FIRST AMENDMENT TO CREDIT AGREEMENT


         FIRST  AMENDMENT TO CREDIT  AGREEMENT (this  "Amendment"),  dated as of
June 17, 1997, among MOOVIES,  INC., a corporation  organized and existing under
the laws of the state of  Delaware  (the  "Borrower"),  the  Banks  party to the
Credit Agreement  referred to below and BANQUE PARIBAS,  as Agent (the "Agent").
Unless otherwise  defined herein,  capitalized  terms used herein and defined in
the Credit Agreement referred to below are used herein as so defined.


                                          W I T N E S S E T H:


         WHEREAS, the Borrower, various financial institutions from time to time
party thereto (the "Banks") and Banque  Paribas,  as Agent,  have entered into a
Credit  Agreement  dated as of March 14, 1997 (as in effect on the date  hereof,
the "Credit Agreement");

         WHEREAS,  the  parties  hereto  wish to amend the Credit  Agreement  as
herein provided; and

         WHEREAS,  subject  to the terms and  conditions  set forth  below,  the
parties hereto agree as follows;


         NOW, THEREFORE, it is agreed:

         1.  Section  1.01(b)  of the  Credit  Agreement  is hereby  amended  by
inserting the following text  immediately  prior to the last sentence  appearing
therein:

         "Notwithstanding   anything  to  the  contrary  contained  herein,  the
aggregate  principal  amount of Capital  Expenditure  Loans incurred  during the
period  commencing on the First Amendment  Effective Date and ending on December
31, 1997,  shall not exceed an amount equal to the  remainder of (x)  $7,000,000
less (y) the aggregate  principal amount of Revolving Loans incurred during such
period,  provided,  that the limitation  contained in the preceding clause shall
not apply to a Borrowing of Capital Expenditure Loans if, on or

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prior  to the date of such  Borrowing,  the  Borrower  delivers  to the  Agent a
certification from its chief financial officer stating that the Borrower will be
in  compliance  with the  covenants  contained in Sections  9.09  through  9.14,
inclusive, as of December 31, 1997 and thereafter."

         2.  Section  1.01(c)  of the  Credit  Agreement  is hereby  amended  by
inserting the following text immediately  following the last sentence  appearing
therein:

         "Notwithstanding   anything  to  the  contrary  contained  herein,  the
aggregate  principal  amount of  Revolving  Loans  incurred  during  the  period
commencing  on the First  Amendment  Effective  Date and ending on December  31,
1997,  shall not exceed an amount equal to the remainder of (x) $7,000,000  less
(y) the aggregate  principal amount of Capital Expenditure Loans incurred during
such period,  provided,  that the limitation  contained in the preceding  clause
shall not apply to a Borrowing of Revolving Loans if, on or prior to the date of
such  Borrowing,  the Borrower  delivers to the Agent a  certification  from its
chief financial officer stating that the Borrower will be in compliance with the
covenants contained in Sections 9.09 through 9.14, inclusive, as of December 31,
1997 and thereafter."

         3.  Section  9.02(ii)  of the  Credit  Agreement  is hereby  amended by
inserting  the  following  text  "provided,  that,  without  the  consent of the
Required Banks,  during the period  commencing on the First Amendment  Effective
Date and ending on  December  31,  1997,  the  Borrower  will not enter into any
obligation or  commitment in connection  with the opening of any new video store
(including,  but not  limited  to, any new lease (as  lessee) of real  property)
unless the Borrower  first  delivers to the Agent written  notice thereof (which
notice shall contain a  certification  from the chief  financial  officer of the
Borrower  stating  that  the  Borrower  is and  will be in  compliance  with the
covenants contained in Sections 9.09 through 9.14, inclusive, as of December 31,
1997 and thereafter" immediately prior to the semicolon appearing therein.


         4.  Section  9.10 of the  Credit  Agreement  is hereby  amended  by (i)
deleting the following portion of the table appearing therein:

             "June 30, 1997                                      3.20:1.0"

and (ii) inserting in lieu thereof the following new portion of the table:


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             "June 30, 1997                                      2.80:1.0"

         5.  Section  9.11 of the  Credit  Agreement  is hereby  amended  by (i)
deleting the following portion of the table appearing therein:

            "June 30, 1997                                       2.60:1.0 
             September 30, 1997                                  2.60:1.0"

and (ii) inserting in lieu thereof the following new portion of the table:

             "June 30, 1997                                      3.90:1.0
              September 30, 1997                                 3.55:1.0"

         6.  Section  9.14 of the  Credit  Agreement  is hereby  amended  by (i)
deleting the following portion of the table appearing therein:

             "June 30, 1997                                      $24,750"

and (ii) inserting in lieu thereof the following new portion of the table:

             "June 30, 1997                                      $22,000"

         7. Section 11 of the Credit Agreement is hereby amended by (i) deleting
the  definition of Applicable  Margin  appearing  therein and (ii) inserting the
following new definition in lieu thereof:

         "Applicable  Margin"  shall mean a  percentage  per annum equal to, (A)
until such time as the Borrower demonstrates compliance with Section 9.11 of the
Credit  Agreement  (as such Section 9.11 exists  immediately  prior to the First
Amendment Effective Date), (i) in the case of Base Rate Loans, 2.00% and (ii) in
the case of Eurodollar Loans,  3.00% or (B) thereafter,  (i) in the case of Base
Rate Loans, 1.75% and (ii) in the case of Eurodollar Loans, 2.75%.

         8.  Section 11 of the Credit  Agreement  is hereby  further  amended by
inserting in the appropriate alphabetical order the following definition:

         "First Amendment Effective Date" shall mean the date on which the First
Amendment to this Agreement, dated as of June 17, 1997, becomes effective.

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         9. In order to induce  the  Banks to enter  into  this  Amendment,  the
Borrower hereby represents and warrants that (i) the representations, warranties
and  agreements  contained  in  Section 7 of the Credit  Agreement  are true and
correct in all material respects on and as of the First Amendment Effective Date
(except  with respect to any  representations  and  warranties  limited by their
terms to a  specific  date,  which  shall be true and  correct  in all  material
respects  as of such date) and (ii) there  exists no Default or Event of Default
on the First Amendment Effective Date after giving effect to this Amendment.

         10. The Borrower agrees to pay a  non-refundable  consent fee (such fee
being in  addition  to and not  creditable  against  any  other  amounts  due in
connection with any of the Credit Documents) equal to 1/8 of 1% of the aggregate
Commitments and, without duplication, Loans of each Bank which shall have signed
a written counterpart hereof and shall have delivered the same (including by way
of  telecopier) to the Agent at the Notice Office prior to 3:00 p.m. on June 17,
1997.


         11. This  Amendment is limited as specified and shall not  constitute a
modification,  acceptance  or  waiver  of any  other  provision  of  the  Credit
Agreement or any other Credit Document.

         12. This Amendment may be executed in any number of counterparts and by
the  different   parties  hereto  on  separate   counterparts,   each  of  which
counterparts when executed and delivered shall be an original,  but all of which
shall  together  constitute  one and the  same  instrument.  A  complete  set of
counterparts shall be lodged with the Borrower and the Agent.

         13.  THIS  AMENDMENT  AND THE RIGHTS  AND  OBLIGATIONS  OF THE  PARTIES
HEREUNDER  SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

         14.  This  Amendment  shall  become  effective  on the date (the "First
Amendment  Effective  Date") when the Borrower and the Required Banks shall have
signed a written counterpart hereof (whether the same or different counterparts)
and shall have delivered  (including by way of telecopier) the same to the Agent
at the Notice Office.


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         15. From and after the First  Amendment  Effective Date, all references
in the Credit  Agreement and the other Credit  Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.


                                      * * *



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         IN WITNESS  WHEREOF,  the  undersigned  has caused this Amendment to be
duly executed and delivered as of the date first above written.


                                    MOOVIES, INC.

                                    By:____________________________________
                                    Name:__________________________________
                                    Title:_________________________________



                                    BANQUE PARIBAS,
                                    Individually and as Agent


                                     By:___________________________________
                                     Name:_________________________________
                                     Title:________________________________


                                     By:___________________________________
                                     Name:_________________________________
                                     Title:________________________________



                                     CAROLINA FIRST BANK


                                     By:__________________________________
                                     Name:________________________________
                                     Title:_______________________________





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                                      CREDITANSTALT-BANKVEREIN


                                      By
                                      Name   :
                                      Title:


                                      By
                                      Name   :
                                      Title:



                                      FIRST SOURCE FINANCIAL LLP

                                      By:      FIRST SOURCE FINANCIAL, INC.,
                                                  its agent/manager


                                      By:__________________________________
                                      Name:________________________________
                                      Title:_______________________________


                                      FLEET FINANCIAL GROUP


                                      By:_________________________________
                                      Name:_______________________________
                                      Title:______________________________





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                                      JACKSON NATIONAL LIFE INSURANCE COMPANY,

                                      By:PPM AMERICA, Inc., as attorney in fact,
                                         on behalf of Jackson National Life
                                         Insurance Company


                                      By:___________________________________
                                      Name:_________________________________
                                      Title:________________________________



                                      MERRILL LYNCH PRIME RATE PORTFOLIO


                                      By: Merrill Lynch Asset Management, L.P.,
                                          as Investment Advisor


                                      By:____________________________________
                                      Name:__________________________________
                                      Title:_________________________________



                                      MERRILL LYNCH SENIOR FLOATING 
                                      RATE FUND, INC.


                                      By:_____________________________________
                                      Name:___________________________________
                                      Title:__________________________________



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                                      PARIBAS CAPITAL FUNDING LLC


                                      By:____________________________________
                                      Name:__________________________________
                                      Title:_________________________________





0000FJ74.W51