AGREEMENT


         THIS AGREEMENT is entered into this 9th day of July, 1997, by and among
RENTRAK CORPORATION,  an Oregon corporation  ("Rentrak"),  VIDEO UPDATE, INC., a
Delaware   corporation  ("VU"),  and  MOOVIES,   INC.,  a  Delaware  corporation
("Moovies").

                                    RECITALS

         WHEREAS,  Moovies is a  participant  in  Rentrak's  pay-per-transaction
("PPT") system pursuant to a Rentrak National Account Agreement,  dated March 8,
1995, as modified by a First Addendum to Rentrak National Account Agreement,  of
even date  therewith,  as  further  modified  by a Second  Addendum  to  Rentrak
National  Account  Agreement,  dated May 18,  1995,  and an  Amendment  to First
Addendum  to  Rentrak   National   Account   Agreement,   dated  June  16,  1995
(collectively, the "PPT Agreement");

         WHEREAS,  VU desires  to  acquire  Moovies  and  Moovies  desires to be
acquired by VU through a merger transaction in which Moovies will be merged into
a wholly owned  subsidiary of VU and Moovies will be the  surviving  corporation
(the "Acquisition");

         WHEREAS,  Pursuant to Section 37 of the PPT  Agreement,  VU and Moovies
cannot consummate the Acquisition  without Rentrak's consent,  which consent may
be withheld in Rentrak's sole discretion;

         WHEREAS,  VU and Rentrak have  simultaneously  herewith  entered into a
Rentrak National Account  Agreement,  as modified by a First Addendum to Rentrak
National  Account  Agreement,  of even date (together,  the "VU PPT Agreement"),
which VU PPT Agreement  shall become  effective and legally  binding upon VU and
Rentrak in accordance with the terms thereof on the closing and effectiveness of
the Acquisition (the "Effective Time");

         WHEREAS,  Rentrak desires to consent to the Acquisition  subject to the
terms and conditions set forth herein.

                                    AGREEMENT

         NOW THEREFORE,  in consideration  of the foregoing,  and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the parties hereto agree as follows:







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         1.  ACKNOWLEDGEMENT  OF  MOOVIES   OBLIGATIONS.   Rentrak  and  Moovies
acknowledge  and agree that,  as of July 7, 1997 (taking  into account  invoices
dated as of July 7, 1997 and payments by Moovies received through July 7, 1997),
Moovies  owes  Rentrak  the  following  amounts  under  the PPT  Agreement:  (i)
$1,685,567.71  in accounts  receivable,  of which  $354,698.32  is past due. The
parties  further  acknowledge  that between the date of this  Agreement  and the
Effective  Time  Moovies will  continue to incur fees and/or  other  amounts due
Rentrak under the PPT Agreement.

         2. CONSENT TO ACQUISITION.  Rentrak hereby consents to the Acquisition;
provided,  however,  that such consent shall not be effective or legally binding
upon Rentrak  until and unless all of the  following  conditions  precedent  are
fully  satisfied  on or before the  earlier of the  Effective  Time or March 31,
1998:

                  A.  EXECUTION OF MERGER  AGREEMENT.  VU and Moovies shall have
         executed  a  definitive  merger  agreement  pursuant  to  which VU will
         acquire Moovies;

                  B.  FULL  PAYMENT  OF ALL PAST DUE  MOOVIES  OBLIGATIONS.  All
         accounts due and payable by Moovies to Rentrak  under the PPT Agreement
         as of 10  business  days  prior to the  Effective  Time  and all  other
         amounts then owed to Rentrak by Moovies,  including without limitation,
         audit  fees and other  costs,  shall be paid in full to  Rentrak  on or
         before the  Effective  Time.  In this regard,  Rentrak  shall submit an
         invoice  to Moovies at least 10  business  days prior to the  Effective
         Time setting  forth the past due  accounts  payable owed by Moovies and
         such other  amounts then owed.  In the event that there is a dispute in
         respect of the invoice,  Rentrak and Moovies will attempt in good faith
         to resolve such dispute,  and, if resolved,  any payments shall be paid
         by Moovies  prior to the  Effective  Time.  If any such  dispute is not
         resolved by Rentrak and Moovies  within 5 business  days after  Moovies
         receives a written copy of such invoice from Rentrak,  then (a) Moovies
         will pay Rentrak prior to the Effective Time all undisputed amounts and
         (b) the specific  matters or amounts on the invoice in dispute shall be
         resolved exclusively through submission by either Moovies or Rentrak to
         arbitration in accordance with the Commercial  Arbitration Rules of the
         American Arbitration  Association then in effect, in Portland,  Oregon,
         before a single  arbitrator  selected in accordance with the Commercial
         Arbitration  Rules  of the  American  Arbitration  Association  then in
         effect. Moovies's payment to Rentrak prior to the Effective Time of all
         undisputed   amounts  and   submission  of  any  disputed   amounts  to
         arbitration  in  accordance  with this  Section 2(b) shall be deemed to
         satisfy the  condition  precedent  of this  Section  2(b).  Rentrak and
         Moovies  agree that the  arbitrator's  award shall be final and binding
         upon them with respect to the dispute.  All costs and expenses incurred
         by the parties  hereto in connection  with the  arbitration  (including
         reasonable  legal  expenses of all parties) shall be borne by the party
         against  whom  the  arbitrator's  award is  directed.  Such  costs  and
         expenses shall be prorated in the event the arbitrator splits the award
         between the parties in proportion to the amounts awarded


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         (e.g. if  Rentrak is awarded 70% of the disputed  amount and Moovies is
         awarded 30%,  Moovies  would pay 70% of Rentrak's  costs,  expenses and
         reasonable  legal fees and  Rentrak  would pay 30% of  Moovies'  costs,
         expenses  and  reasonable  legal  fees).  In the  event an award of the
         disputed  amount is made to Rentrak such award shall  include  interest
         which  shall  accrue at the rate of 1.0% per month  from the  Effective
         Time  until  the  date  such  award is fully  paid.  If the  arbitrator
         determines  that a party has not acted in good faith in connection with
         the matters  presented in the invoice or in  disputing  such matters or
         that the matters  presented  in the invoice  are  frivolous  or that in
         challenging or  maintaining  its challenge  throughout the  arbitration
         with respect to the matter in dispute that such dispute is frivolous or
         designed to delay payment,  the arbitrator  shall award the other party
         an additional  amount,  if any, as determined by the  arbitrator in his
         discretion as he deems appropriate under the  circumstances,  up to 50%
         of the amount  awarded to such  party.  Rentrak  and  Moovies  agree to
         cooperate  in good  faith  with each  other,  each  other's  authorized
         representatives  and any arbitrator  selected  pursuant hereto in order
         that  any  and  all  matters  in  dispute  may be  resolved  as soon as
         practicable;

                  C.  CLOSING OF THE  ACQUISITION.  The  Acquisition  shall have
         closed and become  effective and the VU PPT Agreement shall have become
         effective and legally binding upon VU and Rentrak;

                  D.  PAYMENT  OF  RENTRAK  LEGAL  FEES.  VU shall have paid the
         reasonable  attorneys'  fees and costs and other out of pocket expenses
         and costs  incurred by Rentrak in the VU PPT  Agreement  in  accordance
         with the  Legal  Fees  Agreement,  dated  June 3,  1997 by and  between
         Rentrak and VU.

         3.  AMENDMENT TO PPT AGREEMENT.  As an inducement to and  consideration
for Rentrak  providing its conditional  consent as set forth in Section 2 above,
Rentrak and Moovies agree to amend the PPT  Agreement,  effective as of the date
of this Agreement, as follows:

         A.       Section  36 - Term of  Agreement.  The last two  sentences  of
                  Section  36  beginning  with  the  words  "In  the  event  Ron
                  Berger..."  are  deleted  from  the  PPT  Agreement  in  their
                  entirety and shall have no further force or effect whatsoever.

         B.       Section 41 - Alternate Terms.  Section 41 is hereby deleted in
                  its  entirety  and  shall  have no  further  force  or  effect
                  whatsoever.









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         Except as amended  above and subject to Section 9 below,  all terms and
         conditions  of the PPT Agreement are unchanged and shall remain in full
         force and effect.  The amendments  contained in this Section 3 shall be
         legally binding and shall be given full force and effect whether or not
         VU acquires Moovies or the conditions  precedent for Rentrak's  consent
         set forth in Section 2 are satisfied.

         4.  GUARANTEE  OF  VU.  Upon  the  closing  and  effectiveness  of  the
Acquisition,  VU hereby  unconditionally  guarantees  to Rentrak  (i) the prompt
payment by Moovies to Rentrak of all  accounts  payable  owed by Moovies but not
yet due and payable to Rentrak as of the closing date of the Acquisition,  which
amount shall be paid in the ordinary course of business  pursuant to the payment
terms  contained  in Section 2(b) of the PPT  Agreement  and (ii) the payment by
Moovies of the amounts, if any, awarded to Rentrak by the arbitrator pursuant to
Section 2(b) above.  In no event shall Rentrak have any obligation  (although it
is  entitled,  at its  option)  to proceed or take  enforcement  action  against
Moovies before seeking satisfaction from VU pursuant to said guaranty.

         5. RELEASE BY RENTRAK.  Except as provided herein,  Rentrak, for itself
and its  assigns,  hereby  remises,  releases,  acquits,  satisfies  and forever
discharges  Moovies  and  its  affiliates,   assigns,   employees,   agents  and
representatives,  of and from all past or present claims, demands,  obligations,
actions,  causes of action, rights,  damages,  costs,  expenses,  profits or any
other compensation of any nature whatsoever,  whether based in contract, tort or
any other  theory of  recovery,  whether  at law or in equity  and  whether  for
compensatory,  punitive or other  damages  which Rentrak ever had, for, on or by
reason of any matter,  cause or thing whatsoever arising out of events occurring
on or prior to the date hereof,  provided,  however,  notwithstanding the above,
Rentrak specifically does not and Moovies specifically acknowledges that Rentrak
does not,  release Moovies in any respect from any and all claims,  obligations,
causes of action,  damages, costs, expenses or any other compensation whatsoever
arising from or connected with (i) Rentrak's audit of Moovies  conducted in 1997
or (ii)  accounts  payable  owed by Moovies to Rentrak  under the PPT  Agreement
described in Section 1 of the Agreement or that arise based on events that occur
on or after the date hereof.

         6. RELEASE BY MOOVIES.  Except as provided herein,  Moovies, for itself
and its  assigns,  hereby  remises,  releases,  acquits,  satisfies  and forever
discharges  Rentrak  and  its  affiliates,   assigns,   employees,   agents  and
representatives,  of and from all past or present claims, demands,  obligations,
actions,  causes of action, rights,  damages,  costs,  expenses,  profits or any
other compensation of any nature whatsoever,  whether based in contract, tort or
any other  theory of  recovery,  whether  at law or in equity  and  whether  for
compensatory,  punitive or other  damages  which Moovies ever had, for, on or by
reason of any matter,  cause or thing whatsoever arising out of events occurring
on or prior to the date hereof,  provided,  however,  notwithstanding the above,
Moovies specifically does not and Rentrak specifically acknowledges that Moovies
does not,  release Rentrak in any respect from any and all claims,  obligations,
causes of action, damages, costs, expenses or any other


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compensation  whatsoever  arising from or connected with (i) Rentrak's  audit of
Moovies  conducted in 1997 or (ii)  accounts  payable owed by Moovies to Rentrak
under the PPT  Agreement  described in Section 1 of the  Agreement or that arise
based on events that occur on or after the date hereof.

         7. NO ADMISSION OF LIABILITY.  It is  understood  and agreed by Rentrak
and Moovies that this  Agreement is a compromise  and settlement of doubtful and
disputed  claims and that the execution of this Agreement is not to be construed
as an admission of liability whatsoever on the part of either party hereto.

         8. VOLUNTARY CHOICE.  In entering into this Agreement,  the undersigned
each represent that: (a) they have authority to enter into this  Agreement;  (b)
the  terms of this  Agreement  have been  read in their  entirety  and are fully
understood;  (c) they have proceeded upon the advice of an attorney of their own
choice or have had the opportunity to do so; and (d) the terms of this Agreement
are knowingly and voluntarily accepted.

         9.  EFFECTIVENESS OF PPT AGREEMENT.  The parties hereto acknowledge and
agree that upon the closing and  effectiveness  of the  Acquisition and provided
that Moovies pays Rentrak in full the undisputed amounts specified under Section
2(b) above and any  disputed  amounts  have been  submitted  to  arbitration  in
accordance with Section 2(b), except for VU's guarantee of all the amounts which
at the Effective Time were  outstanding but not yet due from Moovies as provided
in Section 4 above or as otherwise agreed in writing between VU and Rentrak, the
PPT Agreement with Moovies shall no longer be legally binding on or apply to the
parties  thereto and such PPT Agreement as of the Effective Time shall otherwise
be of no  further  force  and  effect  and  shall  be  superseded  by the VU PPT
Agreement.

         10.  WAIVERS  AND  AMENDMENTS.  This  Agreement  may  not  be  amended,
superseded,  or cancelled,  and the terms hereof may not be waived,  except by a
written  instrument signed by the parties hereto or, in the case of a waiver, by
the party  waiving  compliance.  No delay on the part of any party in exercising
any right, power, or privilege hereunder shall operate as a waiver thereof.

         11. PARTIES IN INTEREST.  All the terms,  covenants,  and provisions of
this  Agreement  shall be  binding  upon  and  inure  to the  benefit  of and be
enforceable  by the  respective  successors  and assigns of the parties  hereto,
whether so expressed or not.

         12. CHOICE OF LAW. It is the  intention of the parties  hereto that the
laws of the State of Oregon  shall govern the  validity of this  Agreement,  the
construction of its terms,  and the  interpretation  of the rights and duties of
the  parties.  This  Agreement  is and shall be deemed  accepted  in Oregon  and
interpreted  and  enforced  in  accordance  with the laws of the State of Oregon
applicable to contracts to be made and performed entirely within this state.




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         13.  JURISDICTION;  VENUE; WAIVER OF JURY TRIAL. For any action related
to the judicial  enforcement or interpretation of this Agreement,  and all other
agreements or documents contemplated in or by this Agreement, the parties hereto
expressly  consent to the  exclusive  jurisdiction  of the Circuit Court for the
County of Multnomah,  State of Oregon,  or the Federal Court for the District of
Oregon,  and  irrevocably  waive,  to the fullest  extent  permitted by law, any
objection  they may now have or hereafter  have to the venue of any such suit or
action in any such court and any claim that any suit or action has been  brought
in an inconvenient  forum.  The parties hereby waive their respective right to a
jury trial of any claim or cause of action  based  upon or  arising  out of this
Agreement or any dealings between VU and Rentrak relating to this Agreement.

         14.  RECITALS AS PART OF AGREEMENT.  The recitals to this Agreement are
hereby incorporated into and made a legally binding part of this Agreement.

         15. SEVERABILITY. If any provision of this Agreement shall be deemed or
declared to be unenforceable,  invalid or void, the same shall not impair any of
the other  provisions of this  Agreement,  which shall be enforced in accordance
with their respective terms.

         16. ASSIGNABILITY. Except in respect of the Acquisition, this Agreement
shall not be  assignable  by  operation  of law or  otherwise  without the prior
written consent of Rentrak,  which consent may be withheld in Rentrak's sole and
absolute discretion.

         17.  COUNTERPARTS.  This  Agreement  may be  executed  in  one or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute but one and the same instrument.

///

///

///

///

///

///

///



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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

MOOVIES, INC.                                RENTRAK CORPORATION


By:/s/ John Taylor                           By:/s/ Ron Berger
   -----------------------------                --------------------------------
   John Taylor, Chief Executive                 Ron Berger, Chief Executive
   Officer and President                        Officer and President

VIDEO UPDATE, INC.


By:/s/ Daniel A. Potter
   ----------------------------
   Daniel A. Potter, Chief
   Executive Officer





























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