- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ------------------

                                 SCHEDULE 14D-1
                             TENDER OFFER STATEMENT
                               (AMENDMENT NO. 38)
                      PURSUANT TO SECTION 14(D)(1) OF THE
                      SECURITIES EXCHANGE ACT OF 1934 AND
                                  SCHEDULE 13D
                               (AMENDMENT NO. 39)
                   UNDER THE SECURITIES EXCHANGE ACT OF 1934

                         PARAMOUNT COMMUNICATIONS INC.
                           (Name of Subject Company)

                                  VIACOM INC.
                           NATIONAL AMUSEMENTS, INC.
                               SUMNER M. REDSTONE
                     BLOCKBUSTER ENTERTAINMENT CORPORATION
                                    (Bidder)

                         COMMON STOCK, $1.00 PAR VALUE
                         (Title of Class of Securities)

                                  699216 10 7
                     (CUSIP Number of Class of Securities)

                            PHILIPPE P. DAUMAN, ESQ.
                                  VIACOM INC.
                                 1515 BROADWAY
                            NEW YORK, NEW YORK 10036
                           TELEPHONE: (212) 258-6000
          (Name, Address and Telephone Number of Person Authorized to
            Receive Notices and Communications on Behalf of Bidder)

                                  COPIES TO:

                             STEPHEN R. VOLK, ESQ.
                              SHEARMAN & STERLING
                              599 LEXINGTON AVENUE
                            NEW YORK, NEW YORK 10022
                              TEL.: (212) 848-4000

                              ROGER S. AARON, ESQ.
                             SKADDEN, ARPS, SLATE,
                                MEAGHER & FLOM
                               919 THIRD AVENUE
                            NEW YORK, NEW YORK 10022
                              TEL.: (212) 735-3000

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                              Page 1 of     Pages
                           Exhibit Index on Page



     This Amendment No. 38 to the Tender Offer Statement on
Schedule 14D-1 and Amendment No. 39 to Schedule 13D (the
"Statement") relates to the offer by Viacom Inc., a Delaware
corporation ("Purchaser"), to purchase shares of Common Stock,
par value $1.00 per share (the "Shares"), of Paramount
Communications Inc., a Delaware corporation (the "Company"), at a
price of $107 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in Purchaser's
Offer to Purchase dated October 25, 1993 (the "Offer to
Purchase"), a copy of which was attached as Exhibit (a)(1) to
Amendment No. 1, filed with the Securities and Exchange
Commission (the "Commission") on October 26, 1993, to the Tender
Offer Statement on Schedule 14D-1 filed with the Commission on
October 25, 1993 (the "Schedule 14D-1"), as supplemented by
the Supplement thereto dated November 8, 1993 (the "First
Supplement"), the Second Supplement thereto dated January 7,
1994 (the "Second Supplement"), the Third Supplement thereto
dated January 18, 1994 (the "Third Supplement") and the Fourth
Supplement thereto dated February 1, 1994 (the "Fourth
Supplement") and in the related Letters of Transmittal.

     Capitalized terms used but not defined herein have the
meanings assigned to such terms in the Offer to Purchase, the
First Supplement, the Second Supplement, the Third Supplement,
the Fourth Supplement and the Schedule 14D-1.

ITEM 3.  PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE
         SUBJECT COMPANY.

         Item 3(b) is hereby amended and supplemented as follows:

         On February 4, 1994, the Company announced that its
     Board of Directors confirmed its recommendation that the
     Company's stockholders accept Purchaser's Offer and tender
     their Shares into Purchaser's Offer and reject the QVC Offer
     by not tendering any Shares into the QVC Offer.

         Following the Company's announcement, the Company and
     Purchaser entered into an Amended and Restated Agreement and
     Plan of Merger, dated as of February 4, 1994 (the "February
     Merger Agreement"), which amended and restated in its
     entirety the January Merger Agreement to reflect the terms
     of the Offer as described in the Fourth Supplement. A copy
     of the February Merger Agreement is filed as Exhibit (a)(92)
     and is incorporated herein by reference.



ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.

         Item 11 is hereby amended and supplemented to add
the following Exhibit:

         99(a)(92) Amended and Restated Agreement and Plan of
                   Merger, dated as of February 4, 1994, between
                   Purchaser and the Company



SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.


February 7, 1994

                                          VIACOM INC.

                                          By      /s/ PHILIPPE P. DAUMAN
                                             ...................................

                                                 Philippe P. Dauman
                                                 Senior Vice President, General
                                                   Counsel and Secretary


                                                          *
                                             ...................................

                                                 Sumner M. Redstone,
                                                 Individually


                                          NATIONAL AMUSEMENTS, INC.

                                          By              *
                                             ...................................

                                                 Sumner M. Redstone
                                                 Chairman, Chief Executive
                                                   Officer and President

*By      /s/ PHILIPPE P. DAUMAN
    ...................................

        Philippe P. Dauman
        Attorney-in-Fact under Powers
        of Attorney filed as Exhibit (a)(36)
        to the Schedule 14D-1





SIGNATURE

     After due inquiry  and to the best  of my knowledge and belief,  I certify
that the information set forth in this Statement is true, complete and correct.


February 7, 1994

                                          BLOCKBUSTER ENTERTAINMENT CORPORATION

                                          By      /s/ STEVEN R. BERRARD
                                             ...................................

                                                 Steven R. Berrard
                                                 President and
                                                 Chief Operating Officer



                        EXHIBIT INDEX

                                                         PAGE IN
                                                        SEQUENTIAL
EXHIBIT                                                 NUMBERING
  NO.                                                     SYSTEM
- -------                                                 ----------

99(a)(92) Amended and Restated Agreement and Plan of
          Merger, dated as of February 4, 1994, between
          Purchaser and the Company






                                                                           
          =================================================================










                                 AMENDED AND RESTATED
                             AGREEMENT AND PLAN OF MERGER

                                       between

                                     VIACOM INC.

                                         and

                            PARAMOUNT COMMUNICATIONS INC.

                             Dated as of February 4, 1994










                                                                           
          =================================================================

















                                Index of Defined Terms
                                ----------------------


                                                              Section
                                                              -------

          affiliate                                         SECTION 9.3
          Agreement                                         PREAMBLE
          AMEX                                              SECTION 1.7
          beneficial owner                                  SECTION 9.3
          Blockbuster                                       SECTION 4.3
          Blockbuster Merger Agreement                      SECTION 4.8
          Blockbuster Subscription Agreement                SECTION 4.3
          Blue Sky Laws                                     SECTION 3.5
          Business Combination                              SECTION 8.5
          business day                                      SECTION 9.3
          Cash Election                                     SECTION 1.6
          Cash Election Number                              SECTION 1.6
          Cash Election Shares                              SECTION 1.6
          Cash Fraction                                     SECTION 1.6
          Certificate of Merger                             SECTION 1.3
          Certificates                                      SECTION 1.7
          Claim                                             SECTION 6.3
          Class A Exchange Ratio                            SECTION 1.6
          Class B Exchange Ratio                            SECTION 1.6
          Code                                              RECITALS
          Communications Act                                SECTION 3.5
          Competing Transaction                             SECTION 8.1
          Confidentiality Agreements                        SECTION 6.1
          control                                           SECTION 9.3
          controlled                                        SECTION 9.3
          controlled by                                     SECTION 9.3
          CVRs                                              SECTION 1.6
          CVR Exchange Ratio                                SECTION 1.6
          Debenture Exchange Ratio                          SECTION 1.6
          Delaware Law                                      RECITALS
          Dissenting Shares                                 SECTION 1.10
          ERISA                                             SECTION 3.10
          Effective Time                                    SECTION 1.3
          Exchange Act                                      SECTION 2.2
          Exchange Agent                                    SECTION 1.7
          Exchange Cash Consideration                       SECTION 1.7
          Exchange Debenture Trustee                        SECTION 4.3
          Exchange Fund                                     SECTION 1.7
          Exchange Ratios                                   SECTION 1.6
          Exemption Agreement                               SECTION 2.1(d)
          Expiration Date                                   SECTION 2.1
          FCC                                               SECTION 2.6
          Final Expiration Date                             SECTION 2.1(c)
          Financing                                         SECTION 4.17
          Five Year Warrant Exchange Ratio                  SECTION 1.6
          Five Year Warrants                                SECTION 1.6
          Form of Election                                  SECTION 1.6
          Forward Merger                                    RECITALS
          fully diluted basis                               SECTION 9.3
          Gains Tax                                         SECTION 6.18
          Governmental Entity                               SECTION 3.5







                                                                          2
                           Index of Defined Terms (cont'd)
                           ----------------------


                                                              Section
                                                              -------


          HSR Act                                           SECTION 4.5
          Incentive Stock Option                            SECTION 1.9
          Indemnified Parties                               SECTION 6.3
          Indenture                                         SECTION 4.3
          IRS                                               SECTION 3.10
          Material Paramount Subsidiary                     SECTION 3.1
          Material Viacom Subsidiary                        SECTION 4.1
          Merger                                            RECITALS
          Merger Consideration                              SECTION 1.7
          Merger Debenture Trustee                          SECTION 4.3
          Merger Subsidiary                                 RECITALS
          Minimum Condition                                 SECTION 2.1
          National                                          RECITALS
          Non-Election                                      SECTION 1.6
          Non-Election Fraction                             SECTION 1.6
          Non-Election Shares                               SECTION 1.6
          Offer                                             RECITALS
          Offer Documents                                   SECTION 2.1(b)
          Offer to Purchase                                 SECTION 2.1(b)
          Other Offer                                       SECTION 2.1(c)
          Other Offeror                                     SECTION 2.1(c)
          Other Exemption Agreement                         SECTION 2.1(d)
          Other Expiration Date                             SECTION 2.1(d)
          Paramount                                         PREAMBLE
          Paramount 1992 Balance Sheet                      SECTION 3.12
          Paramount Common Stock                            RECITALS
          Paramount Disclosure Schedule                     SECTION 3.3
          Paramount Indentures                              SECTION 6.17
          Paramount Material Adverse Effect                 SECTION 3.1
          Paramount Plans                                   SECTION 3.10
          Paramount Preferred Stock                         SECTION 3.3
          Paramount SEC Reports                             SECTION 3.7
          Paramount Subsidiary                              SECTION 3.1
          Paramount Triggering Event                        SECTION 6.9
          Per Share Amount                                  RECITALS
          Per Share Cash Amount                             SECTION 1.6
          Proxy Statement                                   SECTION 6.6
          Registration Statement                            SECTION 6.6
          Representatives                                   SECTION 1.6
          Respective Representatives                        SECTION 6.1
          Reverse Merger                                    RECITALS
          Rights                                            SECTION 3.13
          Rights Agreement                                  SECTION 3.13
          Rights Condition                                  SECTION 2.1
          Schedule 14D-1                                    SECTION 2.1
          Schedule 14D-9                                    SECTION 2.2
          SEC                                               SECTION 2.1
          Securities Act                                    SECTION 3.5
          Securities Election                               SECTION 1.6
          Securities Election Number                        SECTION 1.6







                                                                          3
                           Index of Defined Terms (cont'd)
                           ----------------------


                                                              Section
                                                              -------


          Securities Fraction                               SECTION 1.6
          Significant Stockholder                           SECTION 6.21
          Stock Election Shares                             SECTION 1.6
          Stock Option                                      SECTION 3.3
          Stockholders' Meetings                            SECTION 6.7
          subsidiaries                                      SECTION 9.3
          subsidiary                                        SECTION 9.3
          Surviving Corporation                             SECTION 1.1
          Three Year Warrant Exchange Ratio                 SECTION 1.6
          Three Year Warrants                               SECTION 1.6
          Transactions                                      SECTION 3.4
          Transfer Tax                                      SECTION 6.18
          under common control with                         SECTION 9.3
          Viacom                                            PREAMBLE
          Viacom Certificate Amendments                     SECTION 4.4
          Viacom 1992 Balance Sheet                         SECTION 4.12
          Viacom Class A Common Stock                       RECITALS
          Viacom Class B Common Stock                       SECTION 1.6
          Viacom Disclosure Schedule                        SECTION 4.3
          Viacom Exchange Debenture Indenture               SECTION 4.3
          Viacom Exchange Debentures                        ANNEX B
          Viacom Exchange Preferred Stock                   ANNEX B
          Viacom International                              SECTION 4.7
          Viacom Material Adverse Effect                    SECTION 4.1
          Viacom Merger Debenture Indenture                 SECTION 4.3
          Viacom Merger Debentures                          SECTION 1.6
          Viacom Plans                                      SECTION 4.10
          Viacom Preferred Stock                            SECTION 4.3
          Viacom SEC Reports                                SECTION 4.7
          Viacom Series A Preferred                         SECTION 4.3
          Viacom Subsidiary                                 SECTION 4.1
          Viacom Triggering Event                           SECTION 6.9
          Viacom Vote Matter                                SECTION 4.4
          Voting Agreement                                  RECITALS
          Warrants                                          SECTION 1.6

























                                  TABLE OF CONTENTS
                                  -----------------

                                                                       Page
                                                                       ----

                                      ARTICLE I

                                      THE MERGER  . . . . . . . . . . .   2
               SECTION 1.1.  The Merger . . . . . . . . . . . . . . . .   2
               SECTION 1.2.  Closing  . . . . . . . . . . . . . . . . .   3
               SECTION 1.3.  Effective Time . . . . . . . . . . . . . .   3
               SECTION 1.4.  Effect of the Merger . . . . . . . . . . .   3
               SECTION 1.5.  Certificate of Incorporation; By-Laws  . .   3
               SECTION 1.6.  Conversion of Securities . . . . . . . . .   3
               SECTION 1.7.  Exchange of Certificates and Cash  . . . .   9
               SECTION 1.8.  Stock Transfer Books . . . . . . . . . . .  13
               SECTION 1.9.  Stock Options; Payment Rights  . . . . . .  13
               SECTION 1.10. Dissenting Shares  . . . . . . . . . . . .  15

                                      ARTICLE II

                                      THE OFFER . . . . . . . . . . . .  16
               SECTION 2.1.  The Offer  . . . . . . . . . . . . . . . .  16
               SECTION 2.2.  Action by Paramount  . . . . . . . . . . .  19
               SECTION 2.3.  Receipt of Common Stock  . . . . . . . . .  20
               SECTION 2.4.  Completion Certificate . . . . . . . . . .  20
               SECTION 2.5.  Termination of the Offer . . . . . . . . .  20
               SECTION 2.6.  Board of Directors; Section 14(f)  . . . .  21

                                     ARTICLE III

                     REPRESENTATIONS AND WARRANTIES OF PARAMOUNT  . . .  22
               SECTION 3.1.  Organization and Qualification;
                              Subsidiaries  . . . . . . . . . . . . . .  22
               SECTION 3.2.  Certificate of Incorporation and By-Laws .  22
               SECTION 3.3.  Capitalization . . . . . . . . . . . . . .  23
               SECTION 3.4.  Authority Relative to This Agreement . . .  24
               SECTION 3.5.  No Conflict; Required Filings and
                              Consents  . . . . . . . . . . . . . . . .  24
               SECTION 3.6.  Compliance . . . . . . . . . . . . . . . .  25
               SECTION 3.7.  SEC Filings; Financial Statements  . . . .  25
               SECTION 3.8.  Absence of Certain Changes or Events . . .  26
               SECTION 3.9.  Absence of Litigation  . . . . . . . . . .  27
               SECTION 3.10. Employee Benefit Plans . . . . . . . . . .  27
               SECTION 3.11. Trademarks, Patents and Copyrights . . . .  28
               SECTION 3.12. Taxes  . . . . . . . . . . . . . . . . . .  28
               SECTION 3.13. Amendment to Rights Agreement  . . . . . .  29
               SECTION 3.14. Opinion of Financial Advisor . . . . . . .  30
               SECTION 3.15. Vote Required  . . . . . . . . . . . . . .  30
               SECTION 3.16. Brokers  . . . . . . . . . . . . . . . . .  30






                                                                       Page
                                                                       ----
                                      ARTICLE IV

                       REPRESENTATIONS AND WARRANTIES OF VIACOM . . . .  31
               SECTION 4.1.  Organization and Qualification;
                              Subsidiaries  . . . . . . . . . . . . . .  31
               SECTION 4.2.  Certificate of Incorporation and By-Laws .  31
               SECTION 4.3.  Capitalization . . . . . . . . . . . . . .  32
               SECTION 4.4.  Authority Relative to This Agreement . . .  34
               SECTION 4.5.  No Conflict; Required Filings and
                              Consents  . . . . . . . . . . . . . . . .  34
               SECTION 4.6.  Compliance . . . . . . . . . . . . . . . .  35
               SECTION 4.7.  SEC Filings; Financial Statements  . . . .  36
               SECTION 4.8.  Absence of Certain Changes or Events . . .  37
               SECTION 4.9.  Absence of Litigation  . . . . . . . . . .  37
               SECTION 4.10. Employee Benefit Plans . . . . . . . . . .  38
               SECTION 4.11. Trademarks, Patents and Copyrights . . . .  38
               SECTION 4.12. Taxes  . . . . . . . . . . . . . . . . . .  39
               SECTION 4.13. Opinion of Financial Advisor . . . . . . .  40
               SECTION 4.14. Vote Required  . . . . . . . . . . . . . .  40
               SECTION 4.15. Ownership of Paramount Common Stock  . . .  40
               SECTION 4.16. Brokers  . . . . . . . . . . . . . . . . .  40
               SECTION 4.17. Financing  . . . . . . . . . . . . . . . .  40
               SECTION 4.18. Purchases of Securities  . . . . . . . . .  40
               SECTION 4.19. Representations in Blockbuster Merger
                              Agreement . . . . . . . . . . . . . . . .  41

                                      ARTICLE V

                       CONDUCT OF BUSINESSES PENDING THE MERGER . . . .  41
               SECTION 5.1.  Conduct of Respective Businesses by
                              Paramount and Viacom Pending the Merger .  41

                                      ARTICLE VI

                                 ADDITIONAL COVENANTS . . . . . . . . .  43
               SECTION 6.1.  Access to Information; Confidentiality . .  43
               SECTION 6.2.  Intentionally omitted  . . . . . . . . . .  44
               SECTION 6.3.  Directors' and Officers' Indemnification
                              and Insurance . . . . . . . . . . . . . .  44
               SECTION 6.4.  Notification of Certain Matters  . . . . .  45
               SECTION 6.5.  Tax Treatment  . . . . . . . . . . . . . .  45
               SECTION 6.6.  Registration Statement; Joint Proxy
                              Statement; Offer Documents and Schedule
                              14D-9 . . . . . . . . . . . . . . . . . .  46
               SECTION 6.7.  Stockholders' Meetings . . . . . . . . . .  48
               SECTION 6.8.  Letters of Accountants . . . . . . . . . .  48
               SECTION 6.9.  Employee Benefits  . . . . . . . . . . . .  48
               SECTION 6.10. Further Action; Reasonable Best Efforts  .  49
               SECTION 6.11. Debt Instruments . . . . . . . . . . . . .  50
               SECTION 6.12. Public Announcements . . . . . . . . . . .  50
               SECTION 6.13. Listing of Viacom Securities . . . . . . .  50
               SECTION 6.14. Affiliates of Paramount  . . . . . . . . .  50
               SECTION 6.15. Conveyance Taxes . . . . . . . . . . . . .  51
               SECTION 6.16. Rights Agreement . . . . . . . . . . . . .  51
               SECTION 6.17. Assumption of Debt and Leases  . . . . . .  51
               SECTION 6.18. Gains Tax  . . . . . . . . . . . . . . . .  51
               SECTION 6.19. Reverse Merger . . . . . . . . . . . . . .  52

                                          ii







                                                                       Page
                                                                       ----


               SECTION 6.20. Post-Offer Agreements  . . . . . . . . . .  52
               SECTION 6.21. Transactions With Significant Stockholder
                              After the Effective Time  . . . . . . . .  52
               SECTION 6.22. Blockbuster Merger Agreement and
                              Subscription Agreement  . . . . . . . . .  53

                                     ARTICLE VII

                                  CLOSING CONDITIONS  . . . . . . . . .  53
               SECTION 7.1.  Conditions to Obligations of Each Party
                              to Effect the Merger  . . . . . . . . . .  53
               SECTION 7.2.  Additional Conditions to Obligations of
                              Viacom  . . . . . . . . . . . . . . . . .  54
               SECTION 7.3.  Additional Conditions to Obligations of
                              Paramount . . . . . . . . . . . . . . . .  55

                                     ARTICLE VIII

                          TERMINATION, AMENDMENT AND WAIVER . . . . . .  56
               SECTION 8.1.  Termination  . . . . . . . . . . . . . . .  56
               SECTION 8.2.  Effect of Termination  . . . . . . . . . .  58
               SECTION 8.3.  Amendment  . . . . . . . . . . . . . . . .  58
               SECTION 8.4.  Waiver . . . . . . . . . . . . . . . . . .  59
               SECTION 8.5.  Fees, Expenses and Other Payments  . . . .  59

                                      ARTICLE IX

                                  GENERAL PROVISIONS  . . . . . . . . .  59
               SECTION 9.1.  Effectiveness of Representations,
                              Warranties and Agreements . . . . . . . .  59
               SECTION 9.2.  Notices  . . . . . . . . . . . . . . . . .  60
               SECTION 9.3.  Certain Definitions  . . . . . . . . . . .  61
               SECTION 9.4.  Time Period  . . . . . . . . . . . . . . .  62
               SECTION 9.5.  Headings . . . . . . . . . . . . . . . . .  62
               SECTION 9.6.  Severability . . . . . . . . . . . . . . .  62
               SECTION 9.7.  Entire Agreement . . . . . . . . . . . . .  62
               SECTION 9.8.  Assignment . . . . . . . . . . . . . . . .  62
               SECTION 9.9.  Parties in Interest  . . . . . . . . . . .  63
               SECTION 9.10. Specific Performance . . . . . . . . . . .  63
               SECTION 9.11. Governing Law  . . . . . . . . . . . . . .  63
               SECTION 9.12. Counterparts . . . . . . . . . . . . . . .  63




          ANNEX A        Conditions to the Offer
          ANNEX B        Principal Terms of Viacom Merger Debentures
          ANNEX C        Principal Terms of Contingent Value Rights
          ANNEX D        Principal Terms of Three Year Warrants
          ANNEX E        Principal Terms of Five Year Warrants

          EXHIBIT 6.14   Form of Affiliate Letter

                                         iii










          AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER,
dated as of February 4, 1994 (this "Agreement"), between VIACOM
                                    ---------
INC., a Delaware corporation ("Viacom"), and PARAMOUNT
                               ------
COMMUNICATIONS INC., a Delaware corporation ("Paramount"),
                                              ---------
amending and restating the Agreement and Plan of Merger, dated as
of January 21, 1994, between Viacom and Paramount, as amended (the "January
                                                                    -------
Merger Agreement").
- ----------------


                      W I T N E S S E T H :
                      - - - - - - - - - -


          WHEREAS, on January 21, 1994, Viacom and Paramount
entered into the January Merger Agreement, pursuant to which
Viacom and Paramount agreed to enter into a business combination
transaction;

          WHEREAS, Viacom and Paramount have determined that it
is in the best interest of their respective shareholders to enter
into this Agreement so as to facilitate the business combination
of the two companies through a first-step cash tender offer and a
second-step merger, while preserving the ability to proceed with
a single-step merger in appropriate circumstances, and in
accordance with the General Corporation Law of the State of
Delaware ("Delaware Law"), Paramount and Viacom have agreed to
           ------------
enter into a business combination transaction pursuant to which
Paramount will merge with and into Viacom (the "Forward Merger")
                                                --------------
or alternatively, a subsidiary of Viacom ("Merger Subsidiary")
                                           -----------------
will merge with and into Paramount (the "Reverse Merger" and,
                                         --------------
together with the Forward Merger, the "Merger");
                                       ------

          WHEREAS, in furtherance of the Merger, Viacom has
amended and supplemented its outstanding tender offer (as amended
and supplemented in accordance with this Agreement, the "Offer")
                                                         -----
to acquire 61,657,432 shares of common stock, par value $1.00 per
share, of Paramount ("Paramount Common Stock"), or such greater
                      ----------------------
number of shares as equals 50.1% of the shares of Paramount
Common Stock outstanding on a fully diluted basis (as defined in
Section 9.3 herein), for $107.00 per Paramount share (the
consideration per share of Paramount Common Stock to be paid
pursuant to the Offer being referred to as the "Per Share
                                                ---------
Amount"), upon the terms and subject to the conditions of this
- ------
Agreement and the Offer;

          WHEREAS, the Board of Directors of Paramount has
determined that the Merger and the Offer are consistent with and
in furtherance of the long-term business strategy of Paramount
and are fair to, and in the best interests of, Paramount and the
holders of Paramount Common Stock and has approved and adopted
this Agreement and has approved the Merger and the other
transactions contemplated hereby (including, without limitation,
the Offer) and recommended approval and adoption of this
Agreement and approval of the Merger by the stockholders of






                                                                2


Paramount and agreed to continue to recommend that stockholders
of Paramount tender their shares of Paramount Common Stock
pursuant to the Offer;

          WHEREAS, the Board of Directors of Viacom has
determined that the Merger and the Offer are consistent with and
in furtherance of the long-term business strategy of Viacom and
are fair to, and in the best interests of, Viacom and its
stockholders and has approved and adopted this Agreement and has
approved the Merger and the other transactions contemplated
hereby (including, without limitation, the making of the Offer)
and recommended approval and adoption of this Agreement and
approval of the Merger by the holders of the Class A Common
Stock, par value $.01 per share, of Viacom (the "Viacom Class A
                                                 --------------
Common Stock");
- ------------

          WHEREAS, for federal income tax purposes, it is
intended that the Forward Merger qualify as a reorganization
under the provisions of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"); and
                                                ----

          WHEREAS, concurrently with the execution of the January
Merger Agreement and as an inducement to Paramount to enter into
the January Merger Agreement, National Amusements, Inc., a
Maryland corporation and the majority stockholder of Viacom
("National"), and Paramount entered into a Voting Agreement (the
  --------
"Voting Agreement") pursuant to which National shall, among other
 ----------------
things, vote its shares of Viacom Class A Common Stock in favor
of the Merger and the other transactions contemplated by this
Agreement, as amended from time to time;

          NOW, THEREFORE, in consideration of the foregoing and
the respective representations, warranties, covenants and
agreements set forth in this Agreement, the parties hereto agree
as follows:


                            ARTICLE I

                            THE MERGER

          SECTION 1.1.  The Merger.  Upon the terms and subject
                        ----------
to the conditions set forth in this Agreement, and in accordance
with Delaware Law, at the Effective Time (as defined in
Section 1.3), Paramount shall be merged with and into Viacom;
provided, however, that if, after consulting with Paramount and
- --------  -------
its professional advisors in good faith, Shearman & Sterling,
counsel to Viacom, is unable to deliver an opinion in form and
substance reasonably satisfactory to Viacom (such opinion to be
based on customary assumptions and representations) that the
Forward Merger will qualify as a reorganization under Section
368(a) of the Code, Viacom may elect to cause a subsidiary of
Viacom to merge with and into Paramount.  As a result of the
Forward Merger, the separate corporate existence of Paramount
(or, in the case of the Reverse Merger, Merger Subsidiary) shall






                                                                3


cease and Viacom (or, in the case of the Reverse Merger,
Paramount) shall continue as the surviving corporation of the
Merger (the "Surviving Corporation").
             ---------------------

          SECTION 1.2.  Closing.  Unless this Agreement shall
                        -------
have been terminated and the transactions herein contemplated
shall have been abandoned pursuant to Section 8.1 and subject to
the satisfaction or, if permissible, waiver of the conditions set
forth in Article VII, the consummation of the Merger will take
place as promptly as practicable (and in any event within two
business days) after satisfaction or waiver of the conditions set
forth in Article VII, at the offices of Shearman & Sterling, 599
Lexington Avenue, New York, New York, unless another date, time or
place is agreed to in writing by the parties hereto.

          SECTION 1.3.  Effective Time.  As promptly as
                        --------------
practicable after the satisfaction or, if permissible, waiver of
the conditions set forth in Article VII, the parties hereto shall
cause the Merger to be consummated by filing a certificate of
merger (the "Certificate of Merger") with the Secretary of State
             ---------------------
of the State of Delaware in such form as required by, and
executed in accordance with the relevant provisions of, Delaware
Law (the date and time of such filing, or such later date or time
as set forth therein, being the "Effective Time").
                                 --------------

          SECTION 1.4.  Effect of the Merger.  At the Effective
                        --------------------
Time, the effect of the Merger shall be as provided in the
applicable provisions of Delaware Law.  Without limiting the
generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of Viacom
(or, in the case of the Reverse Merger, Merger Subsidiary) and
Paramount shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Viacom (or, in the case of the Reverse
Merger, Merger Subsidiary) and Paramount shall become the debts,
liabilities and duties of the Surviving Corporation.

          SECTION 1.5.  Certificate of Incorporation; By-Laws. 
                        -------------------------------------
(a)  At the Effective Time of the Forward Merger, the Certificate
of Incorporation and the By-Laws of Viacom, as in effect
immediately prior to the Effective Time, shall be the Certificate
of Incorporation and the By-Laws of the Surviving Corporation.

     (b)  Alternatively, at the Effective Time of the Reverse
Merger, the Certificate of Incorporation and By-Laws,
respectively, of the Surviving Corporation shall be amended and
restated in their entirety to read as the Certificate of
Incorporation and By-Laws of Merger Subsidiary.

          SECTION 1.6.  Conversion of Securities.  At the
                        ------------------------
Effective Time, by virtue of the Merger and without any action on
the part of Viacom, Paramount or the holders of any
of the following securities:








                                                                4


          (a)  In the event that the Offer has been consummated
     prior to the Effective Time, each share of Paramount Common
     Stock issued and outstanding immediately prior to the
     Effective Time (other than any shares of Paramount Common
     Stock to be canceled pursuant to Section 1.6(c) and any
     Dissenting Shares (as defined in Section 1.10)) shall be
     converted into the right to receive (A) .93065 shares of
     Class B common stock, par value $0.01 per share ("Viacom
                                                       ------
     Class B Common Stock"), of Viacom, (B) $17.50 principal
     --------------------
     amount of 8% exchangeable subordinated debentures (the
     "Viacom Merger Debentures") of Viacom having the principal
      ------------------------
     terms described in Annex B, (C) .93065 contingent value
     rights of Viacom (the "CVRs") having the principal terms
                            ----
     described in Annex C, (D) .50 warrants (the "Three Year
                                                  ----------
     Warrants") of Viacom having the principal terms described in
     --------
     Annex D and (E) .30 warrants (the "Five Year Warrants", and
                                        ------------------
     together with the Three Year Warrants, the "Warrants") of
                                                 --------
     Viacom having the principal terms described in Annex E;
     provided, however, that, in any event, if between the date
     --------  -------
     of this Agreement and the Effective Time the outstanding
     shares of Viacom Class B Common Stock or Paramount Common
     Stock shall have been changed into a different number of
     shares or a different class, by reason of any stock
     dividend, subdivision, reclassification, recapitalization,
     split, combination or exchange of shares, the amounts of
     Viacom Class B Common Stock, Viacom Merger Debentures, CVRs
     and Warrants specified above shall be correspondingly
     adjusted to reflect such stock dividend, subdivision,
     reclassification, recapitalization, split, combination or
     exchange of shares.  All such shares of Paramount Common
     Stock shall no longer be outstanding and shall automatically
     be canceled and retired and shall cease to exist, and each
     certificate previously evidencing any such shares shall
     thereafter represent the right to receive, upon the
     surrender of such certificate in accordance with the
     provisions of Section 1.7 certificates evidencing (a) such
     number of whole shares of Viacom Class B Common Stock and
     (b) such number of whole CVRs, Viacom Merger Debentures and
     Warrants into which such Paramount Common Stock was
     converted in accordance herewith.  The holders of such
     certificates previously evidencing such shares of Paramount
     Common Stock outstanding immediately prior to the Effective
     Time shall cease to have any rights with respect to such
     shares of Paramount Common Stock except as otherwise
     provided herein or by law.  No fractional share of Viacom
     Class B Common Stock or fractional CVR, Viacom Merger
     Debenture or Warrant shall be issued and, in lieu thereof, a
     cash payment shall be made pursuant to Section 1.7(d).

          (b)  In the event that the Offer has not been
     consummated prior to the Effective Time:

               (i)  subject to the further provisions of this
          Section 1.6, each share of Paramount Common Stock
          issued and outstanding immediately prior to the






                                                                5


          Effective Time (other than any shares of Paramount
          Common Stock to be canceled pursuant to Section 1.6(c)
          and any Dissenting Shares), shall be converted, subject
          to Section 1.7(d), into the right to receive (A)(i)
          .93065 of a share of Viacom Class B Common Stock (the
          "Class B Exchange Ratio"); (ii) $17.50 principal amount
           ----------------------
          of Viacom Merger Debentures (the "Debenture Exchange
                                            ------------------
          Ratio"); (iii) .93065 CVRs (the "CVR Exchange Ratio");
          -----                            ------------------
          (iv) .50 Three Year Warrants (the "Three Year Warrant
                                             ------------------
          Exchange Ratio"); and (v) .30 Five Year Warrants (the
          --------------
          "Five Year Warrant Exchange Ratio", and together with
           --------------------------------
          the Class B Exchange Ratio, the Debenture Exchange
          Ratio, the CVR Exchange Ratio and Three Year Warrant
          Exchange Ratio, the "Exchange Ratios"), (B) $107.00 in
                               ---------------
          cash (the "Per Share Cash Amount") or (C) a combination
                     ---------------------
          of shares of Viacom Class B Common Stock, CVRs, Viacom
          Merger Debentures, Warrants and cash determined in
          accordance with Sections 1.6(b)(iv), (v) and (vi);
          provided, however, that, in any event, if between the
          --------  -------
          date of this Agreement and the Effective Time the
          outstanding shares of Viacom Class B Common Stock,
          Viacom Merger Debentures or Paramount Common Stock
          shall have been changed into a different number of
          shares or a different class, by reason of any stock
          dividend, subdivision, reclassification,
          recapitalization, split, combination or exchange of
          shares, the Exchange Ratios and Per Share Cash Amount
          shall be correspondingly adjusted to reflect such stock
          dividend, subdivision, reclassification,
          recapitalization, split, combination or exchange of
          shares.  All such shares of Paramount Common Stock
          shall no longer be outstanding and shall automatically
          be canceled and retired and shall cease to exist, and
          each certificate previously evidencing any such shares
          shall thereafter represent the right to receive, upon
          the surrender of such certificate in accordance with
          the provisions of Section 1.7 and in accordance with
          the allocation procedures set forth in this Section
          1.6, (i) certificates evidencing (x) such number of
          whole shares of Viacom Class B Common Stock and (y)
          such number of whole CVRs, Viacom Merger Debentures and
          Warrants into which such Paramount Common Stock was
          converted in accordance with the Exchange Ratios and/or
          (ii) the Per Share Cash Amount multiplied by the number
          of shares of Paramount Common Stock previously
          evidenced by the canceled certificate.  The holders of
          such certificates previously evidencing such shares of
          Paramount Common Stock outstanding immediately prior to
          the Effective Time shall cease to have any rights with
          respect to such shares of Paramount Common Stock except
          as otherwise provided herein or by law.  No fractional
          share of Viacom Class B Common Stock or fractional CVR,
          Viacom Merger Debenture or Warrant shall be issued and,
          in lieu thereof, a cash payment shall be made pursuant
          to Section 1.7(d).






                                                                6


              (ii)  Subject to the election and allocation
          procedures set forth in this Section 1.6, each holder
          of record of shares of Paramount Common Stock as of the
          record date for the meeting of stockholders of
          Paramount referred to in Section 6.7 will be entitled
          to (A) elect to receive certificates evidencing such
          number of whole shares of Viacom Class B Common Stock
          and (y) such number of whole CVRs, Viacom Merger
          Debentures and Warrants into which such number of
          shares of Paramount Common Stock would be converted in
          accordance with the Exchange Ratios (a "Securities
                                                  ----------
          Election"), (B) elect to receive the Per Share Cash
          --------
          Amount multiplied by such number of shares of Paramount
          Common Stock (a "Cash Election"), or (C) indicate that
                           -------------
          such holder has no preference as to the receipt of cash
          or shares of Viacom Class B Common Stock and CVRs,
          Viacom Merger Debentures and Warrants in exchange for
          such shares of Paramount Common Stock (a
          "Non-Election").  All such elections shall be made on a
           ------------
          form designed for that purpose and mutually acceptable
          to Viacom and Paramount (a "Form of Election") and
                                      ----------------
          mailed to holders of record of shares of Paramount
          Common Stock as of the record date for the meeting of
          stockholders of Paramount referred to in Section 6.7. 
          Holders of record of shares of Paramount Common Stock
          who hold such shares as nominees, trustees or in other
          representative capacities ("Representatives") may
                                      ---------------
          submit multiple Forms of Election, provided that such
          Representative certifies that each such Form of
          Election covers all the shares of Paramount Common
          Stock held by such Representative for a particular
          beneficial owner entitled to so elect pursuant to the
          first sentence of this Section 1.6(b)(ii).  Elections
          shall be made by holders of Paramount Common Stock by
          mailing to the Exchange Agent (as defined in Section
          1.7) properly completed and signed Forms of Election. 
          In order to be effective, a Form of Election must be
          received by the Exchange Agent no later than the close
          of business on the last business day prior to the
          Effective Time.  All elections may be revoked until the
          last business day prior to the Effective Time.  Viacom
          shall have the discretion, which it may delegate in
          whole or in part to the Exchange Agent, to determine
          whether Forms of Election have been properly completed
          and signed and properly and timely submitted or revoked
          and to disregard immaterial defects in Forms of
          Election, and any good faith decision of Viacom or the
          Exchange Agent in such matters shall be binding and
          conclusive.  Neither Viacom nor the Exchange Agent
          shall be under any obligation to notify any person of
          any defect in a Form of Election.  Any holder of shares
          of Paramount Common Stock who fails to make an election
          and any holder who fails to submit to the Exchange
          Agent a properly completed and signed and properly and







                                                                7


          timely submitted Form of Election shall be deemed to
          have made a Non-Election.

             (iii)  The aggregate number of shares of Paramount
          Common Stock to be converted into the right to receive
          cash in the Merger (the "Cash Election Number") shall
                                   --------------------
          be equal to 50.1% of the number of shares of Paramount
          Common Stock outstanding immediately prior to the
          Effective Time, and the aggregate number of shares of
          Paramount Common Stock to be converted into the right
          to receive shares of Viacom Class B Common Stock, CVRs,
          Viacom Merger Debentures and Warrants in the Merger
          (the "Securities Election Number") shall be equal to
                --------------------------
          49.9% of the number of shares of Paramount Common Stock
          outstanding immediately prior to the Effective Time.

              (iv)  If the aggregate number of shares of
          Paramount Common Stock with respect to which Cash
          Elections have been made plus Dissenting Shares (the
          "Cash Election Shares") exceeds the Cash Election
           --------------------
          Number, all shares of Paramount Common Stock with
          respect to which Securities Elections have been made
          (the "Securities Election Shares") and all shares of
                --------------------------
          Paramount Common Stock with respect to which
          Non-Elections have been made (the "Non-Election
                                             ------------
          Shares") shall be converted into the right to receive
          ------
          shares of Viacom Class B Common Stock and CVRs, Viacom
          Merger Debentures and Warrants, and the Cash Election
          Shares (other than Dissenting Shares) shall be
          converted into the right to receive shares of Viacom
          Class B Common Stock, CVRs, Viacom Merger Debentures,
          Warrants and cash in the following manner:

               each Cash Election Share (other than Dissenting
               Shares) shall be converted into the right to
               receive (i) an amount in cash, without interest,
               equal to the product of (x) the Per Share Cash
               Amount and (y) a fraction (the "Cash Fraction"),
                                               -------------
               the numerator of which shall be the Cash Election
               Number and the denominator of which shall be the
               total number of Cash Election Shares, (ii) a
               number of shares of Viacom Class B Common Stock
               equal to the product of (x) the Class B Exchange
               Ratio and (y) a fraction equal to one minus the
               Cash Fraction, (iii) a number of CVRs equal to the
               product of (x) the CVR Exchange Ratio and (y) a
               fraction equal to one minus the Cash Fraction,
               (iv) a principal amount of Viacom Merger
               Debentures equal to the product of (x) the
               Debenture Exchange Ratio and (y) a fraction equal
               to one minus the Cash Fraction, (v) a number of
               Three Year Warrants equal to the product of (x)
               the Three Year Warrant Exchange Ratio and (y) a
               fraction equal to one minus the Cash Fraction and
               (vi) a number of Five Year Warrants equal to the






                                                                8


               product of (x) the Five Year Warrant Exchange
               Ratio and (y) a fraction equal to one minus the
               Cash Fraction.

               (v)  If the aggregate number of Securities
          Election Shares exceeds the Securities Election Number,
          all Cash Election Shares (other than Dissenting Shares)
          and all Non-Election Shares shall be converted into the
          right to receive cash, and all Securities Election
          Shares shall be converted into the right to receive
          shares of Viacom Class B Common Stock, CVRs, Viacom
          Merger Debentures, Warrants and cash in the following
          manner:

               each Securities Election Share shall be converted
               into the right to receive (i) a number of shares
               of Viacom Class B Common Stock equal to the
               product of (x) the Class B Exchange Ratio and (y)
               a fraction (the "Securities Fraction"), the
                                -------------------
               numerator of which shall be the Securities
               Election Number and the denominator of which shall
               be the total number of Securities Election Shares,
               (ii) a number of CVRs equal to the product of (x)
               the CVR Exchange Ratio and (y) the Securities
               Fraction, (iii) the principal amount of Viacom
               Merger Debentures equal to the product of (x) the
               Debenture Exchange Ratio and (y) the Securities
               Fraction, (iv) a number of Three Year Warrants
               equal to the product of (x) the Three Year Warrant
               Exchange Ratio and (y) the Securities Fraction,
               (v) a number of Five Year Warrants equal to the
               product of (x) the Five Year Warrant Exchange
               Ratio and (y) the Securities Fraction and (vi) an
               amount in cash, without interest, equal to the
               product of (x) the Per Share Cash Amount and (y) a
               fraction equal to one minus the Securities
               Fraction.

              (vi)  In the event that neither Section 1.6(b)(iv)
          nor Section 1.6(b)(v) above is applicable, all Cash
          Election shares shall be converted into the right to
          receive cash, all Securities Election Shares shall be
          converted into the right to receive shares of Viacom
          Class B Common Stock, CVRs, Viacom Merger Debentures
          and Warrants, and the Non-Election Shares, if any,
          shall be converted into the right to receive shares of
          Viacom Class B Common Stock, CVRs, Viacom Merger
          Debentures, Warrants and cash in the following manner:

               each Non-Election Share shall be converted into
               the right to receive (i) an amount in cash,
               without interest, equal to the product of (x) the
               Per Share Cash Amount and (y) a fraction (the
               "Non-Election Fraction"), the numerator of which
                ---------------------
               shall be the excess of the Cash Election Number






                                                                9


               over the total number of Cash Election Shares and
               the denominator of which shall be the excess of
               (A) the number of shares of Paramount Common Stock
               outstanding immediately prior to the Effective
               Time over (B) the sum of the total number of Cash
               Election Shares and the total number of Securities 
               Election Shares, (ii) a number of shares of Viacom
               Class B Common Stock equal to the product of (x)
               the Class B Exchange Ratio and (y) a fraction
               equal to one minus the Non-Election Fraction, 
               (iii) a number of CVRs equal to the product of (x)
               the CVR Exchange Ratio and (y) a fraction equal to
               one minus the Non-Election Fraction, (iv) the
               principal amount of Viacom Merger Debentures equal
               to the product of (x) the Debenture Exchange Ratio
               and (y) a fraction equal to one minus the Non-
               Election Fraction, (v) a number of Three Year
               Warrants equal to the product of (x) the Three
               Year Warrant Exchange Ratio and (y) a fraction
               equal to one minus the Non-Election Fraction and
               (vi) a number of Five Year Warrants equal to the
               product of (x) the Five Year Warrant Exchange
               Ratio and (y) a fraction equal to one minus the
               Non-Election Fraction.

             (vii)  The Exchange Agent shall make all
          computations contemplated by this Section 1.6 and all
          such computations shall be binding and conclusive on
          the holders of Paramount Common Stock.

          (c)  Each share of Paramount Common Stock held in the
     treasury of Paramount and each share of Paramount Common
     Stock owned by Viacom or any direct or indirect wholly owned
     subsidiary of Viacom or of Paramount immediately prior to
     the Effective Time shall automatically be canceled and
     extinguished without any conversion thereof and no payment
     shall be made with respect thereto.

          (d)  In the Reverse Merger, each share of common stock
     of Merger Subsidiary issued and outstanding immediately
     prior to the Effective Time shall be converted into and
     exchanged for one validly issued, fully paid and
     nonassessable share of common stock of the Surviving
     Corporation.

          SECTION 1.7.  Exchange of Certificates and Cash.
                        ---------------------------------
(a)  Exchange Agent.  As of the Effective Time (in the case
     --------------
of a Merger to which Section 1.6(a) applies) or promptly after
completion of the allocation procedures set forth in Section 1.6
(in the case of a Merger to which Section 1.6(b) applies), Viacom
shall deposit, or shall cause to be deposited, with or for the
account of a bank or trust company designated by Viacom, which
shall be reasonably satisfactory to Paramount (the "Exchange
                                                    --------
Agent"), for the benefit of the holders of shares of Paramount
- -----
Common Stock (other than Dissenting Shares), for exchange in






                                                               10


accordance with this Article I, through the Exchange Agent, (i)
certificates evidencing the shares of Viacom Class B Common
Stock, the Viacom Merger Debentures, the Warrants and the CVRs
issuable pursuant to Section 1.6 in exchange for outstanding
shares of Paramount Common Stock and (ii) cash, if any, in the
aggregate amount required to be exchanged for shares of Paramount
Common Stock pursuant to Section 1.6 (the "Exchange Cash
                                           -------------
Consideration") (such certificates for shares of Viacom Class B
- -------------
Common Stock, the Viacom Merger Debentures, the Warrants and the
CVRs, together with any dividends or distributions with respect
thereto, and the Exchange Cash Consideration, if any, being
hereafter collectively referred to as the "Exchange Fund").  The
                                           -------------
Exchange Agent shall, pursuant to irrevocable instructions,
deliver the shares of Viacom Class B Common Stock, the Viacom
Merger Debentures, Warrants, CVRs and cash, if any, contemplated
to be issued pursuant to Section 1.6 out of the Exchange Fund to
holders of shares of Paramount Common Stock.  Except as
contemplated by Section 1.7(d) hereof, the Exchange Fund shall
not be used for any other purpose.  Any interest, dividends or
other income earned on the investment of cash or other property
held in the Exchange Fund shall be for the account of Viacom.

          (b)  Exchange Procedures.  As soon as reasonably
               -------------------
practicable after the Effective Time, Viacom will instruct the
Exchange Agent to mail to each holder of record of a certificate
or certificates which immediately prior to the Effective Time
evidenced outstanding shares of Paramount Common Stock (other
than Dissenting Shares) (the "Certificates"), (i) a letter of
                              ------------
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Exchange Agent
and shall be in such form and have such other provisions as
Viacom may reasonably specify) and (ii) instructions to effect
the surrender of the Certificates in exchange for the
certificates evidencing shares of Viacom Class B Common Stock,
the Viacom Merger Debentures, CVRs, Warrants and cash.  Upon
surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, and such
other customary documents as may be required pursuant to such
instructions, the holder of such Certificate shall be entitled to
receive in exchange therefor (A) certificates evidencing that
number of whole shares of Viacom Class B Common Stock and that
number of whole CVRs, Viacom Merger Debentures and Warrants which
such holder has the right to receive in accordance with Section
1.6 in respect of the shares of Paramount Common Stock formerly
evidenced by such Certificate, (B) cash, if any, which such
holder has the right to receive in accordance with Section 1.6,
(C) any dividends or other distributions to which such holder is
entitled pursuant to Section 1.7(c), and (D) cash in lieu of
fractional shares of Viacom Class B Common Stock and fractional
CVRs, Viacom Merger Debentures and Warrants to which such holder
is entitled pursuant to Section 1.7(d) (the shares of Viacom
Class B Common Stock, CVRs, Viacom Merger Debentures, Warrants,
dividends, distributions and cash described in clauses (A), (B),
(C) and (D) being, collectively, the "Merger Consideration"), and
                                      --------------------






                                                               11


the Certificate so surrendered shall forthwith be canceled.  In
the event of a transfer of ownership of shares of Paramount
Common Stock which is not registered in the transfer records of
Paramount, shares of Viacom Class B Common Stock, CVRs, Viacom
Merger Debentures, Warrants and cash may be issued and paid in
accordance with this Article I to a transferee if the Certificate
evidencing such shares of Paramount Common Stock is presented to
the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid.  Until
surrendered as contemplated by this Section 1.7, each Certificate
shall be deemed at any time after the Effective Time to evidence
only the right to receive upon such surrender the Merger
Consideration.

          (c)  Distributions With Respect to Unexchanged Shares
               ------------------------------------------------
of Viacom Class B Common Stock, CVRs, Viacom Merger Debentures
- --------------------------------------------------------------
and Warrants.  No dividends or other distributions declared or
- ------------
made after the Effective Time with respect to shares of Viacom
Class B Common Stock, CVRs, Viacom Merger Debentures and Warrants
with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the
shares of Viacom Class B Common Stock, CVRs, Viacom Merger
Debentures or Warrants they are entitled to receive until the
holder of such Certificate shall surrender such Certificate.

          (d)  Fractional Shares, CVRs, Viacom Merger Debentures
               -------------------------------------------------
and Warrants.  (i)  No fraction of a share of Viacom Class B
- ------------
Common Stock or fraction of a CVR, Viacom Merger Debenture or
Warrant shall be issued in the Merger.  In lieu of any such
fractional shares or fractional CVRs, Viacom Merger Debentures or
Warrants, each holder of Paramount Common Stock entitled to
receive shares of Viacom Class B Common Stock, CVRs, Viacom
Merger Debentures and Warrants in the Merger, upon surrender of a
Certificate for exchange pursuant to this Section 1.7, shall be
paid (1) an amount in cash (without interest), rounded to the
nearest cent, determined by multiplying (x) the per share closing
price on the American Stock Exchange ("AMEX") of Viacom Class B
                                       ----
Common Stock on the date of the Effective Time (or, if shares of
Viacom Class B Common Stock do not trade on the AMEX on such
date, the first date of trading of such Viacom Class B Common
Stock on the AMEX after the Effective Time) by (y) the fractional
interest in Viacom Class B Stock to which such holder would
otherwise be entitled (after taking into account all shares of
Paramount Common Stock then held of record by such holder) plus
                                                           ----
(2) an amount in cash (without interest), rounded to the nearest
cent, determined by multiplying (x) the fair market value of one
CVR, as determined by reference to a five day average trading
price, if available, or if not available, in the reasonable
judgment of the Viacom Board of Directors by (y) the fractional
interest in a CVR to which such holder would otherwise be
entitled (after taking into account all shares of Paramount
Common Stock then held of record by such holder) plus (3) an
                                                 ----
amount in cash (without interest) rounded to the nearest cent,
determined by multiplying (x) the fair market value of one Three






                                                               12


Year Warrant, as determined by reference to a five day average
trading price, if available, or if not available, in the
reasonable judgment of the Viacom Board of Directors by (y) the
fractional interest in a Three Year Warrant to which such holder
would otherwise be entitled (after taking into account all shares
of Paramount Common Stock then held of record by such holder)
plus (4) an amount in cash (without interest) determined in
- ----
accordance with clause (ii) of this Section 1.7(d) in respect of
the fractional interest in a Viacom Merger Debenture to which
such holder would otherwise be entitled (after taking into
account all shares of Paramount Common Stock then held of record
by such holder) plus (5) an amount in cash (without interest)
                ----
rounded to the nearest cent, determined by multiplying (x) the
fair market value of one Five Year Warrant, as determined by
reference to a five day average trading price, if available, or
if not available, in the reasonable judgment of the Viacom Board
of Directors by (y) the fractional interest in a Five Year
Warrant to which such holder would otherwise be entitled (after
taking into account all shares of Paramount Common Stock then
held of record by such holder).

              (ii)  The Viacom Merger Debentures shall be issued
in the Merger only in principal amounts of $1,000 or integral
multiples thereof.  Holders of shares of Paramount Common Stock
otherwise entitled to fractional amounts of Viacom Merger
Debentures shall be entitled to receive promptly from the
Exchange Agent a cash payment in an amount equal to such holder's
proportionate interest (after taking into account all shares of
Paramount Common Stock then held of record by such holder) in the
proceeds from the sale or sales in the open market by the
Exchange Agent, on behalf of all such holders, of the aggregate
fractional principal amount of Viacom Merger Debentures.

          (e)  Termination of Exchange Fund.  Any portion of the
               ----------------------------
Exchange Fund which remains undistributed to the holders of
Paramount Common Stock for six months after the Effective Time
shall be delivered to Viacom, upon demand, and any holders of
Paramount Common Stock who have not theretofore complied with
this Article I shall thereafter look only to Viacom for the
Merger Consideration to which they are entitled pursuant to this
Article I.

          (f)  No Liability.  Neither Viacom nor Paramount shall
               ------------
be liable to any holder of shares of Paramount Common Stock for
any such shares of Viacom Class B Common Stock, CVRs, Viacom
Merger Debentures, Warrants (or dividends or distributions with
respect thereto) or cash from the Exchange Fund delivered to a
public official pursuant to any applicable abandoned property,
escheat or similar law.

          (g)  Withholding Rights.  Viacom or the Exchange Agent
               ------------------
shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of
shares of Paramount Common Stock such amounts as Viacom or the
Exchange Agent is required to deduct and withhold with respect to






                                                               13


the making of such payment under the Code, or any provision of
state, local or foreign tax law.  To the extent that amounts are
so withheld by Viacom or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Paramount Common
Stock in respect of which such deduction and withholding was made
by Viacom or the Exchange Agent.

          SECTION 1.8.  Stock Transfer Books.  At the Effective
                        --------------------
Time, the stock transfer books of Paramount shall be closed, and
there shall be no further registration of transfers of shares of
Paramount Common Stock thereafter on the records of Paramount. 
On or after the Effective Time, any Certificates presented to the
Exchange Agent or Viacom for any reason shall be converted into
the Merger Consideration.

          SECTION 1.9.  Stock Options; Payment Rights.  (a)  At
                        -----------------------------
the Effective Time, Paramount's obligations with respect to each
outstanding Stock Option (as defined in Section 3.3) to purchase
shares of Paramount Common Stock, as amended in the manner
described in the following sentence, shall be assumed by Viacom. 
The Stock Options so assumed by Viacom shall continue to have,
and be subject to, the same terms and conditions as set forth in
the stock option plans and agreements pursuant to which such
Stock Options were issued as in effect immediately prior to the
Effective Time, except that each such Stock Option shall be
exercisable for (i) that number of whole shares of Viacom Class B
Common Stock equal to the product of the number of shares of
Paramount Common Stock covered by such Stock Option immediately
prior to the Effective Time multiplied by the Class B Exchange
Ratio and rounded up to the nearest whole number of shares of
Viacom Class B Common Stock, (ii) that number of whole CVRs equal
to the product of the number of shares of Paramount Common Stock
covered by such Stock Option immediately prior to the Effective
Time multiplied by the CVR Exchange Ratio and rounded up to the
nearest whole number of CVRs; provided, that, if the option
                              --------
holder has not exercised his or her Stock Option prior to the
maturity of the CVRs, then the CVRs described above shall be
replaced by that number of shares of Viacom Class B Common Stock
equal in value to the amount by which the Target Price (as
defined in Annex C hereto) exceeds the greater of the Current
Market Value (as defined in Annex C hereto) and the Minimum Price
(as defined in Annex C hereto) on the applicable maturity date
multiplied by the number of such CVRs, rounded up to the nearest
whole number of shares, (iii) that number of whole Three Year
Warrants equal to the product of the number of shares of
Paramount Common Stock covered by such Stock Option immediately
prior to the Effective Time multiplied by the Three Year Warrant
Exchange Ratio and rounded up to the nearest whole number of
Three Year Warrants; provided, that, if the option holder has not
                     --------
exercised his or her Stock Option prior to the third anniversary
of the Effective Time, then the Three Year Warrants described
above shall be replaced by that number of shares of Viacom Class
B Common Stock equal in value to the fair market value of such
Three Year Warrants (as determined by reference to the average






                                                               14


trading price for the five-day trading period immediately prior
to the third anniversary of the Effective Time, if available, or,
if not available, in the reasonable judgment of the Viacom Board
of Directors), rounded up to the nearest whole number of shares;
(iv) that number of whole Five Year Warrants equal to the product
of the number of shares of Paramount Common Stock covered by such
Stock Option immediately prior to the Effective Time multiplied
by the Five Year Warrant Exchange Ratio and rounded up to the
nearest whole number of Five Year Warrants; provided, that, if
                                            --------
the option holder has not exercised his or her Stock Option prior
to the fifth anniversary of the Effective Time, then the Five
Year Warrants described above shall be replaced by that number of
shares of Viacom Class B Common Stock equal in value to the fair
market value of such Five Year Warrants (as determined by
reference to the average trading price for the five-day trading
period immediately prior to the fifth anniversary of the
Effective Time, if available, or if not available, in the
reasonable judgment of the Viacom Board of Directors), rounded up
to the nearest whole number of shares; and (v) that (A) principal
amount of whole Viacom Merger Debentures equal to the product of
the number of shares of Paramount Common Stock covered by such
Stock Option immediately prior to the Effective Time multiplied
by the Debenture Exchange Ratio plus an amount in cash (without
                                ----
interest), rounded to the nearest cent, determined by multiplying
(x) the fair market value of one Viacom Merger Debenture, as
determined by reference to a five day average trading price, if
available, or if not available, in the reasonable judgment of the
Viacom Board of Directors by (y) the fractional interest in a
Viacom Merger Debenture to which such option holder would
otherwise be entitled or (B) if issued, that number of whole
shares of Viacom Exchange Preferred Stock equal to the product of 
the number of shares of Paramount Common Stock covered by such Stock 
Option immediately prior to the Effective Time multiplied by .35 and 
rounded up to the nearest whole number of shares of Viacom Exchange 
Preferred Stock or (C) if issued, that principal amount of whole 
Viacom Exchange Debentures equal to the product of the
number of shares of Paramount Common Stock covered by such Stock
Option immediately prior to the Effective Time multiplied by the
Debenture Exchange Ratio plus an amount in cash (without
                         ----
interest), rounded to the nearest cent, determined by multiplying
(x) the fair market value of one Viacom Exchange Debenture, as
determined by reference to a five day average trading price, if
available, or if not available, in the reasonable judgment of the
Viacom Board of Directors by (y) the fractional interest in a
Viacom Exchange Debenture to which such option holder would
otherwise be entitled, provided that there shall be no such
                       --------
rounding up with respect to Incentive Stock Options (as defined
below).  Viacom shall (i) reserve for issuance the number of
shares of Viacom Class B Common Stock, CVRs, Viacom Merger
Debentures and Warrants that will become issuable upon the
exercise of such Stock Options pursuant to this Section 1.9 and
(ii) promptly after the Effective Time, issue to each holder of
an outstanding Stock Option a document evidencing the assumption
by Viacom of Paramount's obligations with respect thereto under






                                                               15


this Section 1.9.  Nothing in this Section 1.9 shall affect the
schedule of vesting with respect to the Stock Options to be
assumed by Viacom as provided in this Section 1.9.  In the case
of any Stock Option to which Section 421 of the Code applies by
reason of its qualification under Section 422 of the Code (an
"Incentive Stock Option"), the option price, the number and type
 ----------------------
of shares purchasable pursuant to such Incentive Stock Option and
the terms and conditions of exercise of such Incentive Stock
Option shall be determined immediately after the Effective Time
in such manner as to comply with Section 424(a) of the Code.  To
preserve the qualification of all Incentive Stock Options under
Section 422 of the Code, (i) in addition to the Viacom Class B
Common Stock and (ii) in lieu of all CVRs, Viacom Merger
Debentures or Warrants for which an Incentive Stock Option would
otherwise become exercisable pursuant to the foregoing provisions
of this Section 1.9, such Incentive Stock Option shall become
exercisable for that number of shares of Viacom Class B Common
Stock equal to the fair market value of such CVRs, Viacom Merger
Debentures or Warrants (determined, at the time of the Merger, by
reference to a five-day average trading price of such securities,
if available, or if not available, in the reasonable judgment of
the Viacom Board of Directors).

          SECTION 1.10.  Dissenting Shares.  (a)  Notwithstanding
                         -----------------
any other provision of this Agreement to the contrary, shares of
Paramount Common Stock that are outstanding immediately prior to
the Effective Time and which are held by stockholders who shall
have not voted in favor of the Merger or consented thereto in
writing and who shall have demanded properly in writing appraisal
for such shares in accordance with Section 262 of Delaware Law
and who shall not have withdrawn such demand or otherwise have
forfeited appraisal rights (collectively, the "Dissenting
                                               ----------
Shares") shall not be converted into or represent the right to
- ------
receive the Merger Consideration.  Such stockholders shall be
entitled to receive payment of the appraised value of such shares
of Paramount Common Stock held by them in accordance with the
provisions of such Section 262, except that all Dissenting Shares
held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to
appraisal of such shares of Paramount Common Stock under such
Section 262 shall thereupon be deemed to have been converted into
and to have become exchangeable, as of the Effective Time, for
the right to receive, without any interest thereon, the Merger
Consideration (as if such Shares were Non-Election Shares in the
case of a Merger to which section 1.6(b) applies), upon
surrender, in the manner provided in Section 1.7, of the
certificate or certificates that formerly evidenced such shares
of Paramount Common Stock.

          (b)  Paramount shall give Viacom (i) prompt notice of
any demands for appraisal received by Paramount, withdrawals of
such demands, and any other instruments served pursuant to
Delaware Law and received by Paramount and (ii) the opportunity
to direct all negotiations and proceedings with respect to
demands for appraisal under Delaware Law.  Paramount shall not,






                                                               16


except with the prior written consent of Viacom, make any payment
with respect to any demands for appraisal, or offer to settle, or
settle, any such demands.


                            ARTICLE II

                            THE OFFER

          SECTION 2.1.  The Offer.  (a)  Viacom has amended and 
                        ---------
supplemented the Offer to (i) provide that the purchase price
offered for shares pursuant to the Offer shall be the Per Share
Amount, (ii) provide that the obligation of Viacom to accept for
payment and pay for Shares tendered pursuant to the Offer shall
be subject to the condition (as such condition may be amended in
accordance with the terms hereof, the "Minimum Condition") that
                                       -----------------
at least 61,657,432 shares of Paramount Common Stock (or such
greater number of shares as equals 50.1% of the shares of
Paramount Common Stock then outstanding on a fully diluted basis)
shall have been validly tendered and not withdrawn prior to the
expiration of the Offer, that the Board of Directors of
Paramount, in accordance with Section 3.13 of this Agreement,
shall have amended the Rights Agreement to make the Rights (such
terms being used as defined in Section 3.13) inapplicable to the
Offer and the Merger as contemplated by Section 3.13 or the
Rights shall be otherwise inapplicable to the Offer and the
Merger (the "Rights Condition"), and also shall be subject to the
             ----------------
satisfaction of the other conditions set forth in Annex A hereto
and (iii) extend the expiration date of the Offer until Midnight
on February 14, 1994.  Viacom expressly reserves the right to
waive any such condition (other than the Minimum Condition), to
increase the aggregate cash consideration to be paid pursuant to
the Offer and to increase the number of shares of Paramount
Common Stock sought in the Offer; provided, however, that no
                                  --------  -------
change may be made without the prior written consent of Paramount
which decreases the number of shares of Paramount Common Stock
sought in the Offer below 50.1% of the outstanding shares of
Paramount Common Stock on a fully diluted basis; which decreases
the aggregate cash consideration payable in the Offer or changes
the form of consideration payable in the Offer (except to the
extent the Other Offeror (as defined below) has made such changes
with the consent of Paramount); or which imposes conditions to
the Offer in addition to those set forth in Annex A hereto. 
Notwithstanding the foregoing sentence, so long as the Other
Offeror is bound by substantially identical restrictions made for
the benefit of Paramount, Viacom shall not amend the Offer in
order to increase by less than $60 million the aggregate cash
consideration to be paid pursuant to the Offer or increase the
number of shares of Paramount Common Stock for which tenders are
sought by less than 2% of the outstanding shares of Paramount
Common Stock.  The Per Share Amount shall, subject to applicable
withholding of taxes, be net to the seller in cash, upon the
terms and subject to the conditions of the Offer.  Subject to the
terms and conditions of the Offer (including, without limitation,
the Minimum Condition and the terms of this Agreement), Viacom






                                                               17


shall pay, as promptly as practicable after expiration of the
Offer, for all shares of Paramount Common Stock validly tendered
and not withdrawn at the earliest such time following expiration
of the Offer that all conditions to the Offer shall have been
waived or satisfied by Viacom.

          (b)  Viacom has filed with the Securities and Exchange
Commission (the "SEC") an amendment to its Tender Offer Statement
                 ---
on Schedule 14D-1 (together with all amendments and supplements
thereto, the "Schedule 14D-1") with respect to the Offer.  The
              --------------
Schedule 14D-1 contains or incorporates by reference an amendment
and supplement to the offer to purchase (the "Offer to Purchase")
                                              -----------------
and forms of the related letter of transmittal and any related
summary advertisement (the Schedule 14D-1, the Offer to Purchase
and such other documents, together with all supplements and
amendments thereto, being referred to herein collectively as the
"Offer Documents").  Viacom and Paramount agree to correct
 ---------------
promptly any information provided by any of them for use in the
Offer Documents which shall have become false or misleading, and
Viacom further agrees to take all steps necessary to cause the
Schedule 14D-1 as so corrected to be filed with the SEC and the
other Offer Documents as so corrected to be disseminated to
holders of shares of Paramount Common Stock, in each case as and
to the extent required by applicable federal securities laws.

          (c)  (i) Notwithstanding the amendment of the Offer,
Viacom shall be free to terminate the Offer at any time subject
to its continuing obligations to consummate the Merger, including
without limitation pursuant to Sections 6.6 and 6.10, provided
                                                      --------
that prior to such termination of the Offer, Viacom shall have
determined in good faith that either (x) terminating the Offer
will facilitate the earlier consummation of the Merger in
accordance with the terms of this Merger Agreement or (y) the
conditions to the Offer (other than the Minimum Condition and the
Rights Condition) are unlikely to be satisfied.  Notwithstanding
the foregoing, Viacom hereby agrees that, without the written
consent of Paramount, it may not terminate the Offer unless
required to terminate pursuant to Section 2.5 hereof or extend
the Expiration Date (as defined below) except for failure to
satisfy a condition at the Expiration Date, at any time that all
of the conditions to the Offer have been satisfied or that there
exists no material risk that the conditions will not be satisfied
by such Expiration Date, provided, Viacom may extend the
                         --------
Expiration Date pursuant to this Section 2.1(c), Sections 2.1(a),
2.1(d) and 2.3 hereof or any such extension required by Federal
securities laws.

         (ii)  No extension of the expiration date (such
expiration date as extended from time to time shall be defined
herein to mean the "Expiration Date") permitted pursuant to this
                    ---------------
Agreement shall be for a period of less than three business days,
and the Expiration Date shall not be extended for any reason
beyond 12:00 midnight on February 14, 1994, or such later date in
accordance with the last parenthetical of Section 2.1(d)(ii),
Section 2.3, or as required by law to the extent that the






                                                               18


extension arises due to an event outside the control of Viacom
(those events not deemed to be outside the control of the Offeror
shall include, without limitation, any change in the terms of the
Offer or the Merger) (the "Final Expiration Date");  Viacom
                           ---------------------
agrees that it will not increase the price per share of Paramount
Common Stock payable in the Offer or the Merger or otherwise
amend the Offer or the terms of the Merger primarily to extend
the expiration date of the tender offer by QVC Network, Inc.
("QVC") (the "Other Offeror") to purchase the outstanding shares
  ---         -------------
of Paramount Common Stock (the "Other Offer").  Any amendment to
                                -----------
the Offer or any change in the consideration offered to the
Paramount stockholders in the Merger that results in an extension
of the Expiration Date shall be publicly announced by 5:00 p.m.
on the date of such amendment or change.  Viacom hereby agrees
that it shall not (a) seek to amend or waive any provision of
this Agreement that is substantially identical to the provisions
relating to the bidding procedures contained in the Other
Exemption Agreement (the "Bidding Procedures") or (b) publicly
                          ------------------
announce an intention to take an action which is not otherwise
permitted, or refrain from taking an action which is required,
under the terms of this Agreement relating to the Bidding
Procedures.

          (d)  In order to cause the Offer and the Other Offer to
remain on the same time schedule, Viacom hereby agrees that if
the Other Offeror remains subject to an agreement (the "Other
                                                        -----
Exemption Agreement"), containing terms for the benefit of
- -------------------
Paramount substantially similar to the form of exemption
agreement between Viacom and Paramount dated as of December 22,
1993, as amended (the "Exemption Agreement"), and (i) extends the
                       -------------------
expiration date of the Other Offer (such expiration date, as
extended from time to time, the "Other Expiration Date") in
                                 ---------------------
accordance with the Other Exemption Agreement, then the
Expiration Date shall be extended (as soon as practicable, but
not later than one business day following the announcement of the
extension of the Other Expiration Date) by Viacom to the Other
Expiration Date, or (ii) if upon notification to Paramount by
Viacom and the Other Offeror of the results of their respective
offers (which notification shall be required to be delivered by
Viacom and the Other Offeror no later than promptly following the
expiration of their respective offers), Paramount has notified
Viacom and the Other Offeror (which notification shall be
required to be delivered by Paramount promptly) that a number of
shares of Paramount Common Stock that would satisfy the Minimum
Condition or the minimum condition defined in the Other Offer
(which under no circumstances may be less than 50.1% of the
outstanding shares of Paramount Common Stock on a fully diluted
basis) (the "Other Minimum Condition") shall not have been
             -----------------------
validly tendered (and not withdrawn) pursuant to either the Offer
or the Other Offer, respectively, at the Expiration Date (or a
number of shares of Paramount Common Stock that would satisfy the
Minimum Condition and the Other Minimum Condition shall have been
validly tendered and not withdrawn pursuant to both the Offer and
the Other Offer at the Expiration Date), then Viacom shall extend







                                                               19


the Expiration Date of the Offer for a period of 10 business
days.

          (e)  Viacom shall be subject to the obligations of
Sections 2.1(c)(ii), 2.1(d) and 2.5 for so long as the Other
Offeror remains subject to the obligations set forth in the Other
Exemption Agreement; provided, however, that Viacom shall not be
                     --------  -------
subject to Sections 2.1(c)(ii), 2.1(d) and 2.5 in the event that
the Other Offeror has not performed or complied in all material
respects with the Other Exemption Agreement.

          SECTION 2.2.  Action by Paramount.  (a)  Paramount
                        -------------------
hereby approves of and consents to the making of the Offer and
represents that (i) the Board of Directors of Paramount, at a
meeting duly called and held on February 4, 1994, has unanimously
(A) determined that the Offer and the Merger, taken together, are
fair to and in the best interests of the holders of shares of
Paramount Common Stock, (B) approved and adopted this Agreement
and the transactions contemplated hereby and (C) recommended that
the stockholders of Paramount approve and adopt this Agreement
and the transactions contemplated hereby and accept the Offer,
and (ii) Lazard Freres & Co. has delivered to the Board an
opinion on February 4, 1994, to the effect that, as of such date,
the consideration to be received by the holders of shares of
Paramount Common Stock pursuant to the Offer and the Merger,
taken together, is fair to the holders of shares of Paramount
Common Stock from a financial point of view.  Subject to the
fiduciary duties of the Board of Directors of Paramount under
applicable law as advised by independent legal counsel (who may
be such party's regularly engaged legal counsel), Paramount
hereby consents to the inclusion in the Offer Documents prepared
in connection with the Offer of the recommendation of the Board
of Directors of Paramount described in the immediately preceding
sentence.

          (b)  As soon as reasonably practicable after the date
hereof, Paramount shall file with the SEC an amendment to its
Solicitation/Recommendation Statement on Schedule 14D-9 (together
with all amendments and supplements thereto, the "Schedule
                                                  --------
14D-9") containing, subject to the fiduciary duties of the Board
- -----
of Directors of Paramount under applicable law as advised by
independent legal counsel (who may be such party's regularly
engaged legal counsel), the recommendation of the Board of
Directors of Paramount described in Section 2.2(a) and shall
disseminate the Schedule 14D-9 to the extent required by Rule
14e-2 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any other applicable federal
              ------------
securities laws.  Paramount and Viacom agree to correct promptly
any information provided by any of them for use in the Schedule
14D-9 which shall have become false or misleading, and Paramount
further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and disseminated
to holders of shares of Paramount Common Stock, in each case as
and to the extent required by applicable federal securities laws.







                                                               20


          (c)  Paramount shall promptly furnish Viacom with
mailing labels containing the names and addresses of all record
holders of shares of Paramount Common Stock and with security
position listings of shares of Paramount Common Stock held in
stock depositories, each as of a recent date, together with all
other available listings and computer files containing names,
addresses and security position listings of record holders and
beneficial owners of shares of Paramount Common Stock.  Paramount
shall furnish Viacom with such additional information, including,
without limitation, updated listings and computer files of
stockholders, mailing labels and security position listings, and
such other assistance as Viacom or its agents may reasonably
request.  Subject to the requirements of applicable law, and
except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the
Merger or the Offer, Viacom shall hold in confidence the
information contained in such labels, listings and files, shall
use such information only in connection with the Merger and the
Offer, and, if this Agreement shall be terminated in accordance
with Section 8.1, shall deliver to Paramount all copies of such
information then in its possession.

          SECTION 2.3.  Receipt of Common Stock.  Unless the
                        -----------------------
event referred to in the last parenthetical of Section 2.1(d)(ii)
that would satisfy the Minimum Condition occurs, in the event
that a number of shares of Paramount Common Stock shall have been
validly tendered and not withdrawn in the Offer at the Expiration
Date and, as of such Expiration Date, Viacom has waived all
conditions to the Offer (other than the Minimum Condition and the
conditions relating to the Rights Agreement, Article XI of the
Paramount Certificate of Incorporation, Section 203 of Delaware
Law and judicial or governmental injunction, each as set forth
therein), then Viacom shall extend the Expiration Date to a date
10 business days from the then scheduled Expiration Date;
provided, that such extension shall be for a period of 5 business
- --------
days in the event that the Other Offer has been terminated prior
to the foregoing Expiration Date.

          SECTION 2.4.  Completion Certificate.  At such time as
                        ----------------------
Viacom has fulfilled the terms of Section 2.3 above, Viacom shall
deliver to the Board of Directors of Paramount a certificate (the
"Completion Certificate"), executed by an authorized officer of
 ----------------------
Viacom, certifying that all the terms of Section 2.3 have been
fulfilled.

          SECTION 2.5.  Termination of the Offer.  Unless the
                        ------------------------
event referred to in the last parenthetical of Section 2.1(d)(ii)
occurs, Viacom hereby agrees to terminate the Offer at such time
as Viacom has been notified pursuant to a certificate executed by
an authorized officer of Paramount that (i) a number of shares of
Paramount Common Stock that would satisfy the Other Minimum
Condition shall have been validly tendered to the Other Offer and
not withdrawn at the Other Expiration Date of the Other Offer,
(ii) all conditions to the Other Offer, except the Other Minimum
Condition and the conditions relating to the Rights Agreement,






                                                               21


Article XI of the Paramount Certificate of Incorporation, Section
203 of the Delaware Law and judicial or governmental injunction,
each as set forth therein, shall have been waived and (iii) a
completion certificate from the Other Offeror has been delivered
to Paramount; provided, however, that Viacom shall not be
              --------  -------
required to terminate the Offer in the event that the Other
Offeror has not performed or complied in all material respects
with the Other Exemption Agreement.

          SECTION 2.6.  Board of Directors; Section 14(f).  (a)
                        ---------------------------------
If requested by Viacom, Paramount shall, promptly following the
acceptance for payment of the shares of Paramount Common Stock to
be purchased pursuant to the Offer, and from time to time
thereafter, take all actions necessary to cause a majority of
directors (and of members of each committee of the Board of
Directors) of Paramount and of each subsidiary of Paramount to be
comprised of the designees of Viacom (whether, at the request of Viacom, 
by means of increasing the size of the Board of Directors of Paramount or
seeking the resignation of directors and causing Viacom's
designees to be elected); provided, that prior to receipt by Viacom
                          --------
of long-form approval by the Federal Communications Commission
(the "FCC") permitting Viacom to control Paramount, Paramount
      ---
shall take all actions necessary to elect the Viacom voting
trustee approved by the FCC to the Paramount Board of Directors
and to otherwise act in a manner consistent with the voting trust
agreement approved by the FCC.

          (b)  Paramount's obligations to cause designees of
Viacom to be elected or appointed to the Board of Directors of
Paramount shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder.  Paramount shall promptly
take all actions required pursuant to Section 14(f) and Rule 14f-
1 in order to fulfill its obligations under this Section, and
shall include in the Schedule 14D-9 such information with respect
to Viacom and its officers and directors as is required under
Section 14(f) and Rule 14f-1.  Viacom will supply to Paramount
any information with respect to it and its nominees, officers,
directors and affiliates required by Section 14(f) and 
Rule 14f-1.

          (c)  Following the election or appointment of Viacom's
designees pursuant to this Section and prior to the Effective
Time, any amendment or termination of this Agreement, extension
for the performance or waiver of the obligations or other acts of
Viacom or waiver of Paramount's rights hereunder, will require
the concurrence of a majority of directors of Paramount then in
office who are directors on the date hereof or are designated by
a majority of the directors of Paramount who are directors on the
date hereof.












                                                               22


                           ARTICLE III

           REPRESENTATIONS AND WARRANTIES OF PARAMOUNT

          Paramount hereby represents and warrants to Viacom
that:

          SECTION 3.1.  Organization and Qualification;
                        -------------------------------
Subsidiaries.  (a)  Each of Paramount and each Material Paramount
- ------------
Subsidiary (as defined below) is a corporation, partnership or
other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
or organization and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing
or in good standing or to have such power, authority and
governmental approvals would not, individually or in the
aggregate, have a Paramount Material Adverse Effect (as defined
below).  Paramount and each Material Paramount Subsidiary is duly
qualified or licensed as a foreign corporation to do business,
and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature
of its business makes such qualification or licensing necessary,
except for such failures to be so qualified or licensed and in
good standing that would not, individually or in the aggregate,
have a Paramount Material Adverse Effect.  The term "Paramount
                                                     ---------
Material Adverse Effect" means any change or effect that is or is
- -----------------------
reasonably likely to be materially adverse to the business,
results of operations or financial condition of Paramount and the
Paramount Subsidiaries, taken as a whole; provided, however,
                                          --------  -------
where such term qualifies a representation or warranty contained
in this Article III during the period beginning after the date
hereof and until the Effective Time, then such term shall mean
any change or effect that is or is reasonably likely to be
materially adverse to the business or financial condition of
Paramount and the Paramount Subsidiaries, taken as a whole.

          (b)  Each subsidiary of Paramount (a "Paramount
                                                ---------
Subsidiary") that constitutes a Significant Subsidiary of
- ----------
Paramount within the meaning of Rule 1-02 of Regulation S-X of
the SEC is referred to herein as a "Material Paramount
                                    ------------------
Subsidiary".
- ----------

          SECTION 3.2.  Certificate of Incorporation and By-Laws. 
                        ----------------------------------------
Paramount has heretofore made available to Viacom a complete and
correct copy of the Certificate of Incorporation and the By-Laws
or equivalent organizational documents, each as amended to date,
of Paramount and each Material Paramount Subsidiary.  Such
Certificates of Incorporation, By-Laws and equivalent
organizational documents are in full force and effect.  Neither
Paramount nor any Material Paramount Subsidiary is in violation
of any provision of its Certificate of Incorporation, By-Laws or
equivalent organizational documents, except for such violations







                                                               23


that would not, individually or in the aggregate, have a
Paramount Material Adverse Effect.

          SECTION 3.3.  Capitalization.  The authorized capital
                        --------------
stock of Paramount consists of 600,000,000 shares of Paramount
Common Stock and 75,000,000 shares of Preferred Stock, par value
$.01 per share ("Paramount Preferred Stock").  As of February 3,
                 -------------------------
1994, 121,937,762 shares of Paramount Common Stock were issued
and outstanding, all of which were validly issued, fully paid and
nonassessable.  As of February 3, 1994, 25,924,286 shares were
held in the treasury of Paramount.  As of January 31, 1994,
9,409,208 shares were reserved for future issuance pursuant to
Paramount's 1992 Stock Option Plan and 1989 Stock Option Plan
(any employee stock option issued under any such plan being a
"Stock Option") and reserved for future issuance under the
 ------------
Long-Term Incentive Plan.  Between August 31, 1993 and the date
of this Agreement, awards have been made under the Long-Term
Performance Plan as indicated on Schedule 3.3.  As of February 3,
1994, options to acquire 2,398,060 shares of Paramount Common
Stock were outstanding.  As of the date hereof, no shares of
Paramount Preferred Stock are issued and outstanding.  Except as
set forth in Section 3.3 of the Disclosure Schedule previously
delivered by Paramount to Viacom (the "Paramount Disclosure
                                       --------------------
Schedule"), or except as set forth in this Section 3.3, and
- --------
except pursuant to the Rights Agreement (as defined in Section
3.13), there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating
to the issued or unissued capital stock of Paramount or any
Material Paramount Subsidiary or obligating Paramount or any
Material Paramount Subsidiary to issue or sell any shares of
capital stock of, or other equity interests in, Paramount or any
Material Paramount Subsidiary.  All shares of Paramount Common
Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued,
fully paid and nonassessable.  Except as set forth in Section 3.3
of the Paramount Disclosure Schedule, there are no material
outstanding contractual obligations of Paramount or any Paramount
Subsidiary to repurchase, redeem or otherwise acquire any shares
of Paramount Common Stock or any capital stock of any Material
Paramount Subsidiary, or make any material investment (in the
form of a loan, capital contribution or otherwise) in, any
Paramount Subsidiary or any other person.  Each outstanding share
of capital stock of each Material Paramount Subsidiary is duly
authorized, validly issued, fully paid and nonassessable and each
such share owned by Paramount or another Paramount Subsidiary is
free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on
Paramount's or such other Paramount Subsidiary's voting rights,
charges and other encumbrances of any nature whatsoever.  Set
forth in Section 3.3 of the Disclosure Schedule is Paramount's
percentage interest in the outstanding capital stock or
partnership interests of USA Networks, United Cinemas
International Multiplex B.V., United International Pictures and
Cinamerica Theatres, L.P.






                                                               24


          SECTION 3.4.  Authority Relative to This Agreement. 
                        ------------------------------------
Paramount has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions (including, without limitation,
the Offer) contemplated hereby (the "Transactions").  The
                                     ------------
execution and delivery of this Agreement by Paramount and the
consummation by Paramount of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of
Paramount are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with
respect to the Merger, the approval and adoption of this
Agreement by the holders of a majority of the then outstanding
shares of Paramount Common Stock, and the filing and recordation
of appropriate merger documents as required by Delaware Law). 
This Agreement has been duly and validly executed and delivered
by Paramount and, assuming the due authorization, execution and
delivery by Viacom, constitutes a legal, valid and binding
obligation of Paramount, enforceable against Paramount in
accordance with its terms.  Paramount has taken all appropriate
actions so that the restrictions on business combinations
contained in Section 203 of Delaware Law and Article XI of
Paramount's Certificate of Incorporation will not apply with
respect to or as a result of the Transactions.

          SECTION 3.5.  No Conflict; Required Filings and
                        ---------------------------------
Consents.  (a)  Except as set forth in Section 3.05 of the
- --------
Disclosure Schedule, the execution and delivery of this Agreement
by Paramount does not, and the performance by Paramount of its
obligations under this Agreement will not, (i) conflict with or
violate the Certificate of Incorporation or By-Laws or equivalent
organizational documents of Paramount or any Material Paramount
Subsidiary, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Paramount or
any Paramount Subsidiary or by which any property or asset of
Paramount or any Paramount Subsidiary is bound or affected, or
(iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a
default) under, result in the loss of a material benefit under,
or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a
lien or other encumbrance on any property or asset of Paramount
or any Paramount Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Paramount or
any Paramount Subsidiary is a party or by which Paramount or any
Paramount Subsidiary or any property or asset of Paramount or any
Paramount Subsidiary is bound or affected, except, in the case of
clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which would not prevent
or delay consummation of the Merger or the Offer in any material
respect, or otherwise prevent Paramount from performing its
obligations under this Agreement in any material respect, and
would not, individually or in the aggregate, have a Paramount
Material Adverse Effect.






                                                               25


          (b)  The execution and delivery of this Agreement by
Paramount does not, and the performance of this Agreement by
Paramount will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign (each a
"Governmental Entity"), except (i) for (A) applicable
 -------------------
requirements, if any, of the Exchange Act, the Securities Act of
1933, as amended (the "Securities Act"), state securities or
                       --------------
"blue sky" laws ("Blue Sky Laws") and state takeover laws, (B)
                  -------------
applicable requirements of the Communications Act of 1934, as
amended (the "Communications Act"), and of state and local
              ------------------
governmental authorities, including state and local authorities
granting franchises to operate cable systems, (C) applicable
requirements of the Investment Canada Act of 1985 and the
Competition Act (Canada), (D) filing and recordation of
appropriate merger documents as required by Delaware Law and (E)
applicable requirements, if any, of any non-United States
competition, antitrust and investment laws and (ii) where failure
to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or delay
consummation of the Merger or the Offer in any material respect,
or otherwise prevent Paramount from performing its obligations
under this Agreement in any material respect, and would not,
individually or in the aggregate, have a Paramount Material
Adverse Effect.

          SECTION 3.6.  Compliance.  Except as set forth in
                        ----------
Section 3.6 of the Paramount Disclosure Schedule, neither
Paramount nor any Paramount Subsidiary is in conflict with,
or in default or violation of, (i) any law, rule, regulation,
order, judgment or decree applicable to Paramount or any
Paramount Subsidiary or by which any property or asset of
Paramount or any Paramount Subsidiary is bound or affected, or
(ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or
obligation to which Paramount or any Paramount Subsidiary is a
party or by which Paramount or any Paramount Subsidiary or any
property or asset of Paramount or any Paramount Subsidiary is
bound or affected, except for any such conflicts, defaults or
violations that would not, individually or in the aggregate, have
a Paramount Material Adverse Effect.

          SECTION 3.7.  SEC Filings; Financial Statements. 
                        ---------------------------------
Except as set forth in Section 3.7 of the Paramount Disclosure
Schedule, (a) Paramount has filed all forms, reports and
documents required to be filed by it with the SEC since October
31, 1990, and has heretofore made available to Viacom, in the
form filed with the SEC (excluding any exhibits thereto), (i) its
Annual Reports on Form 10-K for the fiscal years ended October
31, 1990, 1991 and 1992, respectively, (ii) its Transition Report
on Form 10-K for the six months ended April 30, 1993, as amended,
(iii) its Quarterly Reports on Form 10-Q for the periods ended
July 31, 1993 and October 31, 1993, (iv) all proxy statements
relating to Paramount's meetings of stockholders (whether annual
or special) held since October 31, 1990, and (v) all other forms,






                                                               26


reports and other registration statements (other than Quarterly
Reports on Form 10-Q not referred to in clause (iii) above and
preliminary materials) filed by Paramount with the SEC since
October 31, 1990 (the forms, reports and other documents referred
to in clauses (i), (ii), (iii), (iv) and (v) above being referred
to herein, collectively, as the "Paramount SEC Reports").  The
                                 ---------------------
Paramount SEC Reports and any forms, reports and other documents
filed by Paramount with the SEC after the date of this Agreement
(x) were or will be prepared in accordance with the requirements
of the Securities Act and the Exchange Act, as the case may be,
and the rules and regulations thereunder and (y) did not at the
time they were filed, or will not at the time they are filed,
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.  No
Paramount Subsidiary is required to file any form, report or
other document with the SEC.

          (b)  Each of the consolidated financial statements
(including, in each case, any notes thereto) contained in the
Paramount SEC Reports was prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods indicated (except as may be indicated in
the notes thereto) and each fairly presented the financial
position, results of operations and cash flows of Paramount and
the consolidated Paramount Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein
(subject, in the case of unaudited statements, to normal and
recurring year-end adjustments which were not and are not
expected, individually or in the aggregate, to be material in
amount).

          (c)  Except as set forth in Section 3.7 of the
Paramount Disclosure Schedule or except as and to the extent set
forth in the Paramount SEC Reports filed with the SEC prior to
the date of this Agreement, Paramount and the Paramount
Subsidiaries do not have any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) other
than liabilities and obligations which would not, individually or
in the aggregate, have a Paramount Material Adverse Effect.

          SECTION 3.8.  Absence of Certain Changes or Events. 
                        ------------------------------------
Since April 30, 1993, except as contemplated by this Agreement or
as set forth in Section 3.8 of the Paramount Disclosure Schedule,
contemplated by this Agreement or disclosed in any Paramount SEC
Report filed since April 30, 1993 and prior to the date of this
Agreement, Paramount and the Paramount Subsidiaries have
conducted their businesses only in the ordinary course and in a
manner consistent with past practice and, since April 30, 1993,
there has not been (i) as of the date hereof, any change,
occurrence or circumstance in the business, results of operations
or financial condition of Paramount or any Paramount Subsidiary
having, individually or in the aggregate, a Paramount Material
Adverse Effect, (ii) any damage, destruction or loss (whether or






                                                               27


not covered by insurance) with respect to any property or asset
of Paramount or any Paramount Subsidiary and having, individually
or in the aggregate, a Paramount Material Adverse Effect, (iii)
any change by Paramount in its accounting methods, principles or
practices, (iv) any declaration, setting aside or payment of any
dividend or distribution in respect of any capital stock of
Paramount or any Paramount Subsidiary or any redemption, purchase
or other acquisition of any of their respective securities other
than regular quarterly dividends on the shares of Paramount
Common Stock not in excess of $.20 per share and dividends by a
Paramount Subsidiary to Paramount and other than to fund pre-
established Paramount Plans and dividend reinvestment plans, or
(v) other than as set forth in Section 3.3 and pursuant to the
plans, programs or arrangements referred to in Section 3.10 and
other than in the ordinary course of business consistent with
past practice, any increase in or establishment of any bonus,
insurance, severance, deferred compensation, pension, retirement,
profit sharing, stock option (including, without limitation, the
granting of stock options, stock appreciation rights, performance
awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation
payable or to become payable to any officers or key employees of
Paramount or any Paramount Subsidiary.

          SECTION 3.9.  Absence of Litigation.  Except as set
                        ---------------------
forth in Section 3.9 of the Paramount Disclosure Schedule or
except as disclosed in the Paramount SEC Reports filed with the
SEC prior to the date of this Agreement, there is no claim,
action, proceeding or investigation pending or, to the best
knowledge of Paramount, threatened against Paramount or any
Paramount Subsidiary, or any property or asset of Paramount or
any Paramount Subsidiary, before any court, arbitrator or
administrative, governmental or regulatory authority or body,
domestic or foreign, which, individually or in the aggregate, is
reasonably likely to have a Paramount Material Adverse Effect. 
Except as disclosed in the Paramount SEC Reports filed with the
SEC prior to the date of this Agreement, neither Paramount nor
any Paramount Subsidiary nor any property or asset of Paramount
or any Paramount Subsidiary is subject to any order, writ,
judgment, injunction, decree, determination or award having or
reasonably likely to have, individually or in the aggregate, a
Paramount Material Adverse Effect.

          SECTION 3.10.  Employee Benefit Plans.  With respect to
                         ----------------------
all the employee benefit plans, programs and arrangements
maintained for the benefit of any current or former employee,
officer or director of Paramount or any Paramount Subsidiary (the
"Paramount Plans"), except as set forth in Section 3.10 of the
 ---------------
Paramount Disclosure Schedule or the Paramount SEC Reports and
except as would not, individually or in the aggregate, have a
Paramount Material Adverse Effect:  (i) each Paramount Plan
intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal
Revenue Service (the "IRS") that it is so qualified and nothing
                      ---
has occurred since the date of such letter that could reasonably






                                                               28


be expected to affect the qualified status of such Paramount
Plan; (ii) each Paramount Plan has been operated in all respects
in accordance with its terms and the requirements of applicable
law; (iii) neither Paramount nor any Paramount Subsidiary has
incurred any direct or indirect liability under, arising out of
or by operation of Title IV of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), in connection with
                                   -----
the termination of, or withdrawal from, any Paramount Plan or
other retirement plan or arrangement, and no fact or event exists
that could reasonably be expected to give rise to any such
liability; and (iv) Paramount and the Paramount Subsidiaries have
not incurred any liability under, and have complied in all
material respects with, the Worker Adjustment Retraining
Notification Act, and no fact or event exists that could give
rise to liability under such act.  Except as set forth in Section
3.10 of the Paramount Disclosure Schedule or the Paramount SEC
Reports, the aggregate accumulated benefit obligations of each
Paramount Plan subject to Title IV of ERISA (as of the date of
the most recent actuarial valuation prepared for such Paramount
Plan) do not exceed the fair market value of the assets of such
Paramount Plan (as of the date of such valuation).

          SECTION 3.11.  Trademarks, Patents and Copyrights. 
                         ----------------------------------
Paramount and the Paramount Subsidiaries own or possess adequate
licenses or other valid rights to use all material patents,
patent rights, trademarks, trademark rights, trade names, trade
name rights, copyrights, service marks, trade secrets,
applications for trademarks and for service marks, know-how and
other proprietary rights and information used or held for use in
connection with the business of Paramount and the Paramount
Subsidiaries as currently conducted or as contemplated to be
conducted, and Paramount is unaware of any assertion or claim
challenging the validity of any of the foregoing which,
individually or in the aggregate, would have a Paramount Material
Adverse Effect.  The conduct of the business of Paramount and the
Paramount Subsidiaries as currently conducted does not conflict
in any way with any patent, patent right, license, trademark,
trademark right, trade name, trade name right, service mark or
copyright of any third party that, individually or in the
aggregate, would have a Paramount Material Adverse Effect.  To
the best knowledge of Paramount, there are no infringements of
any proprietary rights owned by or licensed by or to Paramount or
any Paramount Subsidiary which, individually or in the aggregate,
would have a Paramount Material Adverse Effect.

          SECTION 3.12.  Taxes.  Paramount and the Paramount
                         -----
Subsidiaries have timely filed all federal, state, local and
foreign tax returns and reports required to be filed by them
through the date hereof and shall timely file all returns and
reports required on or before the Effective Time, except for such
returns and reports the failure of which to file timely would
not, individually or in the aggregate, have a Paramount Material
Adverse Effect.  Such reports and returns are and will be true,
correct and complete, except for such failure to be true, correct
and complete as would not, individually or in the aggregate, have






                                                               29


a Paramount Material Adverse Effect.  Paramount and the Paramount
Subsidiaries have paid and discharged all federal, state, local
and foreign taxes due from them, other than such taxes that are
being contested in good faith by appropriate proceedings and are
adequately reserved as shown in the audited consolidated balance
sheet of Paramount dated October 31, 1992 (the "Paramount 1992
                                                --------------
Balance Sheet") and its most recent quarterly financial
- -------------
statements, except for such failures to so pay and discharge
which would not, individually or in the aggregate, have a
Paramount Material Adverse Effect.  Neither the IRS nor any other
taxing authority or agency, domestic or foreign, is now asserting
or, to the best knowledge of Paramount, threatening to assert
against Paramount or any Paramount Subsidiary any deficiency or
material claim for additional taxes or interest thereon or
penalties in connection therewith which, if such deficiencies or
claims were finally resolved against Paramount and the Paramount
Subsidiaries would, individually or in the aggregate, have a
Paramount Material Adverse Effect.  The accruals and reserves for
taxes (including interest and penalties, if any, thereon)
reflected in the Paramount 1992 Balance Sheet and the most recent
quarterly financial statements are adequate in accordance with
generally accepted accounting principles, except where the
failure to be adequate would not have a Paramount Material
Adverse Effect.  Paramount and the Paramount Subsidiaries have
withheld or collected and paid over to the appropriate
governmental authorities or are properly holding for such payment
all taxes required by law to be withheld or collected, except for
such failures to have so withheld or collected and paid over or
to be so holding for payment which would not, individually or in
the aggregate, have a Paramount Material Adverse Effect.  There
are no material liens for taxes upon the assets of Paramount or
the Paramount Subsidiaries, other than liens for current taxes
not yet due and payable and liens for taxes that are being
contested in good faith by appropriate proceedings.  Neither
Paramount nor any Paramount Subsidiary has agreed to or is
required to make any adjustment under Section 481(a) of the Code. 
Neither Paramount nor any Paramount Subsidiary has made an
election under Section 341(f) of the Code.  For purposes of this
Section 3.12, where a determination of whether a failure by
Paramount or a Paramount Subsidiary to comply with the
representations herein has a Paramount Material Adverse Effect is
necessary, such determination shall be made on an aggregate basis
with all other failures within this Section 3.12.

          SECTION 3.13.  Amendment to Rights Agreement.  (a)  The
                         -----------------------------
Board of Directors of Paramount has taken all necessary action to
amend the Rights Agreement, dated as of September 7, 1988, as
amended, between Paramount and Manufacturers Hanover Trust
Company, as Rights Agent (the "Rights Agreement") so that (i)
                               ----------------
none of the execution or delivery of this Agreement, the exchange
of the shares of Paramount Common Stock for the shares of Viacom
Class B Common Stock and CVRs, Viacom Merger Debentures, Warrants
and cash in accordance with Article II or the making of the Offer
will cause (A) the rights (the "Rights") issued pursuant to the
                                ------
Rights Agreement to become exercisable under the Rights






                                                               30


Agreement, (B) Viacom or any of the Viacom Subsidiaries to be
deemed an "Acquiring Person" (as defined in the Rights
Agreement), or (C) the "Stock Acquisition Date" (as defined in
the Rights Agreement) to occur upon any such event and (ii) the
"Expiration Date" (as defined in the Rights Agreement) of the
Rights shall occur immediately prior to the Effective Time. 
Paramount agrees to take all necessary action to amend the Rights
Agreement so that the consummation of the Offer, on the terms
permitted hereunder, will not cause any of the effects referred
to in Section 3.13 (a)(i)(A), (B) or (C) to occur; provided,
                                                   --------
however, that Paramount shall not be required to make such
- -------
amendments to the Rights Agreement if (i) Viacom has not
performed or complied in all material respects with all
agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the consummation
of the Offer or (ii) Paramount obtains and there is in force from
the Delaware Court of Chancery an order permanently,
preliminarily or temporarily declaring that the making of such
amendments to the Rights Agreement would be contrary to the
fiduciary duties of the Board of Directors of Paramount. 
Notwithstanding anything else contained herein, in no event shall
the Board of Directors of Paramount make an amendment of the
Rights Agreement in favor of the Other Offeror or any other
person without making such amendments in favor of Viacom;
provided that Paramount will not be obligated to make such
amendments for Viacom if Viacom has become obligated to terminate
its Offer pursuant to Section 2.5 of this Agreement.

          (b)  The "Distribution Date" (as defined in the Rights
Agreement) has not occurred.

          SECTION 3.14.  Opinion of Financial Advisor.  Paramount
                         ----------------------------
has received the opinion of Lazard Freres & Co., dated
February 4, 1994, to the effect that, as of such date, the
consideration to be received by the stockholders of Paramount
pursuant to the offer and the Merger, taken together, is fair to
such stockholders from a financial point of view, a copy of which
opinion will be delivered to Viacom promptly upon receipt.

          SECTION 3.15.  Vote Required.  The affirmative vote of
                         -------------
the holders of a majority of the outstanding shares of Paramount
Common Stock is the only vote of the holders of any class or
series of Paramount capital stock necessary to approve the
Merger.

          SECTION 3.16.  Brokers.  No broker, finder or
                         -------
investment banker (other than Lazard Freres & Co.) is entitled to
any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on
behalf of Paramount.  Paramount has heretofore furnished to
Viacom a complete and correct copy of all agreements between
Paramount and Lazard Freres & Co. pursuant to which such firm
would be entitled to any payment relating to the Transactions.








                                                               31


                            ARTICLE IV

             REPRESENTATIONS AND WARRANTIES OF VIACOM

          Viacom hereby represents and warrants to Paramount
that:

          SECTION 4.1.  Organization and Qualification;
                        -------------------------------
Subsidiaries.  (a)  Each of Viacom and each Material Viacom
- ------------
Subsidiary (as defined below) is a corporation, partnership or
other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
or organization and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing
or in good standing or to have such power, authority and
governmental approvals would not, individually or in the
aggregate, have a Viacom Material Adverse Effect (as defined
below).  Viacom and each Material Viacom Subsidiary is duly
qualified or licensed as a foreign corporation to do business,
and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature
of its business makes such qualification or licensing necessary,
except for such failures to be so qualified or licensed and in
good standing that would not, individually or in the aggregate,
have a Viacom Material Adverse Effect.  The term "Viacom Material
                                                  ---------------
Adverse Effect" means any change or effect that is or is
- --------------
reasonably likely to be materially adverse to the business,
results of operations or financial condition of Viacom and the
Viacom Subsidiaries, taken as a whole; provided, however, where
                                       --------  -------
such term qualifies a representation or warranty contained in
this Article IV during the period beginning after the date hereof
and until the Effective Time, then such term shall mean any
change or effect that is or is reasonably likely to be materially
adverse to the business or financial condition of Viacom and the
Viacom Subsidiaries, taken as a whole.

          (b)  Each subsidiary of Viacom (a "Viacom Subsidiary")
                                             -----------------
that constitutes a Significant Subsidiary of Viacom within the
meaning of Rule 1-02 of Regulation S-X of the SEC is referred to
herein as a "Material Viacom Subsidiary". 
             --------------------------

          SECTION 4.2.  Certificate of Incorporation and By-Laws. 
                        ----------------------------------------
Viacom has heretofore made available to Paramount a complete and
correct copy of the Certificate of Incorporation and the By-Laws
or equivalent organizational documents, each as amended to date,
of Viacom and each Material Viacom Subsidiary.  Such Certificates
of Incorporation, By-Laws and equivalent organizational documents
are in full force and effect.  Neither Viacom nor any Material
Viacom Subsidiary is in violation of any provision of its
Certificate of Incorporation, By-Laws or equivalent
organizational documents, except for such violations that would
not, individually or in the aggregate, have a Viacom Material
Adverse Effect.






                                                               32


          SECTION 4.3.  Capitalization.  The authorized capital
                        --------------
stock of Viacom consists of 100,000,000 shares of Viacom Class A
Common Stock, (together with the Viacom Class B Common Stock, the 
"Viacom Common Stock"), 150,000,000 shares of Viacom Class B Common Stock
 -------------------
and 100,000,000 shares of Preferred Stock, par value $.01 per
share ("Viacom Preferred Stock"), of which 24,000,000 shares have
        ----------------------
been designated Viacom Series A Preferred Stock (the "Viacom
                                                      ------
Series A Preferred Stock") and 24,000,000 shares have been
- ------------------------
designated Viacom Series B Preferred Stock (the "Viacom Series B
                                                 ---------------
Preferred Stock").  As of November 30, 1993, (i) 53,449,125 
- ---------------
shares of Viacom Class A Common Stock and 67,345,982
shares of Viacom Class B Common Stock were issued and
outstanding, all of which were validly issued, fully paid and
non-assessable, (ii) no shares were held in the treasury of
Viacom, (iii) no shares were held by the Viacom Subsidiaries, and
(iv) 224,610 shares of Viacom Class A Common Stock and 3,760,297
shares of Viacom Class B Common Stock were reserved for future
issuance pursuant to employee stock options or stock incentive
rights granted pursuant to Viacom's 1989 Long-Term Management
Incentive Plan and the Viacom Inc. Stock Option Plan for Outside
Directors.  As of the date hereof, 24,000,000 shares of Viacom
Series A Preferred Stock and 24,000,000 shares of Viacom Series B
Preferred Stock are issued and outstanding.  Except as set forth
in this Section 4.3 or as contemplated by this Agreement, there
are no options, warrants or other rights, agreements,
arrangements or commitments of any character relating to the
issued or unissued capital stock of Viacom or any Material Viacom
Subsidiary or obligating Viacom or any Material Viacom Subsidiary
to issue or sell any shares of capital stock of, or other equity
interests in, Viacom or any Material Viacom Subsidiary, except
for (i) options granted since November 30, 1993 in the ordinary
course consistent with past practice, (ii) the reservation of
17,140,800 shares of Viacom Class B Common Stock for issuance
upon conversion of shares of Viacom Series B Preferred Stock,
(iii) the reservation of 8,570,400 shares of Viacom Class B
Common Stock for issuance upon conversion of shares of Viacom
Series A Preferred Stock, (iv) the issuance of any securities in
connection with the acquisition of Blockbuster Entertainment
Corporation, a Delaware corporation ("Blockbuster"), and (v) the
                                      -----------
reservation of 22,727,273 shares of Viacom Class B Common Stock
for issuance upon the consummation of the transactions
contemplated by the Subscription Agreement, dated as of January
7, 1994 (the "Blockbuster Subscription Agreement"), between
              ----------------------------------
Blockbuster and Viacom.  All shares of Viacom Common Stock and
other securities subject to issuance as aforesaid, upon issuance
on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly
issued, fully paid and nonassessable.  Except as set forth in
Section 4.3 of the Disclosure Schedule previously delivered by
Viacom to Paramount (the "Viacom Disclosure Schedule"), there are
                          --------------------------
no material outstanding contractual obligations of Viacom or any
Viacom Subsidiary to repurchase, redeem or otherwise acquire any
shares of Viacom Common Stock or any capital stock of any
Material Viacom Subsidiary, or make any material investment (in
the form of a loan, capital contribution or otherwise) in, any






                                                               33


Viacom Subsidiary or any other person, other than the amended and
restated subscription agreement dated as of October 21, 1993
between Viacom and Blockbuster, the subscription agreement dated
as of October 4, 1993, as amended, between Viacom and NYNEX
Corporation and the Blockbuster Subscription Agreement.  Each
outstanding share of capital stock of each Material Viacom
Subsidiary is duly authorized, validly issued, fully paid and
nonassessable and each such share owned by Viacom or another
Viacom Subsidiary is free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal,
agreements, limitations on Viacom's or such other Viacom
Subsidiary's voting rights, charges and other encumbrances of any
nature whatsoever.  If and when the Warrants are exercised for
Viacom Class B Common Stock in accordance with the terms of the
Warrants, such shares of Viacom Class B Common Stock issued upon
such exercise will be duly authorized, validly issued, fully paid
and non-assessable, and the holders of outstanding shares of
capital stock of Viacom are not entitled to any preemptive or
other rights with respect to the Warrants or the Viacom Class B
Common Stock issued upon such exercise.  The Viacom Merger
Debentures will be duly authorized, and when the Viacom Merger
Debentures have been duly executed, authenticated, issued and
delivered in the Merger pursuant to the terms of this Agreement
and the Indenture pursuant to which they are issued (the "Viacom
                                                          ------
Merger Debenture Indenture") between Viacom and the trustee
- --------------------------
thereunder (the "Merger Debenture Trustee"), such Viacom Merger
                 ------------------------
Debentures will then constitute valid and legal binding
obligations of Viacom entitled to the benefits provided by the
Viacom Merger Debenture Indenture.  Prior to the Effective Time,
the Viacom Merger Debenture Indenture will have been duly
authorized by Viacom, duly qualified under the Trust Indenture
Act of 1939 and, when duly executed and delivered by Viacom and
the Merger Debenture Trustee, will constitute a valid and binding
instrument of Viacom enforceable in accordance with its terms. 
The shares of Viacom Exchange Preferred Stock initially issuable
upon the exchange of the Viacom Merger Debentures will, if
issued, be duly authorized, validly issued, fully paid, non-
assessable and free of pre-emptive rights.  The Viacom Exchange
Debentures initially issuable upon exchange of the Viacom Exchange 
Preferred Stock for such Viacom Exchange Debentures will be duly
authorized; and when the Viacom Exchange Debentures have been
duly executed, authenticated, issued and delivered in exchange
for the Viacom Exchange Preferred Stock in accordance with the
terms of the Viacom Exchange Debentures and the Indenture
pursuant to which they are issued (the "Viacom Exchange
                                        ---------------
Debenture Indenture") between Viacom and the trustee thereunder
- --------------------
(the "Exchange Debenture Trustee"), such Viacom Exchange
      --------------------------
Debentures will then constitute valid and legal binding
obligations of Viacom entitled to the benefits provided by the
Viacom Exchange Debenture Indenture.  By the date of issuance of
the Viacom Exchange Preferred Stock, the Viacom Exchange
Debenture Indenture will have been duly authorized by Viacom,
duly qualified under the Trust Indenture Act of 1939, and, when
duly executed and delivered by Viacom and the Exchange Debenture






                                                               34


Trustee, will constitute a valid and binding instrument of Viacom
enforceable in accordance with its terms.  Upon their issuance,
the Warrants and the CVRs shall each constitute legal, valid and
binding obligations of Viacom enforceable in accordance with
their terms.

          SECTION 4.4.  Authority Relative to This Agreement. 
                        ------------------------------------
Viacom has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby.  The
execution and delivery of this Agreement by Viacom and the
consummation by Viacom of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate
action and the Voting Agreement has been approved by the Viacom
Board of Directors for purposes of Section 203 of Delaware Law
and no other corporate proceedings on the part of Viacom are
necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the
Merger (including the issuance of, to the extent required by law,
the Viacom Class B Common Stock, the Viacom Merger Debentures, the 
CVRs, the Warrants, the Viacom Exchange Preferred Stock and the 
Viacom Exchange Debentures), the approval by the holders of a 
majority of the then outstanding shares of Viacom Class A Common 
Stock of (i) this Agreement and the Merger and (ii) to the extent 
such matters have not been previously voted upon and approved 
by the holders of the Viacom Class A Common Stock, the amendment 
to Viacom's certificate of incorporation necessary to increase 
(x) the shares of authorized Class B Viacom Common Stock to 
a number not less than the number sufficient to consummate the 
issuance of shares of Viacom Common Stock contemplated under this 
Agreement (including such shares issuable upon the exercise of 
the Warrants and, if applicable, in connection with the CVRs) 
and (y) the size of the Board of Directors of Viacom to a number 
not less than 13 (collectively,the "Viacom Vote Matter"; and 
                                    ------------------
the amendments to Viacom's Restated Certificate of Incorporation 
described in clauses (ii)(x) and (y) above being, collectively, 
the "Viacom Certificate Amendments"), and the filing and 
     -----------------------------
recordation of the foregoing amendment to Viacom's Restated 
Certificate of Incorporation and appropriate merger documents as 
required by Delaware Law).  This Agreement has been duly and 
validly executed and delivered by Viacom and, assuming the due 
authorization, execution and delivery by Paramount, constitutes a 
legal, valid and binding obligation of Viacom, enforceable against 
Viacom in accordance with its terms.

          SECTION 4.5.  No Conflict; Required Filings and
                        ---------------------------------
Consents.  (a)  The execution and delivery of this Agreement by
- --------
Viacom does not, and the performance of the transactions
contemplated hereby by Viacom will not, (i) conflict with or
violate the Certificate of Incorporation or By-Laws or equivalent
organizational documents of Viacom or any Material Viacom
Subsidiary, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Viacom or any
Viacom Subsidiary or by which any property or asset of Viacom or
any Viacom Subsidiary is bound or affected, or (iii) result in






                                                               35


any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under,
result in the loss of a material benefit under or give to others
any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on
any property or asset of Viacom or any Viacom Subsidiary pursuant
to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or
obligation to which Viacom or any Viacom Subsidiary is a party or
by which Viacom or any Viacom Subsidiary or any property or asset
of Viacom or any Viacom Subsidiary is bound or affected, except
in the case of clauses (ii) and (iii) of this Section 4.5, for
any such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or delay consummation of the
Merger in any material respect, or otherwise prevent Viacom from
performing its obligations under this Agreement in any material
respect, and would not, individually or in the aggregate, have a
Viacom Material Adverse Effect.

          (b)  The execution and delivery of this Agreement by
Viacom does not, and the performance of this Agreement by Viacom
will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Entity,
except (i) for (A) applicable requirements, if any, of the
Exchange Act, Securities Act, Trust Indenture Act of 1939, state
securities or Blue Sky Laws and state takeover laws, (B) the pre-
merger notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder (the "HSR Act"), (C) applicable
                             -------
requirements of the Communications Act, and of state and local
governmental authorities, including state and local authorities
granting franchises to operate cable systems, (D) applicable
requirements of the Investment Canada Act of 1985 and the
Competition Act (Canada), (E) filing and recordation of
appropriate merger documents and the Viacom Certificate
Amendments as required by Delaware Law and (F) applicable
requirements, if any, of any non-United States competition,
antitrust and investment laws and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make
such filings or notifications, would not prevent or delay
consummation of the Merger in any material respect, or otherwise
prevent Viacom from performing its obligations under this
Agreement in any material respect, and would not, individually or
in the aggregate, have a Viacom Material Adverse Effect.

          SECTION 4.6.  Compliance.  Neither Viacom nor any
                        ----------
Viacom Subsidiary is in conflict with, or in default or violation
of, (i) any law, rule, regulation, order, judgment or decree
applicable to Viacom or any Viacom Subsidiary or by which any
property or asset of Viacom or any Viacom Subsidiary is bound or
affected, or (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument
or obligation to which Viacom or any Viacom Subsidiary is a party
or by which Viacom or any Viacom Subsidiary or any property or
asset of Viacom or any Viacom Subsidiary is bound or affected,






                                                               36


except for any such conflicts, defaults or violations that would
not, individually or in the aggregate, have a Viacom Material
Adverse Effect.

          SECTION 4.7.  SEC Filings; Financial Statements.  (a) 
                        ---------------------------------
Viacom has filed all forms, reports and documents required to be
filed by it with the SEC since December 31, 1990, and has
heretofore made available to Paramount, in the form filed with
the SEC (excluding any exhibits thereto), (i) its Annual Reports
on Form 10-K for the fiscal years ended December 31, 1990, 1991
and 1992, respectively, (ii) its Quarterly Reports on Form 10-Q
for the periods ended March 31, 1993, June 30, 1993 and
September 30, 1993, (iii) all proxy statements relating to
Viacom's meetings of stockholders (whether annual or special)
held since January 1, 1991 and (iv) all other forms, reports and
other registration statements (other than Quarterly Reports on
Form 10-Q not referred to in clause (ii) above and preliminary
materials) filed by Viacom with the SEC since December 31, 1990
(the forms, reports and other documents referred to in clauses
(i), (ii), (iii), and (iv) above being referred to herein,
collectively, as the "Viacom SEC Reports").  The Viacom SEC
                      ------------------
Reports and any other forms, reports and other documents filed by
Viacom with the SEC after the date of this Agreement (x) were or
will be prepared in accordance with the requirements of the
Securities Act and the Exchange Act, as the case may be, and the
rules and regulations thereunder and (y) did not at the time they
were filed, or will not at the time they are filed, contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances
under which they were made, not misleading.  No Viacom Subsidiary
(other than Viacom International Inc., a Delaware corporation
("Viacom International")) is required to file any form, report or
  --------------------
other document with the SEC.

          (b)  Each of the consolidated financial statements
(including, in each case, any notes thereto) contained in the
Viacom SEC Reports was prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods indicated (except as may be indicated in
the notes thereto) and each fairly presented the consolidated
financial position, results of operations and cash flows of
Viacom and the consolidated Viacom Subsidiaries as at the
respective dates thereof and for the respective periods indicated
therein (subject, in the case of unaudited statements, to normal
and recurring year-end adjustments which were not and are not
expected, individually or in the aggregate, to be material in
amount).

          (c)  Except as and to the extent set forth in the
Viacom SEC Reports filed with the SEC prior to the date of this
Agreement, Viacom and the Viacom Subsidiaries do not have any
liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise) other than liabilities and obligations







                                                               37


which would not, individually or in the aggregate, have a Viacom
Material Adverse Effect.

          SECTION 4.8.  Absence of Certain Changes or Events. 
                        ------------------------------------
Since December 31, 1992, except as contemplated by this
Agreement, any actions taken by Viacom in order to consummate the
acquisition of Blockbuster, or any actions taken by Viacom in
order to consummate the transactions contemplated by the
Blockbuster Subscription Agreement, as set forth in Section 4.8
of the Viacom Disclosure Schedule or disclosed in any Viacom SEC
Report filed since December 31, 1992 and prior to the date of
this Agreement, Viacom and the Viacom Subsidiaries have conducted
their businesses only in the ordinary course and in a manner
consistent with past practice and, since December 31, 1992 there
has not been (i) as of the date hereof, any change, occurrence or
circumstance in the business, results of operations or financial
condition of Viacom or any Viacom Subsidiary having, individually
or in the aggregate, a Viacom Material Adverse Effect, (ii) any
damage, destruction or loss (whether or not covered by insurance)
with respect to any property or asset of Viacom or any Viacom
Subsidiary and having, individually or in the aggregate, a Viacom
Material Adverse Effect, (iii) any change by Viacom in its
accounting methods, principles or practices, (iv) any
declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of Viacom or any
Viacom Subsidiary or any redemption, purchase or other
acquisition of any of their respective securities other than
dividends by a Viacom Subsidiary to Viacom or (v) other than as
set forth in Section 4.3 and pursuant to the plans, programs or
arrangements referred to in Section 4.10, other than in the
ordinary course of business consistent with past practice and
other than as contemplated by the Agreement and Plan of Merger,
dated as of January 7, 1994 (the "Blockbuster Merger Agreement"),
                                  ----------------------------
between Blockbuster and Viacom, any increase in or establishment
of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock
appreciation rights, performance awards, or restricted stock
awards), stock purchase or other employee benefit plan, or any
other increase in the compensation payable or to become payable
to any officers or key employees of Viacom or any Viacom
Subsidiary, except for the establishment of the Viacom Inc. Stock
Option Plan for Outside Directors and the grant of options to
purchase an aggregate of 5,000 shares thereunder.

          SECTION 4.9.  Absence of Litigation.  Except as
                        ---------------------
disclosed in the Viacom SEC Reports filed with the SEC prior to
the date of this Agreement there is no claim, action, proceeding
or investigation pending or, to the best knowledge of Viacom,
threatened against Viacom or any Viacom Subsidiary, or any
property or asset of Viacom or any Viacom Subsidiary, before any
court, arbitrator or administrative, governmental or regulatory
authority or body, domestic or foreign, which individually or in
the aggregate, is reasonably likely to have a Viacom Material
Adverse Effect.  Except as disclosed in the Viacom SEC Reports






                                                               38


filed with the SEC prior to the date of this Agreement, neither
Viacom nor any Viacom Subsidiary nor any property or asset of
Viacom or any Viacom Subsidiary is subject to any order, writ,
judgment, injunction, decree, determination or award having or
reasonably likely to have, individually or in the aggregate, a
Viacom Material Adverse Effect.

          SECTION 4.10.  Employee Benefit Plans.  With respect to
                         ----------------------
all the employee benefit plans, programs and arrangements
maintained for the benefit of any current or former employee,
officer or director of Viacom or any Viacom Subsidiary (the
"Viacom Plans"), except as set forth in Section 4.10 of the
 ------------
Viacom Disclosure Schedule or the Viacom SEC Reports and except
as would not, individually or in the aggregate, have a Viacom
Material Adverse Effect:  (i) none of the Viacom Plans is a
multiemployer plan within the meaning of ERISA; (ii) none of the
Viacom Plans promises or provides retiree medical or life
insurance benefits to any person; (iii) each Viacom Plan intended
to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the IRS that it is so
qualified and nothing has occurred since the date of such letter
that could reasonably be expected to affect the qualified status
of such Viacom Plan; (iv) each Viacom Plan has been operated in
all respects in accordance with its terms and the requirements of
applicable law; (v) neither Viacom nor any Viacom Subsidiary has
incurred any direct or indirect liability under, arising out of
or by operation of Title IV of ERISA in connection with the
termination of, or withdrawal from, any Viacom Plan or other
retirement plan or arrangement, and no fact or event exists that
could reasonably be expected to give rise to any such liability;
and (vi) Viacom and the Viacom Subsidiaries have not incurred any
liability under, and have complied in all respects with, the
Worker Adjustment Retraining Notification Act, and no fact or
event exists that could give rise to liability under such Act. 
Except as set forth in Section 4.10 of the Viacom Disclosure
Schedule or the Viacom SEC Reports, the aggregate accumulated
benefit obligations of each Viacom Plan subject to Title IV of
ERISA (as of the date of the most recent actuarial valuation
prepared for such Viacom Plan) do not exceed the fair market
value of the assets of such Viacom Plan (as of the date of such
valuation).

          SECTION 4.11.  Trademarks, Patents and Copyrights. 
                         ----------------------------------
Viacom and the Viacom Subsidiaries own or possess adequate
licenses or other valid rights to use all material patents,
patent rights, trademarks, trademark rights, trade names, trade
name rights, copyrights, service marks, trade secrets,
applications for trademarks and for service marks, know-how and
other proprietary rights and information used or held for use in
connection with the business of Viacom and the Viacom
Subsidiaries as currently conducted or as contemplated to be
conducted, and Viacom is unaware of any assertion or claim
challenging the validity of any of the foregoing which,
individually or in the aggregate, would have a Viacom Material
Adverse Effect.  The conduct of the business of Viacom and the






                                                               39


Viacom Subsidiaries as currently conducted does not conflict in
any way with any patent, patent right, license, trademark,
trademark right, trade name, trade name right, service mark or
copyright of any third party that, individually or in the
aggregate, would have a Viacom Material Adverse Effect.

          SECTION 4.12.  Taxes.  Viacom and the Viacom
                         -----
Subsidiaries have timely filed all federal, state, local and
foreign tax returns and reports required to be filed by them
through the date hereof and shall timely file all returns and
reports required on or before the Effective Time, except for such
returns and reports the failure of which to file timely would
not, individually or in the aggregate, have a Viacom Material
Adverse Effect.  Such reports and returns are and will be true,
correct and complete, except for such failures to be true,
correct and complete as would not, individually or in the
aggregate, have a Viacom Material Adverse Effect.  Viacom and the
Viacom Subsidiaries have paid and discharged all federal, state,
local and foreign taxes due from them, other than such taxes that
are being contested in good faith by appropriate proceedings and
are adequately reserved as shown in the audited consolidated
balance sheet of Viacom dated December 31, 1992 (the "Viacom 1992
                                                      -----------
Balance Sheet") and its most recent quarterly financial
- -------------
statements, except for such failures to so pay and discharge
which would not, individually or in the aggregate, have a Viacom
Material Adverse Effect.  Neither the IRS nor any other taxing
authority or agency, domestic or foreign, is now asserting or, to
the best knowledge of Viacom, threatening to assert against
Viacom or any Viacom Subsidiary any deficiency or material claim
for additional taxes or interest thereon or penalties in
connection therewith which, if such deficiencies or claims were
finally resolved against Viacom and the Viacom Subsidiaries
would, individually or in the aggregate, have a Viacom Material
Adverse Effect.  The accruals and reserves for taxes (including
interest and penalties, if any, thereon) reflected in the Viacom
1992 Balance Sheet and the most recent quarterly financial
statements are adequate in accordance with generally accepted
accounting principles, except where the failure to be adequate
would not have a Viacom Material Adverse Effect.  Viacom and the
Viacom Subsidiaries have withheld or collected and paid over to
the appropriate governmental authorities or are properly holding
for such payment all taxes required by law to be withheld or
collected, except for such failures to have so withheld or
collected and paid over or to be so holding for payment which
would not, individually or in the aggregate, have a Viacom
Material Adverse Effect.  There are no material liens for taxes
upon the assets of Viacom or the Viacom Subsidiaries, other than
liens for current taxes not yet due and payable and liens for
taxes that are being contested in good faith by appropriate
proceedings.  Neither Viacom nor any Viacom Subsidiary has agreed
to or is required to make any adjustment under Section 481(a) of
the Code.  Neither Viacom nor any Viacom Subsidiary has made an
election under Section 341(f) of the Code.  For purposes of this
Section 4.12, where a determination of whether a failure by
Viacom or a Viacom Subsidiary to comply with the representations






                                                               40


herein has a Viacom Material Adverse Effect is necessary, such
determination shall be made on an aggregate basis with all other
failures within this Section 4.12.

          SECTION 4.13.  Opinion of Financial Advisor.  Viacom
                         ----------------------------
has received the opinion of Smith Barney Shearson Inc., dated
February 1, 1994, to the effect that, as of such date, the
financial terms of the proposed acquisition by Viacom of
Paramount are fair from a financial point of view to Viacom and
its stockholders.  A copy of such opinion will be delivered to
Paramount promptly. 

          SECTION 4.14.  Vote Required.  The affirmative vote of
                         -------------
the holders of a majority of the outstanding shares of Viacom
Class A Common Stock is the only vote of the holders of any class
or series of Viacom capital stock necessary to approve the Viacom
Vote Matter.

          SECTION 4.15.  Ownership of Paramount Common Stock.  As
                         -----------------------------------
of the date of this Agreement and based on the number of issued
and outstanding shares of Paramount Common Stock as of September
3, 1993 set forth in Section 3.3, Viacom and its affiliates
beneficially own, in the aggregate, less than five percent of the
issued and outstanding shares of Paramount Common Stock.

          SECTION 4.16.  Brokers.  No broker, finder or
                         -------
investment banker (other than Smith Barney Shearson Inc., Goldman
Sachs & Co. and Bear, Stearns & Co. Inc.) is entitled to any
brokerage, finder's or other fee or commission in connection with
the Transactions based upon arrangements made by or on behalf of
Viacom.  Viacom has heretofore furnished to Paramount a complete
and correct copy of all agreements between Viacom and each of
Smith Barney Shearson Inc., Goldman Sachs & Co. and Bear, Stearns
& Co. Inc. pursuant to which each such firm would be entitled to
any payment relating to the Transactions.

          SECTION 4.17.  Financing.  Viacom has delivered to
                         ---------
Paramount binding commitments or agreements to obtain the
financing in contemplation of the Transactions (the "Financing")
                                                     ---------
in an amount sufficient, together with the Viacom Class B Common
Stock, the Viacom Merger Preferred Stock, the CVRs and Warrants,
to acquire all the shares of Paramount Common Stock in the Offer
and the Merger and to pay all related contemplated fees and
expenses.  Viacom knows of no fact or circumstance (including the
obligations of Viacom under this Agreement) that is reasonably
likely to result in the inability of Viacom to receive the
proceeds from such Financing.

          SECTION 4.18.  Purchases of Securities. Since September
                         -----------------------
12, 1993, neither Viacom nor, to Viacom's knowledge, its
affiliates have purchased or sold shares of Viacom Class A Common
Stock or Viacom Class B Common Stock and neither Viacom nor, to
Viacom's knowledge, its affiliates have any knowledge of any such
trading.







                                                               41


          SECTION 4.19.  Representations in Blockbuster Merger
                         -------------------------------------
Agreement.  Viacom hereby confirms that the representations and
- ---------
warranties contained in Sections 3.07, 3.08 and 3.09 of the
Blockbuster Merger Agreement shall be true and correct as of the
date hereof and as of the date of consummation of the Offer,
except as would not have a material adverse effect on the
financial condition of Paramount, Viacom and Blockbuster and
their subsidiaries taken as a whole.

                            ARTICLE V

             CONDUCT OF BUSINESSES PENDING THE MERGER

          SECTION 5.1.  Conduct of Respective Businesses by
                        -----------------------------------
Paramount and Viacom Pending the Merger.  Each of Paramount and
- ---------------------------------------
Viacom covenants and agrees that, between the date of this
Agreement and the Effective Time, unless the other party shall
have consented in writing (such consent not to be unreasonably
withheld) and, except, in the case of Viacom, for actions taken
by Viacom in order to consummate (x) the acquisition of
Blockbuster and (y) the transactions contemplated by the
Blockbuster Subscription Agreement, the businesses of each of
Paramount and Viacom and their respective subsidiaries shall, in
all material respects, be conducted in, and each of Paramount and
Viacom and their respective subsidiaries shall not take any
material action except in, the ordinary course of business,
consistent with past practice; and each of Paramount and Viacom
shall use its reasonable best efforts to preserve substantially
intact its business organization, to keep available the services
of its and its subsidiaries' current officers, employees and
consultants and to preserve its and its subsidiaries'
relationships with customers, suppliers and other persons with
which it or any of its subsidiaries has significant business
relations.  By way of amplification and not limitation, except
(i) as contemplated by this Agreement (including, without
limitation, the making of the Offer and Section 6.16), (ii) for
any actions taken by Viacom in order to consummate the
acquisition of Blockbuster, (iii) for any actions taken by Viacom
in order to consummate the transactions contemplated by the
Blockbuster Subscription Agreement or (iv) as set forth on
Section 5.1 of the Paramount Disclosure Schedule or Section 5.1
of the Viacom Disclosure Schedule, neither Viacom nor Paramount
nor any of their respective subsidiaries shall, between the date
of this Agreement and the Effective Time, directly or indirectly
do, or propose or agree to do, any of the following without the
prior written consent of the other (provided that the following
                                    --------
restrictions shall not apply to any subsidiaries which Paramount
or Viacom, as the case may be, do not control):

          (a)  amend or otherwise change the Certificate of
     Incorporation or By-Laws of Viacom or Paramount (except,
     with respect to Viacom, the Viacom Certificate Amendments
     and the Certificate of Designations to be filed with the
     Secretary of State of the State of Delaware in respect of
     the Viacom Merger Preferred Stock);






                                                               42


          (b)  issue, sell, pledge, dispose of, grant, encumber,
     or authorize the issuance, sale, pledge, disposition, grant
     or encumbrance of, (i) any shares of capital stock of any
     class of it or any of its subsidiaries, or any options
     (other than the grant of options in the ordinary course of
     business consistent with past practice to employees who are
     not executive officers of Paramount or Viacom), warrants,
     convertible securities or other rights of any kind to
     acquire any shares of such capital stock, or any other
     ownership interest (including, without limitation, any
     phantom interest), of it or any of its subsidiaries (other
     than the issuance of shares of capital stock in connection
     with any dividend reinvestment plan or by any Paramount Plan
     with an employee stock fund or employee stock ownership plan
     feature, consistent with applicable securities laws or the
     exercise of options, warrants or other similar rights, or
     conversion of convertible preferred stock outstanding as of
     the date of this Agreement and in accordance with the terms
     of such options, warrants or rights in effect on the date of
     this Agreement or otherwise permitted to be granted pursuant
     to this Agreement) or (ii) any assets of it or any of its
     subsidiaries, except for sales in the ordinary course of
     business or which, individually do not exceed $10,000,000 or
     which, in the aggregate, do not exceed $25,000,000;

          (c)  declare, set aside, make or pay any dividend or
     other distribution, payable in cash, stock, property or
     otherwise, with respect to any of its capital stock, except
     (i) in the case of Viacom, with respect to the Series A
     Preferred Stock and the Series B Preferred Stock, and in the
     case of Paramount, regular quarterly dividends in amounts
     not in excess of $.20 per quarter and payable consistent
     with past practice; provided that, prior to the declaration
                         --------
     of any such dividend, Paramount shall consult with Viacom as
     to the timing and advisability of declaring any such
     dividend and (ii) dividends declared and paid by a
     subsidiary of either Paramount or Viacom, each such dividend
     to be declared and paid in the ordinary course of business
     consistent with past practice;

          (d)  reclassify, combine, split, subdivide or redeem,
     purchase or otherwise acquire, directly or indirectly, any
     of its capital stock other than acquisitions by a dividend
     reinvestment plan or by any Paramount Plan with an employee
     stock fund or employee stock ownership plan feature,
     consistent with applicable securities laws;

          (e)  (i) acquire (including, without limitation, by
     merger, consolidation, or acquisition of stock or assets)
     any corporation, partnership, other business organization or
     any division thereof or any assets, except for such
     acquisitions which, individually do not exceed $10,000,000
     or which, in the aggregate, do not exceed $25,000,000; (ii)
     incur any indebtedness for borrowed money or issue any debt
     securities or assume, guarantee or endorse, or otherwise as






                                                               43


     an accommodation become responsible for, the obligations of
     any person, or make any loans or advances, except (A) for
     any such indebtedness incurred by Viacom in connection with
     the Merger or the Offer, (B) the refinancing of existing
     indebtedness, (C) borrowings under commercial paper programs
     in the ordinary course of business, (D) borrowings under
     existing bank lines of credit in the ordinary course of
     business, (E) which, in the aggregate, do not exceed
     $25,000,000; or (iii) enter into or amend any contract,
     agreement, commitment or arrangement with respect to any
     matter set forth in this Section 5.1(e);

          (f)  increase the compensation payable or to become
     payable to its executive officers or employees, except for
     increases in the ordinary course of business in accordance
     with past practices, or grant any severance or termination
     pay to, or enter into any employment or severance agreement
     with any director or executive officer of it or any of its
     subsidiaries, or establish, adopt, enter into or amend in
     any material respect or take action to accelerate any rights
     or benefits under any collective bargaining, bonus, profit
     sharing, thrift, compensation, stock option, restricted
     stock, pension, retirement, deferred compensation,
     employment, termination, severance or other plan, agreement,
     trust, fund, policy or arrangement for the benefit of any
     director, executive officer or employee; or

          (g)  take any action, other than reasonable and usual
     actions in the ordinary course of business and consistent
     with past practice, with respect to accounting policies or
     procedures.


                            ARTICLE VI

                       ADDITIONAL COVENANTS
                       --------------------

          SECTION 6.1.  Access to Information; Confidentiality. 
                        --------------------------------------
(a)  From the date hereof to the Effective Time, each of
Paramount and Viacom shall (and shall cause its subsidiaries and
officers, directors, employees, auditors and agents to) afford
the officers, employees and agents of the other party (the
"Respective Representatives") reasonable access at all reasonable
 --------------------------
times to its officers, employees, agents, properties, offices,
plants and other facilities, books and records, and shall furnish
such Respective Representatives with all financial, operating and
other data and information as may be reasonably requested.

          (b)  All information obtained by Paramount or Viacom
pursuant to this Section 6.1 shall be kept confidential in
accordance with the confidentiality agreements, dated July 1,
1993 (the "Confidentiality Agreements"), between Paramount and
           --------------------------
Viacom.








                                                               44


          (c)  No investigation pursuant to this Section 6.1
shall affect any representation or warranty in this Agreement of
any party hereto or any condition to the obligations of the
parties hereto.

          SECTION 6.2.  Intentionally omitted.
                        ---------------------

          SECTION 6.3.  Directors' and Officers' Indemnification
                        ----------------------------------------
and Insurance.  (a)  The Certificate of Incorporation and By-Laws
- -------------
of the Surviving Corporation shall contain the provisions with
respect to indemnification set forth in the Certificate of
Incorporation and By-Laws of Viacom on the date of this
Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years after the Effective
Time in any manner that would adversely affect the rights
thereunder of individuals who at any time prior to the Effective
Time were directors or officers of Paramount in respect of
actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by
this Agreement), unless such modification is required by law.

          (b)  From and after the Effective Time, the Surviving
Corporation shall indemnify, defend and hold harmless the present
and former officers and directors of Paramount (collectively, the
"Indemnified Parties") against all losses, expenses, claims,
 -------------------
damages, liabilities or amounts that are paid in settlement of,
with the approval of the Surviving Corporation (which approval
shall not unreasonably be withheld), or otherwise in connection
with any claim, action, suit, proceeding or investigation (a
"Claim"), based in whole or in part on the fact that such person
 -----
is or was a director or officer of Paramount and arising out of
actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by
this Agreement), in each case to the full extent permitted under
Delaware Law (and shall pay expenses in advance of the final
disposition of any such action or proceeding to each Indemnified
Party to the fullest extent permitted under Delaware Law, upon
receipt from the Indemnified Party to whom expenses are advanced
of the undertaking to repay such advances contemplated by Section
145(e) of Delaware Law).

          (c)  Without limiting the foregoing, in the event any
Claim is brought against any Indemnified Party (whether arising
before or after the Effective Time) after the Effective Time (i)
the Indemnified Parties may retain Paramount's regularly engaged
independent legal counsel or other independent legal counsel
satisfactory to them, provided that such other counsel shall be
                      --------
reasonably acceptable to the Surviving Corporation, (ii) the
Surviving Corporation shall pay all reasonable fees and expenses
of such counsel for the Indemnified Parties promptly as
statements therefor are received and (iii) the Surviving
Corporation will use its reasonable best efforts to assist in the
vigorous defense of any such matter, provided that the Surviving
                                     --------
Corporation shall not be liable for any settlement of any Claim
effected without its written consent, which consent shall not be






                                                               45


unreasonably withheld.  Any Indemnified Party wishing to claim
indemnification under this Section 6.3 upon learning of any such
Claim, shall notify the Surviving Corporation (although the
failure so to notify the Surviving Corporation shall not relieve
the Surviving Corporation from any liability which the Surviving
Corporation may have under this Section 6.3, except to the extent
such failure prejudices the Surviving Corporation), and shall
deliver to the Surviving Corporation the undertaking contemplated
by Section 145(e) of Delaware Law.  The Indemnified Parties as a
group may retain no more than one law firm (in addition to local
counsel) to represent them with respect to each such matter
unless there is, under applicable standards of professional
conduct (as determined by counsel to the Indemnified Parties), a
conflict on any significant issue between the positions of any
two or more Indemnified Parties, in which event such additional
counsel as may be required may be retained by the Indemnified
Parties.

          (d)  For a period of three years after the Effective
Time, the Surviving Corporation shall cause to be maintained in
effect the current policies of directors' and officers' liability
insurance maintained by Paramount (provided that the Surviving
                                   --------
Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are no
less advantageous) with respect to claims arising from facts or
events which occurred before the Effective Time; provided,
                                                 --------
however, that in no event shall the Surviving Corporation be
- -------
required to expend pursuant to this Section 6.3(d) more than an
amount equal to 200% of current annual premiums paid by Paramount
for such insurance (which premiums Paramount represents and
warrants to be $850,000 in the aggregate).

          (e)  This Section 6.3 is intended to be for the benefit
of, and shall be enforceable by, the Indemnified Parties, their
heirs and personal representatives and shall be binding on the
Surviving Corporation and its respective successors and assigns.

          SECTION 6.4.  Notification of Certain Matters. 
                        -------------------------------
Paramount shall give prompt notice to Viacom, and Viacom shall
give prompt notice to Paramount, of (i) the occurrence, or
nonoccurrence, of any event the occurrence, or nonoccurrence, of
which would be likely to cause (x) any representation or warranty
contained in this Agreement to be untrue or inaccurate or (y) any
covenant, condition or agreement contained in this Agreement not
to be complied with or satisfied and (ii) any failure of
Paramount or Viacom, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the
                              --------  -------
delivery of any notice pursuant to this Section 6.4 shall not
limit or otherwise affect the remedies available hereunder to the
party receiving such notice.

          SECTION 6.5.  Tax Treatment.  Each of Paramount and
                        -------------
Viacom will use its reasonable best efforts to cause the Forward
Merger to qualify as a reorganization under the provisions of






                                                               46


Section 368(a) of the Code and to deliver, in connection with the
legal opinion referred to in Section 1.1, letters of
representation reasonable under the circumstances as to their
present intentions and present knowledge.

          SECTION 6.6.  Registration Statement; Joint Proxy
                        -----------------------------------
Statement; Offer Documents and Schedule 14D-9.  (a)  As promptly
- ---------------------------------------------
as practicable after the execution of this Agreement, Viacom and
Paramount shall prepare and file with the SEC an amendment to the
joint proxy statement previously filed with the SEC relating to
the meetings of Paramount's stockholders and holders of Viacom
Class A Common Stock to be held in connection with the Merger
(together with any amendments thereof or supplements thereto, the
"Proxy Statement") and, as promptly as practicable following
 ---------------
consummation of the Offer (or expiration or termination of the
Offer without any purchase of shares thereunder), Viacom shall
prepare and file with the SEC a registration statement on Form
S-4 (together with any amendments thereto, the "Registration
                                                ------------
Statement") in which the Proxy Statement shall be included as a
- ---------
prospectus, in connection with the registration under the
Securities Act of the shares of Viacom Class B Common Stock, the
CVRs, the Viacom Merger Debentures and Warrants to be issued to
the stockholders of Paramount pursuant to the Merger, the Viacom
Exchange Preferred Stock into which such Viacom Merger Debentures
are exchangeable, the Viacom Class B Common Stock issuable upon
the exercise of the Warrants and the Viacom Exchange Debentures
for which such Viacom Exchange Preferred Stock is exchangeable. 
Each of Paramount and Viacom shall use all reasonable efforts to
have or cause the Registration Statement to become effective as
promptly as practicable, and shall take all or any action
required under any applicable federal or state securities laws in
connection with the issuance of shares of Viacom Class B Common
Stock, the CVRs, the Viacom Merger Debentures and Warrants
pursuant to the Merger.  Paramount shall furnish all information
concerning Paramount as Viacom may reasonably request in
connection with such actions and the preparation of the
Registration Statement and Proxy Statement.  As promptly as
practicable after the Registration Statement shall have become
effective, each of Viacom and Paramount shall mail the Proxy
Statement to its respective stockholders; provided that no such
                                          --------
mailing shall be required while the Offer remains outstanding. 
The Proxy Statement shall include the recommendation of the Board
of Directors of each of Viacom and Paramount in favor of the
Merger, unless otherwise necessary due to the applicable
fiduciary duties of the respective directors of Viacom and
Paramount, as determined by such directors in good faith after
consultation with and based upon the advice of independent legal
counsel (who may be such party's regularly engaged independent
legal counsel).

          (b)  The information supplied by Viacom for inclusion
in the Registration Statement and the Proxy Statement shall not,
at (i) the time the Registration Statement is declared effective,
(ii) the time the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to the stockholders of Viacom






                                                               47


and Paramount, (iii) the time of each of the Stockholders'
Meetings (as defined in Section 6.7), and (iv) the Effective
Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. 
If at any time prior to the Effective Time any event or
circumstance relating to Viacom or any of the Viacom
Subsidiaries, or their respective officers or directors, should
be discovered by Viacom which should be set forth in an amendment
or a supplement to the Registration Statement or Proxy Statement,
Viacom shall promptly inform Paramount.

          (c)  The information supplied by Paramount for
inclusion in the Registration Statement and the Proxy Statement
shall not, at (i) the time the Registration Statement is declared
effective, (ii) the time the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to the
stockholders of Paramount and Viacom, (iii) the time of each of
the Stockholders' Meetings, and (iv) the Effective Time, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein not misleading.  If at any time
prior to the Effective Time any event or circumstance relating to
Paramount or any of the Paramount Subsidiaries, or their
respective officers or directors, should be discovered by
Paramount which should be set forth in an amendment or a
supplement to the Registration Statement or Proxy Statement,
Paramount shall promptly inform Viacom.

          (d)  Viacom represents and warrants to Paramount that
the Offer Documents will not, at the time the Offer Documents are
filed with the SEC or are first published, sent or given to
stockholders of Paramount, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under
which they are made, not misleading.  The Offer Documents shall
comply in all material respects as to form with the requirements
of the Exchange Act and the rules and regulations thereunder.

          (e)  Paramount represents and warrants to Viacom that
neither the Schedule 14D-9 nor any information supplied by
Paramount for inclusion in the Offer Documents shall, at the
respective times the Schedule 14D-9, the Offer Documents or any
amendments or supplements thereto are filed with the SEC or are
first published, sent or given to stockholders of Paramount, as
the case may be, shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they are
made, not misleading.  The Schedule 14D-9 shall comply in all
material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder.








                                                               48


          SECTION 6.7.  Stockholders' Meetings.  Paramount shall
                        ----------------------
call and hold a meeting of its stockholders and Viacom shall call
and hold a meeting of the holders of the Viacom Class A Common
Stock (collectively, the "Stockholders' Meetings") as promptly as
                          ----------------------
practicable for the purpose of voting upon the approval, in the
case of Paramount, of the Merger and, in the case of Viacom, of
the Viacom Vote Matter (to the extent such matters have not been
previously voted upon and approved by the holders of the Viacom
Class A Common Stock), and Viacom and Paramount shall use their
reasonable best efforts to hold the Stockholders' Meetings on the
same day and as soon as practicable after the date on which the
Registration Statement becomes effective; provided that neither
                                          --------
Paramount nor Viacom shall be required to call or hold a
stockholders meeting while the Offer remains outstanding. 
Paramount shall use its reasonable best efforts to solicit from
its stockholders proxies in favor of the approval of the Merger,
and Viacom shall use its reasonable best efforts to solicit from
its stockholders proxies in favor of the Viacom Vote Matter and
each of Paramount and Viacom shall take all other action
necessary or advisable to secure the vote or consent of
stockholders required by Delaware Law to obtain such approvals,
unless otherwise necessary under the applicable fiduciary duties
of the respective directors of Paramount and Viacom, as
determined by such directors in good faith after consultation
with and based upon the advice of independent legal counsel (who
may be such party's regularly engaged independent legal counsel).

          SECTION 6.8.  Letters of Accountants.  (a)  Paramount
                        ----------------------
shall use its reasonable best efforts to cause to be delivered to
Viacom "comfort" letters of Ernst & Young, Paramount's
independent public accountants, dated and delivered the date on
which the Registration Statement shall become effective and as of
the Effective Time, and addressed to Viacom, in form and
substance reasonably satisfactory to Viacom and reasonably
customary in scope and substance for letters delivered by
independent public accountants in connection with transactions
such as those contemplated by this Agreement.

          (b)  Viacom shall use its reasonable best efforts to
cause to be delivered to Paramount "comfort" letters of Price
Waterhouse, Viacom's independent public accountants, dated the
date on which the Registration Statement shall become effective
and as of the Effective Time, and addressed to Paramount, in form
and substance reasonably satisfactory to Paramount and reasonably
customary in scope and substance for letters delivered by
independent public accountants in connection with transactions
such as those contemplated by this Agreement.

          SECTION 6.9.  Employee Benefits.  The  "Continuing
                        -----------------
Directors" (as such term is defined in certain Paramount Plans,
including, without limitation,  Paramount's Corporate Annual
Performance Plan, Corporate Long-Term Performance Plan,
Supplemental Executive Retirement Plan, Non-Qualified Retirement
Plan, Retirement Plan for Non-Employee Directors, Deferred
Compensation Plan for Directors and employment agreements with






                                                               49


Messrs. Doppelt, Greenberg, Hertlein, Levinson, Meyers and
Sherman) prior to the Effective Time shall approve the
transactions contemplated by this Agreement, and prior to the
Effective Time Paramount and its officers and directors shall
take such other actions, or shall forbear from taking any action,
as may be necessary to insure that such transactions shall not
constitute a "Change in Control" (or other similar event
accelerating or triggering changes to benefits or the terms of
any Paramount Plan (a "Paramount Triggering Event")) for purposes
                       --------------------------
of any Paramount Plan under which a Change in Control (or other
Paramount Triggering Event) may be avoided by action or inaction,
as the case may be, by Paramount or any of its officers or
directors.  Paramount shall not terminate either Paramount's
Corporate Annual Performance Plan or Paramount's Long-Term
Performance Plan prior to the Effective Time, and shall (a) delay
the establishment and announcement of targets for awards under
Paramount's Corporate Annual Performance Plan with respect to
Paramount's 1994 fiscal year until after the Effective Time, and
(b) delay the implementation of a new performance cycle under
Paramount's Corporate Long-Term Performance Plan, in each case,
until Paramount and Viacom shall review the terms of such Plans
after the Effective Time and make such changes as they deem
appropriate taking into consideration the effects of the Merger. 
Viacom shall take or forbear from taking such action as may be
necessary to insure that the transactions contemplated by this
Agreement shall not constitute a change in ownership or control
(or other similar event accelerating or triggering changes to
benefits or the terms of any Viacom Plan (a "Viacom Triggering
                                             -----------------
Event")) for purposes of any Viacom Plan under which any such
- -----
change in ownership or control (or other Viacom Triggering Event)
may be avoided by action or inaction, as the case may be, by
Viacom or any of its officers or directors.

          SECTION 6.10.  Further Action; Reasonable Best Efforts.
                         ---------------------------------------
(a)  Upon the terms and subject to the conditions hereof, each of
the parties hereto shall (i) make promptly any filings with or
applications to the FCC with respect to the Transactions and (ii)
use its reasonable best efforts to take, or cause to be taken,
all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Transactions,
including, without limitation, using its reasonable best efforts
to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental
Entities and parties to contracts with Viacom and Paramount and
their respective subsidiaries as are necessary for the
consummation of the Transactions.  In case at any time after the
Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall use their
reasonable best efforts to take all such action.

          (b)  Each party shall use its best efforts to not take
any action, or enter into any transaction, which would cause any
of its representations or warranties contained in this Agreement






                                                               50


to be untrue or result in a breach of any covenant made by it in
this Agreement.

          SECTION 6.11.  Debt Instruments.  Prior to or at the
                         ----------------
Effective Time, Paramount and each Paramount Subsidiary shall use
its reasonable best efforts to prevent the occurrence, as a
result of the Merger, the Offer and the other transactions
contemplated by this Agreement, of a change in control or any
event which constitutes a default (or an event which with notice
or lapse of time or both would become a default) under any debt
instrument of Paramount or any Paramount Subsidiary, including,
without limitation, debt securities registered under the
Securities Act.

          SECTION 6.12.  Public Announcements.  Viacom and
                         --------------------
Paramount shall consult with each other before issuing any press
release or otherwise making any public statements with respect to
this Agreement or any Transaction and shall not issue any such
press release or make any such public statement without the prior
consent of the other party, which shall not be unreasonably
withheld; provided, however, that a party may, without the prior
          --------  -------
consent of the other party, issue such press release or make such
public statement as may be required by law or any listing
agreement with a national securities exchange to which Viacom or
Paramount is a party if it has used all reasonable efforts to
consult with the other party and to obtain such party's consent
but has been unable to do so in a timely manner.

          SECTION 6.13.  Listing of Viacom Securities.  Viacom
                         ----------------------------
shall use its reasonable best efforts to cause the shares of
Viacom Class B Common Stock and the Warrants, Viacom Merger
Debentures and CVRs to be issued in the Merger to be approved for
listing on the AMEX prior to the Effective Time and the Viacom
Exchange Preferred Stock and the Viacom Exchange Debentures to be
approved for listing on the AMEX prior to the issuance thereof.

          SECTION 6.14.  Affiliates of Paramount.  Paramount
                         -----------------------
represents and warrants to Viacom that Paramount will promptly
deliver to Viacom a letter identifying all persons who may be
deemed affiliates of Paramount under Rule 145 of the Securities
Act, including, without limitation, all directors and executive
officers of Paramount, and Paramount represents and warrants to
Viacom that Paramount has advised the persons identified in such
letter of the resale restrictions imposed by applicable
securities laws.  Paramount shall use its reasonable best efforts
to obtain from each person identified in such letter a written
agreement, substantially in the form of Exhibit 6.14.  Paramount
shall use its reasonable best efforts to obtain as soon as
practicable from any person who may be deemed to have become an
affiliate of Paramount after Paramount's delivery of the letter
referred to above and prior to the Effective Time, a written
agreement substantially in the form of Exhibit 6.14.









                                                               51


          SECTION 6.15.  Conveyance Taxes.  Viacom and Paramount
                         ----------------
shall cooperate in the preparation, execution and filing of all
returns, questionnaires, applications, or other documents
regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any
transfer, recording, registration and other fees, and any similar
taxes which become payable in connection with the transactions
contemplated hereby that are required or permitted to be filed on
or before the Effective Time.

          SECTION 6.16.  Rights Agreement.  Except as
                         ----------------
contemplated by this Agreement, the Board of Directors of
Paramount shall not amend or modify the Rights Agreement or
redeem the Rights prior to the Effective Time except pursuant to
the Other Exemption Agreement.

          SECTION 6.17.  Assumption of Debt and Leases.  With
                         -----------------------------
respect to debt issued by Paramount under indentures qualified
under the Trust Indenture Act of 1939 ("Paramount Indentures"),
                                        --------------------
Viacom shall execute and deliver to the trustees under the
respective Paramount Indentures, Supplemental Indentures, in form
satisfactory to the respective trustees, expressly assuming the
obligations of Paramount with respect to the due and punctual
payment of the principal of (and premium, if any) and interest,
if any, on all debt securities issued by Paramount under the
respective Indentures and the due and punctual performance of all
the terms, covenants and conditions of the respective Paramount
Indentures to be kept or performed by Paramount and shall deliver
such Supplemental Indentures to the respective trustees under the
Paramount Indenture.  Viacom shall similarly deliver instruments
of assumption to the holders of any debt obligations of, and the
lessors of any real property to, Paramount, which debt
obligations or leases expressly require such assumption in order
for the Merger to comply with the debt instrument or lease.

          SECTION 6.18.  Gains Tax.  Except as provided in
                         ---------
Section 1.7(b), Viacom shall pay any New York State Tax on Gains
Derived from Certain Real Property Transfers (the "Gains Tax"),
                                                   ---------
New York State Real Estate Transfer Tax and New York City Real
Property Transfer Tax (the "Transfer Taxes") and any similar
                            --------------
taxes in any other jurisdiction (and any penalties and interest
with respect to such taxes), which become payable in connection
with the Offer and the Merger, on behalf of the stockholders of
Paramount.  Viacom and Paramount shall cooperate in the
preparation, execution and filing of any required returns with
respect to such taxes (including returns on behalf of the
stockholders of Paramount) and in the determination of the
portion of the consideration allocable to the real property of
Paramount and the Paramount Subsidiaries in New York State and
City (or in any other jurisdiction, if applicable).  The terms of
the Offer to Purchase and of the Proxy Statement shall provide
that the stockholders of Paramount shall be deemed to have agreed
to be bound by the allocation established pursuant to this
Section 6.18 in the preparation of any return with respect to the







                                                               52


Gains Tax and the Transfer Taxes and any similar taxes, if
applicable.

          SECTION 6.19.  Reverse Merger.  In the event that a
                         --------------
decision is made to structure the Merger as a Reverse Merger
pursuant to Section 1.1, Viacom agrees to form Merger Subsidiary
as promptly as practicable following such decision and to cause a
merger agreement conforming to Section 251 of the Delaware Law
and effecting the terms hereof to be adopted by Merger
Subsidiary.  Paramount agrees in such case to enter into such
merger agreement.

          SECTION 6.20.  Post-Offer Agreements.  In the event
                         ---------------------
that the Offer is consummated and subject to any applicable
requirements of the FCC: (a) the affirmative vote of a majority
of the directors of Paramount who are directors on the date
hereof and continue as directors on the date of the actions
described below will be required to amend, modify or waive any
provisions of this Agreement, or to approve any other action by
Paramount with respect to the transactions contemplated hereby
which adversely affect the interests of the stockholders of
Paramount; (b) Viacom shall not directly or indirectly cause
Paramount to breach its obligations hereunder; and (c) at the
Paramount Stockholders' Meeting, Viacom shall cause all shares of
Paramount Common Stock then owned by it or its subsidiaries to be
voted in favor of the approval and adoption of this Agreement and
the transactions contemplated hereby.

          SECTION 6.21.  Transactions With Significant
                         -----------------------------
Stockholder After the Effective Time.  From and after the
- ------------------------------------
Effective Time and until the tenth anniversary of the Effective
Time, Viacom shall not enter into any agreement with any
stockholder (the "Significant Stockholder") who beneficially owns
                  -----------------------
more than 35% of the then outstanding securities entitled to vote
at a meeting of the stockholders of Viacom that would constitute
a Rule 13e-3 (as such rule is in effect today) transaction under
the Exchange Act with respect to any class of common stock of
Viacom (any such transaction being a "Going Private Transaction")
                                      -------------------------
unless Viacom provides in any agreement pursuant to which such
Going Private Transaction shall be effected that, as a condition
to the consummation of such Going Private Transaction, (a) the
holders of a majority of the shares of each class of common stock
subject to such Going Private Transaction and not beneficially
owned by the Significant Stockholder that are voted and present
(whether in person or by proxy) at the meeting of stockholders
called to vote on such Going Private Transaction shall have voted
in favor thereof and (b) a special committee (the "Special
                                                   -------
Committee") of the Board of Directors of Viacom comprised solely
- ---------
of the independent directors of Viacom shall have (i) approved
the terms and conditions of the Going Private Transaction and
shall have recommended that the stockholders vote in favor
thereof and (ii) received from its financial advisor a written
opinion addressed to the Special Committee, for inclusion in the
proxy statement to be delivered to the stockholders, and dated
the date thereof, substantially to the effect that the






                                                               53


consideration to be received by the stockholders (other than the
Significant Stockholder) in the Going Private Transaction is fair
to them from a financial point of view.  Notwithstanding anything
to the contrary in this Section 6.21, the restrictions contained
in this Section 6.21 shall not apply to any Significant
Stockholder if there exists another stockholder who beneficially
owns a greater percentage of outstanding securities entitled to
vote at the meeting than the Significant Stockholder.

          SECTION 6.22.  Blockbuster Merger Agreement and
                         --------------------------------
Subscription Agreement.  Viacom hereby agrees that, from and
- ----------------------
after the date of this Agreement, the terms of (i) the
Blockbuster Merger Agreement and (ii) the Blockbuster
Subscription Agreement shall not, without the consent of
Paramount, be amended or waived in any manner that would have a
material adverse effect on the value of the aggregate
consideration to be received by the Paramount stockholders
pursuant to the terms of the Offer and the Merger taken together. 



                           ARTICLE VII

                        CLOSING CONDITIONS

          SECTION 7.1.  Conditions to Obligations of Each Party
                        ---------------------------------------
to Effect the Merger.  The respective obligations of each party
- --------------------
to effect the Merger and the other transactions contemplated
herein shall be subject to the satisfaction at or prior to the
Effective Time of the following conditions, any or all of which
may be waived, in whole or in part, to the extent permitted by
applicable law:

          (a)  Effectiveness of the Registration Statement.  The
               -------------------------------------------
     Registration Statement shall have been declared effective by
     the SEC under the Securities Act.  No stop order suspending
     the effectiveness of the Registration Statement shall have
     been issued by the SEC and no proceedings for that purpose
     shall have been initiated or, to the knowledge of Viacom or
     Paramount, threatened by the SEC.

          (b)  Stockholder Approval.  This Agreement and the
               --------------------
     Merger shall have been approved and adopted by the requisite
     vote of the stockholders of Paramount and the Viacom Vote
     Matter (to the extent not previously voted upon and approved
     by the holders of Viacom Class A Common Stock) shall have
     been approved and adopted by the requisite vote of the
     stockholders of Viacom.

          (c)  No Order.  No Governmental Entity or federal or
               --------
     state court of competent jurisdiction shall have enacted,
     issued, promulgated, enforced or entered any statute, rule,
     regulation, executive order, decree, injunction or other
     order (whether temporary, preliminary or permanent) which is
     in effect and which materially restricts, prevents or






                                                               54


     prohibits consummation of the Merger or any transaction
     contemplated by this Agreement; provided, however, that the
                                     --------  -------
     parties shall use their reasonable best efforts to cause any
     such decree, judgment, injunction or other order to be
     vacated or lifted.

          (d)  AMEX Listing.  The shares of Viacom Class B Common
               ------------
     Stock and the Warrants, Viacom Merger Debentures and CVRs
     issuable to stockholders of Paramount in accordance with
     Article II shall have been authorized for listing on the
     AMEX upon official notice of issuance.

          SECTION 7.2.  Additional Conditions to Obligations of
                        ---------------------------------------
Viacom.  The obligations of Viacom to effect the Merger and the
- ------
transactions contemplated herein are also subject to the
following conditions:

          (a)  Representations and Warranties.  Each of the
               ------------------------------
     representations and warranties of Paramount contained in
     this Agreement (including, without limitation,
     Section 6.06), without giving effect to any notification to
     Viacom delivered pursuant to Section 6.4, shall be true and
     correct as of the Effective Time as though made on and as of
     the Effective Time, except (i) for changes specifically
     permitted by this Agreement and (ii) that those
     representations and warranties which address matters only as
     of a particular date shall remain true and correct as of
     such date, except in any case for such failures to be true
     and correct which would not, individually or in the
     aggregate, have a Paramount Material Adverse Effect.  Viacom
     shall have received a certificate of the Chief Executive
     Officer and Chief Financial Officer of Paramount to such
     effect.

          (b)  Agreement and Covenants.  Paramount shall have
               -----------------------
     performed or complied in all material respects with all
     agreements and covenants required by this Agreement to be
     performed or complied with by it on or prior to the
     Effective Time.  Viacom shall have received a certificate of
     the Chief Executive Officer and Chief Financial Officer of
     Paramount to that effect.

          (c)  Material Adverse Change.  Since the date of this
               -----------------------
     Agreement, there shall have been no change, occurrence or
     circumstance in the business, results of operations or
     financial condition of Paramount or any Paramount Subsidiary
     having or reasonably likely to have, individually or in the
     aggregate, a material adverse effect on the business,
     results of operations or financial condition of Paramount
     and the Paramount Subsidiaries, taken as a whole.  Viacom
     shall have received a certificate of the Chief Executive
     Officer and Chief Financial Officer of Paramount to such
     effect.








                                                               55


Notwithstanding the foregoing, the obligations of Viacom to
effect the Merger and the other transactions contemplated herein
following prior consummation of the Offer shall not be subject to
the conditions set forth in Sections 7.2(a), (b) and (c).

          SECTION 7.3.  Additional Conditions to Obligations of
                        ---------------------------------------
Paramount.  The obligation of Paramount to effect the Merger and
- ---------
the other transactions contemplated in this Agreement are also
subject to the following conditions:

          (a)  Representations and Warranties.  Each of the
               ------------------------------
     representations and warranties of Viacom contained in this
     Agreement (including, without limitation, Section 6.6),
     without giving effect to any notification made by Viacom to
     Paramount pursuant to Section 6.4, shall be true and correct
     as of the Effective Time, as though made on and as of the
     Effective Time, except (i) for changes specifically
     permitted by this Agreement and (ii) that those
     representations and warranties which address matters only as
     of a particular date shall remain true and correct as of
     such date, except in any case for such failures to be true
     and correct which would not, individually or in the
     aggregate, have a Viacom Material Adverse Effect.  Paramount
     shall have received a certificate of the Chief Executive
     Officer and Chief Financial Officer of Viacom to such
     effect.

          (b)  Agreements and Covenants.  Viacom shall have
               ------------------------
     performed or complied in all material respects with all
     agreements and covenants required by this Agreement to be
     performed or complied with by it on or prior to the
     Effective Time.  Paramount shall have received a certificate
     of the Chief Executive Officer and Chief Financial Officer
     of Viacom to that effect.

          (c)  No Material Adverse Change.  Since the date of
               --------------------------
     this Agreement, there shall have been no change, occurrence
     or circumstance in the business, results of operations or
     financial condition of Viacom or any Viacom Subsidiary
     having or reasonably likely to have, individually or in the
     aggregate, a material adverse effect on the business,
     results of operations or financial condition of Viacom and
     the Viacom Subsidiaries, taken as a whole.  Paramount shall
     have received a certificate of the Chief Executive Officer
     and Chief Financial Officer of Viacom to such effect.

          (d)  Amendments to Viacom's Certificate of
               -------------------------------------
     Incorporation.  Viacom shall have filed with the Secretary
     -------------
     of State of the State of Delaware a certificate of amendment
     to Viacom's certificate of incorporation pursuant to which
     the Viacom Certificate Amendments shall have become
     effective.









                                                               56


                           ARTICLE VIII

                TERMINATION, AMENDMENT AND WAIVER

          SECTION 8.1.  Termination.  This Agreement may be
                        -----------
terminated at any time prior to the Effective Time, whether
before or after approval of this Agreement and the Merger by the
stockholders of Paramount or the approval by the stockholders of
Viacom of the issuance of the shares of Viacom Common Stock in
accordance with Article II:

          (a)  by mutual consent of Paramount and Viacom;

          (b)  by Viacom, prior to consummation of the Offer,
     upon a breach of any representation, warranty, covenant 
     or agreement on the part of Paramount set forth in this 
     Agreement, or if any representation or warranty of Paramount 
     shall have become untrue, in either case such that the 
     conditions set forth in Section 7.2(a) or Section 7.2(b), 
     as the case may be, would be incapable of being satisfied 
     by July 31, 1994 (or as otherwise extended); provided, that 
                                                  --------
     in any case, a wilful breach shall be deemed to cause such 
     conditions to be incapable of being satisfied for purposes 
     of this Section 8.1(b);

          (c)  by Paramount, upon a breach of any representation,
     warranty, covenant or agreement on the part of Viacom set
     forth in this Agreement, or if any representation or
     warranty of Viacom shall have become untrue, in either case
     such that the conditions set forth in Section 7.3(a) or
     Section 7.3(b), as the case may be, would be incapable of
     being satisfied by July 31, 1994 (or as otherwise extended);
     provided, that in any case, a wilful breach shall be deemed
     --------
     to cause such conditions to be incapable of being satisfied
     for purposes of this Section 8.1(c);

          (d)  by either Viacom or Paramount, if any permanent
     injunction or action by any Governmental Entity preventing
     the consummation of the Merger shall have become final and
     nonappealable;

          (e)  by either Viacom or Paramount, if the Merger shall
     not have been consummated before July 31, 1994; provided,
                                                     --------
     however, that this Agreement may be extended by written
     -------
     notice of either Viacom or Paramount to a date not later
     than September 30, 1994, if the Merger shall not have been
     consummated as a direct result of Viacom or Paramount having
     failed by July 31, 1994, to receive all required regulatory
     approvals or consents with respect to the Merger;

          (f)  by either Viacom or Paramount, if this Agreement
     and the Merger shall fail to receive the requisite vote for
     approval and adoption by the stockholders of Paramount or
     Viacom at the Stockholders' Meetings;







                                                               57


          (g)  by Viacom, if (i) the Board of Directors of
     Paramount shall withdraw, modify or change its
     recommendation of this Agreement, the Merger or the Offer in
     a manner adverse to Viacom or shall have resolved to do any
     of the foregoing; provided, that a statement by the Board of
                       --------
     Directors of Paramount that it is neutral or unable to take
     a position with respect to the Offer after the commencement
     or amendment of a tender offer by a third party shall not be
     deemed to constitute a withdrawal, modification or change of
     its recommendation of this Agreement if the
     Solicitation/Recommendation Statement on Schedule 14D-9
     relating to such third party tender offer recommends
     rejection of such tender offer and the Board of Directors of
     Paramount reconfirms its recommendation of the Offer on the
     date of the filing thereof; (ii) the Board of Directors of
     Paramount shall have recommended to the stockholders of
     Paramount a Competing Transaction (as defined below); (iii)
     Viacom has not consummated the Offer and a tender offer or
     exchange offer for 30% or more of the outstanding shares of
     capital stock of Paramount is commenced, and the Board of
     Directors of Paramount recommends that the stockholders of
     Paramount tender their shares in such tender or exchange
     offer; or (iv) Viacom has not consummated the Offer and any
     person shall have acquired beneficial ownership or the right
     to acquire beneficial ownership of or any "group" (as such
     term is defined under Section 13(d) of the Exchange Act and
     the rules and regulations promulgated thereunder) shall have
     been formed which beneficially owns, or has the right to
     acquire "beneficial ownership" (as defined in the Rights
     Plan) of, more than 30% of the then outstanding shares of
     capital stock of Paramount;

          (h)  by Paramount, if the Board of Directors of
     Paramount (x) fails to make or withdraws or modifies its
     recommendation referred to in Section 2.2(a) or Section
     6.6(a) if there exists at such time a tender offer or
     exchange offer or a proposal by a third party to acquire
     Paramount pursuant to a merger, consolidation, share
     exchange, business combination, tender or exchange offer or
     other similar transaction or (y) recommends to Paramount's
     stockholders approval or acceptance of any of the foregoing
     in each case only if the Board of Directors of Paramount,
     after consultation with and based upon the advice of
     independent legal counsel (who may be such party's regularly
     engaged independent legal counsel), determines in good faith
     that such action is necessary for the Board of Directors of
     Paramount to comply with its fiduciary duties to
     stockholders under applicable law; and

          (i)  by Paramount, if due to the occurrence or
     circumstance that would result in a failure to satisfy any
     of the conditions set forth in Annex A or otherwise, (A) the
     Offer shall have expired without the purchase of shares of
     Paramount Common Stock thereunder or Viacom shall be
     obligated to terminate the Offer pursuant to Section 2.5 or






                                                               58


     (B) Viacom shall have failed to accept for payment shares of
     Paramount Common Stock pursuant to the Offer prior to 9:00
     a.m. on the first business day following the Final
     Expiration Date, unless such failure to accept for payment
     shares of Paramount Common Stock shall have been caused by
     or resulted from the failure of Paramount to perform in any
     material respect its material covenants and agreements
     contained in this Agreement or resulted from the termination
     of the Offer pursuant to Section 2.1(c).

The right of any party hereto to terminate this Agreement
pursuant to this Section 8.1 shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of any party hereto, any person controlling any such party
or any of their respective officers or directors, whether prior
to or after the execution of this Agreement.  For purposes of
this Agreement, "Competing Transaction" shall mean any of the
                 ---------------------
following involving Paramount or any Paramount Subsidiaries:  (i)
any merger, consolidation, share exchange, business combination,
or other similar transaction; (ii) any disposition of 30% or more
of the assets of Paramount and the Paramount Subsidiaries, taken
as a whole in the single transaction or series of transactions;
(iii) any tender offer or exchange offer for 30% or more of the
outstanding shares of capital stock of Paramount or the filing of
a registration statement under the Securities Act in connection
therewith; (iv) any person having acquired beneficial ownership
or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder) having been
formed which beneficially owns or has the right to acquire
beneficial ownership of, 30% or more of the then outstanding
shares of capital stock of Paramount; or (v) any public
announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.

          SECTION 8.2.  Effect of Termination.  Except as
                        ---------------------
provided in Section 9.1, in the event of the termination of this
Agreement pursuant to Section 8.1, this Agreement shall forthwith
become void, there shall be no liability on the part of Paramount
or Viacom or any of their respective officers or directors to the
other and all rights and obligations of any party hereto shall
cease; provided, however, that (i) nothing herein shall relieve
       --------  -------
any party from liability for the wilful breach of any of its
representations, warranties, covenants or agreements set forth in
this Agreement and (ii) if Viacom or Paramount shall terminate
this Agreement in accordance with the provisions of Section 8.1,
and if Viacom shall continue the Offer, the exemption agreement
between the parties dated as of December 22, 1993 shall again
become effective.

          SECTION 8.3.  Amendment.  This Agreement may be amended
                        ---------
by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective
Time; provided, further, that, after approval of the Merger by
      --------  -------
the stockholders of Paramount or Viacom, no amendment, which






                                                               59


under applicable law may not be made without the approval of the
stockholders of Paramount or Viacom, may be made without such
approval.  This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.

          SECTION 8.4.  Waiver.  At any time prior to the
                        ------
Effective Time, either party hereto may (a) extend the time for
the performance of any of the obligations or other acts of the
other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained
herein or in any document delivered pursuant hereto and (c) waive
compliance by the other party with any of the agreements or
conditions contained herein.  Any such extension or waiver shall
be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.

          SECTION 8.5.  Fees, Expenses and Other Payments.  All
                        ---------------------------------
costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants,
incurred by the parties hereto shall be borne solely and entirely
by the party which has incurred such costs and expenses;
provided, however, that all costs and expenses related to
- --------  -------
printing, filing and mailing the Registration Statement and the
Proxy Statement and all SEC and other regulatory filing fees
incurred in connection with the Registration Statement and the
Proxy Statement shall be borne equally by Paramount and Viacom.


                            ARTICLE IX

                        GENERAL PROVISIONS

          SECTION 9.1.  Effectiveness of Representations,
                        ---------------------------------
Warranties and Agreements.  (a)  Except as set forth in Section
- -------------------------
9.1(b), the representations, warranties and agreements of each
party hereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any other
party hereto, any person controlling any such party or any of
their officers or directors, whether prior to or after the
execution of this Agreement.

          (b)  The representations, warranties and agreements in
this Agreement shall terminate at the Effective Time or upon the
termination of this Agreement pursuant to Article VIII, except
that the agreements set forth in Articles I, II and IX and
Sections 6.3 and 6.21 shall survive the Effective Time and those
set forth in Sections 2.2(c), 2.3, 6.1(b), 8.2 and 8.5 and
Article IX hereof shall survive termination.

          (c)   Each of the representations and warranties made
in Article III shall be deemed to be made on September 12, 1993
and not made on the date hereof, except for representations and
warranties which address matters as of a particular date,
provided, that the representations set forth in the last sentence
- --------
of Section 3.4, Sections 3.13, 3.14, 4.13 and 4.17 and any






                                                               60


representations and warranties with respect to this Agreement,
the Merger and the Offer are made on the date hereof.

          (d)  Each of Paramount and Viacom agree that nothing
herein shall constitute a waiver of any rights, claims or
defenses of Viacom or Paramount created by or arising under the
Amended and Restated Agreement and Plan of Merger, dated as of
October 24, 1993, as subsequently amended, or the Stock Option
Agreement, dated as of September 12, 1993, between Paramount and
Viacom, as amended by Amendment No. 1 thereto, dated as of
October 24, 1993, all of which rights, claims and defenses are
hereby expressly reserved.

          SECTION 9.2.  Notices.  All notices and other
                        -------
communications given or made pursuant hereto shall be in writing
and shall be deemed to have been duly given or made as of the
date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses (or at such other address for
a party as shall be specified by like changes of address) or sent
by electronic transmission to the telecopier number specified
below:

          (a)  If to Viacom:

               Viacom Inc.
               1515 Broadway
               New York, NY  10036
               Attention:  Senior Vice President,
                           General Counsel
               Telecopier No.:  (212) 258-6134


               with a copy to:

               Shearman & Sterling
               599 Lexington Avenue
               New York, NY  10022
               Attention:  Stephen R. Volk, Esq.
               Telecopier No.:  (212) 848-7179


          (b)  If to Paramount:

               Paramount Communications Inc.
               15 Columbus Circle
               New York, NY  10023
               Attention:  Executive Vice President and
                           General Counsel
               Telecopier No.:  (212) 373-8184










                                                               61


               with a copy to:

               Simpson Thacher & Bartlett
               425 Lexington Avenue
               New York, NY  10017
               Attention:  Joel S. Hoffman
               Telecopier No.:  (212) 455-2502

          SECTION 9.3.  Certain Definitions.  For purposes of
                        -------------------
this Agreement, the term:

          (a)  "affiliate" means a person that, directly or
                ---------
     indirectly, through one or more intermediaries, controls, is
     controlled by, or is under common control with, the first
     mentioned person;

          (b)  "beneficial owner" with respect to any shares of
                ----------------
     Paramount Common Stock means, unless otherwise defined
     herein, a person who shall be deemed to be the beneficial
     owner of such shares (i) which such person or any of its
     affiliates or associates (as such term is defined in Rule
     12b-2 promulgated under the Exchange Act) beneficially owns,
     directly or indirectly, (ii) which such person or any of its
     affiliates or associates has, directly or indirectly, (A)
     the right to acquire (whether such right is exercisable
     immediately or subject only to the passage of time),
     pursuant to any agreement, arrangement or understanding or
     upon the exercise of conversion rights, exchange rights,
     warrants or options, or otherwise or (B) the right to vote
     pursuant to any agreement, arrangement or understanding or
     (iii) which are beneficially owned, directly or indirectly,
     by any other persons with whom such person or any of its
     affiliates or associates, or any person with whom such
     person or any of its affiliates or associates has any
     agreement, arrangement or understanding for the purpose of
     acquiring, holding, voting or disposing of any shares;

          (c)  "business day" shall have the meaning set forth in
                ------------
     Rule 14d-1(c)(6) as promulgated under the Exchange Act;

          (d)  "control" (including the terms "controlled",
                                               ----------
     "controlled by" and "under common control with") means the
      -------------       -------------------------
     possession, directly or indirectly or as trustee or
     executor, of the power to direct or cause the direction of
     the management or policies of a person, whether through the
     ownership of stock or as trustee or executor, by contract or
     credit arrangement or otherwise;

          (e)  The parties agree that the term "fully diluted
                                                -------------
     basis" as used herein, shall mean giving effect to the
     -----
     shares of Paramount Common Stock then outstanding plus the
     shares of Paramount Common Stock issuable upon the exercise
     of the then exercisable stock options;








                                                               62


          (f)  The parties agree that the term "Merger", as used
                                                ------
     herein, may refer to, consistent with the context of such
     usage, each of the single step merger, the second step
     merger following the Offer, or both.  The parties hereto
     agree to promptly amend this Agreement subsequent to the
     execution and delivery thereof to provide for more precise
     defined terms and usage thereof; and

          (g)  "subsidiary" or "subsidiaries" of Paramount,
                ----------      ------------
     Viacom, the Surviving Corporation or any other person means
     any corporation, partnership, joint venture or other legal
     entity of which Paramount, Viacom, the Surviving Corporation
     or such other person, as the case may be (either alone or
     through or together with any other subsidiary), owns,
     directly or indirectly, 50% or more of the stock or other
     equity interests, the holders of which are generally
     entitled to vote for the election of the board of directors
     or other governing body of such corporation or other legal
     entity.

          SECTION 9.4.  Time Period.  In computing any time
                        -----------
period hereunder, the computation shall be governed by Rule
14d-1(c)(6) as promulgated under the Exchange Act.

          SECTION 9.5.  Headings.  The headings contained in this
                        --------
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.

          SECTION 9.6.  Severability.  If any term or other
                        ------------
provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party.  Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.

          SECTION 9.7.  Entire Agreement.  This Agreement
                        ----------------
(together with the Exhibits, the Paramount Disclosure Schedule,
the Viacom Disclosure Schedule and the other documents delivered
pursuant hereto) and the Confidentiality Agreements constitute
the entire agreement of the parties and supersede all prior
agreements and undertakings, both written and oral, between the
parties, or any of them, with respect to the subject matter
hereof.

          SECTION 9.8.  Assignment.  This Agreement shall not be
                        ----------
assigned by operation of law or otherwise.







                                                               63


          SECTION 9.9.  Parties in Interest.  This Agreement
                        -------------------
shall be binding upon and inure solely to the benefit of each
party hereto, and nothing in this Agreement, express or implied
(other than the provisions of Section 6.3), is intended to or
shall confer upon any person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement, including
to confer third party beneficiary rights; provided, however,
                                          --------  -------
nothing in the foregoing shall be deemed to derogate from any
rights of the Other Offeror (other than as a third party
beneficiary) as against Paramount or its Board with respect to
any amendment of this Agreement or failure to enforce the
Agreement.

          SECTION 9.10.  Specific Performance.  The parties
                         --------------------
hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or in equity.

          SECTION 9.11.  Governing Law.  Except to the extent
                         -------------
that Delaware Law is mandatorily applicable to the Merger and the
rights of the stockholders of Paramount and Viacom, this
Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts
of law.

          SECTION 9.12.  Counterparts.  This Agreement may be
                         ------------
executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.




























                                                               64



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


          ATTEST:                            VIACOM INC.


          By /s/ Kathy B. Rosenberg          By /s/ Philippe P. Dauman  
             ------------------------           ------------------------
             Assistant Secretary                Senior Vice President,
                                                General Counsel and
                                                Secretary


          ATTEST:                            PARAMOUNT COMMUNICATIONS INC.


          By /s/ Earl H. Doppelt             By /s/ Donald Oresman      
             ------------------------           ------------------------
             Assistant Secretary                Executive Vice
                                                President 











































                                                          ANNEX A


                     CONDITIONS TO THE OFFER
                     -----------------------


          Notwithstanding any other provision of the Offer,
Viacom shall not be required to accept for payment or pay for any
shares of Paramount Common Stock tendered pursuant to the Offer,
and may terminate or amend the Offer and may postpone the
acceptance for payment of and payment for shares of Paramount
Common Stock tendered, if (i) the Minimum Condition shall not
have been satisfied, (ii) the Rights Condition shall not have
been satisfied, or (iii) at any time on or after the date of this
Agreement, and prior to the acceptance for payment of shares of
Paramount Common Stock, any of the following conditions shall not
exist:

          (a)  No Governmental Entity or federal or state court
     of competent jurisdiction shall have enacted, issued,
     promulgated, enforced or entered any statute, rule,
     regulation, executive order, decree, injunction or other
     order (whether temporary, preliminary or permanent) which is
     in effect and which materially restricts, prevents or
     prohibits consummation of the Offer, the Merger or any
     transaction contemplated by the Agreement; provided that
                                                --------
     Viacom shall have used its reasonable best efforts to cause
     any such decree, judgment, injunction or other order to be
     vacated or lifted;

          (b)  Each of the representations and warranties of
     Paramount contained in the Agreement (including, without
     limitation, Section 6.6), without giving effect to any
     notification to Viacom delivered pursuant to Section 6.4,
     shall be true and correct as of the date of consummation of
     the Offer as though made on and as of such date, except (i)
     for changes specifically permitted by the Agreement and (ii)
     that those representations and warranties which address
     matters only as of a particular date shall remain true and
     correct as of such date, except in any case for such
     failures to be true and correct which would not,
     individually or in the aggregate, have a Paramount Material
     Adverse Effect;

          (c)  Paramount shall have performed or complied in all
     material respects with all agreements and covenants required
     by the Agreement to be performed or complied with by it on
     or prior to the date of consummation of the Offer;

          (d)  Since December 22, 1993, there shall have been no
     change, occurrence or circumstance in the business, results
     of operations or financial condition of Paramount or any
     Paramount Subsidiary having or reasonably likely to have,








                                                                2


     individually or in the aggregate, a material adverse effect
     on the business, results of operations or financial
     condition of Paramount and the Paramount Subsidiaries, taken
     as a whole;

          (e)  The Agreement shall not have been terminated in
     accordance with its terms;

          (f)  Viacom shall not have terminated the Offer under
     Sections 2.1(c) or 2.5 of the Agreement;

          (g)  Viacom and Paramount shall not have agreed that
     Viacom shall terminate the Offer or postpone the acceptance
     for payment of or payment for shares of Paramount Common
     Stock thereunder;

and, in the reasonable judgment of Viacom in any such case, and
regardless of the circumstances (including any action or inaction
by Viacom or any of its affiliates) giving rise to any such
condition, it is inadvisable to proceed with such acceptance for
payment or payment.

          The foregoing conditions are for the sole benefit of
Viacom and may be asserted by Viacom regardless of the
circumstances giving rise to any such condition or may be waived
by Viacom in whole or in part at any time and from time to time
in their sole discretion, subject to the terms of this Agreement. 
The failure by Viacom at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right;
the waiver of any such right with respect to particular facts and
other circumstances shall not be deemed a waiver with respect to
any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from
time to time.






























                                                          ANNEX B


           PRINCIPAL TERMS OF VIACOM MERGER DEBENTURES


Viacom Merger Debentures

Issuer  . . . . . . . . .    Viacom.

Interest  . . . . . . . .    8% per annum, payable semi-annually,
                             provided that the initial interest
                             payment date shall be January 1,
                             1995.

Maturity  . . . . . . . .    12 years from the Effective Time.

Optional Redemption . . .    Not redeemable prior to the fifth
                             anniversary of the Effective Time. 
                             On and after that date, redeemable,
                             in whole or in part, at the option
                             of Viacom, initially at a redemption
                             price of 103% of the principal
                             amount thereof and thereafter at
                             prices declining to 100% of the
                             principal amount thereof on the
                             eighth anniversary of the Effective
                             Time, plus, in each case, all
                             accrued and unpaid interest.

Mandatory Redemption  . .    None.

Denomination  . . . . . .    Issuable in minimum denominations of
                             $1,000 and integral multiples
                             thereof.

Exchange for Viacom
  Exchange Preferred
  Stock . . . . . . . . .    Exchangeable, at the option of
                             Viacom, in whole but not in part, on
                             or after the earlier of (i)
                             January 1, 1995, but only if the
                             Blockbuster Merger has not been
                             consummated by such date, and (ii)
                             the acquisition by a third party of
                             beneficial ownership of a majority
                             of the outstanding voting securities
                             of Blockbuster, into shares of
                             Viacom's 5% Cumulative Exchangeable
                             Preferred Stock (the "Viacom
                             Exchange Preferred Stock") at the
                             rate of one share of Viacom Exchange
                             Preferred Stock for each $50 in
                             principal amount of Viacom Merger
                             Debentures exchanged.  At the time






                                                                2


                             of the exchange, dividends on the
                             Viacom Exchange Preferred Stock will
                             be deemed to have accrued from the
                             date of issuance of the Viacom
                             Merger Debentures, and no accrued
                             interest will be paid with respect
                             to the Viacom Merger Debentures.

Subordination . . . . . .    Subordinated in right of payment to
                             all Senior Indebtedness of Viacom.
                             Senior Indebtedness of Viacom will
                             be defined as (a) the principal of,
                             premium, if any, and accrued and
                             unpaid interest on (i) indebtedness
                             of Viacom for money borrowed,
                             including all obligations of Viacom
                             under its bank credit facilities,
                             (ii) guarantees by Viacom of
                             indebtedness for money borrowed by
                             any other person, including any
                             guarantees by Viacom of obligations
                             of Viacom International Inc., (iii)
                             trade credit of Viacom and
                             indebtedness evidenced by notes,
                             debentures, bonds or other
                             instruments of indebtedness for
                             payment of which Viacom is
                             responsible or liable, by guarantees
                             or otherwise, and (iv) obligations
                             of Viacom under capital leases, and
                             (b) modifications, renewals,
                             extensions and refunding of any such
                             indebtedness, obligations or
                             guarantees, unless it is provided
                             that such indebtedness, obligations
                             or guarantees, or such
                             modifications, renewals, extensions
                             or refundings thereof, are not
                             superior in right of payment to the
                             Viacom Merger Debentures.  No
                             payment on account of principal or
                             interest on the Viacom Merger
                             Debentures may be made if at the
                             time of such payment there exists a
                             payment default with respect to any
                             Senior Indebtedness.  Upon any
                             distribution of the assets of Viacom
                             upon any dissolution, total or
                             partial liquidation or
                             reorganization of or similar
                             proceeding relating to Viacom, the
                             holders of its Senior Indebtedness
                             will be entitled to receive payment
                             in full before the Viacom Merger







                                                                3


                             Debenture holders are entitled to
                             receive any payment.

Events of Default . . . .    The term "Event of Default" when
                             used in the indenture for the Viacom
                             Merger Debentures will mean any of
                             the following:  (i) failure of
                             Viacom to pay (whether or not
                             prohibited by the subordination
                             provisions) interest for thirty days
                             on the principal of or any
                             redemption payment on any of the
                             Viacom Merger Debentures, (ii)
                             failure to perform any other
                             covenant contained in the Indenture
                             for sixty days after notice to
                             Viacom by the trustee (or to Viacom
                             and the trustee by the holders of at
                             least 25% in aggregate principal
                             amount of Viacom Merger Debentures
                             then outstanding) and (iii) certain
                             events of bankruptcy, insolvency or
                             reorganization.  Any acceleration of
                             the Viacom Merger Debentures
                             following an Event of Default shall
                             not be effective until 5 business
                             days after notice of acceleration to
                             holders of Senior Indebtedness under
                             Viacom's bank credit facilities.


Viacom Exchange Preferred
  Stock

Dividends . . . . . . . .    Cumulative from the Effective Time
                             at the annual rate of $2.50 per
                             share of Viacom Exchange Preferred
                             Stock, payable quarterly; provided
                             that, from and after the tenth
                             anniversary of the Effective Time,
                             the annual rate shall increase from
                             $2.50 to $5.00 per share of Viacom
                             Exchange Preferred Stock.

Liquidation Preference  .    $50.00 per share of Viacom Exchange
                             Preferred Stock, plus accrued and
                             unpaid dividends.

Optional Redemption . . .    Not redeemable prior to the fifth
                             anniversary of the Effective Time. 
                             On and after that date, redeemable
                             in whole or in part, at the option
                             of Viacom, initially at a per share
                             redemption price of $52.50 and
                             thereafter at prices declining to






                                                                4


                             $50.00 on and after the tenth
                             anniversary of the Effective Time,
                             plus, in each case, all accrued and
                             unpaid dividends.

Mandatory Redemption  . .    None.

Exchange for Viacom
  Exchange Debentures . .    Exchangeable in whole or in part, at
                             the option of Viacom, on any
                             dividend payment date beginning on
                             and after the third anniversary of
                             the Effective Time, for Viacom's 5%
                             Subordinated Debentures (the "Viacom
                             Exchange Debentures") at the rate of
                             $50.00 principal amount of Viacom
                             Exchange Debentures for each share
                             of Viacom Exchange Preferred Stock. 
                             Viacom may effect such exchange only
                             if all accrued and unpaid dividends
                             on the Viacom Exchange Preferred
                             Stock have been paid.

Voting Rights . . . . . .    No voting rights except (i) as
                             otherwise required by law and (ii)
                             for the right to elect two
                             additional directors to Viacom's
                             Board of Directors in the event that
                             Viacom has failed to pay dividends
                             payable on the shares of Viacom
                             Exchange Preferred Stock for such
                             number of dividend periods which
                             shall in the aggregate contain not
                             less than 360 days.  In any such
                             election, the holders of shares of
                             Viacom Exchange Preferred Stock will
                             vote separately as a class with the
                             holders of shares of any one or more
                             other shares of preferred stock
                             ranking on a parity with the Viacom
                             Exchange Preferred Stock.  Such
                             right to elect two directors will
                             continue until such dividend
                             arrearages have been paid.


Viacom Exchange Debentures

Interest  . . . . . . . .    5% per annum; provided that, from
                             and after the tenth anniversary of
                             the Effective Time, the interest
                             rate shall increase to 10% per
                             annum, payable semi-annually.








                                                                5


Aggregate Principal
  Amount  . . . . . . . .    Equal to aggregate liquidation
                             preference of Viacom Exchange
                             Preferred Stock exchanged, with the
                             Viacom Exchange Debentures being
                             issued in minimum denominations of
                             $1,000 and integral multiples
                             thereof.

Maturity  . . . . . . . .    20 years from the Effective Time.

Optional Redemption . . .    Not redeemable prior to the fifth
                             anniversary of the Effective Time. 
                             On and after that date, redeemable,
                             in whole or in part, at the option
                             of Viacom, initially at a redemption
                             price of 105% of the principal
                             amount thereof and thereafter at
                             prices declining to 100% of the
                             principal amount thereof on and
                             after the tenth anniversary of the
                             Effective Time, plus, in each case,
                             all accrued and unpaid interest.

Mandatory Redemption  . .    None.

Subordination . . . . . .    Same as the Viacom Merger
                             Debentures.

Events of Default . . . .    Same as the Viacom Merger
                             Debentures.

































                                                          ANNEX C


       PRINCIPAL TERMS OF CONTINGENT VALUE RIGHTS ("CVRs")
                                                    ----

Issuer:                  Viacom.

Payment at Maturity:     Following the maturity of a CVR, the
                         holder of such CVR (the "CVR Holder")
                                                  ----------
                         shall have the right to receive the
                         amount, if any, by which the Target
                         Price exceeds the greater of the Current
                         Market Value and the Minimum Price (each
                         as defined below).  The CVRs shall
                         mature on the Maturity Date unless
                         otherwise extended to the First Extended
                         Maturity Date or the Second Extended
                         Maturity Date, as the case may be (each
                         as defined below).

Form of Payment:         Viacom, at its option, may pay any
                         amount due under the terms of the CVRs
                         to the CVR Holders in cash or in the
                         equivalent fair market value (as
                         determined by an independent nationally
                         recognized investment bank) of
                         registered securities of Viacom,
                         including, without limitation, common
                         stock, preferred stock, notes or other
                         securities.

Target Price:            "Target Price" means (i) at the Maturity
                          ------------
                         Date, $48.00, (ii) at the First Extended
                         Maturity Date, $51.00 and (iii) at the
                         Second Extended Maturity Date, $55.00. 
                         In each case, such Target Prices shall
                         be adjusted upon the occurrence of any
                         event described in the Section entitled
                         "Antidilution" set forth below.

Current Market Value:    "Current Market Value" means (i) with
                          --------------------
                         respect to the Maturity Date and the
                         First Extended Maturity Date, the median
                         of the averages of the closing prices on
                         the American Stock Exchange (or such
                         other exchange on which such shares are
                         then listed) of shares of Viacom's Class
                         B Common Stock, par value $.01 per share
                         (the "Class B Common Stock"), during
                               --------------------
                         each 20 consecutive trading day period
                         that both begins and ends in the
                         Valuation Period and (ii) with respect
                         to the Second Extended Maturity Date,
                         the average of the closing prices on the
                         American Stock Exchange (or such other






                                                                2


                         exchange on which such shares are then
                         listed) of the Class B Common Stock
                         during the 20 consecutive trading days
                         in the Valuation Period which yield the
                         highest such average of the closing
                         prices for any such 20 consecutive
                         trading day period within the Valuation
                         Period.  "Valuation Period" means the 60
                                   ----------------
                         trading day period immediately preceding
                         (and including) the Maturity Date, the
                         First Extended Maturity Date or the
                         Second Extended Maturity Date, as the
                         case may be.

Minimum Price:           "Minimum Price" means (i) at the
                          -------------
                         Maturity Date, $36.00, (ii) at the First
                         Extended Maturity Date, $37.00 and (iii)
                         at the Second Extended Maturity Date,
                         $38.00.  In each case, subject to
                         adjustment upon the occurrence of any
                         event described in the Section entitled
                         "Antidilution" set forth below.

Maturity Date;
  Extensions Thereof:    "Maturity Date" means the first
                          -------------
                         anniversary of the effective time (the
                         "Effective Time") of the merger between
                          --------------
                         Viacom and Paramount Communications Inc.
                         (the "Merger"); provided, however, that
                               ------    --------  -------
                         Viacom, at its option, may (i) extend
                         the Maturity Date to the second
                         anniversary of the Effective Time (the
                         "First Extended Maturity Date") and (ii)
                          ----------------------------
                         extend the First Extended Maturity Date
                         to the third anniversary of the
                         Effective Time (the "Second Extended
                                              ---------------
                         Maturity Date").  Viacom shall exercise
                         -------------
                         either such option to extend by
                         publishing notice of such exercise in
                         the Wall Street Journal (Eastern
                             -------------------
                         Edition), or if the Wall Street Journal
                                             -------------------
                         is not then published, such other
                         newspaper with general circulation in
                         the City of New York, New York no later
                         than one business day preceding the
                         Maturity Date or First Extended Maturity
                         Date, as the case may be.

No Interest:             Other than in the case of interest on
                         the Default Amount (as defined below),
                         no interest shall accrue on any amounts
                         payable to the CVR Holders pursuant to
                         the terms of CVRs.








                                                                3


Disposition Payment:     Following the consummation of a
                         Disposition (as defined below), Viacom
                         shall pay to each CVR Holder for each
                         CVR held by such CVR Holder an amount,
                         if any, by which the Discounted Target
                         Price (as defined below) exceeds the
                         greater of (a) the fair market value (as
                         determined by an independent nationally
                         recognized investment banking firm) of
                         the consideration, if any, received by
                         holders of Class B Common Stock for each
                         share of Class B Common Stock held by
                         such holder as a result of such
                         Disposition and (b) the Minimum Price.

Dispositions:            "Disposition" means (a) a merger,
                          -----------
                         consolidation or other business
                         combination involving Viacom as a result
                         of which no shares of Class B Common
                         Stock shall remain outstanding, (b) a
                         sale, transfer or other disposition, in
                         one or a series of transactions, of all
                         or substantially all of the assets of
                         Viacom or (c) a reclassification of
                         Class B Common Stock as any other
                         capital stock of Viacom or any other
                         person.

Acceleration Upon
  Event of Default:      If an Event of Default (as defined
                         below) occurs and is continuing, either
                         the bank or trust company acting as the
                         trustee (the "Trustee") or CVR Holders
                                       -------
                         holding at least 25% of the outstanding
                         CVRs, by notice to Viacom (and to the
                         Trustee if given by CVR Holders), may
                         declare the CVRs to be due and payable,
                         and upon any such declaration, the
                         Default Amount shall become due and
                         payable and, thereafter, shall bear
                         interest at an interest rate of 8% per
                         annum until payment is made to the
                         Trustee.  "Default Amount" means the
                                    --------------
                         amount, if any, by which the Discounted
                         Target Price exceeds the Minimum Price.

Discounted Target
  Price:                 "Discounted Target Price" means (a) if a
                          -----------------------
                         Disposition or an Event of Default shall
                         occur prior to the Maturity Date,
                         $48.00, discounted to the Disposition
                         Payment Date (as defined below) or the
                         Default Payment Date (as defined below),
                         as the case may be, at a per annum rate
                         of 8%; (b) if a Disposition or an Event






                                                                4


                         of Default shall occur after the
                         Maturity Date but prior to the First
                         Extended Maturity Date, $51.00
                         discounted to the date of the
                         Disposition Payment Date or Default
                         Payment Date, as the case may be, at a
                         per annum rate of 8%; or (c) if a
                         Disposition or an Event of Default shall
                         occur after the First Extended Maturity
                         Date but prior to the Second Extended
                         Maturity Date, $55.00 discounted to the
                         Disposition Payment Date or Default
                         Payment Date, as the case may be, at a
                         per annum rate of 8%.  In each case, the
                         Discounted Target Price and the Minimum
                         Price shall be adjusted upon the
                         occurrence of any event described in the
                         Section entitled "Antidilution" set
                         forth below.  "Disposition Payment
                                        -------------------
                         Date", with respect to a Disposition,
                         ----
                         means the date established by Viacom for
                         payment of the amount due on the CVRs in
                         respect of such Disposition, which in no
                         event shall be more than 30 days after
                         the date on which such Disposition was
                         consummated.  "Default Payment Date"
                                        --------------------
                         means the date on which the CVRs become
                         due and payable upon the declaration
                         thereof following an Event of Default.

Events of Default:       "Event of Default", with respect to the
                          ----------------
                         CVRs, means any of the following which
                         shall have occurred and be continuing;
                         (a) default in the payment of all or any
                         part of the amounts payable in respect
                         of any of the CVRs as and when the same
                         shall become due and payable following
                         the Maturity Date, the First Extended
                         Maturity Date or the Second Extended
                         Maturity Date, the Disposition Payment
                         Date or otherwise; (b) material default
                         in the performance, or material breach,
                         of any material covenant or warranty of
                         Viacom, and continuance of such material
                         default or breach for a period of 90
                         days after written notice has been given
                         to Viacom by the Trustee or to Viacom
                         and the Trustee by CVR Holders holding
                         at least 25% of the outstanding CVRs; or
                         (c) certain events of bankruptcy,
                         insolvency, reorganization or other
                         similar events in respect of Viacom.

Antidilution:            If Viacom shall in any manner subdivide
                         (by stock split, stock dividend or






                                                                5


                         otherwise) or combine (by reverse stock
                         split or otherwise) the number of
                         outstanding shares of Class B Common
                         Stock, Viacom shall correspondingly
                         subdivide or combine the CVRs and shall
                         appropriately adjust the Target Price,
                         the Minimum Price and the Discounted
                         Target Price.

Trading:                 None of Viacom, National Amusements,
                         Inc. or any of their affiliates shall
                         trade in shares of Class B Common Stock
                         during the period commencing 10 trading
                         days before the Valuation Period and
                         ending on the last day of the Valuation
                         Period, except with respect to employee
                         benefit plans and other incentive
                         compensation arrangements.

No Fractional CVRs:      No fraction of a CVR will be issued in
                         the Merger.  In lieu thereof, a cash
                         payment will be made in an amount
                         equivalent to the fair market value of
                         the fraction of the CVR.

CVR Agreement:           The CVRs will be issued pursuant to a
                         CVR Agreement between Viacom and the
                         Trustee.  Viacom shall use its
                         reasonable best efforts to cause the CVR
                         Agreement to be qualified under the
                         Trust Indenture Act of 1939, as amended.

Registration/Listing:    The CVRs will be issued in registered
                         form, and Viacom shall use its
                         reasonable best efforts to list the CVRs
                         on the American Stock Exchange (or such
                         other securities exchange on which the
                         shares of Class B Common Stock are then
                         listed).

Nature and Ranking of
  CVRs:                  The CVRs are unsecured obligations of
                         Viacom and will rank equally with all
                         other unsecured obligations of Viacom.




















                                                          ANNEX D


              Principal Terms of Three Year Warrants
              --------------------------------------


          Each Three Year Warrant will entitle the holder thereof to
purchase one share of Viacom Class B Common Stock per whole Three
Year Warrant at any time prior to the third anniversary of the
Merger at a price of $60.00, payable in cash.  The terms of the
Three Year Warrants will include customary anti-dilution (with
respect to stock splits, stock dividends, reverse stock splits or
other similar subdivisions or combinations of stock) and other
provisions.  No fraction of a Three Year Warrant will be issued
in the Merger.  In lieu thereof, a cash payment will be made in
an amount determined in accordance with Section 1.7 of this
Agreement.















































                                                          ANNEX E


              Principal Terms of Five Year Warrants
              -------------------------------------


          Each Five Year Warrant will entitle the holder thereof
to purchase one share of Viacom Class B Common Stock per whole
Five Year Warrant at any time prior to the fifth anniversary of
the Merger at a price of $70.00, exercisable for cash or by
exchanging, if issued, either Viacom Exchange Preferred Stock
with an equivalent liquidation preference or an equivalent
principal amount of Viacom Exchange Debentures.  The terms of the
Five Year Warrants will include customary anti-dilution (with
respect to stock splits, stock dividends, reverse stock splits or
other similar subdivisions or combinations of stock) and other
provisions.  No fraction of a Five Year Warrant will be issued in
the Merger.  In lieu thereof, a cash payment will be made in an
amount determined in accordance with Section 1.7 of this
Agreement.












































                           EXHIBIT 6.14


                     FORM OF AFFILIATE LETTER
                     ------------------------


Viacom Inc.
1515 Broadway
New York, NY 10036

Gentlemen:

          I have been advised that as of the date of this letter
I may be deemed to be an "affiliate" of Paramount Communications
Inc., a Delaware corporation (the "Company"), as the term
                                   -------
"affiliate" is defined for purposes of paragraphs (c) and (d) of
Rule 145 of the rules and regulations (the "Rules and
                                            ---------
Regulations") of the Securities and Exchange Commission (the
- -----------
"Commission") under the Securities Act of 1933, as amended (the
 ----------
"Act").  Pursuant to the terms of the Amended and Restated
 ---
Agreement and Plan of Merger dated as of February 4, 1994 (the
"Agreement"), between Viacom Inc., a Delaware corporation
 ---------
("Viacom"), and the Company, the Company will be merged with and
  ------
into Viacom or a wholly owned Subsidiary of Viacom (the
"Merger").
 ------

          As a result of the Merger, I may receive (i) shares of
Class B common stock, par value $.01 per share, of Viacom, (ii)
8% exchangeable subordinated debentures of Viacom, (iii) CVRs (as
defined in the Agreement) and (iv) Warrants (as defined in the
Agreement) (collectively, the "Viacom Securities").  I would
                               -----------------
receive such securities in exchange for, respectively, shares (or
options for shares) owned by me of common stock, par value $1.00
per share, of the Company (the "Company Securities").
                                ------------------

          I represent, warrant and covenant to Viacom that in the
event I receive any Viacom Securities as a result of the Merger:

          A.   I shall not make any sale, transfer or other
     disposition of the Viacom Securities in violation of the Act
     or the Rules and Regulations.

          B.   I have carefully read this letter and the
     Agreement and discussed the requirements of such documents
     and other applicable limitations upon my ability to sell,
     transfer or otherwise dispose of Viacom Securities to the
     extent I felt necessary, with my counsel or counsel for the
     Company.

          C.   I have been advised that the issuance of Viacom
     Securities to me pursuant to the Merger has been registered
     with the Commission under the Act on a Registration
     Statement Form S-4.  However, I have also been advised that,
     because at the time the Merger is submitted for a vote of
     the stockholders of the Company, (a) I may be deemed to be






                                                                2


     an affiliate of the Company and (b) the distribution by me
     of the Viacom Securities has not been registered under the
     Act, I may not sell, transfer or otherwise dispose of Viacom
     Securities issued to me in the Merger unless (i) such sale,
     transfer or other disposition is made in conformity with the
     volume and other limitations of Rule 145 promulgated by the
     Commission under the Act, (ii) such sale, transfer or other
     disposition has been registered under the Act or (iii) in
     the opinion of counsel reasonably acceptable to Viacom, such
     sale, transfer or other disposition is otherwise exempt from
     registration under the Act.

          D.   I understand that Viacom is under no obligation to
     register the sale, transfer or other disposition of the
     Viacom Securities by me or on my behalf under the Act or to
     take any other action necessary in order to make compliance
     with an exemption from such registration available solely as
     a result of the Merger.

          E.   I also understand that there will be placed on the
     certificates for the Viacom Securities issued to me, or any
     substitutions therefor, a legend stating in substance:

          "THE [SHARES] [RIGHTS] [DEBENTURES] [WARRANTS]
          REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
          TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
          SECURITIES ACT OF 1933 APPLIES.  THE [SHARES] [RIGHTS]
          [DEBENTURES] [WARRANTS]  REPRESENTED BY THIS
          CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH
          THE TERMS OF AN AGREEMENT DATED ____________ BETWEEN
          THE REGISTERED HOLDER HEREOF AND VIACOM INC., A COPY OF
          WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF
          VIACOM INC."

          F.   I also understand that unless a sale or transfer
is made in conformity with the provisions of Rule 145, or
pursuant to a registration statement, Viacom reserves the right
to put the following legend on the certificates issued to my
transferee:

          "THE [SHARES] [RIGHTS] [DEBENTURES] [WARRANTS]
          REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE
          ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES IN A
          TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
          SECURITIES ACT OF 1933 APPLIES.  THE [SHARES] [RIGHTS]
          [DEBENTURES] [WARRANTS] HAVE BEEN ACQUIRED BY THE
          HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION
          WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF
          THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED
          OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN
          EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
          SECURITIES ACT OF 1933."








                                                                3


          It is understood and agreed that the legends set forth
in paragraphs E and F above shall be removed by delivery of
substitute certificates without such legend if the undersigned
shall have delivered to Viacom a copy of a letter from the staff
of the Commission, or an opinion of counsel reasonably
satisfactory to Viacom in form and substance reasonably
satisfactory to Viacom, to the effect that such legend is not
required for purposes of the Act.

          Execution of this letter should not be considered an
admission on my part that I am an "affiliate" of the Company as
described in the first paragraph of this letter, or as a waiver
of any rights I may have to object to any claim that I am such an
affiliate on or after the date of this letter.


                                        Very truly yours,


                                                                        
                                        --------------------------------
                                        Name:

          Accepted this     day of
                        ---
                   , 1994, by
          ---------

          VIACOM INC.


          By                     
            ---------------------
            Name:
            Title: