date of the registration statement filed in connection with such registration, Blockbuster shall determine for any reason not to register the Other Securities, Blockbuster may, at its election, give written notice of such determination to such Holders and thereupon Blockbuster shall be relieved of its obligation to register such Registrable Securities in connection with the registration of such Other Securities, without prejudice, however, to the rights of the Holders of Registrable Securities immediately to request that such registration be effected as a registration under Section 2.01 to the extent permitted thereunder; (b) if the registration referred to in the first sentence of this Section 2.02 is to be an underwritten registration on behalf of Blockbuster, and a nationally recognized investment banking firm selected by Blockbuster advises Blockbuster in writing that, in such firm's good faith view, the inclusion of all or a part of such Registrable Securities in such registration would be likely to have an adverse effect upon the price, timing or distribution of the offering and sale of the Other Securities then contemplated, Blockbuster shall include in such registration: (i) first, all Other Securities Blockbuster proposes to sell for its own account ("Company Securities"); (ii) second, up to the full number of Registrable Securities held by Holders constituting Viacom and its Affiliates that are requested to be included in such registration (Registrable Securities that are so held being sometimes referred to herein as "Holder Securities") in excess of the number of Company Securities to be sold in such offering which, in the good faith view of such investment banking firm, can be sold without adversely affecting such offering and the sale of the Other Securities then contemplated (and (x) if such number is less than the full number of such Holder Securities, such number shall be allocated by Viacom among Viacom and its Affiliates and (y) in the event that such investment banking firm advises that less than all of such Holder Securities may be included in such offering, Viacom and its Affiliates may withdraw their request for registration of their Registrable Securities under this Section 2.02 and 90 days subsequent to the effective date of the registration statement for the registration of such Other Securities request that such registration be effected as a registration under Section 2.01 to the extent permitted thereunder); (iii) third, up to the full number of Registrable Securities held by Holders (other than Viacom and its Affiliates) of Registrable Securities that are requested to be included in such registration in excess of the number of Company Securities and Holder Securities to be sold in such offering which, in the good faith view of such investment banking firm, can be so sold without so adversely affecting such offering (and (x) if such number is less than the full number of such Registrable Securities, such number shall be allocated pro rata among such Holders on the basis of the number of Registrable Securities requested to be included therein by each such Holder and (y) in the event that such investment banking firm advises that less than all of such Registrable Securities may be included in such offering, such Holders may withdraw their request for registration of their Registrable Securities under this 8

Section 2.02 and 90 days subsequent to the effective date of the registration statement for the registration of such Other Securities request that such registration be effected as a registration under Section 2.01 to the extent permitted thereunder); and (iv) fourth, up to the full number of the Other Securities (other than Company Securities), if any, in excess of the number of Company Securities and Registrable Securities to be sold in such offering which, in the good faith view of such investment banking firm, can be so sold without so adversely affecting such offering (and, if such number is less than the full number of such Other Securities, such number shall be allocated pro rata among the holders of such Other Securities (other than Company Securities) on the basis of the number of securities requested to be included therein by each such holder); (c) if the registration referred to in the first sentence of this Section 2.02 is to be an underwritten secondary registration on behalf of holders of Other Securities (the "Other Holders"), and the lead underwriter or managing underwriter advises Blockbuster in writing that in their good faith view, all or a part of such additional securities cannot be sold and the inclusion of such additional securities in such registration would be likely to have an adverse effect on the price, timing or distribution of the offering and sale of the Other Securities then contemplated, Blockbuster shall include in such registration the number of securities (including Registrable Securities) that such underwriters advise can be so sold without adversely affecting such offering, allocated pro rata among the Other Holders and the Holders of Registrable Securities on

Section 2.02 and 90 days subsequent to the effective date of the registration statement for the registration of such Other Securities request that such registration be effected as a registration under Section 2.01 to the extent permitted thereunder); and (iv) fourth, up to the full number of the Other Securities (other than Company Securities), if any, in excess of the number of Company Securities and Registrable Securities to be sold in such offering which, in the good faith view of such investment banking firm, can be so sold without so adversely affecting such offering (and, if such number is less than the full number of such Other Securities, such number shall be allocated pro rata among the holders of such Other Securities (other than Company Securities) on the basis of the number of securities requested to be included therein by each such holder); (c) if the registration referred to in the first sentence of this Section 2.02 is to be an underwritten secondary registration on behalf of holders of Other Securities (the "Other Holders"), and the lead underwriter or managing underwriter advises Blockbuster in writing that in their good faith view, all or a part of such additional securities cannot be sold and the inclusion of such additional securities in such registration would be likely to have an adverse effect on the price, timing or distribution of the offering and sale of the Other Securities then contemplated, Blockbuster shall include in such registration the number of securities (including Registrable Securities) that such underwriters advise can be so sold without adversely affecting such offering, allocated pro rata among the Other Holders and the Holders of Registrable Securities on the basis of the number of securities (including Registrable Securities) requested to be included therein by each Other Holder and each Holder of Registrable Securities; provided that if such registration statement is to be filed at any time after a Viacom Ownership Reduction, if any, and if such Other Holders have requested that such registration statement be filed pursuant to demand registration rights granted to them by Blockbuster, Blockbuster shall include in such registration: (i) Other Securities sought to be included therein by the Other Holders pursuant to the exercise of such demand registration rights; (ii) the number of Holder Securities sought to be included in such registration in excess of the number of Other Securities sought to be included in such registration by the Other Holders which in the good faith view of such investment banking firm, can be so sold without so adversely affecting such offering (and (x) if such number is less than the full number of such Holder Securities, such number shall be allocated by Viacom among Viacom and its Affiliates and (y) in the event that such investment banking firm advises that less than all of such Holder Securities may be included in such offering, Viacom and its Affiliates may withdraw their request for registration of their Registrable Securities under this Section 2.02 and 90 days subsequent to the effective date of the registration statement for the registration of such Other Securities request that such registration be effected as a registration under Section 2.01 to the extent permitted thereunder); and (iii) the number of Registrable Securities sought to be included in such registration by Holders (other than Viacom and its Affiliates) of Registrable Securities in excess of the number of Other Securities and the number of Holder Securities sought to be included in such registration which, in the good faith view of such investment banking firm, can be so sold without so adversely affecting such offering (and (x) if such number is less than the full number of such Registrable Securities, such number shall be allocated pro rata among such Holders on the basis of the number of Registrable Securities requested to be 9

included therein by each such Holder and (y) in the event that such investment banking firm advises that less than all of such Registrable Securities may be included in such offering, such Holders may withdraw their request for registration of their Registrable Securities under this Section 2.02 and 90 days subsequent to the effective date of the registration statement for the registration of such Other Securities request that such registration be effected as a registration under Section 2.01 to the extent permitted thereunder); (d) Blockbuster shall not be required to effect any registration of Registrable Securities under this Section 2.02 incidental to the registration of any of its securities in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or stock option or other executive or employee benefit or compensation plans; and (e) no registration of Registrable Securities effected under this Section 2.02 shall relieve Blockbuster of its obligation to effect a registration of Registrable Securities pursuant to Section 2.01. Section 2.03. Expenses. Except as provided herein, Viacom shall pay all or its pro rata share of Registration

included therein by each such Holder and (y) in the event that such investment banking firm advises that less than all of such Registrable Securities may be included in such offering, such Holders may withdraw their request for registration of their Registrable Securities under this Section 2.02 and 90 days subsequent to the effective date of the registration statement for the registration of such Other Securities request that such registration be effected as a registration under Section 2.01 to the extent permitted thereunder); (d) Blockbuster shall not be required to effect any registration of Registrable Securities under this Section 2.02 incidental to the registration of any of its securities in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or stock option or other executive or employee benefit or compensation plans; and (e) no registration of Registrable Securities effected under this Section 2.02 shall relieve Blockbuster of its obligation to effect a registration of Registrable Securities pursuant to Section 2.01. Section 2.03. Expenses. Except as provided herein, Viacom shall pay all or its pro rata share of Registration Expenses with respect to a particular offering (or proposed offering), as the case may be, except for fees, disbursements and expenses related to Blockbuster's counsel, accountants and other advisors. Notwithstanding the foregoing, each Holder and Blockbuster shall be responsible for its own internal administrative and similar costs, which shall not constitute Registration Expenses. Section 2.04. Registration and Qualification. If and whenever Blockbuster is required to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 2.01 or 2.02, Blockbuster shall as promptly as practicable: (a) prepare, file and use its reasonable best efforts to cause to become effective a registration statement under the Securities Act relating to the Registrable Securities to be offered; (b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities until the earlier of (A) such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition set forth in such registration statement and (B) the expiration of (i) six months after such registration statement becomes effective or (ii) twenty four months after a registration statement filed in a Rule 415 Offering becomes effective; provided, that such respective periods shall be extended for such number of days that equals the number of days elapsing from (x) the date the written notice contemplated by paragraph (f) below is given by Blockbuster to (y) the 10

date on which Blockbuster delivers to the Holders of Registrable Securities the supplement or amendment contemplated by paragraph (f) below; (c) furnish to the Holders of Registrable Securities and to any underwriter of such Registrable Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act, such documents incorporated by reference in such registration statement or prospectus, and such other documents, as the Holders of Registrable Securities or such underwriter may reasonably request, and a copy of any and all transmittal letters or other correspondence to or received from, the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering; (d) use its reasonable best efforts to register or qualify all Registrable Securities covered by such registration statement under the securities or blue sky laws of such jurisdictions as the Holders of such Registrable Securities or any underwriter to such Registrable Securities shall request, and use its reasonable best efforts to obtain all appropriate registrations, permits and consents in connection therewith, and do any and all other acts and things

date on which Blockbuster delivers to the Holders of Registrable Securities the supplement or amendment contemplated by paragraph (f) below; (c) furnish to the Holders of Registrable Securities and to any underwriter of such Registrable Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act, such documents incorporated by reference in such registration statement or prospectus, and such other documents, as the Holders of Registrable Securities or such underwriter may reasonably request, and a copy of any and all transmittal letters or other correspondence to or received from, the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering; (d) use its reasonable best efforts to register or qualify all Registrable Securities covered by such registration statement under the securities or blue sky laws of such jurisdictions as the Holders of such Registrable Securities or any underwriter to such Registrable Securities shall request, and use its reasonable best efforts to obtain all appropriate registrations, permits and consents in connection therewith, and do any and all other acts and things which may be necessary or advisable to enable the Holders of Registrable Securities or any such underwriter to consummate the disposition in such jurisdictions of its Registrable Securities covered by such registration statement; provided, that Blockbuster shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any such jurisdiction wherein it is not so qualified or to consent to general service of process in any such jurisdiction; (e) (i) use its reasonable best efforts to furnish to each Holder of Registrable Securities included in such registration (each, a "Selling Holder") and to any underwriter of such Registrable Securities an opinion of counsel for Blockbuster addressed to each Selling Holder and dated the date of the closing under the underwriting agreement (if any) (or if such offering is not underwritten, dated the effective date of the registration statement) and (ii) use its reasonable best efforts to furnish to each Selling Holder a "cold comfort" letter addressed to each Selling Holder and signed by the independent public accountants who have audited the financial statements of Blockbuster included in such registration statement, in each such case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in underwritten public offerings of securities and such other matters as the Selling Holders may reasonably request and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements; (f) as promptly as practicable, notify the Selling Holders in writing (i) at any time when a prospectus relating to a registration pursuant to Sections 2.01 or 2.02 is required to be delivered under the Securities Act of the happening of any event as a result of which the 11

prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any 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 and (ii) of any request by the SEC or any other regulatory body or other body having jurisdiction for any amendment of or supplement to any registration statement or other document relating to such offering, and in either such case, at the request of the Selling Holders prepare and furnish to the Selling Holders a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include 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 are made, not misleading; (g) if reasonably requested by the lead or managing underwriters, use its reasonable best efforts to list all such Registrable Securities covered by such registration on each securities exchange and automated inter-dealer quotation system on which a class of common equity securities of Blockbuster is then listed;

prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any 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 and (ii) of any request by the SEC or any other regulatory body or other body having jurisdiction for any amendment of or supplement to any registration statement or other document relating to such offering, and in either such case, at the request of the Selling Holders prepare and furnish to the Selling Holders a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include 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 are made, not misleading; (g) if reasonably requested by the lead or managing underwriters, use its reasonable best efforts to list all such Registrable Securities covered by such registration on each securities exchange and automated inter-dealer quotation system on which a class of common equity securities of Blockbuster is then listed; (h) to the extent reasonably requested by the lead or managing underwriters, send appropriate officers of Blockbuster to attend any "road shows" scheduled in connection with any such registration, with all out-of- pocket costs and expense incurred by Blockbuster or such officers in connection with such attendance to be paid by Blockbuster; and (i) furnish for delivery in connection with the closing of any offering of Registrable Securities pursuant to a registration effected pursuant to Sections 2.01 or 2.02 unlegended certificates representing ownership of the Registrable Securities being sold in such denominations as shall be requested by the Selling Holders or the underwriters. Section 2.05. Conversion of Other Securities, Etc. In the event that any Holder offers any options, rights, warrants or other securities issued by it or any other Person that are offered with, convertible into or exercisable or exchangeable for any Registrable Securities, the Registrable Securities underlying such options, rights, warrants or other securities shall continue to be eligible for registration pursuant to Sections 2.01 and 2.02. Section 2.06. Underwriting; Due Diligence. (a) If requested by the underwriters for any underwritten offering of Registrable Securities pursuant to a registration requested under this Article II, Blockbuster shall enter into an underwriting agreement with such underwriters for such offering, which agreement will contain such representations and warranties by Blockbuster and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 2.07, and agreements as to the provision of opinions of counsel and accountants' letters to the effect and to the extent provided in Section 2.04(e). The Selling Holders on whose behalf the Registrable 12

Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, Blockbuster to and for the benefit of such underwriters, shall also be made to and for the benefit of such Selling Holders. Such underwriting agreement shall also contain such representations and warranties by such Selling Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 2.07. (b) In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act pursuant to this Article II, Blockbuster shall give the Holders of such Registrable Securities and the underwriters, if any, and their respective counsel and accountants, such reasonable and customary access to its books and records and such opportunities to discuss the business of Blockbuster with its officers and the independent public accountants who have certified the financial statements of Blockbuster as shall be necessary, in the opinion of such Holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act.

Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, Blockbuster to and for the benefit of such underwriters, shall also be made to and for the benefit of such Selling Holders. Such underwriting agreement shall also contain such representations and warranties by such Selling Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 2.07. (b) In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act pursuant to this Article II, Blockbuster shall give the Holders of such Registrable Securities and the underwriters, if any, and their respective counsel and accountants, such reasonable and customary access to its books and records and such opportunities to discuss the business of Blockbuster with its officers and the independent public accountants who have certified the financial statements of Blockbuster as shall be necessary, in the opinion of such Holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. Section 2.07. Indemnification and Contribution. (a) In the case of each offering of Registrable Securities made pursuant to this Article II, Blockbuster agrees to indemnify and hold harmless, to the extent permitted by law, each Selling Holder, each underwriter of Registrable Securities so offered and each Person, if any, who controls any of the foregoing Persons within the meaning of the Securities Act and the officers, directors, Affiliates, employees and agents of each of the foregoing, against any and all Losses (including, without limitation, any legal or other expenses incurred in connection with defending or investigating any such action or claim), as incurred, arising out of or relating to any untrue statement or alleged untrue statement of a material fact contained in, or incorporated by reference into, in the registration statement (or in any preliminary or final prospectus included therein) or in any offering memorandum or other offering document relating to the offering and sale of such Registrable Securities prepared by Blockbuster or at its direction, or any amendment thereof or supplement thereto, or any omission by Blockbuster or alleged omission by Blockbuster to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; except that Blockbuster shall not be liable to any Person in any such case to the extent that any such Loss arising out of or relating to any untrue statement or alleged untrue statement, or any omission or alleged omission, if such statement or omission shall have been made in reliance upon and in conformity with information relating to a Selling Holder, another holder of securities included in such registration statement or underwriter furnished in writing to Blockbuster by or on behalf of such Selling Holder, other holder or underwriter, as the case may be, specifically for use in the registration statement (or in any preliminary or final prospectus included therein), offering memorandum or other offering document, or any amendment thereof or supplement thereto. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Selling Holder, any other holder or any underwriter and shall survive the transfer of such securities. In the case of an offering with respect to which a Selling Holder has 13

designated the lead or managing underwriters (or a Selling Holder is offering Registrable Securities directly, without an underwriter), this indemnity does not apply to any Loss arising out of or relating to any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or such Selling Holder or other holder, as the case may be) to such Person asserting such Loss at or prior to the written confirmation of the sale of the Registrable Securities as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum. (b) In the case of each offering made pursuant to this Agreement, each Selling Holder, by exercising its registration rights hereunder, agrees to indemnify and hold harmless, and to cause each underwriter of Registrable Securities included in such offering (in the same manner and to the same extent as set forth in Section 2.07(a)) to agree to indemnify and hold harmless, Blockbuster, each other underwriter who participates in such offering, each other Selling Holder or other holder with securities included in such offering and in the case of an underwriter, such Selling Holder or other holder, and each Person, if any, who controls any of the foregoing within the meaning of the Securities Act and the Affiliates and Representatives of each of the foregoing, against any and all Losses (including, without limitation, any legal or other expenses incurred in connection with defending or

designated the lead or managing underwriters (or a Selling Holder is offering Registrable Securities directly, without an underwriter), this indemnity does not apply to any Loss arising out of or relating to any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or such Selling Holder or other holder, as the case may be) to such Person asserting such Loss at or prior to the written confirmation of the sale of the Registrable Securities as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum. (b) In the case of each offering made pursuant to this Agreement, each Selling Holder, by exercising its registration rights hereunder, agrees to indemnify and hold harmless, and to cause each underwriter of Registrable Securities included in such offering (in the same manner and to the same extent as set forth in Section 2.07(a)) to agree to indemnify and hold harmless, Blockbuster, each other underwriter who participates in such offering, each other Selling Holder or other holder with securities included in such offering and in the case of an underwriter, such Selling Holder or other holder, and each Person, if any, who controls any of the foregoing within the meaning of the Securities Act and the Affiliates and Representatives of each of the foregoing, against any and all Losses (including, without limitation, any legal or other expenses incurred in connection with defending or investigating any such action or claim), as incurred, arising out of or relating to any untrue statement or alleged untrue statement of a material fact contained in, or incorporated by reference into, the registration statement (or in any preliminary or final prospectus included therein) or in any offering memorandum or other offering document relating to the offering and sale of such Registrable Securities prepared by Blockbuster or at its direction, or any amendment thereof or supplement thereto, or any omission by such Selling Holder or underwriter, as the case may be, or alleged omission by such Selling Holder or underwriter, as the case may be, of a material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that such untrue statement of a material fact is contained in, or such material fact is omitted from information relating to such Selling Holder or underwriter, as the case may be, furnished in writing to Blockbuster by or on behalf of such Selling Holder or underwriter, as the case may be, specifically for use in such registration statement (or in any preliminary or final prospectus included therein), offering memorandum or other offering document, or any amendment thereof or supplement thereto. In the case of an offering made pursuant to this Agreement with respect to which Blockbuster has designated the lead or managing underwriters (or Blockbuster is offering securities directly, without an underwriter), this indemnity does not apply to any Loss arising out of or related to any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or Blockbuster, as the case may be) to such Person asserting such loss, liability, cost, claim or damage at or prior to the written confirmation of the sale of the Registrable Securities as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum. 14

(c) The indemnification procedures set forth in Section 8.01(b) of the IPO and Split-Off Agreement are incorporated herein and made a part hereof for all purposes as if fully set forth herein and shall govern the parties' rights and obligations with respect thereto. (d) If the indemnification provided for in this Section 2.07 shall for any reason be unavailable (other than in accordance with its terms) to an Indemnified Party in respect of any Loss referred to therein, then each Indemnifying Party shall, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such Loss (i) as between Blockbuster and the Selling Holders on the one hand and the underwriters on the other, in such proportion as shall be appropriate to reflect the relative benefits received by Blockbuster and the Selling Holders on the one hand and the underwriters on the other hand or, if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of Blockbuster and the Selling Holders on the one hand and the underwriters on the other with respect to the statements or omissions which resulted in such Loss as well as any other relevant equitable considerations and (ii) as between Blockbuster on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of Blockbuster and of each Selling Holder in connection with such statements or omissions as well as any other relevant equitable considerations. The relative benefits received by Blockbuster and the Selling Holders on the one hand and the underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of

(c) The indemnification procedures set forth in Section 8.01(b) of the IPO and Split-Off Agreement are incorporated herein and made a part hereof for all purposes as if fully set forth herein and shall govern the parties' rights and obligations with respect thereto. (d) If the indemnification provided for in this Section 2.07 shall for any reason be unavailable (other than in accordance with its terms) to an Indemnified Party in respect of any Loss referred to therein, then each Indemnifying Party shall, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such Loss (i) as between Blockbuster and the Selling Holders on the one hand and the underwriters on the other, in such proportion as shall be appropriate to reflect the relative benefits received by Blockbuster and the Selling Holders on the one hand and the underwriters on the other hand or, if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of Blockbuster and the Selling Holders on the one hand and the underwriters on the other with respect to the statements or omissions which resulted in such Loss as well as any other relevant equitable considerations and (ii) as between Blockbuster on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of Blockbuster and of each Selling Holder in connection with such statements or omissions as well as any other relevant equitable considerations. The relative benefits received by Blockbuster and the Selling Holders on the one hand and the underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by Blockbuster and the Selling Holders bear to the total underwriting discounts and commissions received by the underwriters, in each case as set forth in the table on the cover page of this prospectus. The relative fault of Blockbuster and the Selling Holders on the one hand and of the underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by Blockbuster and the Selling Holders or by the underwriters. The relative fault of Blockbuster on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, but not be reference to any Indemnified Party's stock ownership in Blockbuster. The amount paid or payable by an Indemnified Party as a result of the Loss in respect thereof, referred to above in this paragraph (d) shall be deemed to include, for purposes of this paragraph (d), any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Blockbuster and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.07 were determined by pro rata allocation (even if the underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. Notwithstanding any other provisions of this Section 2.07, no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Selling Holder were 15

offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Each Selling Holder's obligations to contribute pursuant to this Section 2.07 are several in proportion to the proceeds of the offering received by such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders and not joint. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) Indemnification and contribution similar to that specified in the preceding paragraphs of this Section 2.07 (with appropriate modifications) shall be given by Blockbuster, the Selling Holders and underwriters with respect to any required registration or other qualification of securities under any state law or regulation or governmental authority.

offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Each Selling Holder's obligations to contribute pursuant to this Section 2.07 are several in proportion to the proceeds of the offering received by such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders and not joint. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) Indemnification and contribution similar to that specified in the preceding paragraphs of this Section 2.07 (with appropriate modifications) shall be given by Blockbuster, the Selling Holders and underwriters with respect to any required registration or other qualification of securities under any state law or regulation or governmental authority. (f) The obligations of the parties under this Section 2.07 shall be in addition to any liability which any party may otherwise have to any other party. Section 2.08. Rule 144 and Form S-3. Commencing 90 days after the IPO Date, Blockbuster shall use its reasonable best efforts to ensure that the conditions to the availability of Rule 144 set forth in paragraph (c) thereof shall be satisfied. Upon the request of any Holder of Registrable Securities, Blockbuster will deliver to such Holder a written statement as to whether it has complied with such requirements. Blockbuster further agrees to use its reasonable efforts to cause all conditions to the availability of Form S-3 (or any successor form) under the Securities Act of the filing of registration statements under this Agreement to be met as soon as practicable after the IPO Date. Notwithstanding anything contained in this Section 2.08, Blockbuster may deregister under Section 12 of the Securities Exchange Act of 1934, as amended, if it then is permitted to do so pursuant to said Act and the rules and regulations thereunder. Section 2.09. Transfer of Registration Rights. (a) Any Holder may transfer all or any portion of its rights under Article II to (i) any other transferee in respect of a number of Registrable Securities owned by such Holder equal to or exceeding 3% of the outstanding Blockbuster Common Stock at the time of the transfer (each transferee that receives such minimum number of Registrable Securities shall be referred to herein as a "Transferee"). Any transfer of registration rights pursuant to this Section 2.09(a) shall be effective upon receipt by Blockbuster of (i) written notice from such Holder stating the name and address of any Transferee and identifying the number of Registrable Securities with respect to which the rights under this Agreement are being transferred and the nature of the rights so transferred and (ii) a written agreement from such Transferee to be bound by the terms of this Article II and Sections 3.03, 3.06, 3.07, 3.09, and 3.11 of this Agreement. The Holders may exercise their rights hereunder in such priority as they shall agree upon among themselves. 16

(b) Notwithstanding the foregoing, in the event that any stockholder of Viacom receives restricted Registrable Securities in the Split-Off and as a result of the Split-Off, such stockholder is "affiliated" with Blockbuster for purposes of the Securities Act, such stockholder shall be entitled to the rights hereunder; provided, however, that it shall only be entitled to request registration of Registrable Securities pursuant to Section 2.01 only twice and such stockholder signs a written agreement to be bound by the terms of this Agreement. Any such stockholder for purposes of this Agreement shall be considered a "Holder." Section 2.10. Holdback Agreement. If any registration pursuant to this Article II shall be in connection with an underwritten public offering of Registrable Securities, each Selling Holder agrees not to effect any public sale or distribution, including any sale under Rule 144, of any equity security of Blockbuster (otherwise than through the registered public offering then being made), within 7 days prior to or 90 days (or such lesser period as the lead or managing underwriters may permit) after the effective date of the registration statement (or the commencement of the offering to the public of such Registrable Securities in the case of Rule 415 offerings). Upon the reasonable request of the underwriters, Blockbuster hereby also so agrees and agrees to use its reasonable best efforts to cause each other holder of equity securities or securities convertible into or exchangeable or exercisable for such securities (other than in the case of equity securities, under dividend reinvestment plans or employee stock plans) purchased from Blockbuster otherwise than in a public offering to so agree.

(b) Notwithstanding the foregoing, in the event that any stockholder of Viacom receives restricted Registrable Securities in the Split-Off and as a result of the Split-Off, such stockholder is "affiliated" with Blockbuster for purposes of the Securities Act, such stockholder shall be entitled to the rights hereunder; provided, however, that it shall only be entitled to request registration of Registrable Securities pursuant to Section 2.01 only twice and such stockholder signs a written agreement to be bound by the terms of this Agreement. Any such stockholder for purposes of this Agreement shall be considered a "Holder." Section 2.10. Holdback Agreement. If any registration pursuant to this Article II shall be in connection with an underwritten public offering of Registrable Securities, each Selling Holder agrees not to effect any public sale or distribution, including any sale under Rule 144, of any equity security of Blockbuster (otherwise than through the registered public offering then being made), within 7 days prior to or 90 days (or such lesser period as the lead or managing underwriters may permit) after the effective date of the registration statement (or the commencement of the offering to the public of such Registrable Securities in the case of Rule 415 offerings). Upon the reasonable request of the underwriters, Blockbuster hereby also so agrees and agrees to use its reasonable best efforts to cause each other holder of equity securities or securities convertible into or exchangeable or exercisable for such securities (other than in the case of equity securities, under dividend reinvestment plans or employee stock plans) purchased from Blockbuster otherwise than in a public offering to so agree. ARTICLE III MISCELLANEOUS Section 3.01. Limitation of Liability. Neither Viacom nor Blockbuster shall be liable to the other for any special, indirect, incidental or consequential damages of the other arising in connection with this Agreement. Section 3.02. Subsidiaries. Viacom agrees and acknowledges that Viacom shall be responsible for the performance by each of its Affiliates of the obligations hereunder applicable to such Affiliate. Section 3.03. Term. This Agreement shall remain in effect until all Registrable Securities held by Holders have been transferred by them to Persons other than Transferees; provided that the provisions of Section 2.07 shall survive any such expiration. Section 3.04. Further Assurances. Viacom and Blockbuster shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such instruments and take such other action as may be necessary or advisable to carry out their obligations under this Agreement and under any exhibit, document or other instrument delivered pursuant hereto. Section 3.05. Specific Performance. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement 17

were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that they shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which they may be entitled at law or equity. Section 3.06. Amendments. This Agreement shall not be supplemented, amended or modified in any manner whatsoever (including without limitation by course of dealing or of performance or usage of trade) except in writing signed by the parties. Section 3.07. Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. Nothing contained in this Agreement, express or implied, is intended to confer upon any other person or entity any benefits, rights or remedies. Section 3.08. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any portion of this Agreement is declared invalid for

were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that they shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which they may be entitled at law or equity. Section 3.06. Amendments. This Agreement shall not be supplemented, amended or modified in any manner whatsoever (including without limitation by course of dealing or of performance or usage of trade) except in writing signed by the parties. Section 3.07. Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. Nothing contained in this Agreement, express or implied, is intended to confer upon any other person or entity any benefits, rights or remedies. Section 3.08. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any portion of this Agreement is declared invalid for any reason in any jurisdiction, such declaration shall have no effect upon the remaining portions of this Agreement, which shall continue in full force and effect as if this Agreement had been executed with the invalid portions thereof deleted; provided, that the entirety of this Agreement shall continue in full force and effect in all other jurisdictions. Section 3.09. Entire Agreement. Other than the IPO and Split-Off Agreement, the Release and Indemnification Agreement, the Transition Services Agreement and the Tax Matters Agreement, this Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof and thereof. Section 3.10. Notices. All notices, consents, requests, approvals, and other communications provided for or required herein, and all legal process in regard thereto, must be in writing and shall be deemed validly given, made or served, (a) when delivered personally or sent by telecopy to the facsimile number indicated below with a required confirmation copy sent in accordance with subsection (c) below; or (b) on the next business day after delivery to a nationally-recognized express delivery service with instructions and payment for overnight delivery; or (c) on the fifth (5th) day after deposited in any depository regularly maintained by the United States postal service, postage prepaid, certified or registered mail, return receipt requested, addressed to the following addresses or to such other address as the party to be notified shall have specified to the other party in accordance with this section: If to Viacom: 18

Viacom Inc. 1515 Broadway New York New York 10036 Attention: Michael D. Fricklas, General Counsel Phone Number: 212-258-6070 Fax Number: 212-258-6099 If to Blockbuster: Blockbuster Inc. 1201 Elm Street Dallas, Texas 75270 Attention: Ed Stead, General Counsel Phone Number: 214-854-3499 Fax Number: 214-854-3677 Section 3.11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties hereto agrees that any dispute relating to or arising from this Agreement or the transactions contemplated hereby shall be resolved only in the court of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality

Viacom Inc. 1515 Broadway New York New York 10036 Attention: Michael D. Fricklas, General Counsel Phone Number: 212-258-6070 Fax Number: 212-258-6099 If to Blockbuster: Blockbuster Inc. 1201 Elm Street Dallas, Texas 75270 Attention: Ed Stead, General Counsel Phone Number: 214-854-3499 Fax Number: 214-854-3677 Section 3.11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties hereto agrees that any dispute relating to or arising from this Agreement or the transactions contemplated hereby shall be resolved only in the court of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, each of the parties hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal suit, action or proceeding relating to this Agreement or any transaction contemplated hereby, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and appellate courts having jurisdiction of appeals in such courts, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such suit, action, or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such federal court; (b) consents that any such suit, action or proceeding may and shall be brought in such courts and waives any objection that it may now or hereafter have to the venue or jurisdiction or any such action or proceeding in such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party in its address as provided in Section 3.06 hereof; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by New York law; and 19

(e) agrees that this Agreement has been entered into in the State of New York and performed in part in the State of New York. Section 3.12. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same instrument. 20

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. VIACOM INC.
By: /s/ MICHAEL D. FRICKLAS ----------------------------------

(e) agrees that this Agreement has been entered into in the State of New York and performed in part in the State of New York. Section 3.12. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same instrument. 20

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. VIACOM INC.
By: /s/ MICHAEL D. FRICKLAS ---------------------------------Name: Michael D. Fricklas Title: Sr. Vice President

BLOCKBUSTER INC.
By: /s/ EDWARD B. STEAD ---------------------------------Name: Edward B. Stead Title: Exec. Vice President, General Counsel and Secretary

EXHIBIT 10.5 TAX MATTERS AGREEMENT THIS TAX MATTERS AGREEMENT (the "Agreement"), dated as of August 16, 1999 (the "IPO Date"), is entered into between Viacom Inc., a Delaware corporation ("Viacom"), and Blockbuster Inc., a Delaware corporation, ("Blockbuster"). RECITALS A. Viacom is the common parent corporation of an affiliated group of corporations which, together with any other corporations which may become members of such affiliated group, is referred to as the "Viacom Consolidated Group". B. Blockbuster, if it were not included in the Viacom Consolidated Group on the date hereof, would be the common parent corporation of an affiliated group of corporations within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"), which, together with any other corporations which may become members of such affiliated group, is referred to as the "Blockbuster Consolidated Group". C. Viacom and Blockbuster desire to set forth in the Agreement their agreement as to certain matters relating to the inclusion of the Blockbuster Consolidated Group in the Viacom Consolidated Group, including the allocation of tax liabilities for years in which the Blockbuster Consolidated Group is so included, and certain other matters relating to taxes. 1

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. VIACOM INC.
By: /s/ MICHAEL D. FRICKLAS ---------------------------------Name: Michael D. Fricklas Title: Sr. Vice President

BLOCKBUSTER INC.
By: /s/ EDWARD B. STEAD ---------------------------------Name: Edward B. Stead Title: Exec. Vice President, General Counsel and Secretary

EXHIBIT 10.5 TAX MATTERS AGREEMENT THIS TAX MATTERS AGREEMENT (the "Agreement"), dated as of August 16, 1999 (the "IPO Date"), is entered into between Viacom Inc., a Delaware corporation ("Viacom"), and Blockbuster Inc., a Delaware corporation, ("Blockbuster"). RECITALS A. Viacom is the common parent corporation of an affiliated group of corporations which, together with any other corporations which may become members of such affiliated group, is referred to as the "Viacom Consolidated Group". B. Blockbuster, if it were not included in the Viacom Consolidated Group on the date hereof, would be the common parent corporation of an affiliated group of corporations within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"), which, together with any other corporations which may become members of such affiliated group, is referred to as the "Blockbuster Consolidated Group". C. Viacom and Blockbuster desire to set forth in the Agreement their agreement as to certain matters relating to the inclusion of the Blockbuster Consolidated Group in the Viacom Consolidated Group, including the allocation of tax liabilities for years in which the Blockbuster Consolidated Group is so included, and certain other matters relating to taxes. 1

The parties agree as follows: 1. Filing of Consolidated Returns and Payment of Consolidated Tax Liability. For all taxable years in which Viacom files consolidated federal income tax returns (any such return of the Viacom Consolidated Group for any taxable year, a "Viacom Consolidated Return") and is entitled to include the Blockbuster Consolidated Group in such returns under Sections 1501-1504, or successor provisions, of the Code, Viacom shall include the Blockbuster Consolidated Group in the consolidated federal income tax returns it

EXHIBIT 10.5 TAX MATTERS AGREEMENT THIS TAX MATTERS AGREEMENT (the "Agreement"), dated as of August 16, 1999 (the "IPO Date"), is entered into between Viacom Inc., a Delaware corporation ("Viacom"), and Blockbuster Inc., a Delaware corporation, ("Blockbuster"). RECITALS A. Viacom is the common parent corporation of an affiliated group of corporations which, together with any other corporations which may become members of such affiliated group, is referred to as the "Viacom Consolidated Group". B. Blockbuster, if it were not included in the Viacom Consolidated Group on the date hereof, would be the common parent corporation of an affiliated group of corporations within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"), which, together with any other corporations which may become members of such affiliated group, is referred to as the "Blockbuster Consolidated Group". C. Viacom and Blockbuster desire to set forth in the Agreement their agreement as to certain matters relating to the inclusion of the Blockbuster Consolidated Group in the Viacom Consolidated Group, including the allocation of tax liabilities for years in which the Blockbuster Consolidated Group is so included, and certain other matters relating to taxes. 1

The parties agree as follows: 1. Filing of Consolidated Returns and Payment of Consolidated Tax Liability. For all taxable years in which Viacom files consolidated federal income tax returns (any such return of the Viacom Consolidated Group for any taxable year, a "Viacom Consolidated Return") and is entitled to include the Blockbuster Consolidated Group in such returns under Sections 1501-1504, or successor provisions, of the Code, Viacom shall include the Blockbuster Consolidated Group in the consolidated federal income tax returns it files as the common parent corporation of the Viacom Consolidated Group. Viacom, Blockbuster, and the other members of the Viacom Consolidated Group shall file any and all consents, elections or other documents and take any other actions necessary or appropriate to effect the filing of such federal income tax returns. For all taxable years in which the Blockbuster Consolidated Group is included in the Viacom Consolidated Group, Viacom shall pay the entire federal income tax liability of the Viacom Consolidated Group and shall indemnify and hold harmless Blockbuster against any such liability; provided, however, that Blockbuster shall make payments to Viacom or receive payments from Viacom as provided in the Agreement in settlement of the Blockbuster Consolidated Group's share of the entire federal income tax liability of the Viacom Consolidated Group for any taxable year (which term shall throughout the Agreement include any short taxable year) beginning on or after the IPO Date during which the Blockbuster Consolidated Group is included in the Viacom Consolidated Group (any such taxable year, an "Agreement Year" and any taxable year ending on or before the IPO Date, a "preAgreement Year"). For 2

purposes of this Agreement, the Blockbuster Consolidated Group shall be deemed to have a taxable year beginning on January 1, 1999 and ending on the IPO Date (which year shall be treated as a pre-Agreement Year), and the Blockbuster Consolidated Group shall be deemed to have a taxable year beginning on the day after the IPO Date and ending on December 31, 1999 (or, if earlier, the date on which the Blockbuster Consolidated Group's actual taxable year beginning January 1, 1999 ends) which year shall be treated as an Agreement Year.

The parties agree as follows: 1. Filing of Consolidated Returns and Payment of Consolidated Tax Liability. For all taxable years in which Viacom files consolidated federal income tax returns (any such return of the Viacom Consolidated Group for any taxable year, a "Viacom Consolidated Return") and is entitled to include the Blockbuster Consolidated Group in such returns under Sections 1501-1504, or successor provisions, of the Code, Viacom shall include the Blockbuster Consolidated Group in the consolidated federal income tax returns it files as the common parent corporation of the Viacom Consolidated Group. Viacom, Blockbuster, and the other members of the Viacom Consolidated Group shall file any and all consents, elections or other documents and take any other actions necessary or appropriate to effect the filing of such federal income tax returns. For all taxable years in which the Blockbuster Consolidated Group is included in the Viacom Consolidated Group, Viacom shall pay the entire federal income tax liability of the Viacom Consolidated Group and shall indemnify and hold harmless Blockbuster against any such liability; provided, however, that Blockbuster shall make payments to Viacom or receive payments from Viacom as provided in the Agreement in settlement of the Blockbuster Consolidated Group's share of the entire federal income tax liability of the Viacom Consolidated Group for any taxable year (which term shall throughout the Agreement include any short taxable year) beginning on or after the IPO Date during which the Blockbuster Consolidated Group is included in the Viacom Consolidated Group (any such taxable year, an "Agreement Year" and any taxable year ending on or before the IPO Date, a "preAgreement Year"). For 2

purposes of this Agreement, the Blockbuster Consolidated Group shall be deemed to have a taxable year beginning on January 1, 1999 and ending on the IPO Date (which year shall be treated as a pre-Agreement Year), and the Blockbuster Consolidated Group shall be deemed to have a taxable year beginning on the day after the IPO Date and ending on December 31, 1999 (or, if earlier, the date on which the Blockbuster Consolidated Group's actual taxable year beginning January 1, 1999 ends) which year shall be treated as an Agreement Year. 2. Pro Forma Blockbuster Return. For each Agreement Year, Viacom shall prepare a pro forma consolidated federal income tax return for the Blockbuster Consolidated Group (a "Pro Forma Blockbuster Return"). Except as otherwise provided herein, the Pro Forma Blockbuster Return for each Agreement Year shall be prepared as if Blockbuster filed a consolidated return on behalf of the Blockbuster Consolidated Group for such taxable year; provided, however, that the Pro Forma Blockbuster Return shall not include any deduction or other tax benefit attributable to the exercise of an option to purchase Viacom stock by an employee of Blockbuster (or its affiliates). The Pro Forma Blockbuster Return shall reflect any carryovers of net operating losses, net capital losses, excess tax credits, or other tax attributes from prior Agreement Years' Pro Forma Blockbuster Returns which could have been utilized by the Blockbuster Consolidated Group (excluding those attributes carried back pursuant to Section 5 herein) if the Blockbuster Consolidated Group had never been included in the Viacom Consolidated Group and all Pro Forma Blockbuster Returns had been actual returns, but otherwise shall not reflect any tax benefits that arise from any adjustment to a pre3

Agreement Year or carryovers of any other tax attributes from a pre-Agreement Year, regardless of whether such attributes were utilized (on audit or otherwise) on a tax return of Viacom in a pre-Agreement Year. The Pro Forma Blockbuster Return shall be prepared in a manner that reflects all elections, positions, and methods used in the Viacom Consolidated Return that must be applied on a consolidated basis and otherwise shall be prepared in a manner consistent with the Viacom Consolidated Return. The provisions of the Code that require consolidated computations, such as Sections 861, 1201-1212, and 1231, shall be applied separately to the Blockbuster Consolidated Group. Section 1.1502-13 of the Income Tax Regulations shall be applied as if the Blockbuster Consolidated Group and the Viacom Consolidated Group (excluding the members of the Blockbuster Group)

purposes of this Agreement, the Blockbuster Consolidated Group shall be deemed to have a taxable year beginning on January 1, 1999 and ending on the IPO Date (which year shall be treated as a pre-Agreement Year), and the Blockbuster Consolidated Group shall be deemed to have a taxable year beginning on the day after the IPO Date and ending on December 31, 1999 (or, if earlier, the date on which the Blockbuster Consolidated Group's actual taxable year beginning January 1, 1999 ends) which year shall be treated as an Agreement Year. 2. Pro Forma Blockbuster Return. For each Agreement Year, Viacom shall prepare a pro forma consolidated federal income tax return for the Blockbuster Consolidated Group (a "Pro Forma Blockbuster Return"). Except as otherwise provided herein, the Pro Forma Blockbuster Return for each Agreement Year shall be prepared as if Blockbuster filed a consolidated return on behalf of the Blockbuster Consolidated Group for such taxable year; provided, however, that the Pro Forma Blockbuster Return shall not include any deduction or other tax benefit attributable to the exercise of an option to purchase Viacom stock by an employee of Blockbuster (or its affiliates). The Pro Forma Blockbuster Return shall reflect any carryovers of net operating losses, net capital losses, excess tax credits, or other tax attributes from prior Agreement Years' Pro Forma Blockbuster Returns which could have been utilized by the Blockbuster Consolidated Group (excluding those attributes carried back pursuant to Section 5 herein) if the Blockbuster Consolidated Group had never been included in the Viacom Consolidated Group and all Pro Forma Blockbuster Returns had been actual returns, but otherwise shall not reflect any tax benefits that arise from any adjustment to a pre3

Agreement Year or carryovers of any other tax attributes from a pre-Agreement Year, regardless of whether such attributes were utilized (on audit or otherwise) on a tax return of Viacom in a pre-Agreement Year. The Pro Forma Blockbuster Return shall be prepared in a manner that reflects all elections, positions, and methods used in the Viacom Consolidated Return that must be applied on a consolidated basis and otherwise shall be prepared in a manner consistent with the Viacom Consolidated Return. The provisions of the Code that require consolidated computations, such as Sections 861, 1201-1212, and 1231, shall be applied separately to the Blockbuster Consolidated Group. Section 1.1502-13 of the Income Tax Regulations shall be applied as if the Blockbuster Consolidated Group and the Viacom Consolidated Group (excluding the members of the Blockbuster Group) were separate affiliated groups, except that the Pro Forma Blockbuster Return shall also include any gains or losses of the members of the Blockbuster Consolidated Group on transactions within the Blockbuster Consolidated Group (including in years prior to the first Agreement Year) which must be taken into account pursuant to Section 1.1502-13 of the Income Tax Regulations and reflected on the Viacom Consolidated Return if the Blockbuster Consolidated Group ceases to be included in the Viacom Consolidated Group. For purposes of the Agreement, all determinations made as if the Blockbuster Consolidated Group had never been included in the Viacom Consolidated Group and as if all Pro Forma Blockbuster Returns were actual returns shall reflect any actual short taxable years resulting from the Blockbuster Consolidated Group joining or leaving the Viacom Consolidated Group. 4 3. Pro Forma Blockbuster Return Payments. For each Agreement Year, Blockbuster shall make periodic payments ("Periodic Payments") to Viacom in such amounts as determined by Viacom based upon the estimated tax payments that would be due from the Blockbuster Consolidated Group if it were not included in the Viacom Consolidated Group no later than the dates on which payments of estimated tax would be due from the Blockbuster Consolidated Group if it were not included in the Viacom Consolidated Group. The balance of the tax due for an Agreement Year shall be paid to Viacom no later than March 15 of the following year (the "Balance Payment"). Blockbuster shall pay to Viacom no later than the date on which a Viacom Consolidated Return for any Agreement Year is filed an amount equal to the sum of (i) the federal income tax liability shown on the corresponding Pro Forma Blockbuster Return prepared for the Agreement Year and (ii) the additions to tax, if any, under Section 6655 of the Code that would have been imposed on Blockbuster (treating the amount due to Viacom under (i) above as its federal income tax liability and treating any periodic payments to Viacom pursuant to the first sentence of this Section 3 as estimated

Agreement Year or carryovers of any other tax attributes from a pre-Agreement Year, regardless of whether such attributes were utilized (on audit or otherwise) on a tax return of Viacom in a pre-Agreement Year. The Pro Forma Blockbuster Return shall be prepared in a manner that reflects all elections, positions, and methods used in the Viacom Consolidated Return that must be applied on a consolidated basis and otherwise shall be prepared in a manner consistent with the Viacom Consolidated Return. The provisions of the Code that require consolidated computations, such as Sections 861, 1201-1212, and 1231, shall be applied separately to the Blockbuster Consolidated Group. Section 1.1502-13 of the Income Tax Regulations shall be applied as if the Blockbuster Consolidated Group and the Viacom Consolidated Group (excluding the members of the Blockbuster Group) were separate affiliated groups, except that the Pro Forma Blockbuster Return shall also include any gains or losses of the members of the Blockbuster Consolidated Group on transactions within the Blockbuster Consolidated Group (including in years prior to the first Agreement Year) which must be taken into account pursuant to Section 1.1502-13 of the Income Tax Regulations and reflected on the Viacom Consolidated Return if the Blockbuster Consolidated Group ceases to be included in the Viacom Consolidated Group. For purposes of the Agreement, all determinations made as if the Blockbuster Consolidated Group had never been included in the Viacom Consolidated Group and as if all Pro Forma Blockbuster Returns were actual returns shall reflect any actual short taxable years resulting from the Blockbuster Consolidated Group joining or leaving the Viacom Consolidated Group. 4 3. Pro Forma Blockbuster Return Payments. For each Agreement Year, Blockbuster shall make periodic payments ("Periodic Payments") to Viacom in such amounts as determined by Viacom based upon the estimated tax payments that would be due from the Blockbuster Consolidated Group if it were not included in the Viacom Consolidated Group no later than the dates on which payments of estimated tax would be due from the Blockbuster Consolidated Group if it were not included in the Viacom Consolidated Group. The balance of the tax due for an Agreement Year shall be paid to Viacom no later than March 15 of the following year (the "Balance Payment"). Blockbuster shall pay to Viacom no later than the date on which a Viacom Consolidated Return for any Agreement Year is filed an amount equal to the sum of (i) the federal income tax liability shown on the corresponding Pro Forma Blockbuster Return prepared for the Agreement Year and (ii) the additions to tax, if any, under Section 6655 of the Code that would have been imposed on Blockbuster (treating the amount due to Viacom under (i) above as its federal income tax liability and treating any periodic payments to Viacom pursuant to the first sentence of this Section 3 as estimated payments under Section 6655 of the Code) and which result from the inaccuracy of any information provided by Blockbuster to Viacom pursuant to Section 5 hereof or from the failure of Blockbuster to provide any requested information, reduced by (iii) the sum of the amount of the Periodic Payments and the Balance Payment (collectively, the "Total Periodic Payments"), plus (iv) any interest and additions to tax (other than under Section 6655 of the Code) that would be due under the Code if the Total Periodic Payments were actual payments of tax. If Blockbuster's Total Periodic Payments to Viacom for any Agreement Year exceed the 5

amount of its liability under the preceding sentence, Viacom shall refund such excess to Blockbuster within 30 days after filing the Viacom Consolidated Return. For purposes of the Agreement, the term "federal income tax liability" includes the tax imposed by Sections 11, 55 and 59A of the Code, or any successor provisions to such Sections. Viacom shall notify Blockbuster of any amounts due from Blockbuster to Viacom pursuant to this Section 3 no later than 5 business days prior to the date such payments are due and such payments shall not be considered due until the later of the due date described above or the fifth day from the notice from Viacom. 4. Payments for Taxable Years in the Event of Deconsolidation. (a) Payments by Blockbuster to Viacom. If for any taxable year after the Blockbuster Consolidated Group ceases to be included in the Viacom Consolidated Group (a "Post-Consolidation Year"), (i) the federal income tax liability of the Blockbuster Consolidated Group is less than (ii) the federal income tax liability that would have been imposed with respect to the same period if the Blockbuster Consolidated Group had not been included in the Viacom Consolidated Group for any Agreement Year, all Pro Forma Blockbuster Returns had been actual returns for such years, and no carryovers of Blockbuster attributes from pre-Agreement years were permitted, then Blockbuster shall pay to Viacom the excess of (ii) over (i) within 10 days of the filing of the Blockbuster

3. Pro Forma Blockbuster Return Payments. For each Agreement Year, Blockbuster shall make periodic payments ("Periodic Payments") to Viacom in such amounts as determined by Viacom based upon the estimated tax payments that would be due from the Blockbuster Consolidated Group if it were not included in the Viacom Consolidated Group no later than the dates on which payments of estimated tax would be due from the Blockbuster Consolidated Group if it were not included in the Viacom Consolidated Group. The balance of the tax due for an Agreement Year shall be paid to Viacom no later than March 15 of the following year (the "Balance Payment"). Blockbuster shall pay to Viacom no later than the date on which a Viacom Consolidated Return for any Agreement Year is filed an amount equal to the sum of (i) the federal income tax liability shown on the corresponding Pro Forma Blockbuster Return prepared for the Agreement Year and (ii) the additions to tax, if any, under Section 6655 of the Code that would have been imposed on Blockbuster (treating the amount due to Viacom under (i) above as its federal income tax liability and treating any periodic payments to Viacom pursuant to the first sentence of this Section 3 as estimated payments under Section 6655 of the Code) and which result from the inaccuracy of any information provided by Blockbuster to Viacom pursuant to Section 5 hereof or from the failure of Blockbuster to provide any requested information, reduced by (iii) the sum of the amount of the Periodic Payments and the Balance Payment (collectively, the "Total Periodic Payments"), plus (iv) any interest and additions to tax (other than under Section 6655 of the Code) that would be due under the Code if the Total Periodic Payments were actual payments of tax. If Blockbuster's Total Periodic Payments to Viacom for any Agreement Year exceed the 5

amount of its liability under the preceding sentence, Viacom shall refund such excess to Blockbuster within 30 days after filing the Viacom Consolidated Return. For purposes of the Agreement, the term "federal income tax liability" includes the tax imposed by Sections 11, 55 and 59A of the Code, or any successor provisions to such Sections. Viacom shall notify Blockbuster of any amounts due from Blockbuster to Viacom pursuant to this Section 3 no later than 5 business days prior to the date such payments are due and such payments shall not be considered due until the later of the due date described above or the fifth day from the notice from Viacom. 4. Payments for Taxable Years in the Event of Deconsolidation. (a) Payments by Blockbuster to Viacom. If for any taxable year after the Blockbuster Consolidated Group ceases to be included in the Viacom Consolidated Group (a "Post-Consolidation Year"), (i) the federal income tax liability of the Blockbuster Consolidated Group is less than (ii) the federal income tax liability that would have been imposed with respect to the same period if the Blockbuster Consolidated Group had not been included in the Viacom Consolidated Group for any Agreement Year, all Pro Forma Blockbuster Returns had been actual returns for such years, and no carryovers of Blockbuster attributes from pre-Agreement years were permitted, then Blockbuster shall pay to Viacom the excess of (ii) over (i) within 10 days of the filing of the Blockbuster Post-Consolidation Year return. (b) Payments by Viacom to Blockbuster. If for any Post-Consolidation Year (i) the federal income tax liability of the Blockbuster Consolidated Group is greater than (ii) the federal income tax liability that would have been imposed with respect to the same period if the Blockbuster Consolidated Group had not been included in the 6

Viacom Consolidated Group for any Agreement Year, all Pro Forma Blockbuster Returns had been actual returns for such years, and no carryovers of Blockbuster attributes from pre-Agreement Years were permitted, then Viacom shall pay to Blockbuster the excess of (i) over (ii) within 10 days of notification by Blockbuster to Viacom of the filing of the Blockbuster Post-Consolidation Year return. (c) Documentation. Prior to the payment of any amounts due pursuant to this Section 4, the parties shall exchange such information and documentation as is reasonably satisfactory to each of them in order to substantiate the amounts due pursuant to this Section 4. Any disputes as to such amounts and documentation which cannot be resolved prior to the date a payment is due shall be referred to an independent accounting firm whose fees shall paid one half by Blockbuster and one half by Viacom. (d) No Post-Consolidation Year Carrybacks. If a Blockbuster federal income tax return with respect to a PostConsolidation Year reflects a net operating loss, net capital loss, excess tax credits, or any other tax attribute,

amount of its liability under the preceding sentence, Viacom shall refund such excess to Blockbuster within 30 days after filing the Viacom Consolidated Return. For purposes of the Agreement, the term "federal income tax liability" includes the tax imposed by Sections 11, 55 and 59A of the Code, or any successor provisions to such Sections. Viacom shall notify Blockbuster of any amounts due from Blockbuster to Viacom pursuant to this Section 3 no later than 5 business days prior to the date such payments are due and such payments shall not be considered due until the later of the due date described above or the fifth day from the notice from Viacom. 4. Payments for Taxable Years in the Event of Deconsolidation. (a) Payments by Blockbuster to Viacom. If for any taxable year after the Blockbuster Consolidated Group ceases to be included in the Viacom Consolidated Group (a "Post-Consolidation Year"), (i) the federal income tax liability of the Blockbuster Consolidated Group is less than (ii) the federal income tax liability that would have been imposed with respect to the same period if the Blockbuster Consolidated Group had not been included in the Viacom Consolidated Group for any Agreement Year, all Pro Forma Blockbuster Returns had been actual returns for such years, and no carryovers of Blockbuster attributes from pre-Agreement years were permitted, then Blockbuster shall pay to Viacom the excess of (ii) over (i) within 10 days of the filing of the Blockbuster Post-Consolidation Year return. (b) Payments by Viacom to Blockbuster. If for any Post-Consolidation Year (i) the federal income tax liability of the Blockbuster Consolidated Group is greater than (ii) the federal income tax liability that would have been imposed with respect to the same period if the Blockbuster Consolidated Group had not been included in the 6

Viacom Consolidated Group for any Agreement Year, all Pro Forma Blockbuster Returns had been actual returns for such years, and no carryovers of Blockbuster attributes from pre-Agreement Years were permitted, then Viacom shall pay to Blockbuster the excess of (i) over (ii) within 10 days of notification by Blockbuster to Viacom of the filing of the Blockbuster Post-Consolidation Year return. (c) Documentation. Prior to the payment of any amounts due pursuant to this Section 4, the parties shall exchange such information and documentation as is reasonably satisfactory to each of them in order to substantiate the amounts due pursuant to this Section 4. Any disputes as to such amounts and documentation which cannot be resolved prior to the date a payment is due shall be referred to an independent accounting firm whose fees shall paid one half by Blockbuster and one half by Viacom. (d) No Post-Consolidation Year Carrybacks. If a Blockbuster federal income tax return with respect to a PostConsolidation Year reflects a net operating loss, net capital loss, excess tax credits, or any other tax attribute, such attribute may not be carried back to a Viacom tax return. 5. Carrybacks. If a Pro Forma Blockbuster Return reflects a net operating loss, net capital loss, excess tax credit or other tax attribute (a "Pro Forma Blockbuster Attribute"), which is actually utilized in a Viacom Consolidated Return (including any amendments thereto), then, within 30 days after the later of (i) the due date for the Viacom Consolidated Return (taking into account any extensions thereof) or (ii) the date such Pro Forma Blockbuster Attribute is actually realized in cash (whether directly or by 7

offset), Viacom shall pay to Blockbuster an amount equal to the lesser of (x) the refund which the Blockbuster Consolidated Group would have received as a result of the carryback of such Pro Forma Blockbuster Attribute to a Pro Forma Blockbuster Return for any prior Agreement Year or Years (determined as if the first Agreement Year were the earliest taxable year to which such attributes could be carried back) or (y) the tax savings or tax benefit realized by Viacom with respect to the use of such Pro Forma Blockbuster Attribute in a Viacom Consolidated Return. All calculations of deemed refunds pursuant to this Section 5 shall include interest computed as if Blockbuster had filed a claim for refund or an application for a tentative carryback adjustment pursuant to Section 6411(a) of the Code on the date on which the Viacom Consolidated Return is filed.

Viacom Consolidated Group for any Agreement Year, all Pro Forma Blockbuster Returns had been actual returns for such years, and no carryovers of Blockbuster attributes from pre-Agreement Years were permitted, then Viacom shall pay to Blockbuster the excess of (i) over (ii) within 10 days of notification by Blockbuster to Viacom of the filing of the Blockbuster Post-Consolidation Year return. (c) Documentation. Prior to the payment of any amounts due pursuant to this Section 4, the parties shall exchange such information and documentation as is reasonably satisfactory to each of them in order to substantiate the amounts due pursuant to this Section 4. Any disputes as to such amounts and documentation which cannot be resolved prior to the date a payment is due shall be referred to an independent accounting firm whose fees shall paid one half by Blockbuster and one half by Viacom. (d) No Post-Consolidation Year Carrybacks. If a Blockbuster federal income tax return with respect to a PostConsolidation Year reflects a net operating loss, net capital loss, excess tax credits, or any other tax attribute, such attribute may not be carried back to a Viacom tax return. 5. Carrybacks. If a Pro Forma Blockbuster Return reflects a net operating loss, net capital loss, excess tax credit or other tax attribute (a "Pro Forma Blockbuster Attribute"), which is actually utilized in a Viacom Consolidated Return (including any amendments thereto), then, within 30 days after the later of (i) the due date for the Viacom Consolidated Return (taking into account any extensions thereof) or (ii) the date such Pro Forma Blockbuster Attribute is actually realized in cash (whether directly or by 7

offset), Viacom shall pay to Blockbuster an amount equal to the lesser of (x) the refund which the Blockbuster Consolidated Group would have received as a result of the carryback of such Pro Forma Blockbuster Attribute to a Pro Forma Blockbuster Return for any prior Agreement Year or Years (determined as if the first Agreement Year were the earliest taxable year to which such attributes could be carried back) or (y) the tax savings or tax benefit realized by Viacom with respect to the use of such Pro Forma Blockbuster Attribute in a Viacom Consolidated Return. All calculations of deemed refunds pursuant to this Section 5 shall include interest computed as if Blockbuster had filed a claim for refund or an application for a tentative carryback adjustment pursuant to Section 6411(a) of the Code on the date on which the Viacom Consolidated Return is filed. 6. Preparation of Tax Package and Other Financial Reporting Information. Blockbuster shall provide to Viacom in a format determined by Viacom all information requested by Viacom as necessary to prepare the Viacom Consolidated Return and the Pro Forma Blockbuster Return (the "Viacom Tax Package"). The Viacom Tax Package with respect to any taxable year shall be provided to Viacom on a basis consistent with current practices of the Viacom Consolidated Group no later than April 1 of the following year. Blockbuster shall also provide to Viacom information required to determine the Total Periodic Payments, current federal taxable income, current and deferred tax liabilities, tax reserve items, and any additional current or prior information required by Viacom on a timely basis consistent with current practices of the Viacom Consolidated Group. 8 7. Returns, Audits, Refunds, Amended Returns, Litigation, Adjustments and Rulings. (a) Returns. Viacom shall have exclusive and sole responsibility for the preparation and filing of the Viacom Consolidated Returns (including requests for extensions thereof) and any other returns, amended returns and other documents or statements required to be filed with the Internal Revenue Service (the "IRS") in connection with the determination of the federal income tax liability of the Viacom Consolidated Group. (b) Audits; Refund Claims. Viacom will have exclusive and sole responsibility and control with respect to the

offset), Viacom shall pay to Blockbuster an amount equal to the lesser of (x) the refund which the Blockbuster Consolidated Group would have received as a result of the carryback of such Pro Forma Blockbuster Attribute to a Pro Forma Blockbuster Return for any prior Agreement Year or Years (determined as if the first Agreement Year were the earliest taxable year to which such attributes could be carried back) or (y) the tax savings or tax benefit realized by Viacom with respect to the use of such Pro Forma Blockbuster Attribute in a Viacom Consolidated Return. All calculations of deemed refunds pursuant to this Section 5 shall include interest computed as if Blockbuster had filed a claim for refund or an application for a tentative carryback adjustment pursuant to Section 6411(a) of the Code on the date on which the Viacom Consolidated Return is filed. 6. Preparation of Tax Package and Other Financial Reporting Information. Blockbuster shall provide to Viacom in a format determined by Viacom all information requested by Viacom as necessary to prepare the Viacom Consolidated Return and the Pro Forma Blockbuster Return (the "Viacom Tax Package"). The Viacom Tax Package with respect to any taxable year shall be provided to Viacom on a basis consistent with current practices of the Viacom Consolidated Group no later than April 1 of the following year. Blockbuster shall also provide to Viacom information required to determine the Total Periodic Payments, current federal taxable income, current and deferred tax liabilities, tax reserve items, and any additional current or prior information required by Viacom on a timely basis consistent with current practices of the Viacom Consolidated Group. 8 7. Returns, Audits, Refunds, Amended Returns, Litigation, Adjustments and Rulings. (a) Returns. Viacom shall have exclusive and sole responsibility for the preparation and filing of the Viacom Consolidated Returns (including requests for extensions thereof) and any other returns, amended returns and other documents or statements required to be filed with the Internal Revenue Service (the "IRS") in connection with the determination of the federal income tax liability of the Viacom Consolidated Group. (b) Audits; Refund Claims. Viacom will have exclusive and sole responsibility and control with respect to the conduct of IRS examinations of the returns filed by the Viacom Consolidated Group and any refund claims with respect thereto. Blockbuster shall assist and cooperate with Viacom during the course of any such proceeding. Viacom shall give Blockbuster notice of and consult with Blockbuster with respect to any issues relating to items of income, gain, loss, deduction or credit of any member of the Blockbuster Consolidated Group (any such items, "Blockbuster Consolidated Return Items"). Viacom shall not settle or otherwise compromise any Blockbuster Consolidated Return Item that would result in additional liability for Blockbuster under this Agreement without the written consent of Blockbuster, which consent shall not be unreasonably withheld. If Blockbuster does not respond to Viacom's request for consent within 30 days, Blockbuster shall be deemed to have consented. Notwithstanding the foregoing, Viacom shall have the right in its sole discretion to pay any disputed taxes and sue for a refund in the forum of its choice. In the case of any audit or litigation with respect to a Blockbuster return for a Post9

Consolidation Year, Blockbuster shall not settle or otherwise compromise any matter relating to the treatment of any item arising in an Agreement Year or a pre-Agreement Year in a manner which would affect the liability of Viacom to Blockbuster or Blockbuster to Viacom pursuant to Section 4 without the consent of Viacom, which consent shall not be unreasonably withheld. (c) Litigation. If the federal income tax liability of the Viacom Consolidated Group becomes the subject of litigation in any court, the conduct of the litigation shall be controlled exclusively by Viacom. Blockbuster shall assist and cooperate with Viacom during the course of litigation, and Viacom shall consult with Blockbuster regarding any issues relating to Blockbuster Consolidated Return Items. (d) Expenses. Blockbuster shall reimburse Viacom for all reasonable out-of-pocket expenses (including, without

7. Returns, Audits, Refunds, Amended Returns, Litigation, Adjustments and Rulings. (a) Returns. Viacom shall have exclusive and sole responsibility for the preparation and filing of the Viacom Consolidated Returns (including requests for extensions thereof) and any other returns, amended returns and other documents or statements required to be filed with the Internal Revenue Service (the "IRS") in connection with the determination of the federal income tax liability of the Viacom Consolidated Group. (b) Audits; Refund Claims. Viacom will have exclusive and sole responsibility and control with respect to the conduct of IRS examinations of the returns filed by the Viacom Consolidated Group and any refund claims with respect thereto. Blockbuster shall assist and cooperate with Viacom during the course of any such proceeding. Viacom shall give Blockbuster notice of and consult with Blockbuster with respect to any issues relating to items of income, gain, loss, deduction or credit of any member of the Blockbuster Consolidated Group (any such items, "Blockbuster Consolidated Return Items"). Viacom shall not settle or otherwise compromise any Blockbuster Consolidated Return Item that would result in additional liability for Blockbuster under this Agreement without the written consent of Blockbuster, which consent shall not be unreasonably withheld. If Blockbuster does not respond to Viacom's request for consent within 30 days, Blockbuster shall be deemed to have consented. Notwithstanding the foregoing, Viacom shall have the right in its sole discretion to pay any disputed taxes and sue for a refund in the forum of its choice. In the case of any audit or litigation with respect to a Blockbuster return for a Post9

Consolidation Year, Blockbuster shall not settle or otherwise compromise any matter relating to the treatment of any item arising in an Agreement Year or a pre-Agreement Year in a manner which would affect the liability of Viacom to Blockbuster or Blockbuster to Viacom pursuant to Section 4 without the consent of Viacom, which consent shall not be unreasonably withheld. (c) Litigation. If the federal income tax liability of the Viacom Consolidated Group becomes the subject of litigation in any court, the conduct of the litigation shall be controlled exclusively by Viacom. Blockbuster shall assist and cooperate with Viacom during the course of litigation, and Viacom shall consult with Blockbuster regarding any issues relating to Blockbuster Consolidated Return Items. (d) Expenses. Blockbuster shall reimburse Viacom for all reasonable out-of-pocket expenses (including, without limitation, legal, consulting and accounting fees) in the course of proceedings (i) described in paragraphs (b) and (c) of this Section to the extent such expenses are reasonably attributable to Blockbuster Consolidated Return Items for any Agreement Year or (ii) relating to any assertion of liability attributable in whole or in part to actions or events covered by Section 11. (e) Recalculation of Payments to Reflect Adjustments. To the extent that any audit, litigation or claim for refund with respect to a Viacom Consolidated Return or a Blockbuster return for a Post-Consolidation Year results in an additional payment of tax (including a payment of tax made preliminary to commencing a refund claim or litigation) or a refund of tax (any such additional payment or refund, an "Adjustment") relating to the treatment of a Blockbuster Consolidated Return Item for an 10

Agreement Year, a corresponding adjustment shall be made to the corresponding Pro Forma Blockbuster Return. All calculations of payments made pursuant to Sections 3, 4, and 5 of the Agreement shall be recomputed to reflect the effect of any Adjustments on the relevant Pro Forma Blockbuster Return or on the liability of the Blockbuster Consolidated Group for a Post-Consolidation Year. Within 5 days after any such Adjustment, Blockbuster or Viacom, as appropriate, shall make additional payments or refund payments to the other party reflecting such Adjustment, plus interest pursuant to Section 8 of the Agreement calculated as if payments by and to Blockbuster pursuant to Sections 3, 4, and 5 of the Agreement and this Section 7 were payments and refunds of federal income taxes. Blockbuster shall further pay to Viacom the

Consolidation Year, Blockbuster shall not settle or otherwise compromise any matter relating to the treatment of any item arising in an Agreement Year or a pre-Agreement Year in a manner which would affect the liability of Viacom to Blockbuster or Blockbuster to Viacom pursuant to Section 4 without the consent of Viacom, which consent shall not be unreasonably withheld. (c) Litigation. If the federal income tax liability of the Viacom Consolidated Group becomes the subject of litigation in any court, the conduct of the litigation shall be controlled exclusively by Viacom. Blockbuster shall assist and cooperate with Viacom during the course of litigation, and Viacom shall consult with Blockbuster regarding any issues relating to Blockbuster Consolidated Return Items. (d) Expenses. Blockbuster shall reimburse Viacom for all reasonable out-of-pocket expenses (including, without limitation, legal, consulting and accounting fees) in the course of proceedings (i) described in paragraphs (b) and (c) of this Section to the extent such expenses are reasonably attributable to Blockbuster Consolidated Return Items for any Agreement Year or (ii) relating to any assertion of liability attributable in whole or in part to actions or events covered by Section 11. (e) Recalculation of Payments to Reflect Adjustments. To the extent that any audit, litigation or claim for refund with respect to a Viacom Consolidated Return or a Blockbuster return for a Post-Consolidation Year results in an additional payment of tax (including a payment of tax made preliminary to commencing a refund claim or litigation) or a refund of tax (any such additional payment or refund, an "Adjustment") relating to the treatment of a Blockbuster Consolidated Return Item for an 10

Agreement Year, a corresponding adjustment shall be made to the corresponding Pro Forma Blockbuster Return. All calculations of payments made pursuant to Sections 3, 4, and 5 of the Agreement shall be recomputed to reflect the effect of any Adjustments on the relevant Pro Forma Blockbuster Return or on the liability of the Blockbuster Consolidated Group for a Post-Consolidation Year. Within 5 days after any such Adjustment, Blockbuster or Viacom, as appropriate, shall make additional payments or refund payments to the other party reflecting such Adjustment, plus interest pursuant to Section 8 of the Agreement calculated as if payments by and to Blockbuster pursuant to Sections 3, 4, and 5 of the Agreement and this Section 7 were payments and refunds of federal income taxes. Blockbuster shall further pay to Viacom the amount of any penalties or additions to tax incurred by the Viacom Consolidated Group as a result of an adjustment to any Blockbuster Consolidated Return Item for an Agreement Year. (f) Rulings. Blockbuster shall assist and cooperate with Viacom and take all actions requested by Viacom in connection with any ruling requests submitted by Viacom to the IRS, including rulings unrelated to the Distributions (defined in Section 11(a) below). (g) Applicability with Respect to All Consolidated Returns. The provisions of Section 7(a), (b) and (c) above shall apply to Viacom Consolidated Returns and Blockbuster Consolidated Return Items for all taxable years in which the Blockbuster Consolidated Group (or any member thereof) is includable in the Viacom Consolidated Group. 11 (h) Document Retention, Access to Records & Use of Personnel. Until the expiration of the relevant statute of limitations (including extensions), Blockbuster shall (i) retain records, documents, accounting data, computer data and other information (collectively, the "Records") necessary for the preparation, filing, review, audit or defense of all tax returns relevant to an obligation, right or liability of either party under the Agreement; and (ii) give Viacom reasonable access to such Records and to its personnel (insuring their cooperation) and premises to the extent relevant to an obligation, right or liability of either party under the Agreement. Prior to disposing of any such Records, Blockbuster shall notify Viacom in writing of such intention and afford Viacom the opportunity to take possession or make copies of such Records at its discretion.

Agreement Year, a corresponding adjustment shall be made to the corresponding Pro Forma Blockbuster Return. All calculations of payments made pursuant to Sections 3, 4, and 5 of the Agreement shall be recomputed to reflect the effect of any Adjustments on the relevant Pro Forma Blockbuster Return or on the liability of the Blockbuster Consolidated Group for a Post-Consolidation Year. Within 5 days after any such Adjustment, Blockbuster or Viacom, as appropriate, shall make additional payments or refund payments to the other party reflecting such Adjustment, plus interest pursuant to Section 8 of the Agreement calculated as if payments by and to Blockbuster pursuant to Sections 3, 4, and 5 of the Agreement and this Section 7 were payments and refunds of federal income taxes. Blockbuster shall further pay to Viacom the amount of any penalties or additions to tax incurred by the Viacom Consolidated Group as a result of an adjustment to any Blockbuster Consolidated Return Item for an Agreement Year. (f) Rulings. Blockbuster shall assist and cooperate with Viacom and take all actions requested by Viacom in connection with any ruling requests submitted by Viacom to the IRS, including rulings unrelated to the Distributions (defined in Section 11(a) below). (g) Applicability with Respect to All Consolidated Returns. The provisions of Section 7(a), (b) and (c) above shall apply to Viacom Consolidated Returns and Blockbuster Consolidated Return Items for all taxable years in which the Blockbuster Consolidated Group (or any member thereof) is includable in the Viacom Consolidated Group. 11 (h) Document Retention, Access to Records & Use of Personnel. Until the expiration of the relevant statute of limitations (including extensions), Blockbuster shall (i) retain records, documents, accounting data, computer data and other information (collectively, the "Records") necessary for the preparation, filing, review, audit or defense of all tax returns relevant to an obligation, right or liability of either party under the Agreement; and (ii) give Viacom reasonable access to such Records and to its personnel (insuring their cooperation) and premises to the extent relevant to an obligation, right or liability of either party under the Agreement. Prior to disposing of any such Records, Blockbuster shall notify Viacom in writing of such intention and afford Viacom the opportunity to take possession or make copies of such Records at its discretion. 8. Interest. Interest required to be paid by or to Blockbuster pursuant to the Agreement shall, unless otherwise specified, be computed at the rate and in the manner provided in the Code for interest on underpayments and overpayments, respectively, of federal income tax for the relevant period. Any payments required pursuant to the Agreement which are not made within the time period specified in the Agreement shall bear interest at a rate equal to two hundred basis points above the average interest rate on the senior bank debt of Blockbuster. 9. Foreign, State and Local Income Taxes. In the case of foreign, state or local taxes based on or measured by the net income of the Viacom Consolidated Group, or any combination of members thereof (other than solely with respect to members which are members of the Blockbuster 12 Consolidated Group or which are members of the Viacom Consolidated Group but not the Blockbuster Consolidated Group) on a combined, consolidated or unitary basis, the provisions of the Agreement shall apply with equal force to such foreign, state or local tax for each Agreement Year whether or not the Blockbuster Consolidated Group is included in the Viacom Consolidated Group for federal income tax purposes; provided however, that interest pursuant to the first sentence of Section 8 of the Agreement shall be computed at the rate and in the manner provided under such foreign, state or local law for interest on underpayments and overpayments of such tax for the relevant period and references to provisions of the Code throughout the Agreement shall be deemed to be references to analogous provisions of state, local, and foreign law.

(h) Document Retention, Access to Records & Use of Personnel. Until the expiration of the relevant statute of limitations (including extensions), Blockbuster shall (i) retain records, documents, accounting data, computer data and other information (collectively, the "Records") necessary for the preparation, filing, review, audit or defense of all tax returns relevant to an obligation, right or liability of either party under the Agreement; and (ii) give Viacom reasonable access to such Records and to its personnel (insuring their cooperation) and premises to the extent relevant to an obligation, right or liability of either party under the Agreement. Prior to disposing of any such Records, Blockbuster shall notify Viacom in writing of such intention and afford Viacom the opportunity to take possession or make copies of such Records at its discretion. 8. Interest. Interest required to be paid by or to Blockbuster pursuant to the Agreement shall, unless otherwise specified, be computed at the rate and in the manner provided in the Code for interest on underpayments and overpayments, respectively, of federal income tax for the relevant period. Any payments required pursuant to the Agreement which are not made within the time period specified in the Agreement shall bear interest at a rate equal to two hundred basis points above the average interest rate on the senior bank debt of Blockbuster. 9. Foreign, State and Local Income Taxes. In the case of foreign, state or local taxes based on or measured by the net income of the Viacom Consolidated Group, or any combination of members thereof (other than solely with respect to members which are members of the Blockbuster 12 Consolidated Group or which are members of the Viacom Consolidated Group but not the Blockbuster Consolidated Group) on a combined, consolidated or unitary basis, the provisions of the Agreement shall apply with equal force to such foreign, state or local tax for each Agreement Year whether or not the Blockbuster Consolidated Group is included in the Viacom Consolidated Group for federal income tax purposes; provided however, that interest pursuant to the first sentence of Section 8 of the Agreement shall be computed at the rate and in the manner provided under such foreign, state or local law for interest on underpayments and overpayments of such tax for the relevant period and references to provisions of the Code throughout the Agreement shall be deemed to be references to analogous provisions of state, local, and foreign law. For any Agreement Year or pre-Agreement Year, Viacom shall have the sole and exclusive control of (a) the determination of whether a combined, consolidated or unitary tax return should be filed for any foreign, state or local tax purpose and (b) all foreign, state or local income tax audits and litigation with respect to any member of the Blockbuster Consolidated Group. Blockbuster shall reimburse Viacom for all reasonable out-of-pocket expenses (including, without limitation, legal, consulting and accounting fees) in the course of proceedings described in the preceding sentence to the extent such expenses are reasonably attributable to Blockbuster or any member of the Blockbuster Consolidated Group. 13

Blockbuster shall provide to Viacom separate legal entity reporting information with respect to any member of the Blockbuster Consolidated Group as requested by Viacom on a timely basis. Viacom will provide notice of and consult with Blockbuster with respect to any issue relating to such audits and litigation and Blockbuster will provide to Viacom any information necessary to conduct such audits and litigation. Viacom shall not settle or otherwise compromise any audits or litigation that would result in additional liability for Blockbuster under this Section 9 without the written consent of Blockbuster, which consent shall not be unreasonably withheld. If Blockbuster does not respond to Viacom's request for consent within 30 days, Blockbuster shall be deemed to have consented. Notwithstanding the foregoing, Viacom shall have the right in its sole discretion to have Blockbuster pay any disputed taxes and sue for a refund in the forum of Viacom's choice. Blockbuster shall be responsible for filing tax returns relating to payroll, sales and use, property, withholding and similar taxes and shall be responsible for the payment of such taxes.

Consolidated Group or which are members of the Viacom Consolidated Group but not the Blockbuster Consolidated Group) on a combined, consolidated or unitary basis, the provisions of the Agreement shall apply with equal force to such foreign, state or local tax for each Agreement Year whether or not the Blockbuster Consolidated Group is included in the Viacom Consolidated Group for federal income tax purposes; provided however, that interest pursuant to the first sentence of Section 8 of the Agreement shall be computed at the rate and in the manner provided under such foreign, state or local law for interest on underpayments and overpayments of such tax for the relevant period and references to provisions of the Code throughout the Agreement shall be deemed to be references to analogous provisions of state, local, and foreign law. For any Agreement Year or pre-Agreement Year, Viacom shall have the sole and exclusive control of (a) the determination of whether a combined, consolidated or unitary tax return should be filed for any foreign, state or local tax purpose and (b) all foreign, state or local income tax audits and litigation with respect to any member of the Blockbuster Consolidated Group. Blockbuster shall reimburse Viacom for all reasonable out-of-pocket expenses (including, without limitation, legal, consulting and accounting fees) in the course of proceedings described in the preceding sentence to the extent such expenses are reasonably attributable to Blockbuster or any member of the Blockbuster Consolidated Group. 13

Blockbuster shall provide to Viacom separate legal entity reporting information with respect to any member of the Blockbuster Consolidated Group as requested by Viacom on a timely basis. Viacom will provide notice of and consult with Blockbuster with respect to any issue relating to such audits and litigation and Blockbuster will provide to Viacom any information necessary to conduct such audits and litigation. Viacom shall not settle or otherwise compromise any audits or litigation that would result in additional liability for Blockbuster under this Section 9 without the written consent of Blockbuster, which consent shall not be unreasonably withheld. If Blockbuster does not respond to Viacom's request for consent within 30 days, Blockbuster shall be deemed to have consented. Notwithstanding the foregoing, Viacom shall have the right in its sole discretion to have Blockbuster pay any disputed taxes and sue for a refund in the forum of Viacom's choice. Blockbuster shall be responsible for filing tax returns relating to payroll, sales and use, property, withholding and similar taxes and shall be responsible for the payment of such taxes. For all taxable years prior to and including the taxable years that Blockbuster is a member of the Viacom Consolidated Group, Blockbuster shall have the sole and exclusive responsibility for all taxes based on or measured by the net income which are determined solely by the income of the Blockbuster Consolidated Group (or any combination of the members thereof including the predecessors of such members) on a combined, consolidated, unitary or separate company basis. Viacom, in consultation with the Chief Financial Officer of Blockbuster, shall have sole and 14

exclusive responsibility for the preparation of returns relating to such taxes and the control of audits, controversies and proceedings with respect thereto. Notwithstanding the immediately preceding paragraph, in the case of New York State and New York City taxes based on or measured by the net income which are determined solely by the income of the Blockbuster Consolidated Group (or any combination of the members thereof including the predecessors of such members) on a combined, consolidated, unitary or separate company basis, Viacom shall have the sole and exclusive responsibility for such taxes and for the return preparation and the control of audits, controversies and proceedings with respect thereto. 10. UK Tax Surrenders. If requested to do so by Viacom UK Limited ("VUKL"), Blockbuster agrees that it will cause any of its direct or indirect subsidiaries which, under the tax laws of the United Kingdom, are or have been regarded as resident in

Blockbuster shall provide to Viacom separate legal entity reporting information with respect to any member of the Blockbuster Consolidated Group as requested by Viacom on a timely basis. Viacom will provide notice of and consult with Blockbuster with respect to any issue relating to such audits and litigation and Blockbuster will provide to Viacom any information necessary to conduct such audits and litigation. Viacom shall not settle or otherwise compromise any audits or litigation that would result in additional liability for Blockbuster under this Section 9 without the written consent of Blockbuster, which consent shall not be unreasonably withheld. If Blockbuster does not respond to Viacom's request for consent within 30 days, Blockbuster shall be deemed to have consented. Notwithstanding the foregoing, Viacom shall have the right in its sole discretion to have Blockbuster pay any disputed taxes and sue for a refund in the forum of Viacom's choice. Blockbuster shall be responsible for filing tax returns relating to payroll, sales and use, property, withholding and similar taxes and shall be responsible for the payment of such taxes. For all taxable years prior to and including the taxable years that Blockbuster is a member of the Viacom Consolidated Group, Blockbuster shall have the sole and exclusive responsibility for all taxes based on or measured by the net income which are determined solely by the income of the Blockbuster Consolidated Group (or any combination of the members thereof including the predecessors of such members) on a combined, consolidated, unitary or separate company basis. Viacom, in consultation with the Chief Financial Officer of Blockbuster, shall have sole and 14

exclusive responsibility for the preparation of returns relating to such taxes and the control of audits, controversies and proceedings with respect thereto. Notwithstanding the immediately preceding paragraph, in the case of New York State and New York City taxes based on or measured by the net income which are determined solely by the income of the Blockbuster Consolidated Group (or any combination of the members thereof including the predecessors of such members) on a combined, consolidated, unitary or separate company basis, Viacom shall have the sole and exclusive responsibility for such taxes and for the return preparation and the control of audits, controversies and proceedings with respect thereto. 10. UK Tax Surrenders. If requested to do so by Viacom UK Limited ("VUKL"), Blockbuster agrees that it will cause any of its direct or indirect subsidiaries which, under the tax laws of the United Kingdom, are or have been regarded as resident in the United Kingdom to consent under provisions of Chapter IV of Part X of TA 1988 to the surrender of all or any part of their available tax losses to VUKL or to any member of the United Kingdom tax group of which VUKL is the principal member. This agreement is made in respect of all accounting periods ended on or before December 31, 1998, and Blockbuster agrees to take or cause to be taken all actions necessary to effect the loss surrender. 11. Taxes Attributable to the Distributions. (a) Actions Inconsistent with the Rulings. In the event that stock of Blockbuster (or any successor thereto) is ultimately distributed to any or all of Viacom's shareholders pursuant to transactions intended to qualify under Section 355 of the Code, including a distribution of Blockbuster stock from Viacom International Inc. to 15

Viacom, (any such transaction, a "Distribution" and collectively, the "Distributions"), Blockbuster shall not take or fail to take, and shall not permit any other member of the Blockbuster Consolidated Group or any other corporation or other entity that is directly or indirectly more than 50 percent (by vote or value) owned by any member of the Blockbuster Consolidated Group (any such entity, a "Blockbuster Affiliate" and together with the

exclusive responsibility for the preparation of returns relating to such taxes and the control of audits, controversies and proceedings with respect thereto. Notwithstanding the immediately preceding paragraph, in the case of New York State and New York City taxes based on or measured by the net income which are determined solely by the income of the Blockbuster Consolidated Group (or any combination of the members thereof including the predecessors of such members) on a combined, consolidated, unitary or separate company basis, Viacom shall have the sole and exclusive responsibility for such taxes and for the return preparation and the control of audits, controversies and proceedings with respect thereto. 10. UK Tax Surrenders. If requested to do so by Viacom UK Limited ("VUKL"), Blockbuster agrees that it will cause any of its direct or indirect subsidiaries which, under the tax laws of the United Kingdom, are or have been regarded as resident in the United Kingdom to consent under provisions of Chapter IV of Part X of TA 1988 to the surrender of all or any part of their available tax losses to VUKL or to any member of the United Kingdom tax group of which VUKL is the principal member. This agreement is made in respect of all accounting periods ended on or before December 31, 1998, and Blockbuster agrees to take or cause to be taken all actions necessary to effect the loss surrender. 11. Taxes Attributable to the Distributions. (a) Actions Inconsistent with the Rulings. In the event that stock of Blockbuster (or any successor thereto) is ultimately distributed to any or all of Viacom's shareholders pursuant to transactions intended to qualify under Section 355 of the Code, including a distribution of Blockbuster stock from Viacom International Inc. to 15

Viacom, (any such transaction, a "Distribution" and collectively, the "Distributions"), Blockbuster shall not take or fail to take, and shall not permit any other member of the Blockbuster Consolidated Group or any other corporation or other entity that is directly or indirectly more than 50 percent (by vote or value) owned by any member of the Blockbuster Consolidated Group (any such entity, a "Blockbuster Affiliate" and together with the Blockbuster Consolidated Group, the "Blockbuster Entities") to take or fail to take, any action if such act or failure to act would be inconsistent with any ruling, including for all purposes of the Agreement any supplemental rulings, (collectively, the "Rulings") issued by the IRS in connection with the Distributions or any representation, covenant or information included in any submission to the IRS in connection with the Rulings (together with the Rulings, the "Rulings and Submissions"). (b) Liability. Notwithstanding anything to the contrary in the Agreement, Blockbuster and the Blockbuster Entities shall be jointly and severally liable for, and shall indemnify and hold harmless Viacom and each member of the Viacom Consolidated Group (other than members of the Blockbuster Consolidated Group) from and against, on an after-tax basis, any and all taxes (including interest, penalties and additions to tax) resulting from the Distributions to the extent such taxes result from (i) any event or transaction after the Distributions that involves the stock, assets, or business of the Blockbuster Entities, whether or not such event or transaction is the result of direct actions of, or within the control of, the Blockbuster Entities, (ii) any act or failure to act on the part of any of the Blockbuster Entities after the Distributions, (iii) the breach of any representation, covenant or information regarding the Blockbuster Entities included in the Rulings and Submissions, or (iv) any actions contemplated by 16

Section 11(c) below, regardless of whether such actions are permitted pursuant to Section 11(d) below. (c) Covenants. Blockbuster agrees that during the two years following the Distributions, Blockbuster will not, and will not permit any of the Blockbuster Entities to:

Viacom, (any such transaction, a "Distribution" and collectively, the "Distributions"), Blockbuster shall not take or fail to take, and shall not permit any other member of the Blockbuster Consolidated Group or any other corporation or other entity that is directly or indirectly more than 50 percent (by vote or value) owned by any member of the Blockbuster Consolidated Group (any such entity, a "Blockbuster Affiliate" and together with the Blockbuster Consolidated Group, the "Blockbuster Entities") to take or fail to take, any action if such act or failure to act would be inconsistent with any ruling, including for all purposes of the Agreement any supplemental rulings, (collectively, the "Rulings") issued by the IRS in connection with the Distributions or any representation, covenant or information included in any submission to the IRS in connection with the Rulings (together with the Rulings, the "Rulings and Submissions"). (b) Liability. Notwithstanding anything to the contrary in the Agreement, Blockbuster and the Blockbuster Entities shall be jointly and severally liable for, and shall indemnify and hold harmless Viacom and each member of the Viacom Consolidated Group (other than members of the Blockbuster Consolidated Group) from and against, on an after-tax basis, any and all taxes (including interest, penalties and additions to tax) resulting from the Distributions to the extent such taxes result from (i) any event or transaction after the Distributions that involves the stock, assets, or business of the Blockbuster Entities, whether or not such event or transaction is the result of direct actions of, or within the control of, the Blockbuster Entities, (ii) any act or failure to act on the part of any of the Blockbuster Entities after the Distributions, (iii) the breach of any representation, covenant or information regarding the Blockbuster Entities included in the Rulings and Submissions, or (iv) any actions contemplated by 16

Section 11(c) below, regardless of whether such actions are permitted pursuant to Section 11(d) below. (c) Covenants. Blockbuster agrees that during the two years following the Distributions, Blockbuster will not, and will not permit any of the Blockbuster Entities to: (i) sell, exchange, distribute or otherwise transfer all or a substantial portion of its assets or any stock or equity interest in any of the Blockbuster Entities, (ii) enter into any merger or liquidation transaction, (iii) discontinue or otherwise fail to maintain the active trade or business relied upon in connection with the Rulings and Submissions, (iv) purchase any of its outstanding stock other than through stock purchases meeting the requirements of section 4.05(1)(b) of Rev. Proc. 96- 30, (v) issue any stock or equity interests (except pursuant to the exercise of employee stock options), (vi) enter into any agreement for the sale or other disposition of its stock or equity interests, (vii) amend its certificate of incorporation (or other organizational documents), whether through a stockholder vote or otherwise, in a manner that affects the relative voting rights of the separate classes of Blockbuster stock (including, without limitation, through the conversion of one class of Blockbuster stock into another class of Blockbuster stock), or 17

(viii) take any action inconsistent with the information, representations or covenants included in the Rulings and Submissions or that would result in the Distributions being taxable in whole or in part to the Viacom Consolidated Group or Viacom's shareholders. (d) Exceptions to Covenants. Notwithstanding Section 11(c) above, the Blockbuster Entities may take actions inconsistent with the covenants contained in such Section 11(c), if Viacom consents in writing to such actions,

Section 11(c) below, regardless of whether such actions are permitted pursuant to Section 11(d) below. (c) Covenants. Blockbuster agrees that during the two years following the Distributions, Blockbuster will not, and will not permit any of the Blockbuster Entities to: (i) sell, exchange, distribute or otherwise transfer all or a substantial portion of its assets or any stock or equity interest in any of the Blockbuster Entities, (ii) enter into any merger or liquidation transaction, (iii) discontinue or otherwise fail to maintain the active trade or business relied upon in connection with the Rulings and Submissions, (iv) purchase any of its outstanding stock other than through stock purchases meeting the requirements of section 4.05(1)(b) of Rev. Proc. 96- 30, (v) issue any stock or equity interests (except pursuant to the exercise of employee stock options), (vi) enter into any agreement for the sale or other disposition of its stock or equity interests, (vii) amend its certificate of incorporation (or other organizational documents), whether through a stockholder vote or otherwise, in a manner that affects the relative voting rights of the separate classes of Blockbuster stock (including, without limitation, through the conversion of one class of Blockbuster stock into another class of Blockbuster stock), or 17

(viii) take any action inconsistent with the information, representations or covenants included in the Rulings and Submissions or that would result in the Distributions being taxable in whole or in part to the Viacom Consolidated Group or Viacom's shareholders. (d) Exceptions to Covenants. Notwithstanding Section 11(c) above, the Blockbuster Entities may take actions inconsistent with the covenants contained in such Section 11(c), if Viacom consents in writing to such actions, such consent to be determined by Viacom in its sole discretion taking into account solely the preservation of the tax-free status of the Distributions; provided, however, that if such consent is not given, Blockbuster may request, which request may not be unreasonably denied, that Viacom either: (i) seek to obtain a ruling from the IRS that the actions in question (the "Restricted Actions") will not result in the Distributions being taxable to the Viacom Consolidated Group or Viacom's shareholders (an "Additional Ruling"); provided, however, that Viacom shall not be obligated to request such a ruling if it determines in good faith that such request might have an adverse effect on the Viacom Consolidated Group or Viacom's shareholders; or (ii) seek an unqualified opinion of counsel from counsel chosen by Viacom that the Restricted Actions will not result in the Distributions being taxable to the Viacom Consolidated Group or Viacom's shareholders (an "Unqualified Opinion"). If either an Additional Ruling or Unqualified Opinion is obtained in form and substance acceptable to Viacom, the Blockbuster Entities may engage in such Restricted Actions. 18

Blockbuster agrees that Viacom is to have no liability for any tax resulting from any Restricted Actions permitted pursuant to this Section 11(d) and agrees to indemnify and hold harmless Viacom against any such tax. Blockbuster shall also bear all costs incurred by Viacom in connection with considering whether to grant a request pursuant to this Section 11(d) or in requesting and/or obtaining any Additional Ruling or Unqualified Opinion.

(viii) take any action inconsistent with the information, representations or covenants included in the Rulings and Submissions or that would result in the Distributions being taxable in whole or in part to the Viacom Consolidated Group or Viacom's shareholders. (d) Exceptions to Covenants. Notwithstanding Section 11(c) above, the Blockbuster Entities may take actions inconsistent with the covenants contained in such Section 11(c), if Viacom consents in writing to such actions, such consent to be determined by Viacom in its sole discretion taking into account solely the preservation of the tax-free status of the Distributions; provided, however, that if such consent is not given, Blockbuster may request, which request may not be unreasonably denied, that Viacom either: (i) seek to obtain a ruling from the IRS that the actions in question (the "Restricted Actions") will not result in the Distributions being taxable to the Viacom Consolidated Group or Viacom's shareholders (an "Additional Ruling"); provided, however, that Viacom shall not be obligated to request such a ruling if it determines in good faith that such request might have an adverse effect on the Viacom Consolidated Group or Viacom's shareholders; or (ii) seek an unqualified opinion of counsel from counsel chosen by Viacom that the Restricted Actions will not result in the Distributions being taxable to the Viacom Consolidated Group or Viacom's shareholders (an "Unqualified Opinion"). If either an Additional Ruling or Unqualified Opinion is obtained in form and substance acceptable to Viacom, the Blockbuster Entities may engage in such Restricted Actions. 18

Blockbuster agrees that Viacom is to have no liability for any tax resulting from any Restricted Actions permitted pursuant to this Section 11(d) and agrees to indemnify and hold harmless Viacom against any such tax. Blockbuster shall also bear all costs incurred by Viacom in connection with considering whether to grant a request pursuant to this Section 11(d) or in requesting and/or obtaining any Additional Ruling or Unqualified Opinion. (e) Rulings and Additional Rulings. In its sole discretion and control, Viacom shall have the right to obtain the Rulings and, if any, the Additional Rulings. Blockbuster shall cooperate with Viacom and take all actions requested by Viacom in connection with obtaining the Rulings and Additional Rulings (including, without limitation, by making any representation or covenant or providing any materials or information requested by Viacom or the IRS; provided that Blockbuster shall not be required to make any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control). 12. Deductions Attributable to Options. Viacom shall determine whether Viacom or Blockbuster shall file tax returns claiming the deductions attributable to the exercise of (i) options to purchase stock of Viacom which are held by employees of Blockbuster (or its affiliates) after the Distributions or by employees of both Viacom (or its affiliates) and Blockbuster (or its affiliates) after the Distributions and/or (ii) options to purchase stock of Blockbuster which were issued as a result of a conversion of Viacom options and which resulted in a charge to the earnings of Viacom at the time of such conversion for financial reporting purposes. If it is determined that Viacom shall claim all such tax deductions, Viacom 19

shall be entitled to any such tax deductions and the tax returns of Viacom and Blockbuster shall be prepared accordingly and Viacom shall be responsible for the remittance of the employer's share of FICA and similar taxes. To the extent any such deductions are disallowed because a tax authority determines that Blockbuster should have claimed such deductions, Blockbuster shall take all actions necessary to claim such deductions and pay to Viacom an amount equal to the tax benefit of such deductions. If it is determined that Blockbuster shall claim all such tax deductions, Blockbuster shall be entitled to any such tax deductions and the tax returns of Viacom and Blockbuster shall be prepared accordingly. Blockbuster shall notify Viacom of the amount of tax deductions it intends to claim with respect to the exercise of Viacom options and shall pay Viacom an amount

Blockbuster agrees that Viacom is to have no liability for any tax resulting from any Restricted Actions permitted pursuant to this Section 11(d) and agrees to indemnify and hold harmless Viacom against any such tax. Blockbuster shall also bear all costs incurred by Viacom in connection with considering whether to grant a request pursuant to this Section 11(d) or in requesting and/or obtaining any Additional Ruling or Unqualified Opinion. (e) Rulings and Additional Rulings. In its sole discretion and control, Viacom shall have the right to obtain the Rulings and, if any, the Additional Rulings. Blockbuster shall cooperate with Viacom and take all actions requested by Viacom in connection with obtaining the Rulings and Additional Rulings (including, without limitation, by making any representation or covenant or providing any materials or information requested by Viacom or the IRS; provided that Blockbuster shall not be required to make any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control). 12. Deductions Attributable to Options. Viacom shall determine whether Viacom or Blockbuster shall file tax returns claiming the deductions attributable to the exercise of (i) options to purchase stock of Viacom which are held by employees of Blockbuster (or its affiliates) after the Distributions or by employees of both Viacom (or its affiliates) and Blockbuster (or its affiliates) after the Distributions and/or (ii) options to purchase stock of Blockbuster which were issued as a result of a conversion of Viacom options and which resulted in a charge to the earnings of Viacom at the time of such conversion for financial reporting purposes. If it is determined that Viacom shall claim all such tax deductions, Viacom 19

shall be entitled to any such tax deductions and the tax returns of Viacom and Blockbuster shall be prepared accordingly and Viacom shall be responsible for the remittance of the employer's share of FICA and similar taxes. To the extent any such deductions are disallowed because a tax authority determines that Blockbuster should have claimed such deductions, Blockbuster shall take all actions necessary to claim such deductions and pay to Viacom an amount equal to the tax benefit of such deductions. If it is determined that Blockbuster shall claim all such tax deductions, Blockbuster shall be entitled to any such tax deductions and the tax returns of Viacom and Blockbuster shall be prepared accordingly. Blockbuster shall notify Viacom of the amount of tax deductions it intends to claim with respect to the exercise of Viacom options and shall pay Viacom an amount equal to the actual benefit of the related deductions (less any FICA or similar taxes paid by Blockbuster) not later than 3 days prior to the due date of the estimated tax payment immediately following when any member of the Blockbuster Consolidated Group becomes entitled to any tax savings, refund, credit or other offset attributable to such deduction. To the extent any such deductions are disallowed because a tax authority determines that Viacom should have claimed such deductions, Viacom shall pay to Blockbuster an amount equal to the actual benefit received by Viacom as a result of the disallowance to the extent Blockbuster has paid Viacom pursuant to the preceding sentence. For purposes of the preceding sentence, such benefit shall be considered equal to the excess of the amount of tax that would have been payable to a tax authority (or of the refund that would have been receivable) by Viacom. 20 13. Confidentiality. Each of Viacom and Blockbuster agrees that any information furnished pursuant to the Agreement is confidential and, except as and to the extent required by law or otherwise during the course of an audit or litigation or other administrative or legal proceeding, shall not be disclosed to other persons. In addition, each of Viacom and Blockbuster shall cause its employees, agents and advisors to comply with the terms of this Section 13. 14. Successors and Access to Information. The Agreement shall be binding upon and inure to the benefit of any successor to any of the parties, by merger, acquisition of assets or otherwise, to the same extent as if the successor had been an original party to the Agreement. If for any taxable year the Blockbuster Consolidated Group is no longer included in the Viacom

shall be entitled to any such tax deductions and the tax returns of Viacom and Blockbuster shall be prepared accordingly and Viacom shall be responsible for the remittance of the employer's share of FICA and similar taxes. To the extent any such deductions are disallowed because a tax authority determines that Blockbuster should have claimed such deductions, Blockbuster shall take all actions necessary to claim such deductions and pay to Viacom an amount equal to the tax benefit of such deductions. If it is determined that Blockbuster shall claim all such tax deductions, Blockbuster shall be entitled to any such tax deductions and the tax returns of Viacom and Blockbuster shall be prepared accordingly. Blockbuster shall notify Viacom of the amount of tax deductions it intends to claim with respect to the exercise of Viacom options and shall pay Viacom an amount equal to the actual benefit of the related deductions (less any FICA or similar taxes paid by Blockbuster) not later than 3 days prior to the due date of the estimated tax payment immediately following when any member of the Blockbuster Consolidated Group becomes entitled to any tax savings, refund, credit or other offset attributable to such deduction. To the extent any such deductions are disallowed because a tax authority determines that Viacom should have claimed such deductions, Viacom shall pay to Blockbuster an amount equal to the actual benefit received by Viacom as a result of the disallowance to the extent Blockbuster has paid Viacom pursuant to the preceding sentence. For purposes of the preceding sentence, such benefit shall be considered equal to the excess of the amount of tax that would have been payable to a tax authority (or of the refund that would have been receivable) by Viacom. 20 13. Confidentiality. Each of Viacom and Blockbuster agrees that any information furnished pursuant to the Agreement is confidential and, except as and to the extent required by law or otherwise during the course of an audit or litigation or other administrative or legal proceeding, shall not be disclosed to other persons. In addition, each of Viacom and Blockbuster shall cause its employees, agents and advisors to comply with the terms of this Section 13. 14. Successors and Access to Information. The Agreement shall be binding upon and inure to the benefit of any successor to any of the parties, by merger, acquisition of assets or otherwise, to the same extent as if the successor had been an original party to the Agreement. If for any taxable year the Blockbuster Consolidated Group is no longer included in the Viacom Consolidated Group, Viacom and Blockbuster agree to provide to the other party any information reasonably required to complete tax returns for taxable periods beginning after the Blockbuster Consolidated Group is no

13. Confidentiality. Each of Viacom and Blockbuster agrees that any information furnished pursuant to the Agreement is confidential and, except as and to the extent required by law or otherwise during the course of an audit or litigation or other administrative or legal proceeding, shall not be disclosed to other persons. In addition, each of Viacom and Blockbuster shall cause its employees, agents and advisors to comply with the terms of this Section 13. 14. Successors and Access to Information. The Agreement shall be binding upon and inure to the benefit of any successor to any of the parties, by merger, acquisition of assets or otherwise, to the same extent as if the successor had been an original party to the Agreement. If for any taxable year the Blockbuster Consolidated Group is no longer included in the Viacom Consolidated Group, Viacom and Blockbuster agree to provide to the other party any information reasonably required to complete tax returns for taxable periods beginning after the Blockbuster Consolidated Group is no longer included in a Viacom Consolidated Return, and each of Viacom and Blockbuster will cooperate with respect to any audits or litigation relating to any Viacom Consolidated Return. 15. Governing Law. The Agreement shall be governed by and construed in accordance with the laws of New York excluding (to the greatest extent permissible by law) any rule of law that would cause the application of the laws of any jurisdiction other than the State of New York. 16. Headings. 21

The headings in the Agreement are for convenience only and shall not be deemed for any purpose to constitute a part or to affect the interpretation of the Agreement. 17. Counterparts. The Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, and it shall not be necessary in making proof of the Agreement to produce or account for more than one counterpart. 18. Severability. If any provision of the Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the maximum extent practicable. In any event, all other provisions of the Agreement shall be deemed valid, binding, and enforceable to their full extent. 19. Termination. The Agreement shall remain in force and be binding so long as the applicable period of assessments (including extensions) remains unexpired for any taxes contemplated by the Agreement; provided, however, that neither Viacom nor Blockbuster shall have any liability to the other party with respect to tax liabilities for taxable years in which the Blockbuster Consolidated Group is not included in the Viacom Consolidated Returns except as provided in Sections 4, 11, and 12 of this Agreement. 20. Successor Provisions. Any reference herein to any provisions of the Code or Treasury Regulations shall be deemed to include any amendments or successor provisions 22

thereto as appropriate.

The headings in the Agreement are for convenience only and shall not be deemed for any purpose to constitute a part or to affect the interpretation of the Agreement. 17. Counterparts. The Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, and it shall not be necessary in making proof of the Agreement to produce or account for more than one counterpart. 18. Severability. If any provision of the Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the maximum extent practicable. In any event, all other provisions of the Agreement shall be deemed valid, binding, and enforceable to their full extent. 19. Termination. The Agreement shall remain in force and be binding so long as the applicable period of assessments (including extensions) remains unexpired for any taxes contemplated by the Agreement; provided, however, that neither Viacom nor Blockbuster shall have any liability to the other party with respect to tax liabilities for taxable years in which the Blockbuster Consolidated Group is not included in the Viacom Consolidated Returns except as provided in Sections 4, 11, and 12 of this Agreement. 20. Successor Provisions. Any reference herein to any provisions of the Code or Treasury Regulations shall be deemed to include any amendments or successor provisions 22

thereto as appropriate. 21. Compliance by Subsidiaries. Viacom and Blockbuster each agree to cause all members of the Viacom Consolidated Group and Blockbuster Consolidated Group (including predecessors and successors to such members) to comply with the terms of the Agreement. IN WITNESS WHEREOF, each of the parties of the Agreement has caused the Agreement to be executed by its duly authorized officer on this date of August 16, 1999. Viacom Inc.
By: /s/ Michael D. Fricklas ----------------------------Name: Michael D. Fricklas Title: Sr. Vice President, General Counsel and Secretary

Blockbuster Inc.
By: /s/ Edward B. Stead ----------------------------Name: Edward B. Stead Title: Executive Vice President General Counsel and Secretary

thereto as appropriate. 21. Compliance by Subsidiaries. Viacom and Blockbuster each agree to cause all members of the Viacom Consolidated Group and Blockbuster Consolidated Group (including predecessors and successors to such members) to comply with the terms of the Agreement. IN WITNESS WHEREOF, each of the parties of the Agreement has caused the Agreement to be executed by its duly authorized officer on this date of August 16, 1999. Viacom Inc.
By: /s/ Michael D. Fricklas ----------------------------Name: Michael D. Fricklas Title: Sr. Vice President, General Counsel and Secretary

Blockbuster Inc.
By: /s/ Edward B. Stead ----------------------------Name: Edward B. Stead Title: Executive Vice President General Counsel and Secretary

23
ARTICLE 5 This schedule contains summary financial information extracted from the unaudited financial statements as of and for the nine months ended September 30, 1999 and is qualified in its entirety by reference to such financial statements. MULTIPLIER: 1,000,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION

9 MOS DEC 31 1999 JAN 01 1999 SEP 30 1999 122 0 125 10 254 639 1,853 754 8,325 916 1,197 0 0 2 6,177 8,325 3,204 3,268 1,270 1,270 1,917 71

ARTICLE 5 This schedule contains summary financial information extracted from the unaudited financial statements as of and for the nine months ended September 30, 1999 and is qualified in its entirety by reference to such financial statements. MULTIPLIER: 1,000,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS BASIC EPS DILUTED

9 MOS DEC 31 1999 JAN 01 1999 SEP 30 1999 122 0 125 10 254 639 1,853 754 8,325 916 1,197 0 0 2 6,177 8,325 3,204 3,268 1,270 1,270 1,917 71 91 (6) 52 (62) 0 0 0 (62) (0.42) (0.42)


				
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