Amendment No. 3, dated as of June 30, 2004 to the Credit Agreement dated 6-21-99



 Exhibit 10.3 
  
 AMENDMENT NO. 3, dated as of June 30, 2004 (this “Amendment”) to the CREDIT AGREEMENT (as amended,
supplemented or modified from time to time, the “Credit Agreement”), dated as of June 21, 1999, among BLOCKBUSTER INC., a Delaware corporation (the “Borrower”), the Bank parties thereto from time to time, CITIBANK,
N.A., as the Administrative Agent, THE BANK OF NEW YORK, as the Documentation Agent, THE BANK OF AMERICA N.A. (formerly known as THE BANK OF AMERICA NT&SA), as a Syndication Agent and CHASE SECURITIES INC., as a Syndication Agent. 
  
 WITNESSETH: 
  
 WHEREAS, the parties have heretofore entered into the Credit Agreement providing for, among other things, a 5-year revolving
commitment due to mature on July 1, 2004; 
  
 WHEREAS, the parties
desire to amend the Credit Agreement, inter alia, to extend the maturity date of the 5-year revolving loan commitment and reduce the Tranche A Loan Commitments of the Banks by $300,000,000 (the “Reduction Amount”); and

  
 WHEREAS, the parties desire to amend Section 10.8 of the
Credit Agreement to permit the Borrower to declare a special cash dividend to its shareholders (the “Special Dividend”), provided, however, that the Borrower may not pay the Special Dividend unless otherwise permitted
under the Credit Agreement. 
  
 NOW THEREFORE, the parties hereto
agree as follows: 
  
 SECTION 1. Amendments. (a) Section
1.1 of the Credit Agreement is hereby amended by replacing “July 1, 2004” in the definition of “Tranche A Loan Commitment Termination Date” with “December 31, 2004”. 
  
 (b) Section 10.8 of the Credit Agreement is amended by adding the following
paragraph to the end of Section 10.8: 
  
 “(iii) the
declaration (but not the payment) of the Special Dividend.” 
  
 SECTION 2. Reduction of Tranche A Loan Commitments. The Borrower hereby requests and the Banks hereby agree that upon effectiveness of this Amendment, the Tranche A Loan Commitments of the Banks shall be permanently reduced ratably
in the amount of the Reduction Amount, provided, however, that if any Banks elect not to extend the maturity date of their Tranche A Loan Commitments (the “Non-Extending Banks”) as contemplated in Section 1(a) hereof,
the Tranche A Loan Commitments of the Non-Extending Banks (the “Terminated Commitments”) shall terminate on July 1, 2004, and the Tranche A Loan Commitments of the Banks (other than the Non-Extending 







 Banks) shall be permanently reduced ratably in an amount equal to the excess of the Reduction Amount over the amount of
the Terminated Commitments. 
  
 SECTION 3. Notification of
Consent and Election. (a) Any Bank that consents to this Amendment and elects to extend the maturity date of its Tranche A Loan Commitment as contemplated in Section 1(a) hereof, shall deliver a notice of its consent and election to the
Administrative Agent in the form attached as Annex A hereto. 
  
 (b) Any Bank that consents to this Amendment and elects not to extend the maturity date of its Tranche A Loan Commitment as contemplated in Section 1(a) hereof, shall deliver a notice of its consent and election to the Administrative Agent
in the form attached as Annex B hereto. 
  
 SECTION 4.
Deemed Consent. Any Bank that consents to this Amendment expressly agrees that any Bank that shall not have consented hereto (the “Non-Consenting Bank”) prior to July 1, 2004, if repaid on that date in full, shall for
purposes of Section 13.1 of the Credit Agreement be deemed to have elected not to extend the maturity date of such Non-Consenting Bank’s Tranche A Loan Commitment and to have consented to the terms of this Amendment. 
  
 SECTION 5. Effectiveness. This Amendment shall be effective as of the
date first above written when, and only when, (i) the Administrative Agent shall have received counterparts of this Amendment executed by the Borrower and the Majority Banks or, as to any of the Banks, advice satisfactorily to the Administrative
Agent that such Bank has executed this Amendment, and, without duplication, notices of consents and elections from each of the Banks holding Tranche A Loan Commitments in the form of Annex A or Annex B, as the case may be, attached
hereto, and (ii) Banks having aggregate Tranche A Loan Commitments equal to at least $300,000,000 shall have elected to extend the maturity of their respective Tranche A Loan Commitments as contemplated in Section 1(a) hereof. 
  
 SECTION 6. Representations and Warranties. The Borrower hereby
represents and warrants that as of the date hereof (i) the representations and warranties contained in Article VII of the Credit Agreement (other than those stated to be made as of a particular date) are true and correct in all material respects on
and as of the date hereof as though made on the date hereof, and (ii) no Default or Event of Default shall exist or be continuing under the Credit Agreement. 
  
 SECTION 7. Miscellaneous. (a) Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement. 
  
 (b) Except as amended hereby, all of the terms of
the Credit Agreement shall remain and continue in full force and effect and are hereby confirmed in all respects. 







 (c) This Amendment shall be a Loan Document for the purposes of the Credit Agreement. 
  
 (d) This Amendment may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto were upon the same instrument. Delivery of an executed counterpart of a signature page of this Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment. 
  
 (e) The provisions of Sections
13.2, 13.3, 13.9 and 13.10 shall apply to this Amendment mutatis mutandis. 
  
 (f) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 







 IT WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date
first above written. 
  

			
	 BLOCKBUSTER INC.,
 as Borrower

		
	By:	 	 /s/ Larry J. Zine

	 	 	 Name: Larry J. Zine
 Title: Executive Vice President,
Chief Financial Officer
and Chief Administrative Officer











			
	 CITIBANK, N.A.,
 as the Administrative Agent

		
	By:	 	 /s/ Robert H. Chen

	 	 	 Name: Robert H. Chen
 Title: Vice President



  








			
	 JPMorgan Chase Bank
 as a Bank

		
	By:	 	 /s/ Barry K. Bergman

	 	 	 Name: Barry K. Bergman
 Title: Vice President











			
	 THE BANK OF NEW YORK
 as a Bank

		
	By:	 	 /s/ Kristen Talaber

	 	 	 Name: Kristen Talaber
 Title: Vice President



  







 Wachovia Bank, National Association 
 as a Bank 
  
 By: /s/ John D.
Brady                                 
        Name: John D. Brady 
        Title: Director 







 Bank of America, N.A. 
 as a Bank 
  
 By: /s/ Thomas J.
Kane                                     
        Name: Thomas J. Kane 
        Title: Principal 







 Fleet National Bank 
 as a Bank 
  
 By: /s/ Thomas J.
Kane                                     
        Name: Thomas J. Kane 
        Title: Principal 







 BANK ONE, NA 
 as a Bank 
  
 By: /s/ John
Glisson                                 
        Name: John Glisson 
        Title: Associate Director