Document:

Registration Rights Agreement dated November 15, 2005

 Exhibit 4.6 
  

BLOCKBUSTER INC. 
  
 7 1/2 % Series
A Cumulative Convertible Perpetual Preferred Stock 
  
 Registration Rights Agreement 
  
 November 15, 2005 
  
 Citigroup Global Markets Inc. 
 J.P. Morgan Securities Inc. 
 As Representatives of the Initial Purchasers

 c/o Citigroup Global Markets Inc. 
 388 Greenwich Street

 New York, New York 10013 
  
 Ladies and Gentlemen: 
  
 Blockbuster Inc., a Delaware corporation (the “Company”), proposes to issue and sell to Citigroup Global Markets Inc. (“Citigroup”),
J.P. Morgan Securities Inc. (“JPMorgan”) and Credit Suisse First Boston LLC (“CSFB” and together with Citigroup and JPMorgan, the “Initial Purchasers”), upon the terms and subject to the conditions set forth in a
purchase agreement dated November 8, 2005 (the “Purchase Agreement”), up to 172,500 shares of 7 1/2 % Series A Cumulative Convertible Perpetual Preferred Stock (the “Preferred Stock”). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.

  
 As an inducement to the Initial Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to the obligations of the Initial Purchasers thereunder, the parties hereto agree, for the benefit of the holders (including the Initial Purchasers) of the Preferred Stock and the Shares
(as defined below) (collectively, the “Holders”), as follows: 
  

	 	1.	Certain Definitions. 

  
 For purposes of this Registration Rights Agreement, the following terms shall have the following meanings: 
  
 (a) “Agreement” means this Registration Rights
Agreement, as the same may be amended from time to time pursuant to the terms hereof. 
  
 (b) “Certificate of Designations” means the Certificate of Designations, dated as of November 15, 2005 setting forth the
preferences and rights, qualifications, limitations and restrictions of the Preferred Stock. 

 (c) “Closing Date” means the date on which any Preferred Stock is initially
issued. 
  
 (d) “Common Stock” means
the shares of class A common stock, par value $0.01 per share, of the Company. 
  
 (e) “Conversion Price” has the meaning assigned such term in the Certificate of Designations. 
  
 (f) “Commission” means the Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. 
  
 (g) “Company” has the meaning specified in the first paragraph of this Agreement. 
  
 (h) “Deferral Notice” has the meaning assigned
thereto in Section 3(b). 
  
 (i)
“Deferral Period” has the meaning assigned thereto in Section 3(b). 
  
 (j) “Effective Period” has the meaning assigned thereto in Section 2(a). 
  
 (k) “Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder. 
  
 (l) “Holder” means each holder, from time to time, of Registrable Securities (including the Initial Purchasers). 
  
 (m) “Initial Placement” means the initial
placement of the Preferred Stock pursuant to the terms of the Purchase Agreement. 
  
 (n) “Initial Purchasers” has the meaning specified in the first paragraph of this Agreement. 
  
 (o) “Liquidation Damages Amount” has the meaning
assigned thereto in Section 2(d). 
  
 (p)
“Material Event” has the meaning assigned thereto in Section 3(a)(iv). 
  
 (q) “Majority Holders” shall mean, on any date, holders of the majority of the Shares constituting Registrable Securities; for
the purposes of this definition, Holders of Preferred Stock constituting Registrable Securities shall be deemed to be the Holders of the number of Shares into which such Preferred Stock are or would be convertible as of such date. 
  
 (r) “NASD” shall mean the National Association of
Securities Dealers, Inc. 
  

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 (s) “NASD Rules” shall mean the Conduct Rules and the By-Laws of the NASD.

  
 (t) “Notice and Questionnaire”
means a written notice delivered to the Company containing the information called for by the Form of Selling Securityholder Notice and Questionnaire attached as Annex A to the Offering Memorandum. 
  
 (u) “Notice Holder” means, on any date, any Holder
that has delivered a Notice and Questionnaire to the Company on or prior to such date. 
  
 (v) “Offering Memorandum” means the Offering Memorandum dated November 8, 2005 relating to the offer and sale of the
Securities. 
  
 (w) “Person” means an
individual, corporation, association, partnership, organization, business, individual, government or political subdivision thereof or governmental agency. 
  
 (x) “Preferred Stock” has the meaning specified in the first paragraph of this Agreement. 
  
 (y) “Prospectus” means the prospectus included in
any Shelf Registration Statement, as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such
Prospectus. 
  
 (z) “Purchase
Agreement” has the meaning specified in the first paragraph of this Agreement. 
  
 (aa) “Registrable Securities” means Securities; provided, however, that such Securities shall cease to be Registrable
Securities when (i) in the circumstances contemplated by Section 2(a), a registration statement registering such Securities under the Securities Act has been declared or becomes effective and such Securities have been sold or otherwise
transferred by the Holder thereof pursuant to such effective registration statement; or (ii) such Securities are sold pursuant to Rule 144 under circumstances in which any legend borne by such Securities relating to restrictions on
transferability thereof, under the Securities Act or otherwise, is removed or such Securities are eligible to be sold pursuant to Rule 144(k) or any successor provision; or (iii) such Securities shall cease to be outstanding (including, in the
case of the Preferred Stock, upon conversion into Shares). 
  
 (bb) “Registration Default” has the meaning assigned thereto in Section 2(d). 
  
 (cc) “Registration Expenses” has the meaning assigned thereto in Section 5. 
  
 (dd) “Rule 144,” “Rule 405” and
“Rule 415” means, in each case, such rule as promulgated under the Securities Act. 
  
 (ee) “Securities” means, collectively, the Preferred Stock and the Shares. 
  

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 (ff) “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder. 
  
 (gg) “Shares” means any Common Stock (i) into which the Preferred Stock is convertible or that has been issued upon any conversion of Preferred Stock, or any other Security or property that may constitute the
“Shares” under the Certificate of Designation or (ii) that has been delivered to Holders of the Preferred Stock as a dividend payment thereof pursuant to the Certificate of Designations. 
  
 (hh) “Shelf Registration Statement” means the
shelf registration statement referred to in Section 2(a), as amended or supplemented by any amendment or supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by
reference in such Shelf Registration Statement. 
  
 (ii) “Special Counsel” shall have the meaning assigned thereto in Section 5. 
  
 (jj) “Transfer Agent” means the transfer agent with respect to the Preferred Stock and the Shares. 
  
 Unless the context otherwise requires, any reference herein to a
“Section” or “clause” refers to a Section or clause, as the case may be, of this Agreement, and the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement
as a whole and not to any particular Section or other subdivision. Unless the context otherwise requires, any reference to a statute, rule or regulation refers to the same (including any successor statute, rule or regulation thereto) as it may be
amended from time to time. 
  

	 	2.	Registration Under the Securities Act. 

  
 (a) The Company agrees to file under the Securities Act as promptly as practicable but in any event within 120 days after the Closing Date
a shelf registration statement providing for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission. The
Company shall give notice to all Holders of such filings and shall name in such Shelf Registration Statement as selling securityholders all Notice Holders who have submitted their Notice and Questionnaire to the Company at least 5 business days
prior to the effectiveness of such Shelf Registration Statement. The Company shall give all Holders notice of effectiveness of such Shelf Registration Statement. The Company agrees to use its reasonable efforts to cause the Shelf Registration
Statement to become or be declared effective as soon as practicable but in any event within 210 days after the Closing Date and to keep such Shelf Registration Statement continuously effective until the earlier of (i) the second anniversary of
the Closing Date and (ii) such time as there are no longer any Registrable Securities outstanding (the “Effective Period”). None of the Company’s securityholders (other than Holders of Registrable Securities) shall have the right
to include any of the Company’s securities in the Shelf Registration Statement. 
  

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 (b) The Company further agrees that it shall cause the Shelf Registration Statement and
the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (i) to comply in all material respects with the applicable requirements of the
Securities Act; and (ii) not to 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 therein (in the case of the Prospectus, in the light of
the circumstances under which they were made) not misleading, and the Company agrees to furnish to the Holders of the Registrable Securities copies of any supplement or amendment prior to its being used or promptly following its filing with the
Commission; provided, however, that the Company shall have no obligation to deliver to Holders of Registrable Securities copies of any supplement or amendment consisting exclusively of an Exchange Act report or other Exchange Act filing
otherwise publicly available on the Company’s website. If the Shelf Registration Statement, as amended or supplemented from time to time, ceases to be effective for any reason at any time during the Effective Period, the Company shall use its
reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof. 
  
 (c) Each Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to the Shelf
Registration Statement and related Prospectus, it will do so only in accordance with this Section 2(c) and Section 3(b). From and after the date the Shelf Registration Statement is declared effective, the Company shall, as promptly as is
practicable after the date a Notice and Questionnaire is delivered, 
  
 (i) if required by applicable law, file with the Commission a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or
a supplement or amendment to any document incorporated therein by reference or file any other required document so that the Holder delivering such Notice and Questionnaire is named as a selling security holder in the Shelf Registration Statement and
the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use its reasonable efforts to cause such post-effective amendment to be declared effective under the Securities Act as promptly as is practicable; 
  
 (ii) provide such Holder copies of any documents filed pursuant to Section 2(c)(i); and 
  
 (iii) notify such Holder as promptly as practicable after
the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(c)(i); 
  
 provided that the Company shall not be required to make more than one such filing in any calendar quarter in the form of a post-effective amendment
to the Shelf Registration Statement or supplement to the Prospectus; provided, further, that if such Notice and 

  

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Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the
actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 3(b). Notwithstanding anything contained herein to the contrary, the Company shall be under no obligation to name
any Holder that is not a Notice Holder as a selling securityholder in any Shelf Registration Statement or related Prospectus; provided, however, that any Holder that becomes a Notice Holder pursuant to the provisions of this 
 Section 2(c) (whether or not such Holder was a Notice Holder at the time the Shelf Registration Statement was declared effective) shall be named as a
selling securityholder in the Shelf Registration Statement or related Prospectus in accordance with the requirements of this Section 2(c). 
  
 (d) If any of the following events (any such event a “Registration Default”) shall occur, then additional dividends (the
“Additional Dividends”) shall cumulate to Holders in respect of the Preferred Stock in accordance with the Certificate of Designation and cash amounts (the “Liquidated Damages Amount”) shall become payable to Holders of the
Shares as follows: 
  
 (i) if the Shelf
Registration Statement is not filed with the Commission within 120 days following the Closing Date, then commencing on the 121st day after the Closing Date, and for each day thereafter (i) Additional Dividends shall cumulate in respect of any share of Preferred Stock then outstanding, at a rate of 0.25% per annum of the aggregate liquidation
preference of such share of Preferred Stock and (ii) Liquidated Damages Amount shall accrue in respect of each share of the Shares then outstanding, at a rate of 0.25% per annum of the Closing Sale Price (as defined in the Certificate of
Designations) on such day with respect to such Share, in each case for the first 90 days following such 121st day
and at a rate of 0.5% per annum thereafter; or 
  
 (ii) if the Shelf Registration Statement is not declared effective by the Commission within 210 days following the Closing Date, then commencing on the 211th day after the Closing Date, and for each day thereafter (i) Additional Dividends shall cumulate in respect of any share of Preferred Stock then
outstanding, at a rate of 0.25% per annum of the aggregate liquidation preference of such share of Preferred Stock and (ii) Liquidated Damages Amount shall accrue in respect of each share of the Shares then outstanding, at a rate of
0.25% per annum of the Closing Sale Price (as defined in the Certificate of Designations) on such day with respect to such Share, in each case for the first 90 days following such 211th day and at a rate of 0.5% per annum thereafter; or 
  
 (iii) if the Shelf Registration Statement has been declared effective but such Shelf Registration Statement ceases to be effective at any
time during the Effective Period (other than pursuant to Section 3(b) hereof), then commencing on the day such Shelf Registration Statement ceases to be effective, and for each day thereafter (i) Additional Dividends shall cumulate in
respect of any share of Preferred Stock then outstanding, at a rate of 0.25% per annum of the aggregate liquidation preference of such share of Preferred Stock and (ii) Liquidated 

  

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Damages Amount shall accrue in respect of each share of the Shares then outstanding, at a rate of 0.25% per annum of the Closing Sale Price (as defined
in the Certificate of Designations) on such day with respect to such Share, in each case for the first 90 days following such date on which the Shelf Registration Statement ceases to be effective and at a rate of 0.5% per annum thereafter; or

  
 (iv) if the aggregate duration of Deferral
Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 3(b) hereof, then commencing on the day the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in
respect of such period (and again on the first day of any subsequent Deferral Period during such period), and for each day thereafter (i) Additional Dividends shall cumulate in respect of any share of Preferred Stock then outstanding, at a rate
of 0.25% per annum of the aggregate liquidation preference of such share of Preferred Stock and (ii) Liquidated Damages Amount shall accrue in respect of each share of the Shares then outstanding, at a rate of 0.25% per annum of the
Closing Sale Price (as defined in the Certificate of Designations) on such day with respect to such Share, in each case for the first 90 days and at a rate of 0.5% per annum thereafter; 
  
 provided, however, that the Additional Dividends and the Liquidation
Damages Amount rate on the Preferred Stock and the Shares shall not exceed in the aggregate 0.5% per annum and shall not be payable under more than one clause above for any given period of time, except that if the Additional Dividends and the
Liquidation Damages Amount would be payable under more than one clause above, but at a rate of 0.25% per annum under one clause and at a rate of 0.5% per annum under the other, then the Additional Dividends and the Liquidation Damages
Amount rate shall be the higher rate of 0.5% per annum; provided further, however, that (1) upon the filing of the Shelf Registration Statement (in the case of clause (i) above), (2) upon the effectiveness of the Shelf
Registration Statement (in the case of clause (ii) above), (3) upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (iii) above), (4) upon the termination of the
Deferral Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in Section 3(b) to be exceeded (in the case of clause (iv) above) or (5) upon the date the Securities cease to be Registrable
Securities, the Additional Dividends and the Liquidation Damages Amount shall cease to accrue. Additional Dividends shall be payable, if and when declared by the board of directors of the Company, as set forth in the Certificate of Designations.

  
 The Liquidation Damages Amount on the Shares,
if any, will cumulate from and including the date on which a Registration Default occurs to but excluding the date on which all Registration Defaults have been cured and will be payable in cash on November 15 and May 15 of each year (the
“Liquidation Damages Amount Payment Date”) to holders of record of outstanding Shares at the close of business on November 1 or May 1, as the case may be, immediately preceding the relevant Liquidated Damages Payment Date.
Following the cure of all Registration Defaults requiring the payment of Additional Dividends or Liquidation Damages Amounts to the Holders of Securities Registrable Securities pursuant to this Section, the accrual of Additional Dividends or 

  

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Liquidation Damages Amounts will cease (without in any way limiting the effect of any subsequent Registration Default requiring the payment of Additional
Dividends or Liquidation Damages Amounts). 
  
 All of the Company’s obligations set forth in this Section 2(d) that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full (notwithstanding termination of this Agreement). 
  
 Notwithstanding the foregoing, the parties agree that the sole monetary damages payable for a violation of the terms of this Agreement
with respect to which additional monetary amounts are expressly provided shall be as set forth in this Section 2(d). Nothing shall preclude a Notice Holder or Holder of Registrable Securities from pursuing or obtaining specific performance or
other equitable relief with respect to this Agreement. 
  

	 	3.	Registration Procedures. 

  
 The following provisions shall apply to the Shelf Registration Statement filed pursuant to Section 2: 
  
 (a) The Company shall: 
  
 (i) prepare and file with the Commission a registration
statement with respect to the shelf registration on any form which may be utilized by the Company and which shall permit the disposition of the Registrable Securities in accordance with the intended method or methods thereof, as specified in writing
by Notice Holders, and use its reasonable efforts to cause such registration statement to become effective in accordance with Section 2(a) above; 
  
 (ii) before filing any Shelf Registration Statement or Prospectus or any amendments or supplements thereto with the Commission, furnish to
the Initial Purchasers copies of all such documents proposed to be filed and use reasonable efforts to reflect in each such document when so filed with the Commission such comments as the Initial Purchasers reasonably shall propose within three
(3) Business Days of the delivery of such copies to the Initial Purchasers; 
  
 (iii) use its reasonable efforts to prepare and file with the Commission such amendments and post-effective amendments to the Shelf
Registration Statement and file with the Commission any other required document as may be necessary to keep such Shelf Registration Statement continuously effective until the expiration of the Effective Period; cause the related Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act applicable to it
with respect to the disposition of all Securities covered by such Shelf Registration Statement during the Effective Period in accordance with the 

  

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intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or such Prospectus as so supplemented;

  
 (iv) promptly notify the Notice Holders of
Registrable Securities (A) when such Shelf Registration Statement or the Prospectus included therein or any amendment or supplement to the Prospectus or post-effective amendment has been filed with the Commission, and, with respect to such
Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) of any request, following the effectiveness of the Shelf Registration Statement, by the Commission or any other Federal or state governmental
authority for amendments or supplements to the Shelf Registration Statement or related Prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration
Statement or the initiation of any proceedings for that purpose, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, (E) of the occurrence of (but not the nature of or details concerning) any event or the existence of any fact (a “Material Event”) as a result of which any Shelf Registration Statement
shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (F) of the determination by the Company that a
post-effective amendment to the Shelf Registration Statement will be filed with the Commission, which notice may, at the discretion of the Company (or as required pursuant to Section 3(b)), state that it constitutes a Deferral Notice, in which
event the provisions of Section 3(b) shall apply or (G) at any time when a Prospectus is required to be delivered under the Securities Act, that the Shelf Registration Statement, Prospectus, Prospectus amendment or supplement or
post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the rules and regulations of the Commission thereunder; 
  
 (v) prior to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement,
use its reasonable efforts to register or qualify, or cooperate with the Notice Holders of Securities included therein and their respective counsel in connection with the registration or qualification of, such Securities for offer and sale under the
securities or blue sky laws of such U.S. jurisdictions as any such Notice Holders reasonably requests in writing and do any and all other acts or things reasonably necessary or advisable to enable the offer and sale in such jurisdictions of the
Securities covered by the Shelf Registration Statement; prior to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement, use its reasonable efforts to keep each such registration or qualification (or exemption
therefrom) effective during 

  

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the Effective Period in connection with such Notice Holder’s offer and sale of Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such U.S. jurisdictions of such Registrable Securities in the manner set forth in the Shelf Registration Statement and the
related Prospectus; provided that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so subject; 
  
 (vi) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration Statement or any post-effective amendment thereto, and to lift any suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in each case at the earliest practicable date; 
  
 (vii) upon reasonable notice, for a reasonable period prior to the filing of the Shelf Registration
Statement, and throughout the Effective Period, (i) make reasonably available for inspection by Special Counsel acting for, Majority Holders of the Securities being sold and any underwriter (and its counsel) participating in any disposition of
Securities pursuant to such Shelf Registration Statement, all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) use reasonable efforts to have their officers, directors, employees,
accountants and counsel supply all relevant information reasonably requested by such Special Counsel or any such underwriter in connection with such Shelf Registration Statement; provided that if any such information is identified by the
Company as being confidential or proprietary, each Person receiving such information shall take such actions as are reasonably necessary to protect the confidentiality of such information. 
  
 (viii) if requested by Majority Holders of the Securities
being sold in an underwriting, its Special Counsel or the managing underwriters (if any) in connection with such Shelf Registration Statement, use its reasonable efforts to cause (i) its counsel to deliver an opinion relating to the Shelf
Registration Statement and the Securities in customary form, (ii) its officers to execute and deliver all customary documents and certificates requested by the Majority Holders of the Securities being sold, their Special Counsel or the managing
underwriters (if any) and (iii) its independent public accountants to provide a comfort letter or letters in customary form, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing
Standards No. 72; provided, however that the Company shall not be required to deliver, or cause to be delivered, any of the documents set forth in Section 3(a)(viii) unless the underwriting relates to at least 50,000 shares of
Preferred Stock; 
  
 (ix) promptly furnish to
each Notice Holder and the Initial Purchasers, upon their request and without charge, at least one (1) conformed copy of the 

  

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Shelf Registration Statement and any amendments thereto, including financial statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits; provided, however, that the Company shall have no obligation to deliver to Notice Holders or Initial Purchasers a copy of any amendment consisting exclusively of an Exchange Act report or
other Exchange Act filing otherwise publicly available on the Company’s website; 
  
 (x) during the Effective Period, deliver to each Notice Holder in connection with any sale of Registrable Securities pursuant to the Shelf
Registration Statement, without charge, as many copies of the Prospectus relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such Notice Holder may reasonably request; and the
Company hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or supplement thereto by each Notice Holder in connection with any offering and sale
of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein; and 
  
 (xi) cooperate with the Notice Holders of Securities to facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to the Shelf Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders thereof may request in writing at least two business days prior to sales of
Securities pursuant to such Shelf Registration Statement; provided, however that such Holder shall be responsible for the payment of any taxes payable on account of any transfer to any Person other than such Holder. 
  
 (b) Upon (A) the issuance by the Commission of a stop
order suspending the effectiveness of the Shelf Registration Statement or the initiation of proceedings with respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or
the existence of any Material Event as a result of which the Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or (C) the occurrence or existence of any corporate development that, in the discretion of the Company, makes it appropriate to suspend the availability of the Shelf Registration Statement and the related
Prospectus, the Company will (i) in the case of clause (B) above, subject to the third sentence of this provision, as promptly as practicable prepare and file a post-effective amendment to such Shelf Registration Statement or a supplement
to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such Shelf Registration Statement and Prospectus so that such Shelf Registration Statement
does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make 

  

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the statements therein not misleading, and such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to the Shelf Registration Statement, subject to the third sentence of this provision, use reasonable efforts to cause it to be declared effective as promptly as is practicable, and (ii) give notice
to the Notice Holders that the availability of the Shelf Registration Statement is suspended (a “Deferral Notice”). Upon receipt of any Deferral Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to the Shelf
Registration Statement until such Notice Holder’s receipt of copies of the supplemented or amended Prospectus provided for in clause (i) above, or until it is advised in writing by the Company that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. The Company will use its reasonable efforts to ensure that the use of the Prospectus may be resumed (x) in
the case of clause (A) above, as promptly as practicable, (y) in the case of clause (B) above, as soon as, in the sole judgment of the Company, public disclosure of such Material Event would not be prejudicial to or contrary to the
interests of the Company or, if necessary to avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in the case of clause (C) above, as soon as, in the discretion of the Company, such suspension is no longer
appropriate; provided that the period during which the availability of the Shelf Registration Statement and any Prospectus is suspended (the “Deferral Period”), without the Company incurring any obligation to pay Additional Dividends or
Liquidation Damages Amounts pursuant to Section 2(d), shall not exceed one hundred and twenty (120) days in the aggregate in any twelve (12) month period. 
  
 (c) Each Holder of Registrable Securities agrees that upon receipt of any Deferral Notice from the Company,
such Holder shall forthwith discontinue (and cause any placement or sales agent or underwriters acting on their behalf to discontinue) the disposition of Registrable Securities pursuant to the registration statement applicable to such Registrable
Securities until such Holder (i) shall have received copies of such amended or supplemented Prospectus and, if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent
file copies, then in such Holder’s possession of the Prospectus covering such Registrable Securities at the time of receipt of such notice or (ii) shall have received notice from the Company that the disposition of Registrable Securities
pursuant to the Shelf Registration may continue. 
  
 (d) The Company may require each Holder of Registrable Securities as to which any registration pursuant to Section 2(a) is being effected to furnish to the Company such information regarding such Holder and such Holder’s intended
method of distribution of such Registrable Securities as the Company may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act. Each such Holder agrees to
notify the Company as promptly as practicable of any inaccuracy or change in information previously 

  

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furnished by such Holder to the Company or of the occurrence of any event in either case as a result of which any Prospectus relating to such registration
contains or would contain an untrue statement of a material fact regarding such Holder or such Holder’s intended method of disposition of such Registrable Securities or omits to state any material fact regarding such Holder or such
Holder’s intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading, and promptly to furnish to the Company any additional information required to
correct and update any previously furnished information or required so that such Prospectus shall not contain, with respect to such Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading. 
  
 (e) The Company shall comply with all applicable rules and regulations of the Commission and make generally available to its
securityholders earning statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the
end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of the Shelf Registration
Statement, which statements shall cover said 12-month periods. 
  
 (f) The Company shall provide a CUSIP number for all Registrable Securities covered by the Shelf Registration Statement not later than the effective date of such Shelf Registration Statement and provide the Transfer
Agent with printed certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company. 
  
 (g) The Company shall use its reasonable efforts to provide such information as is required for any filings required to be made with the
National Association of Securities Dealers, Inc. 
  
 (h) Until the expiration of two years after the Closing Date, the Company will not resell any of the Securities that have been reacquired by it except pursuant to an effective registration statement under the Securities Act. 
  

	 	4.	Holder’s Obligations. 

  
 Each Holder agrees, by acquisition of the Registrable Securities, that no Holder of Registrable Securities shall be entitled to sell any of such
Registrable Securities pursuant to the Shelf Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(c) hereof (including
the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Each Notice Holder agrees promptly to furnish to the Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not misleading and any other information regarding such Notice Holder and the distribution of such Registrable Securities as 

  

 13 

 
may be required to be disclosed in the Shelf Registration Statement under applicable law or pursuant to Commission comments. Each Holder further agrees not
to sell any Registrable Securities pursuant to the Shelf Registration Statement without delivering, or causing to be delivered, a Prospectus to the purchaser thereof and, following termination of the Effective Period, to notify the Company, within
10 Business Days of a request by the Company, of the amount of Registrable Securities sold pursuant to the Shelf Registration Statement and, in the absence of a response, the Company may assume that all of the Holder’s Registrable Securities
were so sold. 
  

	 	5.	Registration Expenses. 

  
 The Company agrees to bear and to pay or cause to be paid promptly upon request being made therefor all expenses incident to the Company’s
performance of or compliance with this Agreement, including, but not limited to, (a) all Commission and any NASD registration and filing fees and expenses, (b) all fees and expenses in connection with the qualification of the Securities
for offering and sale under the State securities and Blue Sky laws referred to in Section 3(a)(v) hereof, (c) all expenses relating to the preparation, printing, distribution and reproduction of the Shelf Registration Statement, the
related Prospectus, each amendment or supplement to each of the foregoing, the certificates representing the Securities and all other documents relating hereto, (d) fees and expenses of the Transfer Agent for the Securities, (e) fees,
disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or “cold comfort” letters required by or incident to such performance and compliance) and
(f) reasonable fees, disbursements and expenses of one counsel for the Holders of Registrable Securities retained in connection with the Shelf Registration Statement, as selected by the Company (unless reasonably objected to by the Majority
Holders of the Registrable Securities being registered, in which case the Majority Holders shall select such counsel for the Holders) (“Special Counsel”), and fees, expenses and disbursements of any other Persons, including special
experts, retained by the Company in connection with such registration (collectively, the “Registration Expenses”). To the extent that any Registration Expenses are incurred, assumed or paid by any Holder of Registrable Securities or any
underwriter or placement agent therefor, the Company shall reimburse such Person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a documented request therefor. Notwithstanding the foregoing,
the Holders of the Registrable Securities being registered shall pay all underwriting discounts and commissions and placement agent fees and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any
counsel or other advisors or experts retained by such Holders (severally or jointly), other than the counsel and experts specifically referred to above. 
  

	 	6.	Indemnification. 

  
 (a) The Company agrees to indemnify and hold harmless each Holder (including, without limitation, any such Initial Purchaser), the
directors, officers, employees and Affiliates of each Initial Purchaser and each person who controls such Holder within the meaning of either the Act or the Exchange Act (each, for purposes of Section 6(a) only, an “indemnified
party”) against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the 

  

 14 

 
Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming part thereof or in any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged
omission from any such document, in reliance upon and in conformity with written information provided by such indemnified party for inclusion into such document; provided further, that with respect to any untrue statement or omission of
material fact from any related preliminary prospectus, the indemnity agreement contained in this Section 6(a) shall not inure to the benefit of any indemnified party from whom the person asserting any such loss, claim, damage or liability
purchased the securities concerned, to the extent that any such loss, claim, damage or liability of such indemnified party occurs under the circumstance that (y) the untrue statement or omission of a material fact from the related preliminary
prospectus was corrected in the final prospectus unless, in either case, such failure to deliver the final Prospectus was a result of non-compliance by the Company with Section 3(a)(x) and (z) there was not sent or given to such person, at
or prior to the written confirmation of the sale of such securities to such person, a copy of the final prospectus. This indemnity agreement will be in addition to any liability that the Company may otherwise have. 
  
 The Company shall indemnify and hold harmless as provided in
this Section 6(a) or contribute as provided in Section 7 hereof to loss, claim, damage, liability or action of each underwriter, if any, of Securities registered under the Shelf Registration Statement, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if any, who controls such underwriter within the meaning of the Securities Act or the Exchange Act on substantially the same basis as that of the indemnification of the
selling Holders provided in this paragraph (a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement. 
  
 (b) Each Holder agrees to indemnify and hold harmless the Company, each of its directors, each of its officers, and each person, if any,
who controls the Company within the meaning of either the Act or the Exchange Act (each, for purposes of Section 6(b) only, an “indemnified party”), against any and all losses, claims, damages or liabilities, joint or several, to
which the such indemnified party may become subject under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming 

  

 15 

 
part thereof or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with any information furnished to the Company by such Holder for inclusion into such document, and agrees to reimburse each indemnified person, as incurred, for any legal or
other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action provided, however, that no such Holder shall be liable for any indemnity claims hereunder in excess of
the amount of net proceeds received by such Holder from the sale of Securities pursuant to such Shelf Registration Statement. This indemnity agreement will be in addition to any liability which any such Holder may otherwise have. 
  
 (c) Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it has been materially prejudiced through the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b).
If any action shall be brought against an indemnified party and it shall have notified the indemnifying party thereof, the indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at
the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified
party. Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a
conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified 

  

 16 

 
parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party. 
  
 (d) The provisions of this Section 6 and Section 7
shall remain in full force and effect, regardless of any investigation made by or on behalf of any Holder, the Company, or any of the indemnified Persons referred to in this Section 6 and Section 7, and shall survive the sale by a Holder
of securities covered by the Shelf Registration Statement. 
  

	 	7.	Contribution. 

  
 If the indemnification provided for in Section 6 is unavailable or insufficient to hold harmless an indemnified party under Section 6(a) or
6(b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company from the offering and sale of the Preferred Stock, on the one hand, and a Holder with respect to the sale by such Holder of Securities, on
the other, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and such Holder on the other with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to the Company or
information supplied by the Company on the one hand or to any information supplied by such Holder on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement
or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 7 were to be determined by pro rata allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 7 shall be deemed to
include, for purposes of this Section 7, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 7, an indemnifying party that is a Holder of Securities shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities sold by such indemnifying party to any purchaser
exceeds the amount of any damages which such indemnifying party has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of 

  

 17 

 
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
  

	 	8.	Rule 144A and Rule 144. 

  
 So long as any Registrable Securities remain outstanding, the Company shall use its reasonable efforts to file the reports required to be filed by it
under Rule 144A(d)(4) under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the written request of any Holder of Registrable Securities, make publicly
available other information so long as necessary to permit sales of such Holder’s securities pursuant to Rules 144 and 144A. Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to require the Company to register any of
its securities pursuant to the Exchange Act. 
  

	 	9.	Miscellaneous. 

  
 (a) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Majority Holders. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities are being sold pursuant to the Shelf Registration Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of a majority in aggregate amount of the Securities being sold by such Holders pursuant to the Shelf Registration Statement. 
  
 (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telecopier or air courier guaranteeing next-day delivery: 
  
 (1) If to the Company, initially at the address set forth in the Purchase Agreement; 
  
 (2) If to the Initial Purchasers, initially at their respective addresses set forth in the Purchase Agreement; and 
  
 (3) If to a Holder, to the address of such Holder set forth
in the security register, the Notice and Questionnaire or other records of the Company. 
  
 All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; one business
day after being timely delivered to a next-day air courier guaranteeing overnight delivery; five business days after being deposited in the mail; and when receipt is acknowledged by the recipient’s telecopier machine, if sent by telecopier.

  
 (c) Successors And Assigns. This
Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without 

  

 18 

 
limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement. If any transferee of any Holder shall acquire Registrable Securities in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The Initial Purchasers (in their capacity as Initial Purchasers, but not as Holders) shall have no liability or obligation to the Company with respect to
any failure by any other Holder to comply with, or any breach by any other Holder of, any of the obligations of such Holder under this Agreement. 
  
 (d) Counterparts. This Agreement may be executed in any number of counterparts (which may be delivered in original form or by
telecopier) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 
  
 (e) Definition of Terms. For purposes of this
Agreement, (a) the term “business day” means any day on which the New York Stock Exchange is open for trading and (b) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in
Rule 405 under the Securities Act. 
  
 (f)
Headings. The headings in this Agreement are for convenience of reference only and are not a part of this Agreement and shall not limit or otherwise affect the meaning hereof. 
  
 (g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of
the State of New York. 
  
 (h) Remedies.
In the event of a breach by the Company or by any Holder of any of their respective obligations under this Agreement, each Holder or the Company will be entitled to equitable relief, including an injunction and specific performance of its rights
under this Agreement. The Company and each Holder agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (i) No Inconsistent Agreements. The Company represents, warrants and agrees that (i) the rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of any other outstanding securities issued or guaranteed by the Company under any other agreement and (ii) the Company has not entered
into, or on or after the date of this Agreement will not enter into, any agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. 

 

 19 

 (j) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable. 
  
 (k)
Securities Held by the Company, etc. Whenever the consent or approval of Holders of a specified percentage of Securities is required hereunder, Securities held by the Company shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage. 
  

 20 

 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us
a counterpart hereof, whereupon this instrument will become a binding agreement among the Company and the several Initial Purchasers in accordance with its terms. 
  

			
	 Very truly yours,

	
	 BLOCKBUSTER INC.

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

					
	 Accepted: November 15, 2005

		
	 By: 
	 	 CITIGROUP GLOBAL MARKETS INC.

			
	 	 	 By: 
	 	/s/ Derek Van Zandt
	 	 	 	 	Authorized Signatory

					
		
	 By: 
	 	 J.P. MORGAN SECURITIES INC.

			
	 	 	 By: 
	 	/s/
	 	 	 	 	Authorized SignatoryEmployment Agreement between Blockbuster and Frank Paci

 Exhibit 10.2(k) 
  
 January 28, 2003 
  
 Frank Paci 
 1201 Elm Street 
 Dallas, TX 75270 
  
 Dear Frank: 
  
 Blockbuster Inc (“Blockbuster”), 1201 Elm Street, Dallas, Texas 75270, agrees to employ you and you agree to
accept employment with Blockbuster upon the following terms and conditions (the “Agreement”): 
  
 1. Term. The term of this Agreement shall be three (3) years and shall commence on January 28, 2003, but will be automatically renewed on
March 1 of each year for a three (3) year term commencing on the date of automatic renewal, unless terminated by Blockbuster pursuant to Paragraph 8(a) or (b) or otherwise. As used in this Agreement, the “Term” refers to the
period beginning on the initial Commencement Date of this Agreement and for three (3) years thereafter or, if the term of your employment has been automatically renewed pursuant to this Paragraph 1, the period beginning on the date of automatic
renewal and ending on the third anniversary of the date of the automatic renewal, notwithstanding any earlier termination pursuant to Paragraph 8(a) or (b) or otherwise. 
  
 2. Duties. You agree to devote your entire business time, attention and energies to the business of Blockbuster and
its subsidiaries during your employment. You will be Executive Vice President Finance, Strategic Planning & Development of Blockbuster, and you agree to perform all duties reasonable and consistent with that or such comparable office as the
Executive Vice President Chief Financial Officer and Chief Administrative Officer of Blockbuster or other individual designated by the Chief Executive Officer (the “CEO”) of Blockbuster may assign to you from time to time. 
  
 3. Compensation. 
  
 (a) Salary. For all the services rendered by you in
any capacity under this Agreement, Blockbuster agrees to pay you thirty two thousand five hundred Dollars ($32,500) a month in base salary (“Salary”), less applicable deductions and withholding taxes, in accordance with Blockbuster’s
payroll practices as they may exist from time to time. 
  
 (b) Bonus Compensation. You also will receive bonus compensation (“Bonus”) in accordance with Blockbuster’s Short-Term Incentive Plan or, if applicable, Blockbuster’s Senior Executive Short-Term Incentive Plan,
each as may be amended from time to time (either of such plans, as applicable, to be hereinafter referred to as the “STIP”) and as follows: 
  

	 	(i)	Your target bonus (“Target Bonus”) for each calendar year will be 50% of your Salary on November 1st of the calendar year; provided that, for any years in which you are a participant in Blockbuster’s Senior Executive Short-Term Incentive Plan, for
purposes of this Section 3(b)(i), your Target Bonus will be based on your Salary as defined in such plan. Your Bonus may be prorated for any portion of the calendar year that you were employed under this Agreement. 

 Frank Paci 
 January
28, 2003 
  Page
 2
 
  

	 	(ii)	Your Bonus for any calendar year will be payable, less applicable deductions and withholding taxes, by the end of the first quarter of the following year. 

 
 4. Benefits. You will participate in such vacation, medical,
dental, life insurance, long-term disability insurance, 401(k), long-term incentive and other plans as Blockbuster may have or establish from time to time and in which you would be entitled to participate under the terms of the plan. This provision,
however, will not be construed to either require Blockbuster to establish any welfare, compensation or long-term incentive plans, or to prevent the modification or termination of any plan once established, and no action or inaction with respect to
any plan will affect this Agreement. 
  
 5. Business Expenses;
Car Allowance and Insurance. During your employment under this Agreement, Blockbuster will reimburse you for such reasonable travel and other expenses incurred in the performance of your duties consistent with Blockbuster’s then applicable
expense reimbursement policies for Blockbuster executives at comparable position levels. You will receive a car allowance and car insurance for one (1) vehicle in accordance with Blockbuster’s policies, as same may be amended from time to
time. 
  
 6. Non-Competition, Confidential Information,
Etc. 
  
 (a) Non-Competition. You
agree that your employment with Blockbuster is on an exclusive basis and that, while you are employed by Blockbuster, you will not engage in any other business activity which is in conflict with your duties and obligations (including your commitment
of time) under this Agreement. You agree that, during the Non-Compete Period (as defined below), you will not directly or indirectly engage in or participate as an owner, partner, stockholder, officer, employee, director, agent of or consultant for
any Blockbuster Competitor (as defined below) and will perform no services for a Blockbuster Competitor similar to any services performed for Blockbuster; provided, however, that this provision will not prevent you from investing as
less than a one (1%) percent stockholder in the securities of any company listed on a national securities exchange or quoted on an automated quotation system. The Non-Compete Period will cover the entire Term plus any period after the Term for
which you receive payments pursuant to Paragraph 8(c)(i). A Blockbuster Competitor is any business entity which engages in the acquisition, aggregation, or delivery of audio or video entertainment, including but not limited to the rental, sale, or
trading of video, DVD, or other movie product, equipment, or video games, either (i) in electronic, digital, or internet commerce, or (ii) in one or more geographic areas where Blockbuster has its operations (or is engaged in real estate
site selection or has taken other steps toward the commencement of operations), either alone or in association with another entity. In every case, the good faith judgment of Blockbuster will be conclusive as to whether a business entity constitutes
a Blockbuster Competitor. You agree that this non-compete covenant is ancillary to an otherwise enforceable agreement, including but not limited to the confidentiality covenant and the payment provisions in Paragraph 3. 
  
 (b) Confidential Information. You agree that, during
the Term and at any time thereafter, (i) you will not (a) use for any purpose other than the duly authorized business of Blockbuster conducted in the course of your employment at Blockbuster or, (b) disclose to any third party, any
business information, technological information, intellectual property, trade secrets and other information belonging to Blockbuster or any of its affiliated companies or relating to Blockbuster’s business, technology, or customers
(“Confidential Information”), including, without limitation, any written (including in any electronic form) or oral communication incorporating Confidential Information in any way; and (ii) you will comply with any and all
confidentiality obligations of Blockbuster to a third party, whether arising under a written agreement or otherwise. Information will not be deemed Confidential Information which (x) is or becomes generally available to the public other than as
a result of a disclosure by you or at your direction or by any other person who directly or indirectly receives such information from you, or (y) is or becomes available to you on a non-confidential basis from a source which is entitled to
disclose it to you. 
  
 (c) No Employee
Solicitation. You agree that, during the Term and for one (1) year thereafter, you will not, directly or indirectly, engage, employ or solicit the employment or consulting 

 Frank Paci 
 January
28, 2003 
  Page
 3
 
  

 
services of any person who is then or has been within six (6) months prior to the time of such action, an employee of Blockbuster or any of its
affiliated companies 
  
 (d) Blockbuster
Ownership. Any inventions, discoveries, ideas, processes, programs, systems, improvements or contributions (whether or not patentable), including but not limited to any useful process, method, formula or, technique that is conceived, developed
or discovered by you during your employment by Blockbuster shall be the sole property of Blockbuster. Any works of authorship or other materials created by you, in any form (including in any electronic form), created by you in the course of
employment with Blockbuster and/or any of its affiliated companies and any works in progress resulting from such employment will be works-made-for hire pursuant to 17 U.S.C., Section 201 (the Copyright Act) and Blockbuster will be deemed the
sole owner throughout the universe of any and all rights of every nature in and to such works (including, without limitation, any copyrights, patents, trade secrets and trademarks), whether such rights are now known or hereafter defined or
discovered, with the right to use the works in perpetuity in any manner Blockbuster determines in its sole discretion without any further payment to you. If, for any reason, any of such results and proceeds are not legally deemed a
work-made-for-hire and/or there are any rights in such results and proceeds which do not accrue to Blockbuster under the preceding sentence, then you hereby irrevocably assign and agree to assign any and all of your rights, title and interest
thereto, including, without limitation, any and all copyrights, patents, trade secrets, trademarks, and/or other rights of every nature in the work, whether known or hereafter defined or discovered, and Blockbuster will have the right to use the
work in perpetuity throughout the universe in any manner Blockbuster determines in its sole discretion without any further payment to you. You will, as may be requested by Blockbuster from time to time, do any and all things which Blockbuster may
deem useful or desirable to establish or document Blockbuster’s rights in any such results and proceeds, including, without limitation, the execution of appropriate copyright, trademark and/or patent applications, assignments or similar
documents and, if you are unavailable or unwilling to execute such documents, you hereby irrevocably designate the CEO or his designee as your attorney-in-fact with the power to execute such documents on your behalf. To the extent you have any
rights in the results and proceeds of your services under this Agreement that cannot be assigned as described above, you unconditionally and irrevocably waive the enforcement of such rights. This Paragraph 6(d) is subject to, and does not limit,
restrict, or constitute a waiver by Blockbuster or any of its affiliated companies of any ownership rights to which Blockbuster or any of its affiliated companies may be entitled by operation of law by virtue of being your employer. 
  
 (e) Litigation. You agree that, during the Term and
the pendancy of any litigation or other proceeding, and at any time thereafter, (i) you will not communicate with anyone (other than your own attorneys or tax advisors), except to the extent necessary in the performance of your duties under
this Agreement, with respect to the facts or subject matter of any pending or potential litigation, or regulatory or administrative proceeding involving Blockbuster or any of Blockbuster’s affiliated companies, other than any litigation or
other proceeding in which you are a party-in-opposition, without giving prior notice to Blockbuster or Blockbuster’s counsel; and (ii) in the event that any other party attempts to obtain information or documents from you with respect to
matters possibly related to such litigation or other proceeding, you will promptly notify Blockbuster’s counsel before providing such information or documents. 
  
 (f) No Right to Give Interviews, Write Books, or Articles. During the Term and at any time
thereafter, except as authorized by Blockbuster, you will not (i) give any interviews or speeches, or (ii) prepare or assist any person or entity in the preparation of any books, articles, television or motion picture productions or other
creations, in either case, concerning Blockbuster or any of its affiliated companies or any of their respective officers, directors, agents, employees, suppliers or customers. 
  
 (g) Return of Property. All documents, data, recordings, or other property, whether tangible or
intangible, including all information stored in electronic form, obtained or prepared by or for you and utilized by you in the course of your employment with Blockbuster or any of its affiliated companies, will remain the exclusive property of
Blockbuster. In the event of the termination of your 

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employment for any reason, Blockbuster reserves the right, to the extent permitted by law and in addition to any other remedy Blockbuster may have, to deduct
from any monies otherwise payable to you the following: (i) all amounts you may owe to Blockbuster or any of its affiliated companies at the time of or subsequent to the termination of your employment with Blockbuster, and (ii) the value
of the Blockbuster property which you retain in your possession after the termination of your employment with Blockbuster. In the event that the law of any state or other jurisdiction requires the consent of any employee for such deductions, this
Agreement will serve as such consent. 
  
 (h)
Non-Disparagement. You agree that, during the Term and at any time thereafter, you will not, in any communications with the press or other media or any customer, client or supplier of Blockbuster or any of its affiliated companies, criticize,
ridicule or make any statement which disparages or is derogatory of Blockbuster or any of its affiliated companies or any of their respective directors or officers. 
  
 (i) Injunctive Relief. Blockbuster has entered into this Agreement in order to obtain the benefit of
your unique skills, talent, and experience. You acknowledge and agree that any violation of paragraphs 6(a) through (h) of this Agreement will result in irreparable damage to Blockbuster, and, accordingly, Blockbuster shall be entitled to
obtain injunctive and other equitable relief for any breach or threatened breach of such paragraphs, in addition to any other remedies available to Blockbuster. 
  
 (j) Survival; Modification of Terms. Your obligations under Paragraph 6(a) through (i) will
remain in full force and effect for the entire period provided therein notwithstanding the termination of your employment for any reason or the expiration of the Term. You and Blockbuster agree that the restrictions and remedies contained in
paragraphs 6(a) through (i) are reasonable and that it is your intention and the intention of Blockbuster that such restrictions and remedies will be enforceable to the fullest extent permissible by law. If a court of competent jurisdiction
will find that any such restriction or remedy is unenforceable but would be enforceable if some part were deleted or the period or area of application reduced, then such restriction or remedy will apply with the modification necessary to make it
enforceable. 
  
 7. Disability. If you become
“disabled” within the meaning of such term under Blockbuster’s Short-Term Disability (“STD”) program and its Long-Term Disability (“LTD”) program during the Term (such condition is referred to as a
“Disability”), you will receive compensation under the STD program for the first twenty-six (26) weeks of consecutive absence in accordance with its terms. Thereafter, you will be eligible to receive benefits under the LTD program in
accordance with its terms. If you have not returned to work by December 31st of a calendar year during the
Term, you will receive bonus compensation for the calendar year(s) during the Term in which you receive compensation under the STD program, determined as follows: 
  

	 	(i)	for the portion of the calendar year from January 1st until the date on which you first receive compensation under the STD program, bonus compensation will be determined in accordance with the STIP (i.e., based upon Blockbuster’s achievement of specified goals and
Blockbuster’s good faith estimate of your achievement of your personal goals, if applicable) and prorated for such period; and 

  

	 	(ii)	for any subsequent portion of the calendar year and any portion of the following calendar year in which you receive compensation under the STD program, bonus compensation will be in
an amount based on Blockbuster’s achievement of specified goals and prorated for such period(s). 

  
 Bonus compensation under this Paragraph 7 will be paid, less applicable deductions and withholding taxes, by the end of the first quarter of the year(s) following the
year as to which such bonus compensation is payable. You will not receive bonus compensation for any portion of the calendar 

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year(s) during the Term while you receive benefits under the LTD program. For the periods that you receive compensation and benefits under the STD and LTD
programs, such compensation and benefits and the bonus compensation provided under this Paragraph 7 are in lieu of Salary and Bonus under paragraphs 3(a) and (b). Notwithstanding anything to the contrary in this Agreement, the Term will not
automatically extend in the event you are receiving benefits under the STD or LTD programs. 
  
 8. Termination. 
  
 (a) Termination for Cause. Blockbuster may, at its option, terminate your employment under this Agreement forthwith for Cause and thereafter will have no further obligations under this Agreement, including, without limitation, any
obligation to pay Salary or Bonus or provide benefits. Cause will mean: (i) dishonesty; (ii) embezzlement, fraud, or other conduct which would constitute a felony; (iii) unauthorized disclosure of Confidential Information;
(iv) your failure to obey a material lawful directive that is appropriate to your position from an executive(s) in your reporting line; (v) your material breach of this Agreement; or (vi) your failure (except in the event of your
disability) or refusal to substantially perform your material obligations under this Agreement. 
  
 (b) Termination Without Cause. Blockbuster may terminate your employment under this Agreement without Cause at any time during the
Term by written notice to you. 
  
 (c)
Termination Payments/Benefits. If your employment terminates under Paragraph 8(b), you will thereafter receive, less applicable withholding taxes, and conditioned on your execution of a General Release and Waiver of Claims substantially in
the form attached hereto as an Addendum: 
  

	 	(i)	your Salary, as in effect on the date on which your employment terminates, for twenty-four (24) months after the date of such termination, paid in accordance with
Blockbuster’s then effective payroll practices; 

  

	 	(ii)	bonus compensation for the calendar year in which such termination occurs, payable by the end of the first quarter of the following year, determined as follows:

  

	 	(x)	for the portion of the calendar year from January 1st until the date of the termination, bonus compensation will be determined in accordance with the STIP (i.e., based on Blockbuster’s achievement of specified goals and Blockbuster’s good faith estimate of your
achievement of your personal goals, if applicable) and prorated for such period; and 

  

	 	(y)	for the remaining portion of such calendar year during the Term, bonus compensation will be determined based on Blockbuster’s achievement of specified goals and will be
prorated for such period; 

  

	 	(iii)	bonus compensation for each subsequent calendar year or portion thereof during the Term, determined based on Blockbuster’s achievement of specified goals, prorated for any
partial calendar year, and payable by the end of the first quarter of the following year; 

  

	 	(iv)	 medical and dental insurance coverage provided under COBRA at no cost to you (except as hereafter described) pursuant to Blockbuster’s then-current benefit
plans until the end of the Term or, if earlier, the date on which you become eligible for medical and dental coverage from a third party; provided, that, during the period that Blockbuster provides you with this coverage, an amount equal to
the applicable COBRA premiums (or such other amount as may be required by law) will be included in your income for tax purposes to the extent required by law 

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and Blockbuster may withhold taxes from your compensation for this purpose; and provided, further, that you may elect to continue your medical
and dental insurance under COBRA at your own expense for the balance, if any, of the period required by law; 

  

	 	(v)	your car allowance until the end of the Term, paid in accordance with Blockbuster’s then effective payroll practices; 

  

	 	(vi)	life insurance coverage until the end of the Term, pursuant to Blockbuster’s then-current policy in the amount then furnished to Blockbuster employees at no cost (the amount of
such coverage will be reduced by the amount of life insurance coverage furnished to you at no cost by a third party employer); and 

  

	 	(vii)	stock options granted to you under Blockbuster’s Long-Term Management Incentive Plan (“LTMIP”) which are exercisable on or prior to the date of termination of your
employment under Paragraph 8(b) hereof and that would have vested and become exercisable on or before the last date of the Term will be exercisable until six (6) months after the date of such termination or, if earlier, the expiration date of
the stock options. 

  
 You will be required to mitigate the amount
of any payment provided for in (i), (ii), (iii) and (v) of this Paragraph 8(c) by seeking other employment, and the amount of such payments will be reduced by any compensation earned by you from any source, including, without limitation,
salary, sign-on or annual bonus compensation, consulting fees, commission payments, car allowance and, in the event you receive significantly more long-term compensation than you received from Blockbuster, Blockbuster’s good faith estimate of
the present value of the portion of such long-term compensation in excess of the long-term compensation from Blockbuster; provided, that mitigation will not be required, and no reduction for other compensation will be made, for twelve
(12) months after the termination of your employment. You agree to notify Blockbuster with respect to any such compensation earned by you during the period when such mitigation is required and to promptly respond to any inquiries from
Blockbuster with respect to such compensation or your efforts to fulfill your mitigation obligations under this provision. 
  
 (d) Termination of Benefits. Notwithstanding anything in this Agreement to the contrary (except as otherwise provided in Paragraph
8(c) with respect to medical and dental benefits and life insurance), participation in all Blockbuster benefit plans and programs (including, without limitation, vacation accrual, the 401(k) plan, excess plans, LTD and accidental death and
dismemberment and business travel and accident insurance) will terminate upon the termination of your employment except to the extent otherwise expressly provided in such plans or programs and subject to any vested rights you may have under the
terms of such plans or programs. The foregoing will not apply to the LTMIP and, after the termination of your employment, your rights under the LTMIP will be governed by the terms of the LTMIP option agreements and the applicable LTMIP plans
together with Paragraph 8(c)(vii). 
  
 (e)
Resignation from Official Positions. If your employment with Blockbuster terminates for any reason, you will be deemed to have resigned at that time from any and all officer or director positions that you may have held with Blockbuster or any
of its then-current or previously affiliated companies and all board seats or other positions in other entities you held on behalf of Blockbuster. If, for any reason, this Paragraph 8(e) is deemed insufficient to effectuate such resignation, you
agree to execute, upon the request of Blockbuster, any documents or instruments which Blockbuster may deem necessary or desirable to effectuate such resignation or resignations, and you hereby authorize the Secretary and any Assistant Secretary of
Blockbuster to execute any such documents or instruments as your attorney-in-fact. 
  
 9. Death. In the event of your death prior to the end of the Term while actively employed, your beneficiary or estate will receive (i) your Salary up to the date on which the death occurs; (ii) any

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Bonus earned in the prior year but not yet paid; and (iii) bonus compensation for the calendar year in which the death occurs, determined in accordance
with the STIP (i.e., based upon Blockbuster’s achievement of specified goals and Blockbuster’s good faith estimate of your achievement of your personal goals, if applicable) and pro-rated for the portion of the year through the date
of death, payable, less applicable deductions and withholding taxes, by the end of first quarter of the following year. In the event of your death after the termination of your employment while you are entitled to receive compensation under
Paragraph 8(c)(i) your beneficiary or estate will receive (x) any Salary payable under Paragraph 8(c)(i) up to the date on which the death occurs; (y) any bonus compensation earned under Paragraph 8(c)(ii) with respect to the prior year
but not yet paid; and (z) any bonus compensation for the calendar year in which the death occurs, determined in accordance with Paragraph 8(c)(ii) and pro-rated for the portion of the year through the date of death, payable, less applicable
deductions and withholding taxes, by the end of the first quarter of the following year. Notwithstanding anything to the contrary in this Agreement, the Term will terminate as of the date of your death. 
  
 10. No Acceptance of Payments. You represent that you have not
accepted or given nor will you accept or give, directly or indirectly, any money, services or other valuable consideration from or to anyone other than Blockbuster for the inclusion of any matter as part of any film, television program or other
production produced, distributed and/or developed by Blockbuster and/or any of its affiliated companies. 
  
 11. Equal Opportunity Employer. You recognize that Blockbuster is an equal opportunity employer. You agree that you will comply with Blockbuster
policies regarding employment practices and with applicable federal, state and local laws prohibiting discrimination on the basis of race, color, sex, religion, national origin, citizenship, age, marital status, sexual orientation, disability or
veteran status. 
  
 12. Employee Statement of Business
Conduct. You acknowledge you have read and agree that you will comply with the Blockbuster Employee Statement of Business Conduct as it may be amended from time to time. 
  
 13. Notices. All notices under this Agreement must be given in writing, by personal delivery or by mail, at the
parties’ respective addresses shown on this Agreement (or any other address designated in writing by either party), with a copy, in the case of Blockbuster, to the attention of the General Counsel of Blockbuster. Any notice given by mail will
be deemed to have been given three (3) days following such mailing. 
  
 14. Assignment. This is an Agreement for the performance of personal services by you and may not be assigned by you or Blockbuster except that Blockbuster may assign this Agreement to any affiliated company of
or any successor in interest to Blockbuster. 
  
 15. TEXAS
LAW AND JURISDICTION. YOU ACKNOWLEDGE THAT THIS AGREEMENT HAS BEEN EXECUTED, IN WHOLE OR IN PART, IN TEXAS, AND YOUR EMPLOYMENT DUTIES ARE PRIMARILY PERFORMED IN TEXAS. ACCORDINGLY, YOU AGREE THAT THIS AGREEMENT AND ALL MATTERS OR ISSUES ARISING
OUT OF OR RELATING TO YOUR BLOCKBUSTER EMPLOYMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS ENTERED INTO AND PERFORMED ENTIRELY THEREIN. ANY ACTION TO ENFORCE THIS AGREEMENT WILL BE BROUGHT SOLELY IN THE STATE OR
FEDERAL COURTS LOCATED IN THE CITY OF DALLAS. 
  
 16. No
Implied Contract. The parties intend to be bound only upon execution of a written agreement and no negotiation, exchange of draft or partial performance will be deemed to imply an agreement. Neither the continuation of employment nor any other
conduct will be deemed to imply a continuing agreement upon the expiration of the Term. 

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 17. Entire Understanding. This Agreement contains the entire understanding of the parties
hereto relating to the subject matter contained in this Agreement, and can be changed only by a writing signed by both parties. 
  
 18. Void Provisions. If any provision of this Agreement, as applied to either party or to any circumstances, will be found by a court of competent
jurisdiction to be unenforceable but would be enforceable if some part were deleted or the period or area of application were reduced, then such provision will apply with the modification necessary to make it enforceable, and will in no way affect
any other provision of this Agreement or the validity or enforceability of this Agreement. 
  
 19. Effect of Viacom Agreement. If the terms of your employment are currently governed by an agreement entered into between you and Blockbuster Entertainment Group, a business unit of Viacom Inc
(“Viacom”) (“Viacom Agreement”), the Viacom Agreement, along with the applicable Viacom stock option agreement(s), will continue to govern your rights with respect to stock options granted to you under Viacom’s 1994 and 1997
Long Term Management Incentive Plans and any successor or other plans until such time as Viacom distributes all or substantially all of its shares of Blockbuster common stock to stockholders of Viacom (a “Split-Off”). In addition to any
rights set forth in the applicable Viacom stock option agreement(s), Viacom has indicated to Blockbuster that, in the event of a Split-Off, any options to purchase Viacom common stock (“Viacom Stock Options”) that are held by you
(i) that are exercisable at the date you cease to be a Viacom employee as a result of the Split-Off (the “Termination Date”) and (ii) to the extent the terms of your employment are subject to a Viacom Agreement, that would have
become exercisable during the employment term of the Viacom Agreement will remain outstanding and will be exercisable by you for a period of six (6) months after the Termination Date or, if earlier, the expiration date of the stock options. By
executing this Agreement, you hereby acknowledge and agree that, in the event of the foregoing, your only remaining right with respect to the Viacom Agreement will be your right to exercise your Viacom Stock Options and Viacom will be released from
any and all other obligations and liabilities under the Viacom Agreement. 
  
 20. Supersedes Prior Agreement. Subject to Paragraph 19, this Agreement supersedes and cancels all prior agreements relating to your employment by Blockbuster or any of its affiliated companies with respect to
the period covered by the Term. 

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 If the foregoing correctly sets forth our understanding, please sign, date and return all three
(3) copies of this Agreement to the undersigned for execution on behalf of Blockbuster; after this Agreement has been executed by Blockbuster and a fully-executed copy returned to you, it will constitute a binding agreement between us.

  

			
	 Very truly yours,

	
	 BLOCKBUSTER INC.

		
	 By:
	 	 /s/ Larry J. Zine

	 	 	 Larry J. Zine

	 	 	 Executive Vice President and

	 	 	 Chief Financial Officer

  

			
	 ACCEPTED AND AGREED:

	
	 /s/ Frank Paci

	 Frank Paci

		
	 Date:
	 	 5/23/2003

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 GENERAL RELEASE AND WAIVER OF CLAIMS 
  
 a. Release of Claims. As consideration by you, you agree on behalf of
yourself, successors and assigns, to release and forever discharge Blockbuster and its subsidiaries, parent and affiliated companies, employees, officers and directors, and their respective assigns, from any and all manner of claims, debts, demands,
damages, liabilities and causes of action, whether known or unknown, from the beginning of time, which you, or your successors and assigns, may have had or may presently have, relating to or arising out of the employment relationship or the
termination of said relationship including, but not limited to, causes of action for libel, slander, breach of contract, impairment of economic opportunity, intentional infliction of emotional distress or any other tort, or claims under federal,
state, or local constitutions, statutes, regulations, ordinances or common law, including, but not limited to, the Employee Retirement Income Security Act of 1974; the Civil Rights Acts of 1866, 1871, 1964 and 1991; the Age Discrimination in
Employment Act, as amended by the Older Workers Benefit Protection Act of 1990; the Rehabilitation Act of 1973; the Equal Pay Act of 1963; and the Americans with Disabilities Act of 1990. You acknowledge and agree that you have been paid all wages
owed to you and that you have received all leave to which you are entitled. You understand that you are not waiving any right under the Older Workers Benefit Protection Act to test the knowing and voluntary nature of this General Release and Waiver
of Claims in court. 
  
 b. Post-Release Claims. You do not
waive any rights or claims that may arise after the date this Release is executed. 
  
 c. No Admission. Nothing contained in this Release constitutes an admission of liability by Blockbuster concerning any aspect of your employment with or separation from Blockbuster. 
  
 d. Confidentiality. You acknowledge that, during the course of the
employment relationship, you were privy to confidential and proprietary business information belonging to Blockbuster, the unauthorized disclosure of which could cause serious and irreparable injury to Blockbuster and its affiliates. The information
includes, but is not limited to, information concerning existing and prospective expansion plans; existing and potential financing sources and arrangements; existing and prospective marketing plans and activities; proprietary computer software
programs and applications; business plans and strategies and other non-public information. You agree to hold and safeguard the confidential information in trust for Blockbuster, its successors and assigns, and agree that you will not, at any time,
misappropriate, use for your own advantage, disclose or otherwise make available to anyone who is not an officer of Blockbuster, for any reason, any of the confidential information, regardless of whether the confidential information was developed or
prepared by you or others. You agree not to remove any writings containing confidential information from Blockbuster’s premises or possession without Blockbuster’s express consent. You agree to promptly return to Blockbuster all
confidential information in your possession or under your control (whether in original, copy, or disk form). Before disclosing any confidential information under compulsion of legal process, you agree to promptly give notice to Blockbuster of the
fact that you have been served with legal process pursuant to which the disclosure of confidential information may be requested. Such notice will be given within sufficient time to permit Blockbuster to intervene in the matter or to take such other
actions as may be necessary or appropriate to protect its interest in its confidential business information. The scope of this Release is not limited to information that is patented, patentable, copyrighted or technically classifiable as a trade
secret. These restrictions will not apply to confidential information which is or becomes generally available to the public other than as a result of a disclosure by you or any other person who directly or indirectly receives such information from
you, or is or becomes available to you on a non-confidential basis from a source which is entitled to disclose it to you. 
  
 e. Cooperation. Subject to reimbursement by Blockbuster of reasonable out-of-pocket costs and expenses, you agree to cooperate fully with
Blockbuster and its counsel with respect to any matter (including litigation, investigation or governmental proceeding) which relates to matters with which you were involved during the term of your employment with Blockbuster. Such cooperation will
include appearing from time to time at the offices of Blockbuster or Blockbuster’s counsel for conferences and interviews and in general providing the officers of Blockbuster and its counsel with the full benefit of your knowledge with respect
to any such matter. You agree to render such cooperation in a timely fashion and at such times as may be mutually agreeable to the parties concerned. 

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 f. Litigation. You agree that, during the pendency of any litigation or other proceeding, and
anytime thereafter, (x) you will not communicate with anyone (other than your attorneys and tax advisors) with respect to the facts or subject matter of any pending or potential litigation, or regulatory or administrative proceeding involving
Blockbuster or any of its officers, directors, agents, employees, suppliers or customers, other than any litigation or other proceeding in which you are a party-in-opposition, without giving prior notice to Blockbuster’s General Counsel, and
(y) in the event that any other party attempts to obtain information or documents from you with respect to matters possibly related to such litigation or other proceeding, you will promptly so notify Blockbuster’s General Counsel.

  
 g. Confidentiality of Release. This Release and the
terms hereof are confidential. You agree not to disclose this Release or its provisions to any person except to your attorney or tax advisor. 
  
 h. Rights upon Breach. For breach of any provision of this Release, the parties will have such remedies and rights as are customarily available at
law or in equity, except that, in any action or proceeding brought to enforce this Release or to recover damages for its breach, the prevailing party will be entitled to recover, should it substantially prevail in the matter, reasonable
attorneys’ fees and litigation expenses (other than in a proceeding brought by you challenging the validity of this General Release under the Older Workers Benefit Protection Act). In the event you, or any party acting on your behalf, breach
this Release (other than through a challenge to its validity under the Older Workers Benefit Protection Act), Blockbuster’s obligations imposed herein will be extinguished and Blockbuster will not be obligated to continue performance under this
Release. In such a case, you will be required to re-pay Blockbuster all consideration received pursuant to this Release and this Release will act as a complete and total bar to any recovery. 
  
 i. Injunctive Relief. The legal remedies for the breach of this
Release would not be adequate and, in addition to any other remedies available at law, these provisions may be specifically enforced by temporary or permanent injunctive or other equitable relief. 
  
 j. Texas Law and Jurisdiction. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, IRRESPECTIVE OF THE CONFLICT OF LAWS RULES. FURTHERMORE, BECAUSE YOU AND BLOCKBUSTER AGREE THAT THE TEXAS COURTS ARE THE EXCLUSIVE FORUM FOR RESOLVING ANY DISPUTES ARISING OUT OF THIS
AGREEMENT OR YOUR EMPLOYMENT, THE PARTIES SUBMIT THEMSELVES TO THE PERSONAL JURISDICTION OF THE TEXAS COURTS. 
  
 k. Advice of Counsel. You are herein advised to discuss this Release with an attorney of your choice before signing it. 
  
 l. No Parol Evidence. This Release represents the full understanding
between you and Blockbuster, other than any Employment Agreement signed by you and an officer of Blockbuster and still in effect, and no parol evidence other than the Employment Agreement will be relevant to supplement or explain this Release.

  
 m. Void Provisions. Should any provision of this
Release be found unenforceable, the remainder of the Release, in its modified form, will nonetheless be fully enforceable. 
  
 n. Headings. The headings of the sections are included solely for convenience. If the headings and the text of the Release conflict, the text shall
control. All references to sections are to the Release unless otherwise indicated. 
  
 o. Review and Revocation. You acknowledge that you have been given at least twenty-one (21) days to review and consider this Release, and may revoke acceptance within seven (7) days of the execution
of this Release. This Release will become effective and enforceable immediately upon the expiration of the revocation period.

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