[CONFORMED COPY]
AMENDED AND RESTATED
STOCKHOLDERS STOCK OPTION AGREEMENT
AMENDED AND RESTATED STOCKHOLDERS STOCK OPTION AGREEMENT,
dated as of January 7, 1994, among VIACOM INC., a Delaware
corporation ("Viacom"), and each other person and entity listed on
the signature pages hereof (each, a "Stockholder").
WHEREAS, as of the date hereof each Stockholder owns
(either beneficially or of record) the number of shares of common
stock, par value $0.10 per share ("Blockbuster Common Stock"), of
Blockbuster Entertainment Corporation, a Delaware corporation
("Blockbuster"), set forth opposite such Stockholder's name on
Exhibit A hereto (all such shares and any shares hereafter acquired
by the Stockholders prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Viacom and Blockbuster propose to enter into an
Agreement and Plan of Merger, dated as of the date hereof (as the
same may be amended from time to time, the "Merger Agreement"),
which provides, upon the terms and subject to the conditions
thereof, for the merger of Blockbuster with and into Viacom (the
"Merger"); and
WHEREAS, as a condition to the willingness of Viacom to
enter into the Merger Agreement, Viacom has requested that each
Stockholder agree, and, in order to induce Viacom to enter into the
Merger Agreement, each Stockholder has agreed, severally and not
jointly, to grant Viacom options to purchase such Stockholder's
Shares;
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements and covenants set forth herein and in the
Merger Agreement, the parties hereto agree as follows:
ARTICLE I
THE OPTIONS
SECTION 1.01. Grant of Options. Each Stockholder hereby
grants to Viacom an irrevocable option (each, an "Option") to
purchase such Stockholder's Shares at a price per Share equal to
$30.125 (the "Purchase Price"). Each Option shall expire if not
exercised prior to the close of business on the 120th day following
termination of the Merger Agreement. Each Option shall also expire
if the Merger Agreement is terminated pursuant to Section 8.01(c)
thereof.
SECTION 1.02. Exercise of Options. Provided that (a) to
the extent necessary, any applicable waiting periods (and any
extension thereof) under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976 and the rules and regulations promulgated
thereunder (the "HSR Act") with respect to the exercise of an
Option shall have expired or been terminated and (b) no preliminary
or permanent injunction or other order, decree or ruling issued by
any court or governmental or regulatory authority, domestic or
foreign, of competent jurisdiction prohibiting the exercise of an
Option or the delivery of Shares shall be in effect, Viacom may
exercise any or all of the Options at any time following
termination of the Merger Agreement (other than a termination
pursuant to Section 8.01(c) thereof) until the expiration of such
Options, provided that at the time of exercise of the Options there
exists a Competing Transaction (as defined in the Merger Agreement)
with respect to Blockbuster. In the event that Viacom wishes to
exercise an Option, Viacom shall give written notice (the date of
such notice being herein called the "Notice Date"), to the
Stockholder who granted such Option specifying a place and date
(not later than ten Business Days (as defined below) and not
earlier than three Business Days following the Notice Date) for
closing such purchase (the "Closing"). For the purposes of this
Agreement, the term "Business Day" shall mean a Saturday, a Sunday
or a day on which banks are not required or authorized by law or
executive order to be closed in the City of New York.
SECTION 1.03. Payment for and Delivery of Certificates.
At the Closing, (a) Viacom shall pay the aggregate Purchase Price
for the Shares being purchased from each Stockholder by wire
transfer in immediately available funds of the total amount of the
Purchase Price for such Shares to an account designated by such
Stockholder by written notice to Viacom, and (b) each Stockholder
whose Shares are being purchased shall deliver to Viacom a
certificate or certificates evidencing such Stockholder's Shares,
and such Stockholder agrees that such Shares shall be transfered
free and clear of all liens. All such certificates shall be duly
endorsed in blank, or with appropriate stock powers, duly executed
in blank, attached thereto, in proper form for transfer, with the
signature of such Stockholder thereon guaranteed, and with all
applicable taxes paid or provided for.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE STOCKHOLDERS
Each Stockholder, severally and not jointly, hereby
represents and warrants to Viacom as follows:
SECTION 2.01. Due Organization, etc. Such Stockholder
(if it is a corporation, partnership or other legal entity) is duly
organized and validly existing under the laws of the jurisdiction
of its incorporation or organization. Such Stockholder has full
power and authority (corporate or otherwise) to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary action (corporate or otherwise) on the
part of such Stockholder. This Agreement has been duly executed
and delivered by or on behalf of such Stockholder and, assuming its
due authorization, execution and delivery by Viacom, constitutes a
legal, valid and binding obligation of such Stockholder,
enforceable against such Stockholder 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 2.02. No Conflicts; Required Filings and
Consents. (a) The execution and delivery of this Agreement by
such Stockholder do not, and the performance of this Agreement by
such Stockholder will not, (i) conflict with or violate the
Certificate of Incorporation or By-Laws or similar organizational
document of such Stockholder (in the case of a Stockholder that is
a corporation, partnership or other legal entity), (ii) conflict
with or violate any law, rule, regulation, order, judgment or
decree applicable to such Stockholder or by which it or any of its
properties is bound or affected, or (iii) result in any breach of
or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or encumbrance on any of the
property or assets of such Stockholder or (if such Stockholder
purports to be a corporation) any of its subsidiaries pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to
which such Stockholder is a party or by which such Stockholder or
any of its properties is bound or affected, except for any such
breaches, defaults or other occurrences that would not cause or
create a material risk of non-performance or delayed performance by
such Stockholder of its obligations under this Agreement.
(b) The execution and delivery of this Agreement by such
Stockholder do not, and the performance of this Agreement by such
Stockholder will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, except (i) for
applicable requirements, if any, of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (the
"Exchange Act"), and the HSR Act and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay the
performance by such Stockholder of its obligations under this
Agreement.
SECTION 2.03. Title to Shares. At the Closing such
Stockholder will deliver good and valid title to its Shares free
and clear of any pledge, lien, security interest, charge, claim,
equity, option, proxy, voting restriction, right of first refusal
or other limitation on disposition or encumbrance of any kind,
other than pursuant to this Agreement. Subject to Permitted Liens
(as defined below), which will be eliminated prior to or at the
Closing, such Stockholder has full right, power and authority to
sell, transfer and deliver its Shares pursuant to this Agreement.
Upon delivery of such Shares and payment of the Purchase Price
therefor as contemplated herein, Viacom will receive good and valid
title to such Shares, free and clear of any pledge, lien, security
interest, charge, claim, equity, option, proxy, voting restriction
or encumbrance of any kind.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VIACOM
Viacom hereby represents and warrants to each Stockholder
as follows:
SECTION 3.01. Due Organization, etc. Viacom is a
corporation duly organized and validly existing under the laws of
the State of Delaware. Viacom has all necessary corporate power
and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby by Viacom have been duly authorized by all
necessary corporate action on the part of Viacom. This Agreement
has been duly executed and delivered by Viacom and, assuming its
due authorization, execution and delivery by each Stockholder,
constitutes a legal, valid and binding obligation of Viacom,
enforceable against Viacom in accordance with its terms.
SECTION 3.02. No Conflict; Required Filings and
Consents. (a) The execution and delivery of this Agreement by
Viacom do not, and the performance of this Agreement by Viacom will
not, (i) conflict with or violate the Certificate of Incorporation
or By-laws of Viacom, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Viacom or by
which Viacom or any of its properties is bound or affected, or
(iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a
lien or encumbrance on any of the property or assets of Viacom
pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Viacom is a party or by which it or any of its
properties is bound or affected, except for any such breaches,
defaults or other occurrences that would not cause or create a
material risk of non-performance or delayed performance by Viacom
of its obligations under this Agreement.
(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 or regulatory
authority, domestic or foreign, except (i) for applicable
requirements, if any, of the Exchange Act and the HSR Act and (ii)
where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, would not prevent or delay the performance by Viacom
of its obligations under this Agreement.
SECTION 3.03. Investment Intent. The purchase of Shares
from any Stockholder pursuant to this Agreement is for the account
of Viacom for the purpose of investment and not with a view to or
for sale in connection with any distribution thereof within the
meaning of the Securities Act, and the rules and regulations
promulgated thereunder.
ARTICLE IV
TRANSFER AND VOTING OF SHARES
SECTION 4.01. Transfer of Shares. During the term of
the Options, and except as otherwise provided herein, each
Stockholder shall not (a) sell, pledge (other than Permitted Liens
(as defined below)) or otherwise dispose of any of its Shares, (b)
deposit its Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or grant any
proxy with respect thereto or (c) enter into any contract, option
or other arrangement or undertaking with respect to the direct or
indirect acquisition or sale, assignment, transfer or other
disposition of any Blockbuster Common Stock (other than, in the
case of Xxxx X. Xxxx and Xxxxxx X. Xxxxx, the Amended and Restated
Proxy Agreement, dated as of January 7, 1994, among Viacom and each
other person and entity listed on the signature pages thereof).
Exercise of rights or remedies pursuant to bona fide pledges of
Shares to banks or other financial institutions ("Permitted Liens")
are not restricted by this Agreement; provided that in the case of
Permitted Liens granted after the date of this Agreement, such
Shares continue to be subject to the Options.
SECTION 4.02. Voting of Shares; Further Assurances. (a)
Each Stockholder, by this Agreement, with respect to those Shares
that it owns of record, does hereby constitute and appoint Viacom,
or any nominee of Viacom, with full power of substitution, during
and for the term of the Option granted by such Stockholder
hereunder (or, following termination of the Merger Agreement,
during such periods as the Options are exercisable), as its true
and lawful attorney and proxy, for and in its name, place and
stead, to vote each of such Shares as its proxy, at every annual,
special or adjourned meeting of the stockholders of Blockbuster
(including the right to sign its name (as stockholder) to any
consent, certificate or other document relating to Blockbuster that
the law of the State of Delaware may permit or require) (i) in
favor of the adoption of the Merger Agreement and approval of the
Merger and the other transactions contemplated by the Merger
Agreement, (ii) against any proposal for any recapitalization,
merger, sale of assets or other business combination between
Blockbuster and any person or entity (other than the Merger) or any
other action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or
agreement of Blockbuster under the Merger Agreement or which could
result in any of the conditions to Blockbuster's obligations under
the Merger Agreement not being fulfilled, and (iii) in favor of any
other matter relating to consummation of the transactions
contemplated by the Merger Agreement. Each Stockholder further
agrees to cause the Shares owned by it beneficially to be voted in
accordance with the foregoing. Each Stockholder acknowledges
receipt and review of a copy of the Merger Agreement.
(b) If Viacom shall exercise any Option in accordance
with the terms of this Agreement, and without additional
consideration, the Stockholder who granted such Option shall
execute and deliver further transfers, assignments, endorsements,
consents and other instruments as Viacom may reasonably request for
the purpose of effectively carrying out the transactions
contemplated by this Agreement and the Merger Agreement, including
the transfer of any and all of such Stockholder's Shares to Viacom
and the release of any and all liens, claims and encumbrances
covering such Shares.
(c) Each Stockholder shall perform such further acts and
execute such further documents and instruments as may reasonably be
required to vest in Viacom the power to carry out the provisions of
this Agreement.
ARTICLE V
GENERAL PROVISIONS
SECTION 5.01. 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 telecopier number specified below:
(a) If to Viacom:
Viacom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Senior Vice President,
General Counsel and Secretary
Telecopier No.: 000-000-0000
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telecopier No.: (000) 000-0000
(b) If to a Stockholder, to the address set forth
below such Stockholder's name on the signature
pages hereof.
with a copy to:
Blockbuster Entertainment Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Vice President, General
Counsel and Secretary
Telecopier No.: 000-000-0000
SECTION 5.02. 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 5.03. 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.
SECTION 5.04. Entire Agreement. This Agreement
constitutes the entire agreement of the parties and supersedes all
prior agreements and undertakings, both written and oral, between
the parties, or any of them, with respect to the subject matter
hereof.
SECTION 5.05. Assignment. This Agreement shall not be
assigned by operation of law or otherwise.
SECTION 5.06. 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, 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 5.07. Specific Performance. The parties hereto
agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at
law or in equity.
SECTION 5.08. Governing Law. Except to the extent that
Delaware Law is mandatorily applicable to the rights of the
stockholders of Blockbuster, this Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York
applicable to contracts executed and to be performed entirely
within that state.
SECTION 5.09. 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.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
VIACOM INC.
By /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board
/s/ H. Xxxxx Xxxxxxxx
-----------------------------
H. Xxxxx Xxxxxxxx
c/o Blockbuster Entertainment
Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx
c/o Blockbuster Entertainment
Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
/s/ Xxxx X. Xxxx
-----------------------------
Xxxx X. Xxxx
c/o Blockbuster Entertainment
Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
c/o Blockbuster Entertainment
Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
/s/ G. Xxxxx Xxxxxxxx
-----------------------------
G. Xxxxx Xxxxxxxx
for G. Xxxxx Xxxxxxxx
and Xxxx Xxxxxxxx
c/o Blockbuster Entertainment
Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
EXHIBIT A
List of Stockholders
Number of Shares of
Name of Stockholder Blockbuster Common Stock
H. Xxxxx Xxxxxxxx 10,905,885
Xxxxxx X. Xxxxxxx 4,970
Xxxx X. Xxxx 1,547,058
Xxxxxx X. Xxxxx 1,547,057
Xxxxx and Xxxx Xxxxxxxx 1,572,241
