Agreement and Plan of Merger - Viacom Inc. and Blockbuster Entertainment Corp.


                              AGREEMENT AND PLAN OF MERGER
          
                                        between
          
                                      VIACOM INC.
          
                                          and
          
                         BLOCKBUSTER ENTERTAINMENT CORPORATION
          
          
                              Dated as of January 7, 1994

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                                 TABLE OF CONTENTS
          
          
                                                                    Page
          
          
                                     ARTICLE I
          
                                     THE MERGER
          
           1.01  The Merger....................................      2
           1.02  Closing.......................................      2
           1.03  Effective Time................................      2
           1.04  Effect of the Merger..........................      2
           1.05  Certificate of Incorporation; By-Laws.........      3
          
          
                                     ARTICLE II
          
                 CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
          
           2.01  Conversion of Securities......................      3
           2.02  Exchange of Certificates and Cash.............      4
           2.03  Stock Transfer Books..........................      7
           2.04  Stock Options.................................      7
           2.05  Dissenting Shares.............................      8
          
          
                                    ARTICLE III
          
                   REPRESENTATIONS AND WARRANTIES OF BLOCKBUSTER
          
           3.01  Organization and Qualification;
                   Subsidiaries................................      9
           3.02  Certificate of Incorporation and By-Laws......     10
           3.03  Capitalization................................     10
           3.04  Authority Relative to this Agreement..........     11
           3.05  No Conflict; Required Filings and Consents....     12
           3.06  Compliance....................................     13
           3.07  SEC Filings; Financial Statements.............     14
           3.08  Absence of Certain Changes or Events..........     15
           3.09  Absence of Litigation.........................     16
           3.10  Employee Benefit Plans........................     17
           3.11  Trademarks, Patents and Copyrights............     17
           3.12  Taxes.........................................     18
           3.13  Opinion of Financial Advisor..................     19

          
                                        (i)

          
          
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                                                                   Page
          
           3.14  Vote Required.................................     19
           3.15  Brokers.......................................     19
          
          
                                     ARTICLE IV
          
                      REPRESENTATIONS AND WARRANTIES OF VIACOM
          
           4.01  Organization and Qualification;
                   Subsidiaries................................     20
           4.02  Certificate of Incorporation and By-Laws......     20
           4.03  Capitalization................................     21
           4.04  Authority Relative to this Agreement..........     22
           4.05  No Conflict; Required Filings and Consents....     23
           4.06  Compliance....................................     24
           4.07  SEC Filings; Financial Statements.............     25
           4.08  Absence of Certain Changes or Events..........     26
           4.09  Absence of Litigation.........................     27
           4.10  Employee Benefit Plans........................     27
           4.11  Trademarks, Patents and Copyrights............     28
           4.12  Taxes.........................................     29
           4.13  Opinion of Financial Advisor..................     30
           4.14  Vote Required.................................     30
           4.15  Brokers.......................................     30
          
          
                                     ARTICLE V
          
                      CONDUCT OF BUSINESSES PENDING THE MERGER
          
           5.01  Conduct of Respective Businesses by 
                   Blockbuster and Viacom Pending the Merger....    30
          
          
                                     ARTICLE VI
          
                                ADDITIONAL COVENANTS
          
           6.01  Access to Information; Confidentiality........     33
           6.02  Directors' and Officers' Indemnification
                   and Insurance...............................     34
          
          
                                        (ii)

          
          
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                                                                   Page
          
           6.03  Notification of Certain Matters...............     36
           6.04  Tax Treatment.................................     36
           6.05  Registration Statement; Joint Proxy
                   Statement...................................     36
           6.06  Stockholders' Meetings........................     38
           6.07  Letters of Accountants........................     39
           6.08  [Intentionally Deleted].......................     39
           6.09  Further Action; Reasonable Best Efforts.......     39
           6.10  Debt Instruments..............................     40
           6.11  Public Announcements..........................     40
           6.12  Listing of Shares of Viacom
                   Common Stock and VCRs.......................     40
           6.13  Affiliates of Blockbuster.....................     40
           6.14  Conveyance Taxes..............................     40
           6.15  Assumption of Debt and Leases.................     42
           6.16  Transactions with Significant Stockholder
                   After the Effective Time....................     42
          
          
                                    ARTICLE VII
          
                                 CLOSING CONDITIONS
          
           7.01  Conditions to Obligations of Each
                   Party to Effect the Merger..................     43
           7.02  Additional Conditions to Obligations
                   of Viacom..................................      44
           7.03  Additional Conditions to Obligations
                   of Blockbuster.............................      45
          
          
                                    ARTICLE VIII
          
                         TERMINATION, AMENDMENT AND WAIVER
          
           8.01  Termination...................................     46
           8.02  Effect of Termination.........................     49
           8.03  Amendment.....................................     49
           8.04  Waiver........................................     49
           8.05  Fees, Expenses and Other Payments.............     49
          
          
                                     ARTICLE IX
          
                                 GENERAL PROVISIONS
          
           9.01  Effectiveness of Representations,
                   Warranties and Agreements...................     50   
          9.02   Notices.......................................     51
          
                                       (iii)

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                                                                    Page
          
           9.03  Certain Definitions...........................     52
           9.04  Headings......................................     53
           9.05   Severability..................................    53
           9.06  Entire Agreement..............................     54
           9.07  Assignment....................................     54
           9.08  Parties in Interest...........................     54
           9.09  Governing Law.................................     54
           9.10  Counterparts..................................     54
          
          ANNEX A            VCRs Term Sheet
                 
          EXHIBIT 6.13       Form of Affiliate Letter

          
                                        (iv)

          
          
 

          
          
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                   AGREEMENT AND PLAN OF MERGER, dated as of January 7,
          1994 (this "Agreement"), between VIACOM INC., a Delaware
          corporation ("Viacom"), and BLOCKBUSTER ENTERTAINMENT
          CORPORATION, a Delaware corporation ("Blockbuster").
          
                                W I T N E S S E T H:
          
                   WHEREAS, upon the terms and subject to the conditions
          of this Agreement and in accordance with the General
          Corporation Law of the State of Delaware ("Delaware Law"),
          Blockbuster and Viacom will enter into a business combination
          transaction pursuant to which Blockbuster will merge with and
          into Viacom (the "Merger");
          
                   WHEREAS, the Board of Directors of Blockbuster has
          determined that the Merger is consistent with and in
          furtherance of the long-term business strategy of Blockbuster
          and is fair to, and in the best interests of, Blockbuster and
          the holders of Blockbuster Common Stock (as defined in Section
          2.01(a)) and has approved and adopted this Agreement and has
          approved the Merger and the other transactions contemplated
          hereby and recommended approval and adoption of this Agreement
          and approval of the Merger by the stockholders of Blockbuster;
          
                   WHEREAS, the Board of Directors of Viacom has
          determined that the Merger is consistent with and in
          furtherance of the long-term business strategy of Viacom and is
          fair to, and in the best interests of, Viacom and its
          stockholders and has approved and adopted this Agreement and
          has approved the Merger and the other transactions contemplated
          hereby and recommended approval and adoption of this Agreement
          and approval of the Merger by the holders of the Class A Common
          Stock, par value $.01 per share, of Viacom (the "Viacom Class A
          Common Stock"); 
          
                   WHEREAS, for federal income tax purposes, it is
          intended that the Merger qualify as a reorganization under the
          provisions of Section 368(a) of the United States Internal
          Revenue Code of 1986, as amended (the "Code"); and
          
                   WHEREAS, concurrently with the execution of this
          Agreement and as an inducement to Blockbuster to enter into
          this Agreement, National Amusements, Inc., a Maryland
          corporation and the majority stockholder of Viacom ("Parent"),
          and Blockbuster have entered into a Voting Agreement (the
          "Parent Voting Agreement") pursuant to which Parent shall,
          among other things, vote its shares of Viacom Class A Common
          Stock (as defined in Section 2.01(a)) in favor of the Merger
          and the other transactions contemplated by this Agreement;
          
          

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                   NOW, THEREFORE, in consideration of the foregoing and
          the respective representations, warranties, covenants and
          agreements set forth in this Agreement, the parties hereto
          agree as follows:
          
          
                                     ARTICLE I
          
                                     THE MERGER
          
                   SECTION 1.01.  The Merger.  Upon the terms and subject
          to the conditions set forth in this Agreement, and in
          accordance with Delaware Law, at the Effective Time (as defined
          in Section 1.03), Blockbuster shall be merged with and into
          Viacom.  As a result of the Merger, the separate corporate
          existence of Blockbuster shall cease and Viacom shall continue
          as the surviving corporation of the Merger (the "Surviving
          Corporation").
          
                   SECTION 1.02.  Closing.  Unless this Agreement shall
          have been terminated and the transactions herein contemplated
          shall have been abandoned pursuant to Section 8.01 and subject
          to the satisfaction or waiver of the conditions set forth in
          Article VII, the consummation of the Merger will take place as
          promptly as practicable (and in any event within two business
          days) after satisfaction or waiver of the conditions set forth
          in Article VII at the offices of Shearman & Sterling, 599
          Lexington Avenue, New York, New York, unless another date, time
          or place is agreed to in writing by the parties hereto.
          
                   SECTION 1.03.  Effective Time.  As promptly as
          practicable after the satisfaction or, if permissible, waiver
          of the conditions set forth in Article VII, the parties hereto
          shall cause the Merger to be consummated by filing a
          certificate of merger (the "Certificate of Merger") with the
          Secretary of State of the State of Delaware in such form as
          required by, and executed in accordance with the relevant
          provisions of, Delaware Law (the date and time of such filing,
          or such later date or time as set forth therein,  being the
          "Effective Time").
          
                   SECTION 1.04.  Effect of the Merger.  At the Effective
          Time, the effect of the Merger shall be as provided in the
          applicable provisions of Delaware Law.  Without limiting the
          generality of the foregoing, and subject thereto, at the
          Effective Time, except as otherwise provided herein, all the
          property, rights, privileges, powers and franchises of Viacom
          and Blockbuster shall vest in the Surviving Corporation, and
          all debts, liabilities and duties 

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          of Viacom and Blockbuster shall become the debts, liabilities
          and duties of the Surviving Corporation.
          
                   SECTION 1.05.  Certificate of Incorporation; By-Laws. 
          At the Effective Time the Certificate of Incorporation and the
          By-Laws of Viacom, as in effect immediately prior to the
          Effective Time, shall be the Certificate of Incorporation and
          the By-Laws of the Surviving Corporation.
          
          
                                     ARTICLE II
          
                 CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
          
                   SECTION 2.01.  Conversion of Securities.  At the
          Effective Time, by virtue of the Merger and without any action
          on the part of Viacom, Blockbuster or the holders of any of the
          following securities:
          
                   (a)  Each share of common stock, par value $.10 per
              share, of Blockbuster ("Blockbuster Common Stock"), issued
              and outstanding immediately prior to the Effective Time
              (other than any shares of Blockbuster Common Stock to be
              canceled pursuant to Section 2.01(b) and any Dissenting
              Shares (if applicable and as defined in Section 2.05)),
              shall be converted, subject to Section 2.02(d), into the
              right to receive (x) .08 of one share of Viacom Class A
              Common Stock (the "Class A Exchange Ratio"), (y) .60615 of
              one share of Class B Common Stock, par value $.01 per share
              ("Viacom Class B Common Stock", and together with the
              Viacom Class A Common Stock, the "Viacom Common Stock"), of
              Viacom (the "Class B Exchange Ratio") and (z) up to an
              additional .13829 of one share of Viacom Class B Common
              Stock, with such amount to be determined in accordance
              with, and the right to receive such shares to be evidenced
              by, one  variable  common   right (a "VCR")  issued  by
              Viacom having the principal terms described in Annex A (the
              "VCR Exchange Ratio"; together with the Class A and Class B
              Exchange Ratios, the "Exchange Ratios"); provided, however,
              that, in any event, if between the date of this Agreement
              and the Effective Time the outstanding shares of Viacom
              Common Stock or Blockbuster Common Stock shall have been
              changed into a different number of shares or a different
              class, by reason of any stock dividend, subdivision,
              reclassification, recapitalization, split, combination or
              exchange of shares, the Exchange Ratios shall be
              correspondingly adjusted to reflect such stock dividend,
              subdivision, reclassification, recapitalization, split, 

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              combination or exchange of shares.  All such shares of
              Blockbuster Common Stock shall no longer be outstanding and
              shall automatically be canceled and retired and shall cease
              to exist, and each certificate previously evidencing any
              such shares shall thereafter represent the right to
              receive, upon the surrender of such certificate in
              accordance with the provisions of Section 2.02,
              certificates evidencing (i) such number of whole shares of
              Viacom Common Stock into which such Blockbuster Common
              Stock was converted in accordance with the Class A and
              Class B Exchange Ratios and (ii) such number of VCRs into
              which such Blockbuster Common Stock was converted in
              accordance with the VCR Exchange Ratio.  The holders of
              such certificates previously evidencing such shares of
              Blockbuster Common Stock outstanding immediately prior to
              the Effective Time shall cease to have any rights with
              respect to such shares of Blockbuster Common Stock except
              as otherwise provided herein or by law.  No fractional
              share of Viacom Common Stock shall be issued; and, in lieu
              thereof, a cash payment shall be made pursuant to Section
              2.02(d).
          
                   (b)  Each share of Blockbuster Common Stock held in
              the treasury of Blockbuster and each share of Blockbuster
              Common Stock owned by Viacom or any direct or indirect
              wholly owned subsidiary of Viacom or of Blockbuster
              immediately prior to the Effective Time shall automatically
              be canceled and extinguished without any conversion thereof
              and no payment shall be made with respect thereto.
          
                   SECTION 2.02.  Exchange of Certificates and Cash.  (a) 
          Exchange Agent.  Viacom shall deposit, or shall cause to be
          deposited, with or for the account of a bank or trust company
          designated by Viacom, which shall be reasonably satisfactory to
          Blockbuster (the "Exchange Agent"), for the benefit of the
          holders of shares of Blockbuster Common Stock (other than
          Dissenting Shares, if applicable), for exchange in accordance
          with this Article II, through the Exchange Agent, at the
          Effective Time, (i) certificates evidencing the shares of
          Viacom Common Stock and the VCRs issuable pursuant to
          Section 2.01 in exchange for outstanding shares of Blockbuster
          Common Stock and (ii) upon the request of the Exchange Agent,
          cash in an amount sufficient to make any cash payment due under
          Section 2.02(d) (such certificates for shares of Viacom Common
          Stock, together with any dividends or distributions with
          respect thereto, the VCRs and cash being hereafter collectively
          referred to as the "Exchange Fund").  The Exchange Agent shall,
          pursuant to irrevocable instructions, deliver the Viacom Common
          Stock and VCRs 

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          contemplated to be issued pursuant to Section 2.01 out of the
          Exchange Fund to holders of shares of Blockbuster Common Stock. 
          Except as contemplated by Section 2.02(d) hereof, the Exchange
          Fund shall not be used for any other purpose.  Any interest,
          dividends or other income earned on the investment of cash or
          other property held in the Exchange Fund shall be for the
          account of Viacom.
          
                   (b)  Exchange Procedures.  As soon as reasonably
          practicable after the Effective Time, Viacom will instruct the
          Exchange Agent to mail to each holder of record of a
          certificate or certificates which immediately prior to the
          Effective Time evidenced outstanding shares of Blockbuster
          Common Stock (other than Dissenting Shares, if applicable) (the
          "Certificates") (i) a letter of transmittal (which shall
          specify that delivery shall be effected, and risk of loss and
          title to the Certificates shall pass, only upon proper delivery
          of the Certificates to the Exchange Agent and shall be in such
          form and have such other provisions as Viacom may reasonably
          specify) and (ii) instructions to effect the surrender of the
          Certificates in exchange for the certificates evidencing shares
          of Viacom Common Stock and the VCRs and cash (if any).  Upon
          surrender of a Certificate for cancellation to the Exchange
          Agent together with such letter of transmittal, duly executed,
          and such other customary documents as may be required pursuant
          to such instructions, the holder of such Certificate shall be
          entitled to receive in exchange therefor (A) certificates
          evidencing that number of whole shares of Viacom Common Stock
          and VCRs that such holder has the right to receive in
          accordance with the Exchange Ratios in respect of the shares of
          Blockbuster Common Stock formerly evidenced by such
          Certificate, (B) any dividends or other distributions to which
          such holder is entitled pursuant to Section 2.02(c) and (C)
          cash in lieu of fractional shares of Viacom Common Stock to
          which such holder is entitled pursuant to Section 2.02(d) (the
          shares of Viacom Common Stock, the VCRs and the dividends,
          distributions and cash described in clauses (A), (B) and (C)
          being, collectively, the "Merger Consideration"), and the
          Certificate so surrendered shall forthwith be canceled.  In the
          event of a transfer of ownership of shares of Blockbuster
          Common Stock that is not registered in the transfer records of
          Blockbuster, shares of Viacom Common Stock and VCRs may be
          issued and paid in accordance with this Article II to a
          transferee if the Certificate evidencing such shares of
          Blockbuster Common Stock is presented to the Exchange Agent,
          accompanied by all documents required to evidence and effect
          such transfer and by evidence that any applicable stock
          transfer taxes have been paid.  Until surrendered as
          contemplated by this Section 2.02, each Certificate shall be 

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          deemed at any time after the Effective Time to evidence only
          the right to receive upon such surrender the Merger
          Consideration.  
          
                   (c)  Distributions with Respect to Unexchanged Shares
          of Viacom Common Stock.  No dividends or other distributions
          declared or made after the Effective Time with respect to
          Viacom Common Stock with a record date after the Effective Time
          shall be paid to the holder of any unsurrendered Certificate
          with respect to the shares of Viacom Common Stock they are
          entitled to receive until the holder of such Certificate shall
          surrender such Certificate.  
          
                   (d)  Fractional Shares.  No fraction of a share of
          Viacom Common Stock shall be issued in the Merger.  In lieu of
          any such fractional shares, each holder of Blockbuster Common
          Stock upon surrender of a Certificate for exchange pursuant to
          this Section 2.02 shall be paid an amount in cash (without
          interest), rounded to the nearest cent, determined by
          multiplying (i) the per share closing price on the American
          Stock Exchange ("AMEX") of Viacom Class A Common Stock or
          Viacom Class B Common Stock, as the case may be, on the date of
          the Effective Time (or, if shares of Viacom Class A Common
          Stock or Viacom Class B Common Stock, as the case may be, do
          not trade on the AMEX on such date, the first date of trading
          of such Viacom Common Stock on the AMEX after the Effective
          Time) by (ii) the fractional interest to which such holder
          would otherwise be entitled (after taking into account all
          shares of Blockbuster Common Stock then held of record by such
          holder).  
          
                   (e)  Termination of Exchange Fund.  Any portion of the
          Exchange Fund that remains undistributed to the holders of
          Blockbuster Common Stock for six months after the Effective
          Time shall be delivered to Viacom, upon demand, and any holders
          of Blockbuster Common Stock who have not theretofore complied
          with this Article II shall thereafter look only to Viacom for
          the Merger Consideration to which they are entitled pursuant to
          this Article II.
          
                   (f)  No Liability.  Neither Viacom nor Blockbuster
          shall be liable to any holder of shares of Blockbuster Common
          Stock for any such shares of Viacom Common Stock (or dividends
          or distributions with respect thereto) or VCRs from the
          Exchange Fund delivered to a public official pursuant to any
          applicable abandoned property, escheat or similar law.
          
                   (g)  Withholding Rights.  Viacom or the Exchange Agent
          shall be entitled to deduct and withhold from the consideration
          otherwise payable pursuant to this Agreement to 

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          any holder of shares of Blockbuster Common Stock such amounts
          as Viacom or the Exchange Agent is required to deduct and
          withhold with respect to the making of such payment under the
          Code, or any provision of state, local or foreign tax law.  To
          the extent that amounts are so withheld by Viacom or the
          Exchange Agent, such withheld amounts shall be treated for all
          purposes of this Agreement as having been paid to the holder of
          the shares of Blockbuster Common Stock in respect of which such
          deduction and withholding was made by Viacom or the Exchange
          Agent.
          
                   SECTION 2.03.  Stock Transfer Books.  At the Effective
          Time, the stock transfer books of Blockbuster shall be closed,
          and there shall be no further registration of transfers of
          shares of Blockbuster Common Stock thereafter on the records of
          Blockbuster.  On or after the Effective Time, any Certificates
          presented to the Exchange Agent or Viacom for any reason shall
          be converted into the Merger Consideration.  
          
                   SECTION 2.04.  Stock Options.  At the Effective Time,
          Blockbuster's obligations with respect to each outstanding
          Blockbuster Stock Option (as defined in Section 3.03) to
          purchase shares of Blockbuster Common Stock, as amended in the
          manner described in the following sentence, shall be assumed by
          Viacom.  The Blockbuster Stock Options so assumed by Viacom
          shall continue to have, and be subject to, the same terms and
          conditions as set forth in the stock option plans and
          agreements pursuant to which such Blockbuster Stock Options
          were issued as in effect immediately prior to the Effective
          Time, except that each such Blockbuster Stock Option shall be
          exercisable for (A) that number of whole shares of (i) Viacom
          Class A Common Stock equal to the product of the number of
          shares of Blockbuster Common Stock covered by such Blockbuster
          Stock Option immediately prior to the Effective Time multiplied
          by the Class A Exchange Ratio and rounded up to the nearest
          whole number of shares of Viacom Class A Common Stock and (ii)
          Viacom Class B Common Stock equal to the product of the number
          of shares of Blockbuster Common Stock covered by such
          Blockbuster Stock Option immediately prior to the Effective
          Time multiplied by the Class B Exchange Ratio and rounded up to
          the nearest whole number of shares of Viacom Class B Common
          Stock and (B) that number of VCRs equal to the product of the
          number of shares of Blockbuster Common Stock covered by such
          Blockbuster Stock Option immediately prior to the Effective
          Time multiplied by the VCR Exchange Ratio.  Each warrant held by
          employees or directors of Blockbuster shall be converted into a 
          Viacom warrant on the same terms and conditions except that each
          such warrant shall be exercisable for (A) that number of whole
          shares of (i) Viacom Class A Common Stock equal to the product 
          of the number of shares of Blockbuster Common Stock covered by
          such warrant immediately prior to the Effective Time multiplied by
          the Class A Exchange Ratio and rounded up to the nearest whole 
          number of shares of Viacom Class A Common Stock and (ii) Viacom
          Class B Common Stock equal to the product of the number of shares 
          of Blockbuster Common Stock covered by such warrant immediately prior
          to the Effective Time multiplied by the Class B Exchange Ratio and
          rounded up to the nearest whole number of shares of Viacom Class B
          Common Stock and (B) that number of VCRs equal to the product of the
          number of shares of Blockbuster Common Stock covered by such warrant
          immediately prior to the Effective Time multiplied by the VCR Exchange
          Ratio.  Viacom shall (i) reserve for issuance the number of shares 
          of Viacom Common Stock that will become issuable upon the exercise
          of such Blockbuster Stock Options pursuant to this Section 2.04 

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          and (ii) promptly after the Effective Time issue to each holder
          of an outstanding Blockbuster Stock Option a document
          evidencing the assumption by Viacom of Blockbuster's
          obligations with respect thereto under this Section 2.04. 
          Nothing in this Section 2.04 shall affect the schedule of
          vesting with respect to the Blockbuster Stock Options to be
          assumed by Viacom as provided in this Section 2.04; provided,
          however, that Blockbuster and Viacom shall use their best
          efforts to secure from each of the executives previously
          identified by mutual agreement of Blockbuster and Viacom (the
          "Designated Executives"), as promptly as practicable following
          the execution of this Agreement, a waiver of (i) the
          accelerated vesting of Blockbuster Stock Options held by such
          Designated Executive (such waiver to lapse (and vesting of such
          Blockbuster Stock Option to occur if such option has not
          already vested in accordance with the applicable vesting
          schedule) upon the termination of such Designated Executive's
          employment with Blockbuster or Viacom for any reason) and (ii)
          the triggering of the right of such Designated Executive to
          cause Blockbuster to acquire his Blockbuster Stock Options for
          cash, in each case resulting from the execution of this
          Agreement and the transactions contemplated hereby, in
          consideration for Blockbuster entering into an employment
          agreement acceptable to Blockbuster and Viacom with such
          Designated Executive.  In addition to the adjustment provided
          by Section 2.04, effective as of the Effective Time, the
          terms of each Blockbuster Stock Option held by a Blockbuster
          employee who as of the date hereof is not subject to the
          reporting requirements of Section 16(a) of the Exchange Act,
          and, subject, at Blockbuster's discretion, to any stockholder
          approvals it determines are necessary, any non employee director,
          shall be amended to provide that, if such Blockbuster
          employee's employment is terminated without cause, or such 
          directorship shall cease, such  Blockbuster Stock Option shall not
          expire prior to the second  anniversary of the Effective Time; 
          provided, however, that in no event shall the maximum term of such
          Blockbuster Stock Option be extended.
          
                   SECTION 2.05.  Dissenting Shares.  (a)  If provided
          for under Delaware Law, notwithstanding any other provision of
          this Agreement to the contrary, shares of Blockbuster Common
          Stock that are outstanding immediately prior to the Effective
          Time and which are held by stockholders who shall have not
          voted in favor of the Merger or consented thereto in writing
          and who shall have demanded properly in writing appraisal for
          such shares in accordance with Section 262 of Delaware Law and
          who shall not have withdrawn such demand or otherwise have
          forfeited appraisal rights (collectively, the "Dissenting
          Shares") shall not be converted into or represent the right to
          receive the Merger Consideration.  Such stockholders shall be
          entitled to receive payment of the appraised value of such
          shares of Blockbuster Common Stock held by them in accordance
          with the provisions of such 

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          Section 262, except that all Dissenting Shares held by
          stockholders who shall have failed to perfect or who
          effectively shall have withdrawn or lost their rights to
          appraisal of such shares of Blockbuster Common Stock under such
          Section 262 shall thereupon be deemed to have been converted
          into and to have become exchangeable, as of the Effective Time,
          for the right to receive, without any interest thereon, the
          Merger Consideration, upon surrender, in the manner provided in
          Section 2.02, of the certificate or certificates that formerly
          evidenced such shares of Blockbuster Common Stock.
          
                   (b)  Blockbuster shall give Viacom (i) prompt notice
          of any demands for appraisal received by Blockbuster,
          withdrawals of such demands, and any other instruments served
          pursuant to Delaware Law and received by Blockbuster and (ii)
          the opportunity to direct all negotiations and proceedings with
          respect to demands for appraisal under Delaware Law. 
          Blockbuster shall not, except with the prior written consent of
          Viacom, make any payment with respect to any demands for
          appraisal, or offer to settle, or settle, any such demands.
          
          
                                    ARTICLE III
          
                   REPRESENTATIONS AND WARRANTIES OF BLOCKBUSTER
          
                   Blockbuster hereby represents and warrants to Viacom
          that:
          
                   SECTION 3.01.  Organization and Qualification;
          Subsidiaries.  (a)  Each of Blockbuster and each Material
          Blockbuster Subsidiary (as defined below) is a corporation,
          partnership or other legal entity duly organized, validly
          existing and in good standing under the laws of the
          jurisdiction of its incorporation or organization and has the
          requisite power and authority and all necessary governmental
          approvals to own, lease and operate its properties and to carry
          on its business as it is now being conducted, except where the
          failure to be so organized, existing or in good standing or to
          have such power, authority and governmental approvals would
          not, individually or in the aggregate, have a Blockbuster
          Material Adverse Effect (as defined below).  Blockbuster and
          each Material Blockbuster Subsidiary are duly qualified or
          licensed as foreign corporations to do business, and are in
          good standing, in each jurisdiction where the character of the
          properties owned, leased or operated by them or the nature of
          their business makes such qualification or licensing necessary,
          except for such failures to be so qualified or licensed and in
          good standing that would not, 

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          individually or in the aggregate, have a Blockbuster Material
          Adverse Effect.  The term "Blockbuster Material Adverse Effect"
          means any change or effect that is or would be materially
          adverse to the business, results of operations or financial
          condition of Blockbuster and the Blockbuster Subsidiaries,
          taken as a whole; provided that from and after the date on
          which the issuance and sale of shares of Viacom Class B Common
          Stock contemplated by the Subscription Agreement (the
          "Subscription Agreement") dated as of the date of this
          Agreement between Viacom and Blockbuster is consummated (the
          "Subscription Date"), the term "Blockbuster Material Adverse
          Effect", for purposes of Article III and Section 7.02(a) only,
          shall be changed to mean any change or effect that is or would
          be materially adverse to the financial condition of Blockbuster
          and the Blockbuster Subsidiaries, taken as a whole, excluding
          any changes or effects caused by changes in general economic
          conditions or changes generally affecting Blockbuster's
          industry..
          
                   (b)  Each subsidiary of Blockbuster (a "Blockbuster
          Subsidiary") that constitutes a Significant Subsidiary of
          Blockbuster within the meaning of Rule 1-02 of Regulation S-X
          of the Securities and Exchange Commission (the "SEC") is
          referred to herein as a "Material Blockbuster Subsidiary".
          
                   SECTION 3.02.  Certificate of Incorporation and
          By-Laws.  Blockbuster has heretofore made available to Viacom a
          complete and correct copy of the Certificate of Incorporation
          and the By-Laws or equivalent organizational documents, each as
          amended to date, of Blockbuster and each Material Blockbuster
          Subsidiary.  Such Certificates of Incorporation, By-Laws and
          equivalent organizational documents are in full force and
          effect.  Neither Blockbuster nor any Material Blockbuster
          Subsidiary is in violation of any provision of its Certificate
          of Incorporation, By-Laws or equivalent organizational
          documents, except for such violations that would not,
          individually or in the aggregate, have a Blockbuster Material
          Adverse Effect.
          
                   SECTION 3.03.  Capitalization.  The authorized capital
          stock of Blockbuster consists of 300,000,000 shares of
          Blockbuster Common Stock and 500,000 shares of Preferred Stock,
          par value $1.00 per share ("Blockbuster Preferred Stock").  As
          of December 31, 1993, (i) 247,487,375 shares of Blockbuster
          Common Stock were issued and outstanding, all of which were
          validly issued, fully paid and nonassessable, (ii) no shares
          were held in the treasury of Blockbuster, (iii) 11,425,584
          shares were reserved for future issuance pursuant to
          outstanding employee stock options granted pursuant to
          Blockbuster's 1987 Stock Option Plan, as amended, 1989 

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          Stock Option Plan, as amended, 1990 Stock Option Plan, as
          amended, 1991 Employee Director Stock Option Plan, 1991
          Non-Employee Director Stock Option Plan and any other employee
          stock option plan or program (any employee or director stock
          option issued under any such plan being a "Blockbuster Stock 
          Option") and (iv) 7,138,859 shares were reserved for future 
          issuance pursuant to the terms of outstanding warrants to 
          purchase shares of Blockbuster Common Stock.  As of the date 
          hereof, no shares of Blockbuster Preferred Stock are issued 
          and  outstanding.  Except  as  set  forth  in Section 3.03 
          of  the  Disclosure  Schedule  previously  delivered  by 
          Blockbuster  to  Viacom  (the  "Blockbuster  Disclosure
          Schedule"), or except as set forth in this Section 3.03, there
          are no options, warrants or other rights, agreements,
          arrangements or commitments of any character relating to the
          issued or unissued capital stock of Blockbuster or any Material
          Blockbuster Subsidiary or obligating Blockbuster or any
          Material Blockbuster Subsidiary to issue or sell any shares of
          capital stock of, or other equity interests in, Blockbuster or
          any Material Blockbuster Subsidiary.  All shares of Blockbuster
          Common Stock subject to issuance as aforesaid, upon issuance on
          the terms and conditions specified in the instruments pursuant
          to which they are issuable, will be duly authorized, validly
          issued, fully paid and nonassessable.  Except as set forth in
          Section 3.03 of the Blockbuster Disclosure Schedule, there are
          no material outstanding contractual obligations of Blockbuster
          or any Blockbuster Subsidiary to repurchase, redeem or
          otherwise acquire any shares of Blockbuster Common Stock or any
          capital stock of any Material Blockbuster Subsidiary, or make
          any material investment (in the form of a loan, capital
          contribution or otherwise) in, any Blockbuster Subsidiary or
          any other person.  Each outstanding share of capital stock of
          each Material Blockbuster Subsidiary is duly authorized,
          validly issued, fully paid and nonassessable and each such
          share owned by Blockbuster or another Blockbuster Subsidiary is
          free and clear of all security interests, liens, claims,
          pledges, options, rights of first refusal, agreements,
          limitations on Blockbuster's or such other Blockbuster
          Subsidiary's voting rights, charges and other encumbrances of
          any nature whatsoever.
          
                   SECTION 3.04.  Authority Relative to this Agreement. 
          Blockbuster has all necessary power and authority to execute
          and deliver this Agreement, to perform its obligations
          hereunder and to consummate the transactions 

          
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          contemplated hereby.  The execution and delivery of this
          Agreement by Blockbuster and the consummation by Blockbuster of
          the transactions contemplated hereby have been duly and validly
          authorized by all necessary corporate action and no other
          corporate proceedings on the part of Blockbuster are necessary
          to authorize this Agreement or to consummate the transactions
          contemplated herein (other than, with respect to the Merger,
          the approval and adoption of this Agreement by the holders of a
          majority of the then outstanding shares of Blockbuster Common
          Stock and the filing and recordation of appropriate merger
          documents as required by Delaware Law).  This Agreement has
          been duly and validly executed and delivered by Blockbuster
          and, assuming the due authorization, execution and delivery by
          Viacom, constitutes a legal, valid and binding obligation of
          Blockbuster, enforceable against Blockbuster in accordance with
          its terms, subject to the effect of any applicable bankruptcy,
          reorganization, insolvency, moratorium or similar laws
          affecting creditors' rights generally and subject, as to
          enforceability, to the effect of general principles of equity
          (regardless of whether such enforceability is considered in a
          proceeding in equity or at law).  Blockbuster has taken all
          appropriate actions so that the restrictions on business
          combinations contained in Section 203 of Delaware Law and
          Article 6 of Blockbuster's Certificate of Incorporation will
          not apply with respect to or as a result of the transactions
          contemplated herein or related hereto.
          
                   SECTION 3.05.  No Conflict; Required Filings and
          Consents.  (a)  Except as set forth in Section 3.05 of the
          Blockbuster Disclosure Schedule, the execution and delivery of
          this Agreement by Blockbuster do not, and the performance of
          the transactions contemplated herein by Blockbuster will not,
          (i) conflict with or violate the Certificate of Incorporation
          or By-Laws or equivalent organizational documents of
          Blockbuster or any Material Blockbuster Subsidiary, (ii)
          conflict with or violate any law, rule, regulation, order,
          judgment or decree applicable to Blockbuster or any Blockbuster
          Subsidiary or by which any property or asset of Blockbuster or
          any Blockbuster Subsidiary is bound or affected, or (iii)
          result in any breach of or constitute a default (or an event
          which with notice or lapse of time or both would become a
          default) under, result in the loss of a material benefit under,
          or give to others any right of termination, amendment,
          acceleration or cancellation of, or result in the creation of a
          lien or other encumbrance on any property or asset of
          Blockbuster or any Blockbuster Subsidiary pursuant to, any
          note, bond, mortgage, indenture, contract, agreement, lease,
          license, permit, franchise or other instrument or obligation 

          
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          to which Blockbuster or any Blockbuster Subsidiary is a party
          or by which Blockbuster or any Blockbuster Subsidiary or any
          property or asset of Blockbuster or any Blockbuster Subsidiary
          is bound or affected, except, in the case of clauses (ii) and
          (iii), for any such conflicts, violations, breaches, defaults
          or other occurrences which would not prevent or delay
          consummation of the Merger in any material respect, or
          otherwise prevent Blockbuster from performing its obligations
          under this Agreement in any material respect, and would not,
          individually or in the aggregate, have a Blockbuster Material
          Adverse Effect.
          
                   (b)  The execution and delivery of this Agreement by
          Blockbuster do not, and the performance of this Agreement by
          Blockbuster will not, require any consent, approval,
          authorization or permit of, or filing with or notification to,
          any governmental or regulatory authority, domestic or foreign
          (each a "Governmental Entity"), except (i) for (A) applicable
          requirements, if any, of the Securities Exchange Act of 1934,
          as amended (the "Exchange Act"), the Securities Act of 1933, as
          amended (the "Securities Act"), state securities or "blue sky"
          laws ("Blue Sky Laws") and state takeover laws, (B) the
          pre-merger notification requirements of the Hart-Scott-Rodino
          Antitrust Improvements Act of 1976, as amended, and the rules
          and regulations thereunder (the "HSR Act"), (C) applicable
          requirements of the Investment Canada Act of 1985 and the
          Competition Act (Canada), (D) filing and recordation of
          appropriate merger documents as required by Delaware Law and
          (E) any non-United States competition, antitrust and investment
          laws and (ii) where failure to obtain such consents, approvals,
          authorizations or permits, or to make such filings or
          notifications, would not prevent or delay consummation of the
          Merger in any material respect, or otherwise prevent
          Blockbuster from performing its obligations under this
          Agreement in any material respect, and would not, individually
          or in the aggregate, have a Blockbuster Material Adverse
          Effect.  
          
                   SECTION 3.06.  Compliance.  Except as set forth in
          Section 3.06 of the Blockbuster Disclosure Schedule, neither
          Blockbuster nor any Blockbuster Subsidiary is in conflict with,
          or in default or violation of, (i) any law, rule, regulation,
          order, judgment or decree (including, without limitation, laws,
          rules and regulations relating to franchises) applicable to
          Blockbuster or any Blockbuster Subsidiary or by which any
          property or asset of Blockbuster or any Blockbuster Subsidiary
          is bound or affected, or (ii) any note, bond, mortgage,
          indenture, contract, agreement, lease, license, permit,
          franchise or other instrument or 

          
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          obligation to which Blockbuster or any Blockbuster Subsidiary
          is a party or by which Blockbuster or any Blockbuster
          Subsidiary or any property or asset of Blockbuster or any
          Blockbuster Subsidiary is bound or affected, except for any
          such conflicts, defaults or violations that would not,
          individually or in the aggregate, have a Blockbuster Material
          Adverse Effect.
          
                   SECTION 3.07.  SEC Filings; Financial Statements.  (a) 
          Blockbuster has filed all forms, reports and documents required
          to be filed by it with the SEC since December 31, 1990 and has
          heretofore made available to Viacom, in the form filed with the
          SEC (excluding any exhibits thereto), (i) its Annual Reports on
          Form 10-K for the years ended December 31, 1990, 1991 and 1992,
          respectively, (ii) its Quarterly Reports on Form 10-Q for the
          periods ended March 30, 1993, June 30, 1993 and September 30,
          1993, (iii) all proxy statements relating to Blockbuster's
          meetings of stockholders (whether annual or special) held since
          January 1, 1991 and (iv) all other forms, reports and other
          registration statements (other than Quarterly Reports on Form
          10-Q not referred to in clause (ii) above and preliminary
          materials) filed by Blockbuster with the SEC since December 31,
          1990 (the forms, reports and other documents referred to in
          clauses (i), (ii), (iii) and (iv) above being referred to
          herein, collectively, as the "Blockbuster SEC Reports").  The
          Blockbuster SEC Reports and any forms, reports and other
          documents filed by Blockbuster with the SEC after the date of
          this Agreement (x) were or will be prepared in accordance with
          the requirements of the Securities Act and the Exchange Act, as
          the case may be, and the rules and regulations thereunder and
          (y) did not at the time they were filed, or will not at the
          time they are filed, contain any untrue statement of a material
          fact or omit to state a material fact required to be stated
          therein or necessary in order to make the statements made
          therein, in the light of circumstances under which they were
          made, not misleading.  No Material Blockbuster Subsidiary,
          except for Spelling Entertainment Group Inc., a Florida
          corporation ("Spelling"), is required to file any form, report
          or other document with the SEC.
          
                   (b)  Spelling has filed all forms, reports and
          documents required to be filed by it with the SEC since
          June 30, 1992 and Blockbuster has heretofore made available to
          Viacom, in the form filed with the SEC (excluding any exhibits
          thereto), (i) Spelling's Quarterly Reports on Form 10-Q for the
          periods ended June 30, 1993 and September 30, 1993,
          (ii) all proxy statements relating to Spelling's meetings of
          stockholders (whether annual or special) held since May 1, 1993
          and (iii) all other forms, reports and 
          

          
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          other registration statements (other than Quarterly Reports on
          Form 10-Q not referred to in clause (ii) above and preliminary
          materials) filed by Spelling with the SEC since May 1, 1992
          (the forms, reports and other documents referred to in clauses
          (i), (ii) and (iii) above being referred to herein,
          collectively, as the "Spelling SEC Reports").  The Spelling SEC
          Reports and any forms, reports and other documents filed by
          Spelling with the SEC after the date of this Agreement (x) were
          or will be prepared in accordance with the requirements of the
          Securities Act and the Exchange Act, as the case may be, and
          the rules and regulations thereunder and (y) did not at the
          time they were filed, or will not at the time they are filed,
          contain any untrue statement of a material fact or omit to
          state a material fact required to be stated therein or
          necessary in order to make the statements made therein, in
          light of the circumstances under which they were made, not
          misleading.
          
                   (c)  Each of the consolidated financial statements
          (including, in each case, any notes thereto) contained in the
          Blockbuster SEC Reports and Spelling SEC Reports was prepared
          in accordance with generally accepted accounting principles
          applied on a consistent basis throughout the periods indicated
          (except as may be indicated in the notes thereto) and each
          fairly presented the financial position, results of operations
          and cash flows of Blockbuster and the consolidated Blockbuster
          Subsidiaries or Spelling and its subsidiaries, as the case may
          be, as at the respective dates thereof and for the respective
          periods indicated therein (subject, in the case of unaudited
          statements, to normal and recurring year-end adjustments which
          were not and are not expected, individually or in the
          aggregate, to be material in amount).
          
                   (d)  Except as set forth in Section 3.07 of the
          Blockbuster Disclosure Schedule or except as and to the extent
          set forth in the Blockbuster SEC Reports filed with the SEC
          prior to the date of this Agreement, Blockbuster and the
          Blockbuster Subsidiaries do not have any liability or
          obligation of any nature (whether accrued, absolute, contingent
          or otherwise) other than liabilities and obligations which
          would not, individually or in the aggregate, have a Blockbuster
          Material Adverse Effect.
          
                   SECTION 3.08.  Absence of Certain Changes or Events. 
          Since December 31, 1992, except as set forth in Section 3.08 of
          the Blockbuster Disclosure Schedule, contemplated by this
          Agreement or disclosed in any Blockbuster SEC Report filed
          since December 31, 1992 and prior to the date of this
          Agreement, Blockbuster and the Blockbuster Subsidiaries have
          conducted their businesses only 

          
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          in the ordinary course and in a manner consistent with past
          practice and, since December 31, 1992, there has not been (i)
          any Blockbuster Material Adverse Effect, (ii) any damage,
          destruction or loss (whether or not covered by insurance) with
          respect to any property or asset of Blockbuster or any
          Blockbuster Subsidiary and having, individually or in the
          aggregate, a Blockbuster Material Adverse Effect, (iii) any
          change by Blockbuster in its accounting methods, principles or
          practices, (iv) any declaration, setting aside or payment of
          any dividend or distribution in respect of any capital stock of
          Blockbuster or any Blockbuster Subsidiary or any redemption,
          purchase or other acquisition of any of their respective
          securities other than (A) regular quarterly dividends on the
          shares of Blockbuster Common Stock not in excess of $0.025 per
          share, (B) regular quarterly dividends on the shares of the
          common stock of Spelling not in excess of $.020 per share, (C)
          dividends by a Blockbuster Subsidiary to Blockbuster and (D) to
          fund pre-established dividend reinvestment plans or (v) other
          than as set forth in Section 3.03 and pursuant to the plans,
          programs or arrangements referred to in Section 3.10 and other
          than in the ordinary course of business consistent with past
          practice, any increase in or establishment of any bonus,
          insurance, severance, deferred compensation, pension,
          retirement, profit sharing, stock option (including, without
          limitation, the granting of stock options, stock appreciation
          rights, performance awards, or restricted stock awards), stock
          purchase or other employee benefit plan, or any other increase
          in the compensation payable or to become payable to any
          officers or key employees of Blockbuster or any Blockbuster
          Subsidiary.
          
                   SECTION 3.09.  Absence of Litigation.  Except as set
          forth in Section 3.09 of the Blockbuster Disclosure Schedule or
          except as disclosed in the Blockbuster SEC Reports filed with
          the SEC prior to the date of this Agreement, there is no claim,
          action, proceeding or investigation pending or, to the best
          knowledge of Blockbuster, threatened against Blockbuster or any
          Blockbuster Subsidiary, or any property or asset of Blockbuster
          or any Blockbuster Subsidiary, before any court, arbitrator or
          administrative, governmental or regulatory authority or body,
          domestic or foreign, which, individually or in the aggregate,
          would have a Blockbuster Material Adverse Effect.  Except as
          disclosed in the Blockbuster SEC Reports filed with the SEC
          prior to the date of this Agreement, neither Blockbuster nor
          any Blockbuster Subsidiary nor any property or asset of
          Blockbuster or any Blockbuster Subsidiary is subject to any
          order, writ, judgment, injunction, decree, determination or
          award which would have, individually or in the aggregate, a
          Blockbuster Material Adverse Effect.
          

          
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                   SECTION 3.10.  Employee Benefit Plans.  With respect
          to all the employee benefit plans, programs and arrangements
          maintained or contributed to by Blockbuster or any Blockbuster
          Subsidiary for the benefit of any current or former employee,
          officer or director of Blockbuster or any Blockbuster
          Subsidiary (the "Blockbuster Plans"), except as set forth in
          Section 3.10 of the Blockbuster Disclosure Schedule or the
          Blockbuster SEC Reports and except as would not, individually
          or in the aggregate, have a Blockbuster Material Adverse
          Effect:  (i) each Blockbuster Plan intended to be qualified
          under Section 401(a) of the Code has received a favorable
          determination letter from the Internal Revenue Service (the
          "IRS") that it is so qualified and nothing has occurred since
          the date of such letter that could reasonably be expected to
          affect the qualified status of such Blockbuster Plan; (ii) each
          Blockbuster Plan has been operated in all material respects in
          accordance with its terms and the requirements of applicable
          law; (iii) neither Blockbuster nor any Blockbuster Subsidiary
          has incurred any direct or indirect liability under, arising
          out of or by operation of Title IV of the Employee Retirement
          Income Security Act of 1974, as amended ("ERISA"), in
          connection with the termination of, or withdrawal from, any
          Blockbuster Plan or other retirement plan or arrangement, and
          no fact or event exists that could reasonably be expected to
          give rise to any such liability; and (iv) Blockbuster and the
          Blockbuster Subsidiaries have not incurred any liability under,
          and have complied in all material respects with, the Worker
          Adjustment Retraining Notification Act ("WARN"), and no fact or
          event exists that could give rise to liability under such act. 
          Except as set forth in Section 3.10 of the Blockbuster
          Disclosure Schedule, none of the Blockbuster Plans currently
          maintained by or contributed to by Blockbuster nor any Plan
          maintained by any entity that together with Blockbuster or the
          Blockbuster Subsidiaries would be deemed a "single employer"
          within the meaning of Section 4001(b) of ERISA (a "Blockbuster
          Affiliate Plan") is subject to Title IV of ERISA.  No
          Blockbuster Plan or Blockbuster Affiliate Plan has incurred any
          "accumulated funding deficiency" (as defined in Section 302 of
          ERISA and Section 412 of the Code), whether or not waived as of
          the most recently completed plan year of such plan.
          
                   SECTION 3.11.  Trademarks, Patents and Copyrights. 
          Blockbuster and the Blockbuster Subsidiaries own, or possess
          adequate licenses or other valid rights to use, all material
          patents, patent rights, trademarks, trademark rights, trade
          names, trade name rights, copyrights, service marks, service
          mark rights, trade secrets, applications to register, and 

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          registrations for, the foregoing trademarks, service marks,
          know-how and other proprietary rights and information used in
          connection with the business of Blockbuster and the Blockbuster
          Subsidiaries as currently conducted, and no assertion or claim
          has been made in writing challenging the validity of any of the
          foregoing which, individually or in the aggregate, would have a
          Blockbuster Material Adverse Effect.  To the best knowledge of
          Blockbuster, the conduct of the business of Blockbuster and the
          Blockbuster Subsidiaries as currently conducted does not
          conflict in any way with any patent, patent right, license,
          trademark, trademark right, trade name, trade name right,
          service mark or copyright of any third party that, individually
          or in the aggregate, would have a Blockbuster Material Adverse
          Effect.  
          
                   SECTION 3.12.  Taxes.  Except as set forth in Section
          3.12 of the Disclosure Schedule, Blockbuster and the
          Blockbuster Subsidiaries have timely filed all federal, state,
          local and foreign tax returns and reports required to be filed
          by them through the date hereof and shall timely file all
          returns and reports required on or before the Effective Time,
          except for such returns and reports the failure of which to
          file timely would not, individually or in the aggregate, have a
          Blockbuster Material Adverse Effect.  Such reports and returns
          are and will be true, correct and complete, except for such
          failures to be true, correct and complete as would not,
          individually or in the aggregate, have a Blockbuster Material
          Adverse Effect.  Blockbuster and the Blockbuster Subsidiaries
          have paid and discharged all federal, state, local and foreign
          taxes due from them, other than such taxes that are being
          contested in good faith by appropriate proceedings and are
          adequately reserved as shown in the audited consolidated
          balance sheet of Blockbuster dated December 31, 1992 (the
          "Blockbuster 1992 Balance Sheet") and its most recent quarterly
          financial statements, except for such failures to so pay and
          discharge which would not, individually or in the aggregate,
          have a Blockbuster Material Adverse Effect.  Neither the IRS
          nor any other taxing authority or agency, domestic or foreign,
          is now asserting or, to the best knowledge of Blockbuster,
          threatening to assert against Blockbuster or any Blockbuster
          Subsidiary any deficiency or material claim for additional
          taxes or interest thereon or penalties in connection therewith
          which, if such deficiencies or claims were finally resolved
          against Blockbuster and the Blockbuster Subsidiaries would,
          individually or in the aggregate, have a Blockbuster Material
          Adverse Effect.  The accruals and reserves for taxes (including
          interest and penalties, if any, thereon) reflected in the
          Blockbuster 1992 Balance Sheet and the most recent quarterly
          financial statements are adequate in accordance 

         

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          with generally accepted accounting principles, except where the
          failure to be adequate would not have a Blockbuster Material
          Adverse Effect.  Blockbuster and the Blockbuster Subsidiaries
          have withheld or collected and paid over to the appropriate
          governmental authorities or are properly holding for such
          payment all taxes required by law to be withheld or collected,
          except for such failures to have so withheld or collected and
          paid over or to be so holding for payment which would not,
          individually or in the aggregate, have a Blockbuster Material
          Adverse Effect.  There are no material liens for taxes upon the
          assets of Blockbuster or the Blockbuster Subsidiaries, other
          than liens for current taxes not yet due and payable and liens
          for taxes that are being contested in good faith by appropriate
          proceedings.  Neither Blockbuster nor any Blockbuster
          Subsidiary has agreed to or is required to make any adjustment
          under Section 481(a) of the Code.  Neither Blockbuster nor any
          Blockbuster Subsidiary has made an election under Section
          341(f) of the Code.  For purposes of this Section 3.12, where a
          determination of whether a failure by Blockbuster or a
          Blockbuster Subsidiary to comply with the representations
          herein has a Blockbuster Material Adverse Effect is necessary,
          such determination shall be made on an aggregate basis with all
          other failures within this Section 3.12.
          
                   SECTION 3.13.  Opinion of Financial Advisor. 
          Blockbuster has received the opinion of Merrill Lynch, Pierce,
          Fenner & Smith Incorporated ("Merrill Lynch"), dated January 7,
          1994, to the effect that, as of such date, the Exhange Ratios,
          taken as a whole, are fair to the stockholders of Blockbuster
          from a financial point of view, a copy of which opinion has
          been delivered to Viacom.
          
                   SECTION 3.14.  Vote Required.  The affirmative vote of
          the holders of a majority of the outstanding shares of
          Blockbuster Common Stock is the only vote of the holders of any
          class or series of Blockbuster capital stock necessary to
          approve the Merger.
          
                   SECTION 3.15.  Brokers.  No broker, finder or
          investment banker (other than Merrill Lynch) is entitled to any
          brokerage, finder's or other fee or commission in connection
          with the transactions contemplated herein based upon
          arrangements made by or on behalf of Blockbuster.  Blockbuster
          has heretofore furnished to Viacom a complete and correct copy
          of all agreements between Blockbuster and Merrill Lynch
          pursuant to which such firm would be entitled to any payment
          relating to the transactions contemplated herein.
          
          

          
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                                     ARTICLE IV
          
                      REPRESENTATIONS AND WARRANTIES OF VIACOM
          
                   Viacom hereby represents and warrants to Blockbuster
          that:
          
                   SECTION 4.01.  Organization and Qualification;
          Subsidiaries.  (a)  Each of Viacom and each Material Viacom
          Subsidiary (as defined below) is a corporation, partnership or
          other legal entity duly organized, validly existing and in good
          standing under the laws of the jurisdiction of its
          incorporation or organization and has the requisite power and
          authority and all necessary governmental approvals to own,
          lease and operate its properties and to carry on its business
          as it is now being conducted, except where the failure to be so
          organized, existing or in good standing or to have such power,
          authority and governmental approvals would not, individually or
          in the aggregate, have a Viacom Material Adverse Effect (as
          defined below).  Viacom and each Material Viacom Subsidiary is
          duly qualified or licensed as a foreign corporation to do
          business, and is in good standing, in each jurisdiction where
          the character of the properties owned, leased or operated by it
          or the nature of its business makes such qualification or
          licensing necessary, except for such failures to be so
          qualified or licensed and in good standing that would not,
          individually or in the aggregate, have a Viacom Material
          Adverse Effect.  The term "Viacom Material Adverse Effect"
          means any change or effect that is or would be materially
          adverse to the business, results of operations or financial
          condition of Viacom and the Viacom Subsidiaries, taken as a
          whole; provided that from and after the Subscription Date, the
          term "Viacom Material Adverse Effect", for purposes of Article
          IV and Section 7.03(a) only, shall be changed to mean any
          change or effect that is or would be materially adverse to the
          financial condition of Viacom and the Viacom Subsidiaries,
          taken as a whole, excluding any changes or effects caused by
          changes in general economic conditions or changes generally
          affecting Viacom's industry.
          
                   (b)  Each subsidiary of Viacom (a "Viacom Subsidiary")
          that constitutes a Significant Subsidiary of Viacom within the
          meaning of Rule 1-02 of Regulation S-X of the SEC is referred
          to herein as a "Material Viacom Subsidiary".
          
                   SECTION 4.02.  Certificate of Incorporation and
          By-Laws.  Viacom has heretofore made available to Blockbuster 

         

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          a complete and correct copy of the Certificate of Incorporation
          and the By-Laws or equivalent organizational documents, each as
          amended to date, of Viacom and each Material Viacom Subsidiary. 
          Such Certificates of Incorporation, By-Laws and equivalent
          organizational documents are in full force and effect.  Neither
          Viacom nor any Material Viacom Subsidiary is in violation of
          any provision of its Certificate of Incorporation, By-Laws or
          equivalent organizational documents, except for such violations
          that would not, individually or in the aggregate, have a Viacom
          Material Adverse Effect.
          
                   SECTION 4.03.  Capitalization.  The authorized capital
          stock of Viacom consists of 100,000,000 shares of Viacom
          Class A Common Stock, 150,000,000 shares of Viacom Class B
          Common Stock and 100,000,000 shares of Preferred Stock, par
          value $.01 per share ("Viacom Preferred Stock"), of which
          24,000,000 shares have been designated Series A Preferred Stock
          (the "Series A Preferred Stock") and 24,000,000 shares have
          been designated Series B Preferred Stock (the "Series B
          Preferred Stock").  As of November 30, 1993, (i) 53,449,125
          shares of Viacom Class A Common Stock and 67,345,982 shares of
          Viacom Class B Common Stock were issued and outstanding, all of
          which were validly issued, fully paid and nonassessable, (ii)
          no shares were held in the treasury of Viacom, (iii) no shares
          were held by the Viacom Subsidiaries, and (iv) 224,610 shares
          of Viacom Class A Common Stock and 3,760,297 shares of Viacom
          Class B Common Stock were reserved for future issuance pursuant
          to outstanding employee stock options or stock incentive rights
          granted pursuant to Viacom's 1989 Long-Term Management
          Incentive Plan, the Viacom Inc. Stock Option Plan for Outside
          Directors and any other employee stock option plan or program. 
          Since December 1, 1993 to the date of this Agreement, stock
          options were granted pursuant to which no shares of Viacom Class
          A Common Stock and no shares of Viacom Class B Common Stock are
          subject to issuance.  As of the date hereof, 24,000,000 shares
          of Viacom Series A Preferred Stock and 24,000,000 shares of
          Viacom Series B Preferred Stock are issued and outstanding. 
          Except as set forth in this Section 4.03 and as contemplated by
          this Agreement, there are no options, warrants or other rights,
          agreements, arrangements or commitments of any character
          relating to the issued or unissued capital stock of Viacom or
          any Material Viacom Subsidiary or obligating Viacom or any
          Material Viacom Subsidiary to issue or sell any shares of
          capital stock of, or other equity interests in, Viacom or any
          Material Viacom Subsidiary, except for (i) options granted
          since November 30, 1993 in the ordinary course consistent with
          past practice, (ii) the reservation of 8,570,400 shares of
          Class B Common 

          
                                         21
          
   27
 

          Stock for issuance upon conversion of shares of Viacom Series A
          Preferred Stock and (iii) the reservation of 17,140,800 shares
          of Class B Common Stock for issuance upon conversion of shares
          of Series B Preferred Stock.  All shares of Viacom Common Stock
          subject to issuance as aforesaid, upon issuance on the terms
          and conditions specified in the instruments pursuant to which
          they are issuable, will be duly authorized, validly issued,
          fully paid and nonassessable.  Except as set forth in Section
          4.03 of the Disclosure Schedule previously delivered by Viacom
          to Blockbuster (the "Viacom Disclosure Schedule"), there are no
          material outstanding contractual obligations of Viacom or any
          Viacom Subsidiary to repurchase, redeem or otherwise acquire
          any shares of Viacom Common Stock or any capital stock of any
          Material Viacom Subsidiary, or make any material investment (in
          the form of a loan, capital contribution or otherwise) in, any
          Viacom Subsidiary or any other person.  Each outstanding share
          of capital stock of each Material Viacom Subsidiary is duly
          authorized, validly issued, fully paid and nonassessable and
          each such share owned by Viacom or another Viacom Subsidiary is
          free and clear of all security interests, liens, claims,
          pledges, options, rights of first refusal, agreements,
          limitations on Viacom's or such other Viacom Subsidiary's
          voting rights, charges and other encumbrances of any nature
          whatsoever.  The VCRs to be issued pursuant to the Merger will
          be duly and validly authorized by Viacom and, when issued and
          delivered pursuant to the terms of this Agreement, will be duly
          and validly issued, fully paid and nonassessable.  The shares
          of Viacom Class B Common Stock (if any) issuable pursuant to
          the terms of the VCRs will be duly authorized, validly issued,
          fully paid and nonassessable.  The VCRs constitute legal, valid
          and binding obligations of Viacom, enforceable against Viacom
          in accordance with their terms, subject to the effect of any
          applicable bankruptcy, reorganization, insolvency, moratorium
          or similar laws affecting creditors' rights generally and
          subject, as to enforceability, to the effect of general
          principles of equity (regardless of whether such enforceability
          is considered in a proceeding in equity or at law).
          
                   SECTION 4.04.  Authority Relative to this Agreement. 
          Viacom has all necessary power and authority to execute and
          deliver this Agreement, to perform its obligations hereunder
          and to consummate the transactions contemplated herein.  The
          execution and delivery of this Agreement by Viacom and the
          consummation by Viacom of the transactions contemplated herein
          have been duly and validly authorized by all necessary
          corporate action and the Parent Voting Agreement has been
          approved by the Viacom Board of 

        

                                         22
          
          
   28
 

          
          
          Directors for purposes of Section 203 of Delaware Law and no
          other corporate proceedings on the part of Viacom are necessary
          to authorize this Agreement or to consummate the transactions
          contemplated herein (other than, with respect to the Merger,
          the approval by the holders of a majority of the then
          outstanding shares of Viacom Class A Common Stock of (i) this
          Agreement and the Merger and (ii) to the extent necessary, the
          amendment to Viacom's Certificate of Incorporation necessary to
          increase (x) the shares of authorized Viacom Class B Common
          Stock to a number not less than the number sufficient to
          consummate the issuance of Shares of Viacom Class B Common
          Stock contemplated under this Agreement and (y) the size of the
          Board of Directors of Viacom to a number not less than 12
          (collectively, the "Viacom Vote Matter"; and the amendments to
          Viacom's Certificate of Incorporation described in clauses (x)
          and (y) being, collectively, the "Viacom Certificate
          Amendments"), and the filing and recordation of the foregoing
          amendment to Viacom's Certificate of Incorporation and
          appropriate merger documents as required by Delaware Law). 
          This Agreement has been duly and validly executed and delivered
          by Viacom and, assuming the due authorization, execution and
          delivery by Blockbuster, constitutes a legal, valid and binding
          obligation of Viacom, enforceable against Viacom in accordance
          with its terms, subject to the effect of any applicable
          bankruptcy, reorganization, insolvency, moratorium or similar
          laws affecting creditors' rights generally and subject, as to
          enforceability, to the effect of general principles of equity
          (regardless of whether such enforceability is considered in a
          proceeding in equity or at law).
          
                   SECTION 4.05.  No Conflict; Required Filings and
          Consents.  (a)  Except as set forth in Section 4.05 of the
          Viacom Disclosure Schedule, the execution and delivery of this
          Agreement by Viacom do not, and the performance of the
          transactions contemplated herein by Viacom will not,
          (i) conflict with or violate the Certificate of Incorporation
          or By-Laws or equivalent organizational documents of Viacom or
          any Material Viacom Subsidiary, (ii) conflict with or violate
          any law, rule, regulation, order, judgment or decree applicable
          to Viacom or any Viacom Subsidiary or by which any property or
          asset of Viacom or any Viacom Subsidiary is bound or affected,
          or (iii) result in any breach of or constitute a default (or an
          event which with notice or lapse of time or both would become a
          default) under, result in the loss of a material benefit under
          or give to others any right of termination, amendment,
          acceleration or cancellation of, or result in the creation of a
          lien or other encumbrance on any property or asset of Viacom or
          any Viacom Subsidiary pursuant 

          
                                         23
          
   29
 

          to, any note, bond, mortgage, indenture, contract, agreement,
          lease, license, permit, franchise or other instrument or
          obligation to which Viacom or any Viacom Subsidiary is a party
          or by which Viacom or any Viacom Subsidiary or any property or
          asset of Viacom or any Viacom Subsidiary is bound or affected,
          except in the case of clauses (ii) and (iii), for any such
          conflicts, violations, breaches, defaults or other occurrences
          which would not prevent or delay consummation of the Merger in
          any material respect, or otherwise prevent Viacom from
          performing its obligations under this Agreement in any material
          respect, and would not, individually or in the aggregate, have a
          Viacom Material Adverse Effect.
          
                   (b)  The execution and delivery of this Agreement by
          Viacom do not, and the performance of this Agreement by Viacom
          will not, require any consent, approval, authorization or
          permit of, or filing with or notification to, any Governmental
          Entity, except (i) for (A) applicable requirements, if any, of
          the Exchange Act, Securities Act, state securities or Blue Sky
          Laws and state takeover laws, (B) the pre-merger notification
          requirements of the HSR Act, (C) applicable requirements, if
          any, of the Communications Act, and of state and local
          governmental authorities, including state and local authorities
          granting franchises to operate cable systems, (D) applicable
          requirements of the Investment Canada Act of 1985 and the
          Competition Act (Canada), (E) filing and recordation of
          appropriate merger documents and the Viacom Certificate
          Amendments as required by Delaware Law and (F) any non-United
          States competition, antitrust and investment laws and (ii)
          where failure to obtain such consents, approvals,
          authorizations or permits, or to make such filings or
          notifications, would not prevent or delay consummation of the
          Merger in any material respect, or otherwise prevent Viacom
          from performing its obligations under this Agreement in any
          material respect, and would not, individually or in the
          aggregate, have a Viacom Material Adverse Effect.  
          
                   SECTION 4.06.  Compliance.  Neither Viacom nor any
          Viacom Subsidiary is in conflict with, or in default or
          violation of, (i) any law, rule, regulation, order, judgment or
          decree applicable to Viacom or any Viacom Subsidiary or by
          which any property or asset of Viacom or any Viacom Subsidiary
          is bound or affected, or (ii) any note, bond, mortgage,
          indenture, contract, agreement, lease, license, permit,
          franchise or other instrument or obligation to which Viacom or
          any Viacom Subsidiary is a party or by which Viacom or any
          Viacom Subsidiary or any property or asset of Viacom or any
          Viacom Subsidiary is bound or affected, except for any 

          
                                         24
          
   30
 

          such conflicts, defaults or violations that would not,
          individually or in the aggregate, have a Viacom Material
          Adverse Effect.
          
                   SECTION 4.07.  SEC Filings; Financial Statements.  (a) 
          Viacom has filed all forms, reports and documents required to
          be filed by it with the SEC since December 31, 1990, and has
          heretofore made available to Blockbuster, in the form filed
          with the SEC (excluding any exhibits thereto), (i) its Annual
          Reports on Form 10-K for the fiscal years ended December 31,
          1990, 1991 and 1992, respectively, (ii) its Quarterly Reports
          on Form 10-Q for the periods ended March 31, 1993, June 30,
          1993 and September 30, 1993, (iii) all proxy statements
          relating to Viacom's meetings of stockholders (whether annual
          or special) held since January 1, 1991 and (iv) all other
          forms, reports and other registration statements (other than
          Quarterly Reports on Form 10-Q not referred to in clause (ii)
          above and preliminary materials) filed by Viacom with the SEC
          since December 31, 1990 (the forms, reports and other documents
          referred to in clauses (i), (ii), (iii), and (iv) above being
          referred to herein, collectively, as the "Viacom SEC Reports"). 
          The Viacom SEC Reports and any other forms, reports and other
          documents filed by Viacom with the SEC after the date of this
          Agreement (x) were or will be prepared in accordance with the
          requirements of the Securities Act and the Exchange Act, as the
          case may be, and the rules and regulations thereunder and (y)
          did not at the time they were filed, or will not at the time
          they are filed, contain any untrue statement of a material fact
          or omit to state a material fact required to be stated therein
          or necessary in order to make the statements made therein, in
          the light of the circumstances under which they were made, not
          misleading.  No Material Viacom Subsidiary (other than Viacom
          International Inc., a Delaware corporation
          ("Viacom International")) is required to file any form, report
          or other document with the SEC.
          
                   (b)  Viacom International has filed all forms, reports
          and documents required to be filed by it with the SEC since
          December 31, 1992 and Viacom has heretofore made available to
          Blockbuster, in the form filed with the SEC (excluding any
          exhibits thereto), (i) Viacom International's Annual Report on
          Form 10-K for the year ended December 31, 1992, (ii) Viacom
          International's Quarterly Reports on Form 10-Q for the periods
          ended March 31, 1993, June 30, 1993 and September 30, 1993,
          (iii) all proxy statements relating to Viacom International's
          meetings of stockholders (whether annual or special) held since
          January 1, 1993 and (iv) all other forms, reports and other
          registration statements (other than Quarterly Reports on Form
          10-Q not referred to in clause 

                                         25
          
   31
 

          (ii) above and preliminary materials) filed by Viacom
          International with the SEC since December 31, 1992 (the forms,
          reports and other documents referred to in clauses (i), (ii),
          (iii) and (iv) above being referred to herein, collectively, as
          the "Viacom International SEC Reports").  The Viacom
          International SEC Reports and any forms, reports and other
          documents filed by Viacom International with the SEC after the
          date of this Agreement (x) were or will be prepared in
          accordance with the requirements of the Securities Act and the
          Exchange Act, as the case may be, and the rules and regulations
          thereunder and (y) did not at the time they were filed, or will
          not at the time they are filed, contain any untrue statement of
          a material fact or omit to state a material fact required to be
          stated therein or necessary in order to make the statements
          made therein, in the light of the circumstances under which
          they were made, not misleading.
          
                   (c)  Each of the consolidated financial statements
          (including, in each case, any notes thereto) contained in the
          Viacom SEC Reports and the Viacom International SEC Reports was
          prepared in accordance with generally accepted accounting
          principles applied on a consistent basis throughout the periods
          indicated (except as may be indicated in the notes thereto) and
          each fairly presented the consolidated financial position,
          results of operations and cash flows of Viacom and the
          consolidated Viacom Subsidiaries or Viacom International or the
          subsidiaries of Viacom International, as the case may be, as at
          the respective dates thereof and for the respective periods
          indicated therein (subject, in the case of unaudited
          statements, to normal and recurring year-end adjustments which
          were not and are not expected, individually or in the
          aggregate, to be material in amount).
          
                   (d)  Except as and to the extent set forth in the
          Viacom SEC Reports filed with the SEC prior to the date of this
          Agreement, Viacom and the Viacom Subsidiaries do not have any
          liability or obligation of any nature (whether accrued,
          absolute, contingent or otherwise) other than liabilities and
          obligations which would not, individually or in the aggregate,
          have a Viacom Material Adverse Effect.
          
                   SECTION 4.08.  Absence of Certain Changes or Events. 
          Since December 31, 1992, except as contemplated by this
          Agreement, as set forth in Section 4.08 of the Disclosure
          Schedule or disclosed in any Viacom SEC Report filed since
          December 31, 1992 and prior to the date of this Agreement,
          Viacom and the Viacom Subsidiaries have conducted their
          businesses only in the ordinary course and in a manner
          consistent with past practice and, since December 31, 1992 

          
                                         26
          
          
   32
 

          
          
          there has not been (i) any Viacom Material Adverse Effect, (ii)
          any damage, destruction or loss (whether or not covered by
          insurance) with respect to any property or asset of Viacom or
          any Viacom Subsidiary and having, individually or in the
          aggregate, a Viacom Material Adverse Effect, (iii) any change
          by Viacom in its accounting methods, principles or practices,
          (iv) any declaration, setting aside or payment of any dividend
          or distribution in respect of any capital stock of Viacom or
          any Viacom Subsidiary or any redemption, purchase or other
          acquisition of any of their respective securities other than
          dividends by a Viacom Subsidiary to Viacom or (v) other than as
          set forth in Section 4.03 and pursuant to the plans, programs
          or arrangements referred to in Section 4.10, other than in the
          ordinary course of business consistent with past practice, any
          increase in or establishment of any bonus, insurance,
          severance, deferred compensation, pension, retirement, profit
          sharing, stock option (including, without limitation, the
          granting of stock options, stock appreciation rights,
          performance awards, or restricted stock awards), stock purchase
          or other employee benefit plan, or any other increase in the
          compensation payable or to become payable to any officers or
          key employees of Viacom or any Viacom Subsidiary, except for
          the establishment of the Viacom Inc. Stock Option Plan for
          Outside Directors and the grant of options to purchase an
          aggregate of 25,000 shares thereunder.
          
                   SECTION 4.09.  Absence of Litigation.  Except as
          disclosed in the Viacom SEC Reports filed with the SEC prior to
          the date of this Agreement, there is no claim, action,
          proceeding or investigation pending or, to the best knowledge
          of Viacom, threatened against Viacom or any Viacom Subsidiary,
          or any property or asset of Viacom or any Viacom Subsidiary,
          before any court, arbitrator or administrative, governmental or
          regulatory authority or body, domestic or foreign, which,
          individually or in the aggregate, would have a Viacom Material
          Adverse Effect.  Except as disclosed in the Viacom SEC Reports
          filed with the SEC prior to the date of this Agreement, neither
          Viacom nor any Viacom Subsidiary nor any property or asset of
          Viacom or any Viacom Subsidiary is subject to any order, writ,
          judgment, injunction, decree, determination or award which
          would have, individually or in the aggregate, a Viacom Material
          Adverse Effect.
          
                   SECTION 4.10.  Employee Benefit Plans.  With respect
          to all the employee benefit plans, programs and arrangements
          maintained or contributed to by Viacom or any Viacom Subsidiary
          for the benefit of any current or former employee, officer or
          director of Viacom or any Viacom Subsidiary (the "Viacom
          Plans"), except as set forth in Section 4.10 of the 

          
                                         27
          
          
   33
 

          
          
          Viacom Disclosure Schedule or the Viacom SEC Reports and except
          as would not, individually or in the aggregate, have a Viacom
          Material Adverse Effect:  (i) none of the Viacom Plans is a
          multiemployer plan within the meaning of ERISA; (ii) none of
          the Viacom Plans promises or provides retiree medical or life
          insurance benefits to any person; (iii) each Viacom Plan
          intended to be qualified under Section 401(a) of the Code has
          received a favorable determination letter from the IRS that it
          is so qualified and nothing has occurred since the date of such
          letter that could reasonably be expected to affect the
          qualified status of such Viacom Plan; (iv) each Viacom Plan has
          been operated in all material respects in accordance with its
          terms and the requirements of applicable law; (v) neither
          Viacom nor any Viacom Subsidiary has incurred any direct or
          indirect liability under, arising out of or by operation of
          Title IV of ERISA in connection with the termination of, or
          withdrawal from, any Viacom Plan or other retirement plan or
          arrangement, and no fact or event exists that could reasonably
          be expected to give rise to any such liability; and (vi) Viacom
          and the Viacom Subsidiaries have not incurred any liability
          under, and have complied in all respects with, WARN, and no
          fact or event exists that could give rise to liability under
          such act.  Except as set forth in Section 4.10 of the Viacom
          Disclosure Schedule or the Viacom SEC Reports, the aggregate
          accumulated benefit obligations of each Viacom Plan subject to
          Title IV of ERISA (as of the date of the most recent actuarial
          valuation prepared for such Viacom Plan) do not exceed the fair
          market value of the assets of such Viacom Plan (as of the date
          of such valuation).
          
                   SECTION 4.11.  Trademarks, Patents and Copyrights. 
          Viacom and the Viacom Subsidiaries own, or possess adequate
          licenses or other valid rights to use, all material patents,
          patent rights, trademarks, trademark rights, trade names, trade
          name rights, copyrights, service marks, service mark rights,
          trade secrets, applications to register, and registrations for,
          the foregoing trademarks, service marks, know-how and other
          proprietary rights and information used in connection with the
          business of Viacom and the Viacom Subsidiaries as currently
          conducted, and no assertion or claim has been made in writing
          challenging the validity of any of the foregoing which,
          individually or in the aggregate, would have a Viacom Material
          Adverse Effect.  To the best knowledge of Viacom, the conduct
          of the business of Viacom and the Viacom Subsidiaries as
          currently conducted does not conflict in any way with any
          patent, patent right, license, trademark, trademark right,
          trade name, trade name right, service mark or copyright of any
          third party that, 

                                         28
          
   34
 

          individually or in the aggregate, would have a Viacom Material
          Adverse Effect.  
          
                   SECTION 4.12.  Taxes.  Viacom and the Viacom
          Subsidiaries have timely filed all federal, state, local and
          foreign tax returns and reports required to be filed by them
          through the date hereof and shall timely file all returns and
          reports required on or before the Effective Time, except for
          such returns and reports the failure of which to file timely
          would not, individually or in the aggregate, have a Viacom
          Material Adverse Effect.  Such reports and returns are and will
          be true, correct and complete, except for such failures to be
          true, correct and complete as would not, individually or in the
          aggregate, have a Viacom Material Adverse Effect.  Viacom and
          the Viacom Subsidiaries have paid and discharged all federal,
          state, local and foreign taxes due from them, other than such
          taxes that are being contested in good faith by appropriate
          proceedings and are adequately reserved as shown in the audited
          consolidated balance sheet of Viacom dated December 31, 1992
          (the "Viacom 1992 Balance Sheet") and its most recent quarterly
          financial statements, except for such failures to so pay and
          discharge which would not, individually or in the aggregate,
          have a Viacom Material Adverse Effect.  Neither the IRS nor any
          other taxing authority or agency, domestic or foreign, is now
          asserting or, to the best knowledge of Viacom, threatening to
          assert against Viacom or any Viacom Subsidiary any deficiency
          or material claim for additional taxes or interest thereon or
          penalties in connection therewith which, if such deficiencies
          or claims were finally resolved against Viacom and the Viacom
          Subsidiaries, would, individually or in the aggregate, have a
          Viacom Material Adverse Effect.  The accruals and reserves for
          taxes (including interest and penalties, if any, thereon)
          reflected in the Viacom 1992 Balance Sheet and the most recent
          quarterly financial statements are adequate in accordance with
          generally accepted accounting principles, except where the
          failure to be adequate would not have a Viacom Material Adverse
          Effect.  Viacom and the Viacom Subsidiaries have withheld or
          collected and paid over to the appropriate governmental
          authorities or are properly holding for such payment all taxes
          required by law to be withheld or collected, except for such
          failures to have so withheld or collected and paid over or to
          be so holding for payment which would not, individually or in
          the aggregate, have a Viacom Material Adverse Effect.  There
          are no material liens for taxes upon the assets of Viacom or
          the Viacom Subsidiaries, other than liens for current taxes not
          yet due and payable and liens for taxes that are being
          contested in good faith by appropriate proceedings.  Neither
          Viacom nor any Viacom Subsidiary has agreed to or is required
          to make any 

                                      29          
          
   35
 

          
          
          adjustment under Section 481(a) of the Code.  Neither Viacom
          nor any Viacom Subsidiary has made an election under Section
          341(f) of the Code.  For purposes of this Section 4.12, where a
          determination of whether a failure by Viacom or a Viacom
          Subsidiary to comply with the representations herein has a
          Viacom Material Adverse Effect is necessary, such determination
          shall be made on an aggregate basis with all other failures
          within this Section 4.12.
          
                   SECTION 4.13.  Opinion of Financial Advisor.  Viacom
          has received the opinion of Smith Barney Shearson Inc. ("Smith
          Barney"), dated January 6, 1994, to the effect that, as of such
          date, the Merger is fair to the stockholders of Viacom from a
          financial point of view, a copy of which opinion has been
          delivered to Blockbuster.
          
                   SECTION 4.14.  Vote Required.  The affirmative vote of
          the holders of a majority of the outstanding shares of Viacom
          Class A Common Stock is the only vote of the holders of any
          class or series of Viacom capital stock necessary to approve
          the Viacom Vote Matter.
          
                   SECTION 4.15.  Brokers.  No broker, finder or
          investment banker (other than Smith Barney) is entitled to any
          brokerage, finder's or other fee or commission in connection
          with the transactions contemplated herein based upon
          arrangements made by or on behalf of Viacom.  Viacom has
          heretofore furnished to Blockbuster a complete and correct copy
          of all agreements between Viacom and Smith Barney pursuant to
          which such firm would be entitled to any payment relating to
          the transactions contemplated herein.
          
          
                                     ARTICLE V
          
                      CONDUCT OF BUSINESSES PENDING THE MERGER
          
                   SECTION 5.01.  Conduct of Respective Businesses by
          Blockbuster and Viacom Pending the Merger.  Each of Blockbuster
          and Viacom covenants and agrees that, between the date of this
          Agreement and the Effective Time, unless the other party shall
          have consented in writing (such consent not to be unreasonably
          withheld), the businesses of each of Blockbuster and Viacom and
          their respective subsidiaries shall, in all material respects,
          be conducted in, and each of Blockbuster and Viacom and their
          respective subsidiaries shall not take any material action
          except in, the ordinary course of business, consistent with
          past practice; and each of Blockbuster and Viacom shall use its
          reasonable best efforts to preserve substantially intact its
          business 

          
          
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          organization, to keep available the services of its and its
          subsidiaries' current officers, employees and consultants and
          to preserve its and its subsidiaries' relationships with
          customers, suppliers and other persons with which it or any of
          its subsidiaries has significant business relations.  By way of
          amplification and not limitation, except (i) as contemplated by
          this Agreement, (ii) for any actions taken by Viacom relating
          to the proposed acquisition by Viacom of Paramount
          Communications Inc., a Delaware corporation ("Paramount"),
          (iii) for any actions taken by Blockbuster in its capacity as
          the controlling stockholder of Spelling that are necessary due
          to the applicable fiduciary duties to Spelling and the other
          stockholders of Spelling, as determined by Blockbuster in good
          faith after consultation with and based upon the advice of
          independent legal counsel (who may be Blockbuster's regularly
          engaged independent legal counsel) or (iv) as set forth on
          Section 5.01 of the Blockbuster Disclosure Schedule or Section
          5.01 of the Viacom Disclosure Schedule, neither Viacom nor
          Blockbuster nor any of their respective subsidiaries shall,
          between the date of this Agreement and the Effective Time,
          directly or indirectly do, or propose or agree to do, any of
          the following without the prior written consent of the other
          (provided that the following restrictions shall not apply to
          any subsidiaries which Blockbuster or Viacom, as the case may
          be, do not control):
          
                   (a)  amend or otherwise change the Certificate of
              Incorporation or By-Laws of Viacom or Blockbuster (except,
              with respect to Viacom, the Viacom Certificate Amendments);
          
                   (b)  issue, sell, pledge, dispose of, grant, encumber,
              or authorize the issuance, sale, pledge, disposition, grant
              or encumbrance of, (i) any shares of capital stock of any class 
              of it or any of its subsidiaries, or any options (other than 
              the grant of options in the ordinary course of business 
              consistent with past practice to employees who are not 
              executive officers of Blockbuster or Viacom or the grant of 
              options previously disclosed by Blockbuster to Viacom prior 
              to the date of this Agreement), warrants, convertible 
              securities or other rights of any kind to acquire any shares
              of such capital stock, or any other ownership interest 
              (including, without limitation, any phantom interest), of it 
              or any of its subsidiaries (other than the issuance of 
              shares of capital stock in connection with (A) any dividend 
              reinvestment plan or by any Blockbuster Plan with an employee 
              stock fund or employee stock ownership plan feature, 
              consistent with applicable 

          
          
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              securities laws, (B) the exercise of options, warrants or
              other similar rights outstanding as of the date of this
              Agreement and in accordance with the terms of such options,
              warrants or rights in effect on the date of this Agreement,
              (C) otherwise permitted to be granted pursuant to this
              Agreement or (D) any acquisition by Blockbuster permitted
              by paragraph (e)(i) of this Section 5.01) or (ii) any
              assets of it or any of its subsidiaries, except for sales
              in the ordinary course of business or which, individually,
              do not exceed $10,000,000 or which, in the aggregate, do
              not exceed $25,000,000;
          
                   (c)  declare, set aside, make or pay any dividend or
              other distribution, payable in cash, stock, property or
              otherwise, with respect to any of its capital stock except,
              (i) in the case of Blockbuster, the regular quarterly
              dividend payable on or about April 1, 1994 in an amount not
              to exceed $.025 per share of Blockbuster Common Stock, (ii)
              in the case of Blockbuster, other regular quarterly
              dividends in amounts not in excess of $.025 per share per
              quarter and payable consistent with past practice, (iii) in
              the case of Spelling, regular quarterly dividends of $.020
              per share per quarter and payable consistent with past
              practice and (iv) dividends declared and paid by a
              subsidiary of either Blockbuster (other than Spelling) or
              Viacom (each such dividend to be declared and paid in the
              ordinary course of business consistent with past practice);
          
                   (d)  reclassify, combine, split, subdivide or redeem,
              purchase or otherwise acquire, directly or indirectly, any
              of its capital stock other than acquisitions by a dividend
              reinvestment plan or by any Blockbuster Plan with an
              employee stock fund or employee stock ownership plan
              feature, consistent with applicable securities laws;
          
                   (e)  (i) acquire (for cash or shares of stock)
              (including, without limitation, by merger, consolidation,
              or acquisition of stock or assets) any corporation,
              partnership, other business organization or any division
              thereof or any assets, except for such acquisitions which,
              individually, do not exceed $10,000,000 or which, in the
              aggregate, do not exceed $25,000,000; (ii) incur any
              indebtedness for borrowed money or issue any debt
              securities or assume, guarantee or endorse, or otherwise as
              an accommodation become responsible for, the obligations of
              any person, or make any loans or advances, except (A)
              indebtedness incurred by Viacom in connection with the
              proposed acquisition by Viacom of Paramount and 

          
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              in connection with this Agreement and the transactions
              contemplated hereby, (B) indebtedness incurred by
              Blockbuster in connection with the performance of its
              obligations under the Subscription Agreement, (C) the
              refinancing of existing indebtedness, (D) in connection
              with this Agreement and the transactions contemplated
              hereby, borrowings under commercial paper programs in the
              ordinary course of business, (E) borrowings under existing
              bank lines of credit in the ordinary course of business,
              (F) in the case of Blockbuster, indebtedness resulting from
              the issuance of debt securities registered pursuant to the
              Registration Statement on Form S-3, registration number
              33-56154, or (G) indebtedness which, in the aggregate, does
              not exceed $25,000,000; or (iii) enter into or amend any
              contract, agreement, commitment or arrangement with respect
              to any matter set forth in this Section 5.01(e);
          
                   (f)  increase the compensation payable or to become
              payable to its executive officers or employees, except for
              increases in the ordinary course of business in accordance
              with past practice, or grant any severance or termination
              pay to, or enter into any employment or severance agreement
              with any director or executive officer of it or any of its
              subsidiaries, or establish, adopt, enter into or amend in
              any material respect or take action to accelerate any
              rights or benefits under any collective bargaining, bonus,
              profit sharing, thrift, compensation, stock option, restricted
              stock, pension, retirement, deferred compensation, employment, 
              termination, severance or other plan, agreement, trust, fund, 
              policy or arrangement for the benefit of any director, executive
              officer or employee; or
          
                   (g)  take any action, other than reasonable and usual
              actions in the ordinary course of business and consistent
              with past practice, with respect to accounting policies or
              procedures.
          
          
                                     ARTICLE VI
          
                                ADDITIONAL COVENANTS
          
          
                   SECTION 6.01.  Access to Information; Confidentiality. 
          (a)  From the date hereof to the Effective Time, each of
          Blockbuster and Viacom shall (and shall cause its subsidiaries
          and officers, directors, employees, auditors and agents to)
          afford the officers, employees and agents of 

          
                                      33
   39

          the other party (the "Respective Representatives") reasonable
          access at all reasonable times to its officers, employees,
          agents, properties, offices, plants and other facilities, books
          and records, and shall furnish such Respective Representatives
          with all financial, operating and other data and information as
          may be reasonably requested.
          
                   (b)  All information obtained by Blockbuster or Viacom
          pursuant to this Section 6.01 shall be kept confidential in
          accordance with the confidentiality agreement, dated July 1,
          1993 (the "Confidentiality Agreement"), between Blockbuster and
          Viacom.
          
                   (c)  No investigation pursuant to this Section 6.01
          shall affect any representation or warranty in this Agreement
          of any party hereto or any condition to the obligations of the
          parties hereto.
          
                   SECTION 6.02.  Directors' and Officers'
          Indemnification and Insurance.  (a)  The Certificate of
          Incorporation and By-Laws of the Surviving Corporation shall
          contain the provisions with respect to indemnification set
          forth in the Certificate of Incorporation and By-Laws of Viacom
          on the date of this Agreement, which provisions shall not be
          amended, repealed or otherwise modified for a period of six
          years after the Effective Time in any manner that would
          adversely affect the rights thereunder of individuals who at
          any time prior to the Effective Time were directors or officers
          of Blockbuster in respect of actions or omissions occurring at
          or prior to the Effective Time (including, without limitation,
          the transactions contemplated by this Agreement), unless such
          modification is required by law.
          
                   (b)  From and after the Effective Time, the Surviving
          Corporation shall indemnify, defend and hold harmless the
          present and former officers and directors of Blockbuster
          (collectively, the "Indemnified Parties") against all losses,
          expenses, claims, damages, liabilities or amounts that are paid
          in settlement of, with the approval of the Surviving
          Corporation (which approval shall not unreasonably be
          withheld), or otherwise in connection with any claim, action,
          suit, proceeding or investigation (a "Claim"), based in whole
          or in part on the fact that such person is or was a director or
          officer of Blockbuster and arising out of actions or omissions
          occurring at or prior to the Effective Time (including, without
          limitation, the transactions contemplated by this Agreement),
          in each case to the full extent permitted under Delaware Law
          (and shall pay expenses in advance of the final disposition of
          any such action or proceeding to each Indemnified Party to the
          fullest extent permitted under 

         
                                     34
          
          
   40
           
          
          Delaware Law, upon receipt from the Indemnified Party to whom
          expenses are advanced of the undertaking to repay such advances
          contemplated by Section 145(e) of Delaware Law).
          
                   (c)  Without limiting the foregoing, in the event any
          Claim is brought against any Indemnified Party (whether arising
          before or after the Effective Time) after the Effective Time
          (i) the Indemnified Parties may retain Blockbuster's regularly
          engaged independent legal counsel or other independent legal
          counsel satisfactory to them, provided that such other counsel
          shall be reasonably acceptable to the Surviving Corporation,
          (ii) the Surviving Corporation shall pay all reasonable fees
          and expenses of such counsel for the Indemnified Parties
          promptly as statements therefor are received and (iii) the
          Surviving Corporation will use its reasonable best efforts to
          assist in the vigorous defense of any such matter, provided
          that the Surviving Corporation shall not be liable for any
          settlement of any Claim effected without its written consent,
          which consent shall not be unreasonably withheld.  Any
          Indemnified Party wishing to claim indemnification under this
          Section 6.02 upon learning of any such Claim shall notify the
          Surviving Corporation (although the failure so to notify the
          Surviving Corporation shall not relieve the Surviving
          Corporation from any liability which the Surviving Corporation
          may have under this Section 6.02, except to the extent such
          failure materially prejudices the Surviving Corporation's
          position with respect to such claim), and shall deliver to the
          Surviving Corporation the undertaking contemplated by Section
          145(e) of Delaware Law.  The Indemnified Parties as a group may
          retain no more than one law firm (in addition to local counsel)
          to represent them with respect to each such matter unless there
          is, under applicable standards of professional conduct (as
          determined by counsel to the Indemnified Parties), a conflict
          on any significant issue between the positions of any two or
          more Indemnified Parties, in which event such additional
          counsel as may be required may be retained by the Indemnified
          Parties.
          
                   (d)  For a period of three years after the Effective
          Time, the Surviving Corporation shall cause to be maintained in
          effect the current policies of directors' and officers'
          liability insurance maintained by Blockbuster (provided that
          the Surviving Corporation may substitute therefor policies of
          at least the same coverage and amounts containing terms and
          conditions which are no less advantageous to former officers
          and directors of Blockbuster) with respect to claims arising
          from facts or events which occurred before the Effective Time;
          provided, however, that in no event shall the Surviving
          Corporation be required to expend pursuant to this Section 

         
          
                                        35
          
   41
 
            
          
          6.02(d) more than an amount equal to 200% of current annual
          premiums paid by Blockbuster for such insurance (which premiums
          Blockbuster represents and warrants to be $756,000 in the
          aggregate).

                   (e)  This Section 6.02 is intended to be for the
          benefit of, and shall be enforceable by, the Indemnified
          Parties, their heirs and personal representatives and shall be
          binding on the Surviving Corporation and its respective
          successors and assigns.
          
                   SECTION 6.03.  Notification of Certain Matters. 
          Blockbuster shall give prompt notice to Viacom, and Viacom
          shall give prompt notice to Blockbuster, of (i) the occurrence,
          or non-occurrence, of any event the occurrence, or
          non-occurrence, of which would be likely to cause (x) any
          representation or warranty contained in this Agreement to be
          untrue or inaccurate or (y) any covenant, condition or
          agreement contained in this Agreement not to be complied with
          or satisfied and (ii) any failure of Blockbuster or Viacom, as
          the case may be, to comply with or satisfy any covenant,
          condition or agreement to be complied with or satisfied by it
          hereunder; provided, however, that the delivery of any notice
          pursuant to this Section 6.03 shall not limit or otherwise
          affect the remedies available hereunder to the party receiving
          such notice.
          
                   SECTION 6.04.  Tax Treatment.  Each of Blockbuster and
          Viacom will use its reasonable best efforts to cause the Merger
          to qualify as a reorganization under the provisions of Section
          368(a) of the Code and to obtain the opinions of counsel
          referred to in Sections 7.02(c) and 7.03(c).
          
                   SECTION 6.05.  Registration Statement; Joint Proxy
          Statement.  (a)  As promptly as practicable after the execution
          of this Agreement, (i) Viacom and Blockbuster shall prepare and
          file with the SEC a joint proxy statement relating to the
          meetings of Blockbuster's stockholders and holders of Viacom
          Class A Common Stock to be held in connection with the Merger
          (together with any amendments thereof or supplements thereto,
          the "Proxy Statement") and (ii) Viacom shall prepare and file
          with the SEC a registration statement on Form S-4 (together
          with all amendments thereto, the "Registration Statement") in
          which the Proxy Statement shall be included as a prospectus, in
          connection with the registration under the Securities Act of
          the shares of Viacom Common Stock and the VCRs to be issued to
          the stockholders of Blockbuster pursuant to the Merger.  Each
          of Blockbuster and Viacom shall use all reasonable efforts to
          have or cause the Registration Statement to become 

                                        36

   42
 

          
          
          effective as promptly as practicable, and shall take all or any
          action required under any applicable federal or state
          securities laws in connection with the issuance of shares of
          Viacom Common Stock and VCRs pursuant to the Merger.  Each of
          Blockbuster and Viacom shall furnish all information concerning
          itself to the other as the other may reasonably request in
          connection with such actions and the preparation of the
          Registration Statement and Proxy Statement.  As promptly as
          practicable after the Registration Statement shall have become
          effective, each of Viacom and Blockbuster shall mail the Proxy
          Statement to its respective stockholders.  The Proxy Statement
          shall include the recommendation of the Board of Directors of
          each of Viacom and Blockbuster in favor of the Merger, unless
          otherwise necessary due to the applicable fiduciary duties of
          the respective directors of Viacom and Blockbuster, as
          determined by such directors in good faith after consultation
          with and based upon the advice of independent legal counsel
          (who may be such party's regularly engaged independent legal
          counsel).
          
                   (b)  The information supplied by Viacom for inclusion
          in the Registration Statement and the Proxy Statement shall
          not, at (i) the time the Registration Statement is declared
          effective, (ii) the time the Proxy Statement (or any amendment
          thereof or supplement thereto) is first mailed to the
          stockholders of Viacom and Blockbuster, (iii) the time of each
          of the Stockholders' Meetings (as defined in Section 6.06), and
          (iv) the Effective Time, contain any untrue statement of a
          material fact or omit to state any material fact required to be
          stated therein or necessary in order to make the statements
          therein not misleading.  If at any time prior to the Effective
          Time any event or circumstance relating to Viacom or any of the
          Viacom Subsidiaries, or their respective officers or directors,
          should be discovered by Viacom which should be set forth in an
          amendment or a supplement to the Registration Statement or
          Proxy Statement, Viacom shall promptly inform Blockbuster.
          
                   (c)  The information supplied by Blockbuster for
          inclusion in the Registration Statement and the Proxy Statement
          shall not, at (i) the time the Registration Statement is
          declared effective, (ii) the time the Proxy Statement (or any
          amendment thereof or supplement thereto) is first mailed to the
          stockholders of Blockbuster and Viacom, (iii) the time of each
          of the Stockholders' Meetings, and (iv) the Effective Time,
          contain any untrue statement of a material fact or omit to
          state any material fact required to be stated therein or
          necessary in order to make the statements therein not
          misleading.  If at any time prior to the Effective Time any
          event or circumstance relating to 

                                     37
          
   43
 

          Blockbuster or any of the Blockbuster Subsidiaries, or their
          respective officers or directors, should be discovered by
          Blockbuster which should be set forth in an amendment or a
          supplement to the Registration Statement or Proxy Statement,
          Blockbuster shall promptly inform Viacom.
          
                   (d)  Viacom represents and warrants to Blockbuster
          that the information supplied by and relating to Viacom for
          inclusion in the Paramount Offer Documents (as defined below)
          will not, at the time the Paramount Offer Documents are filed
          with the SEC or are first published, sent or given to
          stockholders of Paramount, as the case may be, contain any
          untrue statement of a material fact or omit to state any
          material fact required to be stated therein or necessary in
          order to make the statements made therein, in the light of the
          circumstances under which they are made, not misleading.  The
          Paramount Offer Documents shall comply in all material respects
          as to form with the requirements of the Exchange Act and the
          rules and regulations thereunder.
          
                   (e)  Blockbuster represents and warrants to Viacom
          that the information supplied by and relating to Blockbuster
          for inclusion in the Paramount Offer Documents will not, at the
          time the Paramount Offer Documents are filed with the SEC or
          are first published, sent or given to stockholders of
          Paramount, as the case may be, contain any untrue statement of a
          material fact or omit to state any material fact required to be
          stated therein or necessary in order to make the statements
          made therein, in the light of the circumstances under which
          they are made, not misleading.
          
                   (f)  For the purposes of this Section 6.05, the term
          "Paramount Offer Documents" shall mean the Tender Offer
          Statement on Schedule 14D-1 relating to the tender offer by
          Viacom for shares of common stock of Paramount, the offer to
          purchase incorporated by reference therein and forms of the
          related letter of transmittal and any related summary
          advertisement, together with all supplements and amendments to
          the foregoing.
          
                   SECTION 6.06.  Stockholders' Meetings.  Blockbuster
          shall call and hold a meeting of its stockholders and Viacom
          shall call and hold a meeting of the holders of the Viacom
          Class A Common Stock (collectively, the "Stockholders'
          Meetings") as promptly as practicable for the purpose of voting
          upon the approval, in the case of Blockbuster, of the Merger
          and, in the case of Viacom, of the Viacom Vote Matter, and
          Viacom and Blockbuster shall use their reasonable best efforts
          to hold the Stockholders' Meetings on the same day and as soon
          as practicable after the date on which the 

                                       38
          
   44
     

          Registration Statement becomes effective.  Blockbuster shall
          use its reasonable best efforts to solicit from its
          stockholders proxies in favor of the approval of the Merger,
          and shall take all other action necessary or advisable to
          secure the vote or consent of stockholders required by Delaware
          Law to obtain such approvals, unless otherwise necessary under
          the applicable fiduciary duties of the respective directors of
          Blockbuster, as determined by such directors in good faith
          after consultation with and based upon the advice of
          independent legal counsel (who may be such party's regularly
          engaged independent legal counsel).
          
                   SECTION 6.07.  Letters of Accountants.  (a) 
          Blockbuster shall use its reasonable best efforts to cause to
          be delivered to Viacom "comfort" letters of Arthur Andersen,
          Blockbuster's independent public accountants, dated and
          delivered the date on which the Registration Statement shall
          become effective and as of the Effective Time, and addressed to
          Viacom, in form and substance reasonably satisfactory to Viacom
          and reasonably customary in scope and substance for letters
          delivered by independent public accountants in connection with
          transactions such as those contemplated by this Agreement.
          
                   (b)  Viacom shall use its reasonable best efforts to
          cause to be delivered to Blockbuster "comfort" letters of Price
          Waterhouse, Viacom's independent public accountants, dated the
          date on which the Registration Statement shall become effective
          and as of the Effective Time, and addressed to Blockbuster, in
          form and substance reasonably satisfactory to Blockbuster and
          reasonably customary in scope and substance for letters
          delivered by independent public accountants in connection with
          transactions such as those contemplated by this Agreement.
          
                   SECTION 6.08.  [Intentionally Deleted]
          
                   SECTION 6.09.  Further Action; Reasonable Best
          Efforts.  (a)  Upon the terms and subject to the conditions
          hereof, each of the parties hereto shall (i) make promptly its
          respective filings, and thereafter make any other required
          submissions under the HSR Act with respect to the transactions
          contemplated herein, (ii) make promptly filings with or
          applications to the Federal Communications Commission (the
          "FCC") with respect to the transactions contemplated herein, if
          required and (iii) use its reasonable best efforts to take, or
          cause to be taken, all appropriate action, and to do, or cause
          to be done, all things necessary, proper or advisable under
          applicable laws and regulations to consummate and make
          effective the transactions contemplated herein, 

          
          
                                      39
          
   45
               
          
          including, without limitation, using its reasonable best
          efforts to obtain all licenses, permits, consents, approvals,
          authorizations, qualifications and orders of Governmental
          Entities and parties to contracts with Viacom and Blockbuster
          and their respective subsidiaries as are necessary for the
          consummation of the transactions contemplated herein.  In case
          at any time after the Effective Time any further action is
          necessary or desirable to carry out the purposes of this
          Agreement, the proper officers and directors of each party to
          this Agreement shall use their reasonable best efforts to take
          all such action.  
          
                   (b)  Each party shall use its best efforts not to take
          any action, or enter into any transaction, which would cause
          any of its representations or warranties contained in this
          Agreement to be untrue or result in a breach of any covenant
          made by it in this Agreement.
          
                   SECTION 6.10.  Debt Instruments.  Prior to or at the
          Effective Time, Blockbuster and each Blockbuster Subsidiary
          shall use its reasonable best efforts to prevent the
          occurrence, as a result of the Merger and the other
          transactions contemplated by this Agreement, of a change in
          control or any event which constitutes a default (or an event
          which with notice or lapse of time or both would become a
          default) under any debt instrument of Blockbuster or any
          Blockbuster Subsidiary, including, without limitation, debt
          securities registered under the Securities Act.
          
                   SECTION 6.11.  Public Announcements.  Viacom and
          Blockbuster shall consult with each other before issuing any
          press release or otherwise making any public statements with
          respect to this Agreement or any transaction contemplated
          herein and shall not issue any such press release or make any
          such public statement without the prior consent of the other
          party, which shall not be unreasonably withheld; provided,
          however, that a party may, without the prior consent of the
          other party, issue such press release or make such public
          statement as may be required by law or any listing agreement
          with a national securities exchange to which Viacom or
          Blockbuster is a party if it has used all reasonable efforts to
          consult with the other party and to obtain such party's consent
          but has been unable to do so in a timely manner.
          
                   SECTION 6.12.  Listing of Shares of Viacom Common
          Stock and VCRs.  Viacom shall use its reasonable best efforts
          to cause the shares of Viacom Common Stock and the VCRs to be
          issued in the Merger to be approved for listing on the AMEX
          prior to the Effective Time.
          
          

         
          
                                         40
          
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                   SECTION 6.13.  Affiliates of Blockbuster.  
              (a)  Within 30 days after the date of this Agreement, (a)
          Blockbuster shall deliver to Viacom a letter identifying all
          persons who may be deemed affiliates of Blockbuster under Rule
          145 of the Securities Act ("Rule 145"), including, without
          limitation, all directors and executive officers of Blockbuster
          and (b) Blockbuster shall advise the persons identified in such
          letter of the resale restrictions imposed by applicable
          securities laws.  Blockbuster shall use its reasonable best
          efforts to obtain as soon as practicable from any person who
          may be deemed to have become an affiliate of Blockbuster after
          Blockbuster's delivery of the letter referred to above and
          prior to the Effective Time, a written agreement substantially
          in the form of Exhibit 6.13.
          
              (b)  If any stockholder of Blockbuster who is identified by
          Blockbuster as an affiliate of Blockbuster in accordance with
          paragraph (a) of this Section 6.13 reasonably determines that
          such stockholder will not be eligible to sell all of the shares
          (the "Stockholder Shares") of Viacom Common Stock received by
          such stockholder in the Merger pursuant to Rule 145(d)(1) in
          the three month period immediately following the Effective
          Time, Viacom agrees, if requested by such stockholder, to
          either, at Viacom's option, (i) take such actions reasonably
          necessary to register the Stockholder Shares for resale
          pursuant to the Registration Statement or (ii) promptly after
          the Effective Time, register the Stockholder Shares pursuant to
          a registration statement on Form S-3.  Viacom shall maintain
          the effectiveness of any such registration statement (subject
          to Viacom's right to convert to a Form S-3 registration from
          the Registrtion Statement at any time) until such time as
          Viacom reasonably determines that such stockholder will be
          eligible to sell all of the Stockholder Shares then owned by
          the Stockholder pursuant to Rule 145(d)(1) in the three month
          period immediately following the termination of the
          effectiveness of the applicable registration statement. 
          Viacom's obligations contained in this paragraph (b) shall
          terminate on the second anniversary of the Effective Time.
          
                   SECTION 6.14.  Conveyance Taxes.  Viacom and
          Blockbuster shall cooperate in the preparation, execution and
          filing of all returns, questionnaires, applications, or other
          documents regarding any real property transfer or gains, sales,
          use, transfer, value added, stock transfer and stamp taxes, any
          transfer, recording, registration and other fees, and any
          similar taxes which become payable in connection with the
          transactions contemplated hereby that are required or permitted
          to be filed on or before the Effective Time.
          
          

          
          
                                          41

   47
 

          
          
                   SECTION 6.15.  Assumption of Debt and Leases.  With
          respect to debt issued by Blockbuster under indentures
          qualified under the Trust Indenture Act of 1939 ("Indentures"),
          Viacom shall execute and deliver to the trustees, under the
          respective Indentures, Supplemental Indentures, in form
          satisfactory to the respective trustees, expressly assuming the
          obligations of Blockbuster with respect to the due and punctual
          payment of the principal of (and premium, if any) and interest,
          if any, on all debt securities issued by Blockbuster under the
          respective Indentures and the due and punctual performance of
          all the terms, covenants and conditions of the respective
          Indentures to be kept or performed by Blockbuster, and shall
          deliver such Supplemental Indentures to the respective trustees
          under the Indenture.  Viacom shall similarly deliver
          instruments of assumption to the holders of any debt
          obligations of, holders of warrants of, and the lessors of any
          real property to, Blockbuster, which debt obligations, warrants
          or leases expressly require such assumption in order for the
          Merger to comply with the debt instrument, warrant or lease.
          
                   SECTION 6.16.  Transactions with Significant
          Stockholder After the Effective Time.  From and after the
          Effective Time and until the tenth anniversary of the Effective
          Time, the Surviving Corporation shall not enter into any
          agreement with any stockholder (the "Significant Stockholder")
          who beneficially owns more than 35% of the then outstanding
          securities entitled to vote at a meeting of the stockholders of
          Viacom that would constitute a Rule 13e-3 (as such rule is in
          effect today) transaction under the Exchange Act with respect
          to any class of common stock of Viacom (any such transaction
          being a "Going Private Transaction"), unless Viacom provides in
          any agreement pursuant to which such Going Private Transaction
          shall be effected that, as a condition to the consummation of
          such Going Private Transaction, (a) the holders of a majority
          of the shares not beneficially owned by the Significant
          Stockholder that are voted and present (whether in person or by
          proxy) at the meeting of stockholders called to vote on such
          Going Private Transaction shall have voted in favor thereof and
          (b) a special committee (the "Special Committee") of the Board
          of Directors of Viacom comprised solely of the independent
          directors of Viacom shall have (i) approved the terms and
          conditions of the Going Private Transaction and shall have
          recommended that the stockholders vote in favor thereof and
          (ii) received from its financial advisor a written opinion
          addressed to the Special Committee, for inclusion in the proxy
          statement to be delivered to the stockholders, and dated the
          date thereof, substantially to the effect that the
          consideration to be received by the stockholders (other than
          the majority 

          
                                         42
   48
 

          stockholder) in the Going Private Transaction is fair to them
          from a financial point of view.  Notwithstanding anything to
          the contrary in this Section 6.16, the restrictions contained
          in this Section 6.16 shall not apply to any Significant
          Stockholder if there exists another stockholder who
          beneficially owns a greater percentage of outstanding
          securities entitled to vote at the meeting than the Significant
          Stockholder.
          
          
                                    ARTICLE VII
          
                                 CLOSING CONDITIONS
          
                   SECTION 7.01.  Conditions to Obligations of Each Party
          to Effect the Merger.  The respective obligations of each party
          to effect the Merger and the other transactions contemplated
          herein shall be subject to the satisfaction at or prior to the
          Effective Time of the following conditions, any or all of which
          may be waived, in whole or in part, to the extent permitted by
          applicable law:
          
                   (a)  Effectiveness of the Registration Statement.  The
              Registration Statement shall have been declared effective
              by the SEC under the Securities Act.  No stop order
              suspending the effectiveness of the Registration Statement
              shall have been issued by the SEC and no proceedings for
              that purpose shall have been initiated or, to the knowledge
              of Viacom or Blockbuster, threatened by the SEC.
          
                   (b)  Stockholder Approval.  This Agreement and the
              Merger shall have been approved and adopted by the
              requisite vote of the stockholders of Blockbuster and the
              Viacom Vote Matter shall have been approved and adopted by
              the requisite vote of the holders of Viacom Class A Common
              Stock.   
          
                   (c)  No Order.  No Governmental Entity or federal or
              state court of competent jurisdiction shall have enacted,
              issued, promulgated, enforced or entered any statute, rule,
              regulation, executive order, decree, injunction or other
              order (whether temporary, preliminary or permanent) which
              is in effect and which materially restricts, prevents or
              prohibits consummation of the Merger or any transaction
              contemplated by this Agreement; provided, however, that the
              parties shall use their reasonable best efforts to cause
              any such decree, judgment, injunction or other order to be
              vacated or lifted.
          
          

         
          
          
                                           43
   49
      

          
                   (d)  HSR Act.  The applicable waiting period under the
              HSR Act shall have expired or been terminated.  
          
                   (e)  Approvals.  Other than the filing of merger
              documents in accordance with Delaware Law, all
              authorizations, consents, waivers, orders or approvals
              required to be obtained, and all filings, notices or
              declarations required to be made, by Viacom and Blockbuster
              prior to the consummation of the Merger and the
              transactions contemplated hereunder shall have been
              obtained from, and made with, all required Governmental
              Entities except for such authorizations, consents, waivers,
              orders, approvals, filings, notices or declarations the
              failure to obtain or make which would not have a material
              adverse effect, at or after the Effective Time, on the
              financial condition (as existing immediately prior to the
              consummation of the Merger) of (i) Blockbuster and the
              Blockbuster Subsidiaries, taken as a whole, or (ii) Viacom
              and the Viacom Subsidiaries, taken as a whole.
          
                   SECTION 7.02.  Additional Conditions to Obligations of
          Viacom.  The obligations of Viacom to effect the Merger and the
          transactions contemplated herein are also subject to the
          following conditions:
          
                   (a)  Representations and Warranties.  Each of the
              representations and warranties of Blockbuster contained in
              this Agreement (including, without limitation,
              Section 6.05), without giving effect to any notification to
              Viacom delivered pursuant to Section 6.03, shall be true
              and correct as of the Effective Time as though made on and
              as of the Effective Time, except (i) for changes
              specifically permitted by this Agreement and (ii) that
              those representations and warranties which address matters
              only as of a particular date shall remain true and correct
              as of such date, except in any case for such failures to be
              true and correct which would not, individually or in the
              aggregate, have a Blockbuster Material Adverse Effect. 
              Viacom shall have received a certificate of the Chief
              Executive Officer and Chief Financial Officer of
              Blockbuster to such effect.
          
                   (b)  Agreement and Covenants.  Blockbuster shall have
              performed or complied in all material respects with all
              agreements and covenants required by this Agreement to be
              performed or complied with by it on or prior to the
              Effective Time.  Viacom shall have received a certificate
              of the Chief Executive Officer and Chief Financial Officer
              of Blockbuster to that effect.
          

          
          
                                      44
          
   50
 

                   (c)  Tax Opinion.  Viacom shall have received the
              opinion of Shearman & Sterling, dated on or about the date
              that is two business days prior to the date the Proxy
              Statement is first mailed to stockholders of Viacom and
              Blockbuster, to the effect that the Merger will be treated
              for federal income tax purposes as a reorganization
              qualifying under the provisions of Section 368(a) of the
              Code, which opinion shall not have been withdrawn or
              modified in any material respect.  The issuance of such
              opinion shall be conditioned on the receipt of
              representation letters from each of Viacom, Blockbuster,
              and certain stockholders of Blockbuster.  The specific
              provisions of each such representation letter shall be in
              form and substance satisfactory to each of Shearman & Sterling and Skadden, Arps, Slate, Meagher & Flom, and each
              such representation letter shall be dated on or before the
              date of such opinion and shall not have been withdrawn or
              modified in any material respect.
          
                   SECTION 7.03.  Additional Conditions to Obligations of
          Blockbuster.  The obligation of Blockbuster to effect the
          Merger and the other transactions contemplated in this
          Agreement are also subject to the following conditions:
          
                   (a)  Representations and Warranties.  Each of the
              representations and warranties of Viacom contained in this
              Agreement (including, without limitation, Section 6.05),
              without giving effect to any notification made by Viacom to
              Blockbuster pursuant to Section 6.03, shall be true and
              correct as of the Effective Time, as though made on and as
              of the Effective Time, except (i) for changes specifically
              permitted by this Agreement and (ii) that those
              representations and warranties which address matters only
              as of a particular date shall remain true and correct as of
              such date, except in any case for such failures to be true
              and correct that would not, individually or in the
              aggregate, have a Viacom Material Adverse Effect. 
              Blockbuster shall have received a certificate of the Chief
              Executive Officer and Chief Financial Officer of Viacom to
              such effect.
          
                   (b)  Agreements and Covenants.  Viacom shall have
              performed or complied in all material respects with all
              agreements and covenants required by this Agreement to be
              performed or complied with by it on or prior to the
              Effective Time.  Blockbuster shall have received a
              certificate of the Chief Executive Officer and Chief
              Financial Officer of Viacom to that effect.
          

          
                                      45
   51
 

          
                   (c)  Tax Opinion.  Blockbuster shall have received the
              opinion of Skadden, Arps, Slate, Meagher & Flom, dated on
              or about the date that is two business days prior to the
              date the Proxy Statement is first mailed to stockholders of
              Viacom and Blockbuster, to the effect that the Merger will
              be treated for federal income tax purposes as a
              reorganization qualifying under the provisions of
              Section 368(a) of the Code, which opinion shall not have
              been withdrawn or modified in any material respect.  The
              issuance of such opinion shall be conditioned on the
              receipt of representation letters from each of Viacom,
              Blockbuster, and certain stockholders of Blockbuster.  The
              specific provisions of each such representation letter
              shall be in form and substance satisfactory to each of
              Shearman & Sterling and Skadden, Arps, Slate, Meagher & Flom, and each such representation letter shall be dated on
              or before the date of such opinion and shall not have been
              withdrawn or modified in any material respect.
          
                   (d)  Amendments to Viacom's Certificate of
              Incorporation.  Viacom shall have filed with the Secretary
              of State of the State of Delaware a Certificate of
              Amendment to Viacom's Certificate of Incorporation pursuant
              to which the Viacom Certificate Amendments shall have
              become effective.
          
          
                                    ARTICLE VIII
          
                         TERMINATION, AMENDMENT AND WAIVER
          
                   SECTION 8.01.  Termination.  This Agreement may be
          terminated at any time prior to the Effective Time, whether
          before or after approval of this Agreement and the Merger by
          the stockholders of Blockbuster or the approval by the
          stockholders of Viacom of the issuance of the shares of Viacom
          Common Stock in accordance with Article II:
          
                   (a)  by mutual consent of Blockbuster and Viacom;
          
                   (b)  by Viacom, upon a breach of any representation,
              warranty, covenant or agreement on the part of Blockbuster
              set forth in this Agreement, or if any representation or
              warranty of Blockbuster shall have become untrue, in either
              case such that the conditions set forth in Section 7.02(a)
              or Section 7.02(b), as the case may be, would be incapable
              of being satisfied by September 30, 1994 (or as otherwise
              extended); provided 

                                         46
          
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              that, in any case, a wilful breach shall be deemed to cause
              such conditions to be incapable of being satisfied for
              purposes of this Section 8.01(b);
          
                   (c)  by Blockbuster, upon a breach of any
              representation, warranty, covenant or agreement on the part
              of Viacom set forth in this Agreement, or if any
              representation or warranty of Viacom shall have become
              untrue, in either case such that the conditions set forth
              in Section 7.03(a) or Section 7.03(b), as the case may be,
              would be incapable of being satisfied by September 30, 1994
              (or as otherwise extended); provided that, in any case, a
              wilful breach shall be deemed to cause such conditions to
              be incapable of being satisfied for purposes of this
              Section 8.01(c);
          
                   (d)  by either Viacom or Blockbuster, if any permanent
              injunction or action by any Governmental Entity preventing
              the consummation of the Merger shall have become final and
              nonappealable;
          
                   (e)  by either Viacom or Blockbuster, if the Merger
              shall not have been consummated before September 30, 1994;
              provided, however, that this Agreement may be extended by
              written notice of either Viacom or Blockbuster to a date
              not later than November 30, 1994, if the Merger shall not
              have been consummated as a direct result of Viacom or
              Blockbuster having failed, by September 30, 1994, to
              receive all required regulatory approvals or consents with
              respect to the Merger;
          
                   (f)  by either Viacom or Blockbuster, if this
              Agreement and the Merger shall fail to receive the
              requisite vote for approval and adoption by the
              stockholders of Blockbuster or, with respect to Blockbuster
              only, Viacom at the Stockholders' Meetings;
          
                   (g)  by Viacom, if (i) the Board of Directors of
              Blockbuster shall withdraw, modify or change its
              recommendation of this Agreement or the Merger in a manner
              adverse to Viacom or shall have resolved to do any of the
              foregoing; (ii) the Board of Directors of Blockbuster shall
              have recommended to the shareholders of Blockbuster a
              Competing Transaction (as defined below); (iii) a tender
              offer or exchange offer for 25% or more of the outstanding
              shares of capital stock of Blockbuster is commenced, and
              the Board of Directors of Blockbuster recommends that the
              stockholders of Blockbuster tender their shares in such
              tender or exchange offer; or (iv) any person shall have
              acquired beneficial ownership 

                                       47
          
   53
 

              or the right to acquire beneficial ownership of or any
              "group" (as such term is defined under Section 13(d) of the
              Exchange Act and the rules and regulations promulgated
              thereunder) shall have been formed which beneficially owns,
              or has the right to acquire beneficial ownership of, more
              than 25% of the then outstanding shares of capital stock of
              Blockbuster; and
          
                   (h)  by Blockbuster, if the Board of Directors of
              Blockbuster (x) fails to make or withdraws or modifies its
              recommendation referred to in Section 6.05(a) if there
              exists at such time a tender offer or exchange offer or a
              proposal by a third party to acquire Blockbuster pursuant
              to a merger, consolidation, share exchange, business
              combination, tender or exchange offer or other similar
              transaction or (y) recommends to Blockbuster's stockholders
              approval or acceptance of any of the foregoing, in each
              case only if the Board of Directors of Blockbuster, after
              consultation with and based upon the advice of independent
              legal counsel (who may be such party's regularly engaged
              independent legal counsel), determines in good faith that
              such action is necessary for the Board of Directors of
              Blockbuster to comply with its fiduciary duties to
              stockholders under applicable law.
          
                   The right of any party hereto to terminate this
          Agreement pursuant to this Section 8.01 shall remain operative
          and in full force and effect regardless of any investigation
          made by or on behalf of any party hereto, any person
          controlling any such party or any of their respective officers
          or directors, whether prior to or after the execution of this
          Agreement.  For purposes of this Agreement, "Competing
          Transaction" shall mean any of the following (other than the
          transactions contemplated under the Agreement) involving a
          party hereto or any of its subsidiaries:  (i) any merger,
          consolidation, share exchange, business combination, or other
          similar transaction; (ii) any sale, lease, exchange, mortgage,
          pledge, transfer or other disposition of 25% or more of the
          assets of such party and its subsidiaries, taken as a whole, in
          a single transaction or series of transactions; (iii) any
          tender offer or exchange offer for 25% or more of the
          outstanding shares of capital stock of such party or the filing
          of a registration statement under the Securities Act in
          connection therewith; (iv) any person having acquired
          beneficial ownership or the right to acquire beneficial
          ownership of, or any "group" (as such term is defined under
          Section 13(d) of the Exchange Act and the rules and regulations
          promulgated thereunder) having been formed which beneficially
          owns or has the right to acquire 

          
                                     48
          
   54
 

          
          
          beneficial ownership of, 25% or more of the then outstanding
          shares of capital stock of such party; or (v) any public
          announcement of a proposal, plan or intention to do any of the
          foregoing or any agreement to engage in any of the foregoing.
          
                   SECTION 8.02.  Effect of Termination.  Except as
          provided in Section 8.05 or Section 9.01, in the event of the
          termination of this Agreement pursuant to Section 8.01, this
          Agreement shall forthwith become void, there shall be no
          liability on the part of Blockbuster or Viacom or any of their
          respective officers or directors to the other and all rights
          and obligations of any party hereto shall cease; provided,
          however, that nothing herein shall relieve any party from
          liability for the wilful breach of any of its representations,
          warranties, covenants or agreements set forth in this
          Agreement.
          
                   SECTION 8.03.  Amendment.  This Agreement may be
          amended by the parties hereto by action taken by or on behalf
          of their respective Boards of Directors at any time prior to
          the Effective Time; provided, however, that, after approval of
          the Merger by the stockholders of Blockbuster or Viacom, no
          amendment, which under applicable law may not be made without
          the approval of the stockholders of Blockbuster or Viacom, may
          be made without such approval.  This Agreement may not be
          amended except by an instrument in writing signed by the
          parties hereto.
          
                   SECTION 8.04.  Waiver.  At any time prior to the
          Effective Time, either party hereto may (a) extend the time for
          the performance of any of the obligations or other acts of the
          other party hereto, (b) waive any inaccuracies in the
          representations and warranties of the other party contained
          herein or in any document delivered pursuant hereto and
          (c) waive compliance by the other party with any of the
          agreements or conditions contained herein.  Any such extension
          or waiver shall be valid only if set forth in an instrument in
          writing signed by the party or parties to be bound thereby.
          
                   SECTION 8.05.  Fees, Expenses and Other Payments.  (a) 
          Subject to paragraph (b) of this Section 8.05, all
          out-of-pocket costs and expenses, including, without
          limitation, fees and disbursements of counsel, financial
          advisors and accountants, incurred by the parties hereto shall
          be borne solely and entirely by the party which has incurred
          such costs and expenses (with respect to such party, its
          "Expenses"); provided, however, that all costs and expenses
          related to printing, filing and mailing the 

          
                                      49
          
          
   55
 

          
          Registration Statement and the Proxy Statement and all SEC and
          other regulatory filing fees incurred in connection with the
          Registration Statement and the Proxy Statement shall be borne
          equally by Blockbuster and Viacom.
          
                   (b)  Blockbuster agrees that if this Agreement shall
          be terminated pursuant to (i) Section 8.01(b); (ii)
          Section 8.01(f) because this Agreement and the Merger shall
          fail to receive the requisite vote for approval and adoption by
          the stockholders of Blockbuster at the meeting of stockholders
          of Blockbuster called to vote thereon and at the time of such
          meeting there shall exist a Competing Transaction; or (iii)
          Section 8.01(g)(i), (ii) or (iii) or Section 8.01(h) and at the
          time of such termination there shall exist a Competing
          Transaction and the terms of such Competing Transaction provide
          that Blockbuster's stockholders shall receive consideration
          having a higher per share value than the consideration per
          share payable to Blockbuster's stockholders under this
          Agreement then in any such event Blockbuster shall pay to
          Viacom an amount equal to Viacom's Expenses; provided, however,
          that in no event shall Blockbuster be obligated to pay any of
          Viacom's Expenses exceeding $50,000,000.  For purposes of this
          Section 8.05(b), the per share value of the consideration
          payable to the Blockbuster stockholders under this Agreement
          and under the terms of the Competing Transaction shall be the
          blended weighted average price per share determined as of the
          close of business on the business day prior to the date this
          Agreement is terminated. 
          
                   (c)  Any payment required to be made pursuant to
          Section 8.05(b) shall be made as promptly as practicable but
          not later than five business days after the delivery by Viacom
          to Blockbuster of a statement setting forth any of Viacom's
          Expenses in reasonable detail and shall be made by wire
          transfer of immediately available funds to an account
          designated by Viacom.
          
          
                                     ARTICLE IX
          
                                 GENERAL PROVISIONS
          
                   SECTION 9.01.  Effectiveness of Representations,
          Warranties and Agreements.  (a)  Except as set forth in
          Section 9.01(b), the representations, warranties and agreements
          of each party hereto shall remain operative and in full force
          and effect, regardless of any investigation made by or on
          behalf of any other party hereto, any person controlling any
          such party or any of their officers or 

         
          
          
                                      50
          
          
   56
 

          
          
          directors, whether prior to or after the execution of this
          Agreement.
          
                   (b)  The representations, warranties and agreements in
          this Agreement shall terminate at the Effective Time or upon
          the termination of this Agreement pursuant to Article VIII;
          except that the agreements set forth in Articles I, II and IX
          and Sections 6.02 and 6.16 shall survive the Effective Time and
          those set forth in Sections 6.01(b), 8.02 and 8.05 and Article
          IX hereof shall survive termination.
          
                   (c)  Notwithstanding anything to the contrary in this
          Agreement, no action taken by Viacom in connection with the
          acquisition of Paramount, or effect thereof, shall cause any
          breach of a representation, warranty or covenant under this
          Agreement.
          
                   SECTION 9.02.  Notices.  All notices and other
          communications given or made pursuant hereto shall be in
          writing and shall be deemed to have been duly given or made as
          of the date delivered, mailed or transmitted, and shall be
          effective upon receipt, if delivered personally, mailed by
          registered or certified mail (postage prepaid, return receipt
          requested) to the parties at the following addresses (or at
          such other address for a party as shall be specified by like
          changes of address) or sent by electronic transmission to the
          facsimile numbers specified below:
          
                   (a)  If to Viacom:
          
                        Viacom Inc.
                        1515 Broadway
                        New York, New York 10036
          
                        Attention:  Senior Vice President, 
                                    General Counsel and Secretary
          
                        Facsimile No.:  (212) 258-6134
          
          
                        with a copy to:
          
                        Shearman & Sterling
                        599 Lexington Avenue
                        New York, NY  10022
          
                        Attention:  Stephen R. Volk, Esq.
          
                        Facsimile No.:  (212) 848-7179
          

          
          
                                     51

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                   (b)  If to Blockbuster:
          
                        Blockbuster Entertainment
                        Corporation
                        One Blockbuster Plaza
                        Fort Lauderdale, Florida 33301-1860
          
                        Attention:  Vice President, 
                                    General Counsel and Secretary
          
                        Facsimile No.:  (305) 852-3939
          
                        with a copy to:
          
                        Skadden, Arps, Slate, Meagher & Flom
                        919 Third Avenue
                        New York, New York  10022
          
                        Attention:  Roger S. Aaron, Esq.
          
                        Facsimile No.:  (212) 735-2001
          
          
                   SECTION 9.03.  Certain Definitions.  For purposes of
          this Agreement, the term:
          
                   (a)  "affiliate" means a person that, directly or
              indirectly, through one or more intermediaries, controls,
              is controlled by, or is under common control with, the
              first mentioned person;
          
                   (b)  "beneficial owner", with respect to any shares of
              Blockbuster Common Stock, means, unless otherwise defined
              herein, a person who shall be deemed to be the beneficial
              owner of such shares (i) which such person or any of its
              affiliates or associates (as such term is defined in Rule
              12b-2 promulgated under the Exchange Act) beneficially
              owns, directly or indirectly, (ii) which such person or any
              of its affiliates or associates has, directly or
              indirectly, (A) the right to acquire (whether such right is
              exercisable immediately or subject only to the passage of
              time), pursuant to any agreement, arrangement or
              understanding or upon the exercise of consideration rights,
              exchange rights, warrants or options, or otherwise or (B)
              the right to vote pursuant to any agreement, arrangement or
              understanding or (iii) which are beneficially owned,
              directly or indirectly, by any other persons with whom such
              person or any of its 

         

                                      52
          
   58
 

          
          
              affiliates or associates, or any person with whom such
              person or any of its affiliates or associates has any
              agreement, arrangement or understanding for the purpose of
              acquiring, holding, voting or disposing of any shares;
          
                   (c)  "business day" means any day other than a day on
              which (i) banks in the State of New York are authorized or
              obligated to be closed or (ii) the New York Stock Exchange
              is closed;
          
                   (d)  "control" (including the terms "controlled",
              "controlled by" and "under common control with") means the
              possession, directly or indirectly or as trustee or
              executor, of the power to direct or cause the direction of
              the management or policies of a person, whether through the
              ownership of stock or as trustee or executor, by contract
              or credit arrangement or otherwise; and
          
                   (e)  "subsidiary" or "subsidiaries" of Blockbuster,
              Viacom, the Surviving Corporation or any other person means
              any corporation, partnership, joint venture or other legal
              entity of which Blockbuster, Viacom, the Surviving
              Corporation or such other person, as the case may be
              (either alone or through or together with any other
              subsidiary), owns, directly or indirectly, 50% or more of
              the stock or other equity interests, the holders of which
              are generally entitled to vote for the election of the
              board of directors or other governing body of such
              corporation or other legal entity.
          
                   SECTION 9.04.  Headings.  The headings contained in
          this Agreement are for reference purposes only and shall not
          affect in any way the meaning or interpretation of this
          Agreement.
          
                   SECTION 9.05.  Severability.  If any term or other
          provision of this Agreement is invalid, illegal or incapable of
          being enforced by any rule of law or public policy, all other
          conditions and provisions of this Agreement shall nevertheless
          remain in full force and effect so long as the economic or
          legal substance of the transactions contemplated hereby is not
          affected in any manner materially adverse to any party.  Upon
          such determination that any term or other provision is invalid,
          illegal or incapable of being enforced, the parties hereto
          shall negotiate in good faith to modify this Agreement so as to
          effect the original intent of the parties as closely as
          possible to the fullest extent permitted by applicable law in
          an acceptable manner to the end that the transactions
          contemplated hereby are fulfilled to the extent possible.
          

                                      53

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                   SECTION 9.06.  Entire Agreement.  This Agreement
          (together with the Exhibit, the Blockbuster Disclosure
          Schedule, the Viacom Disclosure Schedule and the other
          documents delivered pursuant hereto) and the Confidentiality
          Agreement constitute the entire agreement of the parties and
          supersede all prior agreements and undertakings, both written
          and oral, between the parties, or any of them, with respect to
          the subject matter hereof.
          
                   SECTION 9.07.  Assignment.  This Agreement shall not
          be assigned by operation of law or otherwise.
          
                   SECTION 9.08.  Parties in Interest.  This Agreement
          shall be binding upon and inure solely to the benefit of each
          party hereto, and nothing in this Agreement, express or implied
          (other than the provisions of Section 6.02 and 6.16), is
          intended to or shall confer upon any person any right, benefit
          or remedy of any nature whatsoever under or by reason of this
          Agreement.
          
                   SECTION 9.09.  Governing Law.  Except to the extent
          that Delaware Law is mandatorily applicable to the Merger and
          the rights of the stockholders of Blockbuster and Viacom, this
          Agreement shall be governed by, and construed in accordance
          with, the laws of the State of New York, regardless of the laws
          that might otherwise govern under applicable principles of
          conflicts of law.
          
                   SECTION 9.10.  Counterparts.  This Agreement may be
          executed in one or more counterparts, and by the different
          parties hereto in separate counterparts, each of which when
          executed shall be deemed to be an original but all of which
          taken together shall constitute one and the same agreement.
          
          

          
                                         54
          
   60
 

                   IN WITNESS WHEREOF, Viacom and Blockbuster have caused
          this Agreement to be executed as of the date first written
          above by their respective officers thereunto duly authorized.
          
          
          ATTEST:                          VIACOM INC.
          
                                           
          By                               By                       
            Name:                            Name:
            Title:                           Title:
          
          
          ATTEST:                          BLOCKBUSTER ENTERTAINMENT
                                             CORPORATION
          
          
          By                               By                       
            Name:                            Name:
            Title:                           Title:
          
          

          
                                         55

   61
        

          
                                                 ANNEX A

          
                          VARIABLE COMMON RIGHTS ("VCRs")
          
          
                                     Term Sheet
          
          Issuer:                      Viacom, Inc.
          
          No. of VCRs to
            be issued:                 One VCR per Blockbuster Share
                                       issued and outstanding at the time
                                       of the Merger, including
                                       Blockbuster Shares subject to
                                       outstanding employee stock
                                       options.
          
          Maturity:                    First anniversary of Merger.
          
          Trading/Listing:             VCRs will be certificated and
                                       trade separately from Viacom
                                       Common Shares.  Viacom will use
                                       best efforts to list VCRs on AMEX
                                       or such other exchange on which
                                       its shares are then listed.
          
          Payout:                      In the ninety trading day period
                                       immediately preceding Maturity
                                       (the "Valuation Period"), a value
                                       for Viacom B Common Shares ("B
                                       Share Value") will be determined. 
                                       The B Share Value will equal the
                                       average closing price on the AMEX
                                       (or such other exchange on which
                                       such shares are then listed) for a
                                       Viacom B Common Share during any
                                       30 consecutive trading days in the
                                       Valuation Period which yield the
                                       highest such average closing
                                       price.
          
                                       Subject to the dilution protection
                                       mentioned below, each VCR will
                                       represent a fraction of one Viacom
                                       B Common Share, such fraction to
                                       be determined based upon the B
                                       Share Value, as set forth below:

                                        56
   62
 

          
          B Share Value                Value of VCR*
          
          $0 to $35.99                 .13829
          
          $36 to $40                     30 - .32    - .08 - .60615
                                       B Share Value
          
          $40.01 to $47.99             .05929
          
          $48 to $52                     36 - .32    - .08 - .60615
                                       B Share Value
          
          $52.01 and above             0
          
          Maximum Payout:              .13829 of one Viacom B Common Share.
          
          Minimum Payout:              0
          
          General Market Adjustment:   The dollar amounts set forth in the
                                       table above under "B Share Value" will
                                       be reduced by a percentage equal to any
                                       percentage decline in excess of 25% in
                                       the S&P 400 Index from the Merger to
                                       Maturity.  
          
          Limitation on Payout:        Notwithstanding the table above, if at
                                       any time during the period from the
                                       Merger to Maturity the average closing
                                       price for a Viacom B Common Share on
                                       AMEX (or such other exchange on which
                                       such shares are then listed) for any 30
                                       consecutive trading days is:
          
                                       (a) above $40, then the maximum payout,
                                       if any, for each VCR will equal .05929 
                                       of one Viacom B Common Share; or
          
                                       (b) above $52, then the VCRs will have
                                       no value and will automatically
                                       terminate.

                             
          *  Expressed as a fraction of one Viacom B Common Share
          

                                        57
          
   63
 

          
          Dilution Protection          The number of Viacom B Shares
                                       represented by each VCR will be
                                       adjusted to appropriately reflect
                                       any distribution or dividend paid
                                       in Viacom B Shares and any
                                       combination, split or
                                       reclassification of Viacom B
                                       Shares.
          

          Determination of             For purposes of determining any
          Trading Period               period of consecutive trading
                                       days, trading days shall not be
                                       included if, (i) during the
                                       first month following the
                                       Effective Time, fewer than
                                       400,000 shares of Viacom B
                                       Shares trade, (ii) during the
                                       second month following the
                                       Effective Time, fewer than
                                       300,000 shares of Viacom B
                                       Shares trade, (iii) during the
                                       third month following the
                                       Effective Time, fewer than
                                       250,000 shares of Viacom B
                                       Shares trade and (iv) from and
                                       after the first day of the
                                       fourth month following the
                                       Effective Time, fewer than
                                       200,000 shares of Viacom B
                                       Shares trade.

                                       Neither Viacom Inc., National
                                       Amusements Inc. nor any of
                                       their affiliates shall trade
                                       in Viacom B Shares during 
                                       the  period  from  the 
                                       Merger to Maturity, except for
                                       benefit plan purposes.

          
          
                                       58
          
          
   64
 

          
                                                            EXHIBIT 6.13

                              FORM OF AFFILIATE LETTER

          
          
          Viacom Inc.
          1515 Broadway
          New York, New York 10036
          
          Gentlemen:
          
                   I have been advised that as of the date of this letter
          I may be deemed to be an "affiliate" of Blockbuster
          Entertainment Corporation, a Delaware corporation (the
          "Company"), as the term "affiliate" is defined for purposes of
          paragraphs (c) and (d) of Rule 145 of the rules and regulations
          (the "Rules and Regulations") of the Securities and Exchange
          Commission (the "Commission") under the Securities Act of 1933,
          as amended (the "Act").  Pursuant to the terms of the Agreement
          and Plan of Merger dated as of January 7, 1994 (the
          "Agreement"), between Viacom Inc., a Delaware corporation
          ("Viacom"), and the Company, the Company will be merged with
          and into Viacom (the "Merger").
          
                   As a result of the Merger, I may receive (A) shares of
          (i) Class A Common Stock, par value $.01 per share, of Viacom
          (the "Viacom Class A Common Stock") and (ii) Class B Common
          Stock, par value $.01 per share, of Viacom (the "Viacom Class B
          Common Stock"; and, together with the Viacom Class A Common
          Stock, the "Viacom Common Stock") and (B) VCRs (as defined in
          the Agreement) (the VCRs, together with the Viacom Common
          Stock, being the "Viacom Securities").  I would receive such
          Viacom Securities in exchange for, respectively, shares (or
          options for shares) owned by me of common stock, par value $.10
          per share, of the Company (the "Company Common Stock").
          
                   I represent, warrant and covenant to Viacom that in
          the event I receive any Viacom Securities as a result of the
          Merger:
          
                   A.  I shall not make any sale, transfer or other
              disposition of the Viacom Securities in violation of the
              Act or the Rules and Regulations.
          
          

          
                                      59
          
   65
 

                                         2
          
          
                   B.  I have carefully read this letter and the
              Agreement and discussed the requirements of such documents
              and other applicable limitations upon my ability to sell,
              transfer or otherwise dispose of Viacom Common Stock to the
              extent I felt necessary, with my counsel or counsel for the
              Company.
          
                   C.  I have been advised that the issuance of Viacom
              Securities to me pursuant to the Merger has been registered
              with the Commission under the Act on a Registration
              Statement Form S-4.  However, I have also been advised
              that, because at the time the Merger is submitted for a
              vote of the stockholders of the Company, (a) I may be
              deemed to be an affiliate of the Company and (b) the
              distribution by me of the Viacom Securities has not been
              registered under the Act, I may not sell, transfer or
              otherwise dispose of Viacom Securities issued to me in the
              Merger unless (i) such sale, transfer or other disposition
              is made in conformity with the volume and other limitations
              of Rule 145 promulgated by the Commission under the Act,
              (ii) such sale, transfer or other disposition has been
              registered under the Act or (iii) in the opinion of counsel
              reasonably acceptable to Viacom, such sale, transfer or
              other disposition is otherwise exempt from registration
              under the Act.
          
                   D.  I understand that Viacom is under no obligation to
              register the sale, transfer or other disposition of the
              Viacom Securities by me or on my behalf under the Act or to
              take any other action necessary in order to make compliance
              with an exemption from such registration available solely
              as a result of the Merger.
          
                   E.  I also understand that there will be placed on the
              certificates for the Viacom Securities issued to me, or any
              substitutions therefor, a legend stating in substance:
          
                   "THE [SHARES] [RIGHTS] REPRESENTED BY THIS CERTIFICATE
                   WERE ISSUED IN A TRANSACTION TO WHICH RULE 145
                   PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. 
                   THE [SHARES] [RIGHTS] REPRESENTED BY THIS CERTIFICATE
                   MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS
                   OF AN AGREEMENT  
          
          

          
                                   60
          
          
   66
 

          
          
                                         3
          
          
              DATED           , 1994 BETWEEN THE REGISTERED HOLDER HEREOF
              AND VIACOM INC., A COPY OF WHICH AGREEMENT IS ON FILE AT
              THE PRINCIPAL OFFICES OF VIACOM INC."
          
                   F.  I also understand that unless a sale or transfer
              is made in conformity with the provisions of Rule 145, or
              pursuant to a registration statement, Viacom reserves the
              right to put the following legend on the certificates
              issued to my transferee:
          
                   "THE [SHARES] [RIGHTS] REPRESENTED BY THIS CERTIFICATE
                   HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
                   1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED SUCH
                   SHARES IN A TRANSACTIONTO WHICH RULE 145 PROMULGATED
                   UNDER THE SECURITIES ACT OF 1933 APPLIES.  THE
                   [SHARES] [RIGHTS] HAVE BEEN ACQUIRED BY THE HOLDER NOT
                   WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
                   DISTRIBUTION THEREOF WITHIN THE MEANING OF THE
                   SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR
                   OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN
                   EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
                   SECURITIES ACT OF 1933."
          
                   It is understood and agreed that the legends set forth
          in paragraphs E and F above shall be removed by delivery of
          substitute certificates without such legend if the undersigned
          shall have delivered to Viacom a copy of a letter from the
          staff of the Commission, or an opinion of counsel reasonably
          satisfactory to Viacom, in form and substance reasonably
          satisfactory to Viacom, to the effect that such legend is not
          required for purposes of the Act.
          
                   Execution of this letter should not be considered an
          admission on my part that I am an "affiliate" of the Company as
          described in the first paragraph of this letter, nor as a
          waiver of any rights I may have to object to any claim that I
          am such an affiliate on or after the date of this letter.
          
          
                                              Very truly yours,

                                                                        
                                              Name:  

                                       61
          
   67
 

          
                                         4

          Accepted this     day of
                , 1994, by 
          
          VIACOM INC.
          
          By                            
            Name:  
            Title:  
          
          

          
                                        
          
   68
  

         

          
          
                               Index of Defined Terms

          
                                                         Section      
          
          affiliate                                   SECTION 9.03
          Agreement                                   PREAMBLE
          AMEX                                        SECTION 2.02
          beneficial owner                            SECTION 9.03
          Blockbuster                                 PREAMBLE
          Blockbuster Common Stock                    SECTION 2.01
          Blockbuster Disclosure Schedule             SECTION 3.03
          Blockbuster Material Adverse Effect         SECTION 3.01
          Blockbuster 1992 Balance Sheet              SECTION 3.12
          Blockbuster Plans                           SECTION 3.10
          Blockbuster Preferred Stock                 SECTION 3.03
          Blockbuster SEC Reports                     SECTION 3.07
          Blue Sky Laws                               SECTION 3.05
          Blockbuster Stock Option                    SECTION 3.03
          Blockbuster Subsidiary                      SECTION 3.01
          business day                                SECTION 9.03
          Certificate of Merger                       SECTION 1.03
          Certificates                                SECTION 2.02
          Class A Exchange Ratio                      SECTION 2.01
          Class B Exchange Ratio                      SECTION 2.01
          Code                                        RECITALS
          Communications Act                          SECTION 3.05
          Competing Transaction                       SECTION 8.01
          Confidentiality Agreements                  SECTION 6.01
          control                                     SECTION 9.03
          Delaware Law                                RECITALS
          Dissenting Shares                           SECTION 2.05
          Effective Time                              SECTION 1.03
          ERISA                                       SECTION 3.10
          Exchange Act                                SECTION 3.05
          Exchange Agent                              SECTION 2.02
          Exchange Fund                               SECTION 2.02
          Exchange Ratios                             SECTION 2.01
          FCC                                         SECTION 6.09
          Governmental Entity                         SECTION 3.05
          HSR Act                                     SECTION 3.05
          IRS                                         SECTION 3.10
          Material Blockbuster Subsidiary             SECTION 3.01
          Material Viacom Subsidiary                  SECTION 4.01
          Merger                                      RECITALS
          Merger Consideration                        SECTION 2.02

          
         

          
   69
 

          
                          Index of Defined Terms (cont'd)

          
                                                         Section      
          
          Merrill Lynch                               SECTION 3.13
          Parent Voting Agreement                     RECITALS
          Paramount                                   SECTION 5.01
          Paramount Offer Documents                   SECTION 6.05
          Proxy Statement                             SECTION 6.05
          Registration Statement                      SECTION 6.05
          Respective Representatives                  SECTION 6.01
          SEC                                         SECTION 3.01
          Securities Act                              SECTION 3.05
          Smith Barney                                SECTION 4.13
          Spelling                                    SECTION 3.07
          Stockholders' Meetings                      SECTION 6.06
          subsidiary                                  SECTION 9.03
          Surviving Corporation                       SECTION 1.01
          VCRs                                        SECTION 2.01
          VCR Exchange Ratio                          SECTION 2.01
          Viacom                                      PREAMBLE
          Viacom Certificate Amendments               SECTION 4.04
          Viacom Class A Common Stock                 RECITALS
          Viacom Class B Common Stock                 SECTION 2.01
          Viacom Common Stock                         SECTION 2.01
          Viacom Disclosure Schedule                  SECTION 4.03
          Viacom International                        SECTION 4.07
          Viacom Material Adverse Effect              SECTION 4.01
          Viacom 1992 Balance Sheet                   SECTION 4.12
          Viacom Plans                                SECTION 4.10
          Viacom Preferred Stock                      SECTION 4.03
          Viacom SEC Reports                          SECTION 4.07
          Viacom Subsidiary                           SECTION 4.01
          Viacom Vote Matter                          SECTION 4.04
          WARN                                        SECTION 3.10