Document:

<PAGE>

                                                                    Exhibit 10.5

                        AFFILIATE SUBORDINATION AGREEMENT

     AFFILIATE SUBORDINATION AGREEMENT, dated as of August 25, 2003, among (i)
Austin Ventures III-A, L.P., a Delaware limited partnership, Austin Ventures
III-B, L.P., a Delaware limited partnership, Austin Ventures V, L.P., a Delaware
limited partnership, Austin Ventures V Affiliates Fund, L.P., a Delaware limited
partnership (collectively, and jointly, severally and jointly and severally,
"Austin Ventures"), (ii) Capital Resource Lenders II, L.P., a Delaware limited
partnership, Capital Resource Partners II, L.P., a Delaware limited partnership
(collectively, and jointly, severally and jointly and severally, "Capital
Resources"), (iii) ABRY Partners IV, L.P., a Delaware limited partnership, ABRY
Investment Partnership, L.P., a Delaware limited partnership (collectively, and
jointly, severally and jointly and severally, "ABRY"), (iv) Windward Capital
Partners II, L.P., a Delaware limited partnership, Windward Capital LP II, LLC,
a Delaware limited liability company (collectively, and jointly, severally and
jointly and severally, "Windward"), (v) The Northwestern Mutual Life Insurance
Company ("NML"), (vi) Hull Family Limited Partnership, a Texas limited
partnership ("Hull Partnership"), (vii) James Hull, individually, (viii) Robert
Sherman, individually, (ix) Michael Gregory, individually, (x) Michael Meyers,
individually and (xi) Stephen Hedrick, individually (Austin Ventures, Capital
Resources, ABRY, Windward, NML, Hull Partnership, James Hull, Robert Sherman,
Michael Gregory, Michael Meyers, Stephen Hedrick, collectively the "Subordinated
Creditors", and each a "Subordinated Creditor"), and Fleet National Bank, as
Secured Party for the Lenders from time to time party to the credit agreement
referred to below (in such capacity, the "Secured Party"). The Secured Party and
the other Credit Parties referred to in the Credit Agreement referred to below
are sometimes referred to herein collectively as the "Senior Creditor".

                              W I T N E S S E T H :

     WHEREAS, Monitronics International, Inc., a Texas corporation (the
"Borrower"), the Secured Party, Bank of America, N.A., as syndication agent, and
the Lenders party thereto have entered into a Credit Agreement dated as of the
date hereof (as amended, modified, supplemented and/or extended from time to
time, the "Credit Agreement", capitalized terms used herein and not otherwise
defined shall have the same meanings herein as in the Credit Agreement),
pursuant to which the Lenders agreed, subject to the terms and conditions set
forth therein, to make revolving credit loans and term loans to the Borrower
(collectively, the "Loans"), such Loans to be evidenced by the Borrower's
Revolving Credit and Term Notes, payable to the order of the respective Lenders
(collectively, as amended, modified, supplemented and/or extended from time to
time the "Notes"); and

     WHEREAS, the Subordinated Creditors collectively own substantially all of
the capital stock and warrants of the Borrower and will thereby benefit from the
making of the Loans; and

     WHEREAS, the obligation of the Lenders to make the Loans is subject to the
conditions, among others, that the Subordinated Creditors shall execute and
deliver this Agreement and

<PAGE>

agree to the subordination provisions contained herein, and the Subordinated
Creditors hereby enter into this Agreement to induce the Lenders to enter into
the Credit Agreement and make the Loans;

     NOW, THEREFORE, in consideration of the willingness of the Lenders to enter
into the Credit Agreement and to agree, subject to the terms and conditions set
forth therein, to make the Loans to the Borrower pursuant thereto, and for other
good and valuable consideration, receipt and sufficiency of which is hereby
acknowledged by the Subordinated Creditors, it is hereby agreed as follows:

     1.   Representations by Subordinated Creditors.

          (a) Each Subordinated Creditor represents and warrants for itself to
the Senior Creditor that (i) all Indebtedness of the Borrower to such
Subordinated Creditor, if any, is set forth in Schedule 4.4 to the Credit
Agreement, (ii) such Indebtedness, if any, is not subject to any currently
effective assignment to or subordination in favor of any other Person and that
such Subordinated Creditor holds no security therefor, and (iii) the rights
associated with the Capital Stock established under the Borrower's Articles of
Incorporation, as amended through the date hereof, or warrants issued by the
Borrower to the Subordinated Creditors are the only rights or options held by
such Subordinated Creditor to acquire additional shares of any class or series
of Capital Stock of the Borrower.

          (b) Each Subordinated Creditor that is a business entity is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all necessary power and authority to enter
into this Agreement, to carry out its respective obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by such Subordinated Creditor, the performance by such
Subordinated Creditor of its respective obligations hereunder, and the
consummation by such Subordinated Creditor of the transactions contemplated
hereby have been duly authorized by all requisite limited partnership,
corporate, limited liability company or other analogous powers on the part of
such Subordinated Creditor that is a business entity. This Agreement has been
duly executed and delivered by such Subordinated Creditor, and (assuming due
authorization, execution and delivery by the Secured Party) this Agreement
constitutes the legal, valid and binding obligation of such Subordinated
Creditor, enforceable against such Subordinated Creditor in accordance with its
terms, except as such enforcement may be limited by applicable Debtor Relief
Laws generally and by general equity principles (whether enforcement is sought
at law or in equity).

          (c) Each Subordinated Creditor agrees and acknowledges that this
Agreement is a "subordination agreement" within the meaning of Section 510(a) of
the United States Bankruptcy Code, 11 U.S.C (S)510(a).

     2.   Subordination; Limitation on Sale Right During an Event of Default.

          (a) Subordination. Each Subordinated Creditor hereby subordinates (i)
all present and future Indebtedness of the Borrower to such Subordinated
Creditor and (ii) any and

                                       2

<PAGE>

all obligations or liabilities of the Borrower and any rights of such
Subordinated Creditor now existing or hereafter arising, absolute or contingent,
arising by contract, at law or otherwise, with respect to dividends payable on
the Capital Stock, the purchase, redemption or other acquisition by the Borrower
of such Capital Stock and any other amount payable to the holders of such
Capital Stock as such (collectively the "Subordinated Indebtedness"), to any and
all Indebtedness now or hereafter owing by the Borrower (including any interest
accruing after the commencement of any proceeding by or against the Borrower
under the federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, and any
other interest that would have accrued but for the commencement of such
proceeding, whether or not any such interest is allowed as a claim enforceable
against the Borrower in such proceeding) to the Senior Creditor (the "Senior
Indebtedness") to the extent and in the manner hereinafter set forth, and such
Subordinated Creditor agrees not to demand, accept or receive any payment in
respect of the Subordinated Indebtedness, including, without limitation, any
payment received through the exercise of any right of setoff, counterclaim or
cross claim, or any collateral therefor, or any right to cause the Borrower to
redeem, purchase, assume or otherwise retire the Subordinated Indebtedness, in
contravention hereof:

               (i) In the event of any insolvency or bankruptcy proceedings, or
          any receivership, liquidation, reorganization or other similar
          proceedings in connection therewith, relative to the Borrower or to
          its creditors, as such, or to its properties, or in the event of any
          proceedings for voluntary liquidation, dissolution or other winding up
          of the Borrower, whether or not involving insolvency or bankruptcy,
          then the Senior Creditor shall be entitled to receive payment in full
          in cash of all of the Senior Indebtedness before such Subordinated
          Creditor is entitled to receive any payment in respect of the
          Subordinated Indebtedness (except securities which are subordinate and
          junior in right of payment to all Senior Indebtedness then
          outstanding), and to that end the holder of the Senior Indebtedness
          shall be entitled to receive for application in payment thereof any
          payment or distribution of any kind or character, whether in cash or
          property or securities, which may be payable or deliverable in any
          such proceedings in respect of the Subordinated Indebtedness; and

               (ii) No amount shall be paid (except in securities which are
          subordinate and junior in right of payment to all Senior Indebtedness
          then outstanding, it being understood that all such securities shall
          constitute "Subordinated Indebtedness" hereunder), whether in cash,
          property, or securities or otherwise, and the Subordinated Creditors
          will not exercise any rights with respect to the Capital Stock, in
          respect of the Subordinated Indebtedness, except as expressly
          permitted under the Credit Agreement or the Pledge Agreement.

          (b) Limitation on Sale Rights During an Event of Default.
Notwithstanding any provision to the contrary in any agreement between the
Borrower and the Subordinated Creditors, in the event of the enforcement by the
Senior Creditor of its rights during the existence of an Event of Default that
shall be continuing after applicable grace and cure periods, the Subordinated
Creditors may not exercise any rights under any agreement between the Borrower

                                       3

<PAGE>

and the Subordinated Creditors involving rights to block a Change in Control of
the Borrower or a public offering of the Borrower's common stock.

     3. Limitations on Remedies. So long as any Senior Indebtedness is
outstanding, no Subordinated Creditor shall (i) as a holder of Subordinated
Indebtedness commence or join (unless the Senior Creditor shall also join) in
any involuntary proceeding against the Borrower or any of its Subsidiaries under
any bankruptcy, reorganization, readjustment of debt, arrangement of debt,
receivership, liquidation or insolvency law or statute of any federal or state
government, or (ii) commence any action or proceeding against the Borrower or
any of its Subsidiaries to enforce payment of all or any part of the
Subordinated Indebtedness. Notwithstanding the foregoing, nothing contained
herein shall prohibit or otherwise restrict the Borrower or any of its
Subsidiaries from filing any voluntary proceeding under any bankruptcy,
reorganization, readjustment of debt, arrangement of debt, receivership,
liquidation or insolvency law or statute of any federal or state government.

     4. Delivery of Payments. If, prior to the satisfaction of the Senior
Indebtedness in full in cash and the termination of the obligation of the Senior
Creditor to make Loans to the Borrower under the Credit Agreement and the
documents related thereto, any of the Subordinated Creditors receives any
payment with respect to any of the Subordinated Indebtedness (except payment, if
any, expressly permitted under the Credit Agreement), or any security for or on
account of the Subordinated Indebtedness, such Subordinated Creditor shall
forthwith deliver such payment or security to the Secured Party for the benefit
of the Senior Creditor, in precisely the form received, except for such
Subordinated Creditor's endorsement when necessary, to be applied in payment of
(or if no Default or Event of Default shall then be continuing, to be held by
the Senior Creditor as security for) the Senior Indebtedness and until so
delivered, such payment or security shall be held in trust by such Subordinated
Creditor as the property of the Senior Creditor. In the event of the failure of
such Subordinated Creditor to endorse any instrument for the payment of money so
received by such Subordinated Creditor, the Secured Party for the benefit of the
Senior Creditor is irrevocably appointed attorney for such Subordinated Creditor
with full power to make such endorsement and with full power of substitution.

     5. Further Assurances. In order to carry out the terms and intent of this
Agreement more effectively, the Subordinated Creditors will do all acts and
execute all further documents and instruments necessary or convenient to
preserve for the Senior Creditor the benefits of this Agreement.

     6. Waivers, etc. No action which the Senior Creditor, or the Borrower, may
take or refrain from taking with respect to any Senior Indebtedness, or any note
or notes representing the same, or any collateral therefor, including any waiver
or release thereof or of any agreement or agreements (including guaranties) in
connection therewith, shall affect this Agreement or the obligations of the
Subordinated Creditors hereunder. No waiver shall be deemed to be made by the
Senior Creditor of any of its rights hereunder unless the same shall be in
writing and then only with respect to the specific instance involved, and shall
in no way impair or offset the rights of the Senior Creditor or the obligations
of the Subordinated Creditors in any other respect or at any other time.

                                       4

<PAGE>

     7. Transfer. The Subordinated Creditors may transfer, sell or otherwise
dispose of all or a portion of the Subordinated Indebtedness, but only on the
condition that a transferee of the Subordinated Indebtedness first becomes a
party hereto; provided, however, that in the event that there shall exist an
Event of Default under the Credit Agreement on account of the Borrower's failure
to pay principal or interest on any Note when the same is due and payable
(whether at maturity, upon acceleration or otherwise) or on account of the
Borrower's failure to perform or comply with any covenant or term contained in
Sections 8.16 or 8.17 of the Credit Agreement, and such Event of Default shall
be continuing after applicable grace and cure periods, the Subordinated
Creditors may not transfer any of the Subordinated Indebtedness without the
prior written consent of the Lenders, which consent shall not be unreasonably
withheld or delayed.

     8. Miscellaneous. This Agreement shall be binding upon the Subordinated
Creditors and the Borrower and their respective heirs, legal representatives,
successors and assigns and shall inure to the benefit of the Senior Creditor and
its legal representatives, successors and assigns (including without limitation
any transferee of any Senior Indebtedness). This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of the counterparts shall together constitute one and the same
instrument.

     9. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement,
including the validity hereof and the rights and obligations of the parties
hereunder, shall be governed by, and construed in accordance with, the internal
laws (as opposed to the conflicts of law provisions, but including sections
5-1401 and 5-1402 of the general obligations law of the State of New York) and
decisions of the State of New York. Each party hereto hereby irrevocably submits
to the nonexclusive jurisdiction of any New York or Federal court sitting in the
City of New York, New York over any suit, action or proceeding arising out of or
relating to this Agreement and waives, to the fullest extent permitted or not
prohibited by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.

                                       5

<PAGE>

     10. Amendments to Senior Indebtedness. Notwithstanding anything contained
in this Agreement to the contrary, the Senior Creditor shall not, without the
prior written consent of the Subordinated Creditors, (a) increase the stated
principal amount of the Senior Indebtedness to an amount in excess of the
Aggregate Commitment from time to time in effect under the Credit Agreement (up
to $470,000,000) plus $47,000,000, or (b) extend the Revolving Loan Maturity
Date or the Term Loan Maturity Date or any Incremental Term Loan Maturity Date
more than sixty (60) days.

                            [Signature page follows]

                                       6

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first above written.

                                        AUSTIN VENTURES III-A, L.P.

                                        By: AV Partners III, L.P.,
                                            General Partner

                                        By: /s/ Blaine F. Wesner
                                            ------------------------------------
                                            Blaine F. Wesner
                                            Authorized Signatory

                                        AUSTIN VENTURES III-B, L.P.

                                        By: AV Partners III, L.P.,

                                            General Partner

                                        By: /s/ Blaine F. Wesner
                                            ------------------------------------
                                            Blaine F. Wesner
                                            Authorized Signatory

                                        AUSTIN VENTURES V, L.P.

                                        By: AV Partners V, L.P.
                                            Its General Partner

                                        By: /s/ Blaine F. Wesner
                                            ------------------------------------
                                            Blaine F. Wesner
                                            General Partner

                                        AUSTIN VENTURES V AFFILIATES FUND, L.P.

                                        By: AV Partners V, L.P.
                                            Its General Partner

                                        By: /s/ Blaine F. Wesner
                                            ------------------------------------
                                            Blaine F. Wesner
                                            General Partner

<PAGE>

                                        CAPITAL RESOURCE LENDERS II, L.P.

                                        By: Capital Resource Partners II, L.P.
                                            Its General Partner

                                        By: /s/ Stephen M. Jenks
                                            ------------------------------------
                                            Name: Stephen M. Jenks
                                            Title: Class B Limited Partner

                                        CAPITAL RESOURCE PARTNERS II, L.P.

                                        By:
                                            ------------------------------------
                                            Its General Partner

                                        By: /s/ Stephen M. Jenks
                                            ------------------------------------
                                            Name: Stephen M. Jenks
                                            Title: Class B Limited Partner

                                        WINDWARD CAPITAL PARTNERS II, L.P.

                                        By: Windward Capital GP, LLC,
                                            Its General Partner

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

                                        WINDWARD CAPITAL L.P. II, LLC

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

<PAGE>

                                        CAPITAL RESOURCE LENDERS II, L.P.

                                        By: Capital Resource Partners II, L.P.
                                            Its General Partner

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

                                        CAPITAL RESOURCE PARTNERS II, L.P.

                                        By:
                                            ------------------------------------
                                            Its General Partner

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

                                        WINDWARD CAPITAL PARTNERS II, L.P.

                                        By: Windward Capital GP, LLC,
                                            Its General Partner

                                        By: /s/ Peter Scott Macdonald
                                            ------------------------------------
                                            Name: Peter Scott Macdonald
                                            Title: Managing Member

                                        WINDWARD CAPITAL L.P. II, LLC

                                        By: /s/ Peter Scott Macdonald
                                            ------------------------------------
                                            Name: Peter Scott Macdonald
                                            Title: Managing Member

<PAGE>

                                        ABRY PARTNERS IV, L.P.

                                        By: ABRY Capital Partners, L.P.,
                                            its general partner

                                        By: /s/ Jay Grossman
                                            ------------------------------------
                                            Name: Jay Grossman
                                            Title:

                                        ABRY INVESTMENT PARTNERSHIP, L.P.

                                        By: ABRY Investment GP, LLC,
                                            its general partner

                                        By: /s/ Jay Grossman
                                            ------------------------------------
                                            Name: Jay Grossman
                                            Title:

                                        HULL FAMILY LIMITED PARTNERSHIP

                                        By: James R. Hull Management Trust,
                                            Its General Partner

                                        By:
                                            ------------------------------------
                                            James R. Hull, Trustee

                                        ----------------------------------------
                                        James R. Hull, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

                                        ----------------------------------------
                                        Robert Sherman, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

<PAGE>

                                        ABRY PARTNERS IV, L.P.

                                        By: ABRY Capital Partners, L.P.,
                                            its general partner

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

                                        ABRY INVESTMENT PARTNERSHIP, L.P.

                                        By: ABRY Investment GP, LLC,
                                            its general partner

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

                                        HULL FAMILY LIMITED PARTNERSHIP

                                        By: James R. Hull Management Trust,
                                            Its General Partner

                                        By: /s/ James R. Hull
                                            ------------------------------------
                                            James R. Hull, Trustee

                                        /s/ James R. Hull
                                        ----------------------------------------
                                        James R. Hull, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

                                        /s/ Robert Sherman
                                        ----------------------------------------
                                        Robert Sherman, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

<PAGE>

                                        /s/ Michael Meyers
                                        ----------------------------------------
                                        Michael Meyers, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

                                        /s/ Michael Gregory
                                        ----------------------------------------
                                        Michael Gregory, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

                                        /s/ Stephen Hedrick
                                        ----------------------------------------
                                        Stephen Hedrick, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

                                        THE NORTHWESTERN MUTUAL LIFE
                                        INSURANCE COMPANY

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

<PAGE>

                                        ----------------------------------------
                                        Michael Meyers, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

                                        ----------------------------------------
                                        Michael Gregory, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

                                        ----------------------------------------
                                        Stephen Hedrick, individually
                                        c/o Monitronics International, Inc.
                                        12801 Stemmons Freeway, Suite 821
                                        Dallas, Texas  75234

                                        THE NORTHWESTERN MUTUAL LIFE
                                        INSURANCE COMPANY

                                        By: /s/ Mark E. Kishler
                                            ------------------------------------
                                            Name: Mark E. Kishler
                                            Title: Its Authorized Representative

<PAGE>

                                        FLEET NATIONAL BANK,
                                        as Secured Party

                                        By: /s/ John F. Lynch
                                            ------------------------------------
                                            Name: John F. Lynch
                                            Title: Senior Vice President

ACKNOWLEDGMENT:

     The Borrower hereby acknowledges notice of the within and foregoing
Agreement and agrees to be bound by all of the terms, provisions and conditions
hereof.

MONITRONICS INTERNATIONAL, INC.

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

<PAGE>

                                        FLEET NATIONAL BANK,
                                        as Secured Party

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

ACKNOWLEDGMENT:

     The Borrower hereby acknowledges notice of the within and foregoing
Agreement and agrees to be bound by all of the terms, provisions and conditions
hereof.

MONITRONICS INTERNATIONAL, INC.

By: /s/ Michael Meyers
    -------------------------------
    Name: Michael Meyers
    Title: Vice President & CFO<PAGE>

                                                                    Exhibit 10.6

                    INTERCREDITOR AND SUBORDINATION AGREEMENT

     This Intercreditor and Subordination Agreement (this "Agreement") is dated
as of August 25, 2003 by and among Monitronics International, Inc., a Texas
corporation (the "Company"), The Northwestern Mutual Life Insurance Company
("Northwestern") and The Bank of New York Trust Company of Florida, N.A., as
trustee ("Trustee") for holders of the Company's 11.75% Senior Subordinated
Notes due 2010 (the "Senior Subordinated Notes").

                                    RECITALS

     WHEREAS, the Company and Northwestern are parties to that certain
Subordinated Note and Warrant Purchase Agreement dated as of January 18, 2002
(the "Original Junior Subordinated Purchase Agreement") pursuant to which the
Company issued to Northwestern (i) the Company's 13.5% Subordinated Notes due
2009 (collectively, as amended, modified, supplemented and/or extended from time
to time, the "Junior Subordinated Notes"), and (ii) warrants to purchase an
aggregate of up to 1,133,328 shares of Class A Common Stock, par value $.01 per
share, of the Company (collectively, as amended, modified, supplemented and/or
extended from time to time, the "Junior Warrants"); and

     WHEREAS, on the date hereof, the Company and Northwestern are entering into
a first amendment to the Original Junior Subordinated Purchase Agreement (the
"Amendment"; the Amendment and the Original Junior Subordinated Purchase
Agreement being referred to herein collectively as the "Junior Subordinated
Purchase Agreement"), and the Company is redeeming a portion of the principal
amount of the Original Junior Subordinated Notes and paying such amounts as
required under the Junior Subordinated Purchase Agreement to be paid in
connection with such redemption; and

     WHEREAS, on the date hereof, the Company is issuing $160,000,000 aggregate
principal amount of its Senior Subordinated Notes in an offering exempt from the
registration requirements of the U.S. Securities Act of 1933 and Northwestern
will be one of the purchasers of the Senior Subordinated Notes in such offering;
and

     WHEREAS, the execution and delivery of this Agreement and the subordination
of the Subordinate Liabilities to the Senior Obligations, to the extent and
manner hereinafter set forth, is a condition, among others, to the execution and
delivery of the Senior Subordinated Debt Agreements (in each case as hereinafter
defined);

     NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein, the parties hereto agree as follows:

                                    AGREEMENT

Section 1. Definitions.

     As used in this Agreement, the terms defined above shall have their
respective meanings set forth above and the following terms shall have the
following meanings:

<PAGE>

     1.1 "Credit Agreement" shall mean the credit agreement dated as of the date
hereof among the Company, Fleet National Bank, as administrative agent (the
"Administrative Agent"), Bank of America, N.A., as syndication agent, and the
lenders (the "Senior Lenders") referred to therein (as amended, modified,
supplemented and/or extended from time to time).

     1.2 "Indenture" shall mean the indenture, dated as of August 25, 2003
between the Company and the Trustee, under which the Senior Subordinated Notes
are issued (as amended, modified, supplemented and/or extended from time to
time).

     1.3 "Junior Subordinated Creditors" shall mean Northwestern, together with
any other holder of any Subordinate Liabilities.

     1.4 "Junior Subordinated Debt Documents" shall mean, collectively, the
Junior Subordinated Purchase Agreement and the Junior Subordinated Notes.

     1.5 "Senior Event of Default" shall mean the occurrence of any Default or
Event of Default under and as from time to time defined in the Senior
Subordinated Debt Agreements.

     1.6 "Senior Obligations" shall mean any and all indebtedness of the Company
to the Senior Subordinated Creditors for principal, interest (including, without
limitation, interest and other amounts that would accrue and become due but for
the filing of a petition in bankruptcy or the operation of the automatic stay
under Section 362(a) of Title 11 of the United States Code, as amended, or
similar laws, as now or hereafter in effect, whether or not any such interest or
other amounts is allowed as a claim enforceable against the Company in such
proceeding), fees, indemnities, expenses and costs (including costs of
collection, and including fees and expenses accrued during any bankruptcy
proceeding, whether or not such fees and expenses are allowed as a claim
enforceable against the Company in such proceeding) and all other amounts,
including amounts advanced to protect the liens and security interests (and/or
the collateral) of the Senior Subordinated Creditors, in each case as provided
under the Senior Subordinated Debt Agreements and/or any documents contemplated
thereby, direct or indirect, contingent or noncontingent, secured or unsecured,
now existing or hereafter arising or incurred or now or hereafter due and owing
to the Senior Subordinated Creditors; provided, that the principal amount
(exclusive of interest (including, without limitation, interest and other
amounts that would accrue and become due but for the filing of a petition in
bankruptcy or the operation of the automatic stay under Section 362(a) of Title
11 of the United States Code, as amended, or similar laws, as now or hereafter
in effect, whether or not any such interest or other amounts is allowed as a
claim enforceable against the Company in such proceeding)) of such indebtedness
shall not exceed an amount equal to One Hundred and Sixty Million Dollars
($160,000,000) minus the aggregate principal amount of all prepayments and other
repayments of the Senior Subordinated Notes, without the prior written consent
of the Junior Subordinated Creditors in accordance with Section 6.2 hereof.

     1.7 "Senior Subordinated Creditors" shall mean the Trustee on behalf of
holders of Senior Obligations or any holder of Senior Obligations.

     1.8 "Senior Subordinated Debt Agreements" shall mean, collectively, the
Indenture and the Senior Subordinated Notes issued thereunder.

                                        2

<PAGE>

     1.9 "Subordinate Liabilities" shall mean all indebtedness of the Company to
the Junior Subordinated Creditors for (a) principal of and interest on the
Junior Subordinated Notes, together with any prepayment fees or premiums under
the Junior Subordinated Notes, including without limitation any Make-Whole
Amount (as such term is defined in the Junior Subordinated Purchase Agreement)
and (b) any and all other indebtedness, liabilities or obligations of any kind
or nature of the Company, direct or indirect, contingent or non-contingent, now
existing or hereafter arising or incurred or now or hereafter due and owing to
any Subordinated Creditor under or with respect to the Junior Subordinated Notes
and/or the Junior Subordinated Purchase Agreement, including without limitation
fees, expenses, costs, and post-petition interest in bankruptcy.

Section 2. Subordination.

     2.1 Subordination.

          (a) The rights of the holders of Senior Obligations under this
Agreement are junior, subordinate and subject to the rights of the
Administrative Agent and the Senior Lenders under Article Ten of the Indenture.
Without limiting the foregoing, any right of the holders of the Senior
Obligations hereunder to receive funds (or to take certain actions under Section
2.2(b) hereof) are subject to the prior right of the Administrative Agent and
the Senior Lenders to receive such funds (and/or to take such actions) under
Article Ten of the Indenture.

          (b) So long as any Senior Obligations are outstanding, each Junior
Subordinated Creditor agrees that the Subordinate Liabilities are and shall at
all times hereafter be expressly subordinate and junior in right of payment and
exercise of remedies to all Senior Obligations in the manner and to the extent
set forth in this Section 2, including but not limited to the occurrence of
redemptions or any other event that would require the Company to accelerate
payment in respect of the Subordinate Liabilities. Without limiting the
foregoing, any lien on, security interest in, or mortgage or pledge of or into
any of the assets of the Company in favor of or for the benefit of any Junior
Subordinated Creditor, whether now existing or arising in the future, is hereby
expressly made subordinate and junior in priority of payment and right of
enforcement to any liens, security interests, mortgages or pledges of or into
any of the assets of the Company, both now existing and arising in the future,
securing any of the Senior Obligations.

     2.2 Bankruptcy; Insolvency, etc.

          (a) In the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceedings relative to the Company
or to its assets, or in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Company, whether or not involving
insolvency or bankruptcy, so long as any Senior Obligations are outstanding, the
holders of Senior Obligations shall be entitled in any such proceedings to
receive payment in full in cash of all Senior Obligations before the Junior
Subordinated Creditors are entitled in such proceeding to receive any payment on
account of the Subordinate Liabilities (except for payment in securities which
are subordinate and junior in right of payment to all Senior Obligations then
outstanding), and to that end in any such proceedings, so long as any Senior
Obligations remain outstanding, any payment or distribution of any kind or
character, whether in cash or in other property, to which the Junior
Subordinated Creditors would be

                                        3

<PAGE>

entitled but for the provisions hereof (except for payment in securities which
are subordinate and junior in right of payment to all Senior Obligations then
outstanding) shall be delivered to the holders of Senior Obligations to the
extent necessary to make payment in full in cash of all Senior Obligations
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of Senior Obligations in respect thereof.

          (b) So long as any Senior Obligations remain outstanding, the holders
of Senior Obligations (or their representatives) are authorized and empowered,
in any proceedings described in Section 2.2(a), in their own names or in the
names of the Junior Subordinated Creditors, to (i) file claims, proofs of claim
and other instruments of similar character reasonably necessary to enforce the
obligations of the Company in respect of the Subordinate Liabilities in the
event the Junior Subordinated Creditors fail to do so within 15 days of the due
date pertaining thereto; and (ii) receive and apply to the Senior Obligations
every payment or distribution of every kind or character to which such Junior
Subordinated Creditors are entitled in respect thereof and give acquittance
therefor. The Junior Subordinated Creditors will execute and deliver such other
documents and instruments as the holders of the Senior Obligations, or any agent
or representative designated by them may reasonably request in order to give
effect to the foregoing terms of this Section 2.2(b). Notwithstanding the
foregoing, neither this Section 2.2 nor any other provision of this Agreement,
the Junior Subordinated Debt Documents or the Company's charter documents shall
be construed to give any holder of Senior Obligations any right to vote any
Junior Subordinated Note or any shares of common stock of the Company
represented by the Junior Warrants or issued pursuant to the exercise of the
Junior Warrants or any claim thereunder or with respect thereto, or any portion
of any such notes, shares or claims, whether in connection with any resolution,
arrangements, plan of reorganization, compromise, settlement, election of
trustees or otherwise.

     2.3 Payment Block.

          (a) If any default in the payment (a "Payment Default") on account of
any principal of or interest on the Senior Subordinated Notes (whether at
maturity or at a date fixed for prepayment or by declaration, acceleration or
otherwise) occurs or exists, then (i) the rights of any Junior Subordinated
Creditor to receive any payments or other distributions with respect to the
Subordinate Liabilities shall be suspended from and after the date that such
Junior Subordinated Creditor receives from the Senior Subordinated Creditors a
notice (a "Stop Payment Notice") of such Payment Default, (ii) immediately
following any Payment Default, and without the necessity of delivery of a Stop
Payment Notice, no payment or distribution of any character, whether in cash,
securities or other property (except for payment in securities which are
subordinate and junior in right of payment to all Senior Obligations then
outstanding) shall be made by the Company on account of the Subordinate
Liabilities or in respect of the redemption, retirement, purchase or other
acquisition thereof, and (iii) following the receipt by any Junior Subordinated
Creditor of a Stop Payment Notice, no payment or distribution of any character,
whether in cash, securities or other property on account of the Subordinate
Liabilities or in respect of the redemption, retirement, purchase or other
acquisition thereof (except securities which are subordinate and junior in right
of payment to all Senior Obligations then outstanding) shall be received or
accepted by such Junior Subordinated Creditor unless and until such Payment
Default shall have been cured or waived.

                                        4

<PAGE>

          (b) The Company may pay and each Junior Subordinated Creditor may take
and retain any payment on the Subordinate Liabilities before receipt by the
Junior Subordinated Creditors of a Stop Payment Notice; provided, however, that
in the event that Section 2.2 becomes applicable, then the provisions of Section
2.2 shall become effective without the necessity of delivery of a Stop Payment
Notice. Subject to the proviso in the immediately preceding sentence, the
Company shall be entitled to resume the making of any payments otherwise
prohibited under this Section 2.3, including any payments previously suspended,
at such time as the Payment Default giving rise to such prohibition under
Section 2.3(a) shall have been cured or waived in writing. Notwithstanding the
foregoing, the Company shall not make, and the Junior Subordinated Creditors
shall not be entitled to take and retain, any optional prepayments in respect of
Subordinate Liabilities without the consent of the Senior Subordinated
Creditors. Further, the Company shall not make, and the Junior Subordinated
Creditors shall not be entitled to take and retain, any mandatory prepayments in
respect of the Subordinate Liabilities upon a Change of Control (as such term is
defined in the Junior Subordinated Purchase Agreement) unless the Company has
satisfied all mandatory prepayment obligations in respect of the Senior
Obligations resulting from such Change of Control under the Senior Subordinated
Debt Agreements; provided, however, that the foregoing provisions of this
sentence shall not apply if the holders of Senior Obligations waive any payment
due upon any Change of Control.

          (c) Notwithstanding anything to the contrary herein, the Senior
Subordinated Creditors shall not be required to deliver Stop Payment Notices to
Transferees (as hereinafter defined) who have not complied with Section 6.1
hereof.

     2.4 Reserved.

     2.5 Turn-Over of Payments Received by Junior Subordinated Creditors.

          (a) In the event that (i) the Company shall make or any Junior
Subordinated Creditor shall receive any payment on the Subordinate Liabilities
which the holders thereof are not permitted to receive and retain pursuant to
Sections 2.1, 2.2 or 2.3 hereof, such payment shall be held in trust by the
Junior Subordinated Creditor receiving same, for the benefit of the Senior
Subordinated Creditors, and shall be paid over immediately (without necessity of
demand) to the Senior Subordinated Creditors, for the benefit of the holders of
the Senior Obligations, or as their respective interests may appear, for
application in accordance with the Senior Subordinated Debt Agreements to the
payment of all Senior Obligations remaining due and payable until the same shall
have been paid in full in cash, after giving effect to any concurrent payment or
distribution to the holders of such Senior Obligations.

          (b) The proceeds of any sale or other disposition (other than to the
Company, or any Subsidiary or any Affiliate of the Company which has liability
for the Senior Subordinated Notes) of Subordinate Liabilities in accordance with
Section 6.1 hereof, which may be received by a holder thereof, shall not be
treated as a payment to which the holders of Senior Obligations are entitled
under this Agreement.

     2.6 Obligations Absolute. The provisions of this Agreement are solely for
the purposes of defining the relative rights of the holders of Senior
Obligations on the one hand and

                                        5

<PAGE>

the holders of Subordinate Liabilities on the other hand, with respect to the
enforcement of rights and remedies and priority of payment of the various
obligations of the Company to each of them. Nothing herein shall impair, as
between the Company and the holder of any Subordinate Liabilities, the
obligations of the Company, which are unconditional and absolute, to pay to the
holder thereof the principal and interest thereon and any other liabilities
encompassed in the Subordinate Liabilities, all in accordance with their
respective terms, nor shall anything in this Agreement prevent the occurrence of
any event of default under the Junior Subordinated Debt Documents, or prevent
any Junior Subordinated Creditor from exercising all remedies otherwise
permitted by the Junior Subordinated Debt Documents, applicable law or
otherwise, subject to (a) the rights, if any, of the holders of Senior
Obligations under Section 2.5 hereof to receive cash or property otherwise
payable or deliverable to the Junior Subordinated Creditors, and (b) the
restrictions on the Junior Subordinated Creditors in favor of the holders of
Senior Obligations set forth in Section 2 hereof.

     2.7 Subrogation. Upon and subject to the payment in full in cash of the
Senior Obligations, the Junior Subordinated Creditors shall be subrogated to the
rights of the holders of Senior Obligations to receive payments or distributions
of assets of the Company applicable to the Senior Obligations until the
Subordinate Liabilities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of Senior Obligations
to which the Junior Subordinated Creditors would be entitled except for the
provisions of this Agreement shall, as between the Company and its creditors
other than the holders of Senior Obligations and the Junior Subordinated
Creditors, be deemed to be a payment on account of the Senior Obligations. Each
Junior Subordinated Creditor hereby waives any claim against the Senior
Subordinated Creditors based on impairment of the Junior Subordinated Creditor's
rights of subrogation against the Company due to the action or inaction of the
Senior Subordinated Creditors or otherwise.

     2.8 Subordination Not Affected. Without the necessity of any reservation of
rights against or any notice to or further assent by the Junior Subordinated
Creditors, (i) any demand for payment of any Senior Obligations made by any
holder of Senior Obligations may be rescinded in whole or in part by such
holder, (ii) the holders of Senior Obligations may exercise or refrain from
exercising any rights and/or remedies against the Company and others, if any,
liable under the Senior Obligations, and (iii) the Senior Obligations (including
without limitation, the Senior Subordinated Debt Agreements and the Senior
Subordinated Notes), or any collateral security therefor or right of any nature
with respect thereto, may be amended, extended, modified, continued,
accelerated, compromised, waived, surrendered or released by the holders of the
Senior Obligations, and any agreement or instrument evidencing, securing or
otherwise relating to the Senior Obligations may be amended, extended, modified,
continued, accelerated, compromised, waived, surrendered or released by the
holder thereof, all without impairing, abridging, releasing or affecting in any
manner the subordination of the Subordinate Liabilities to the Senior
Obligations provided for herein; provided, that without the prior written
consent of the Junior Subordinated Creditors (including, for purposes of this
Section, only Transferees who have complied with Section 6.1 hereof), the Senior
Subordinated Creditors shall not amend or otherwise modify any provision of the
Senior Subordinated Debt Agreements to (i) expressly prohibit the Company from
making payments in respect of the Subordinate Liabilities that, in each case,
are permitted to be made under this Agreement; (ii) expressly prohibit the
Company from making any amendments or modifications to the documents relating to
the Subordinate

                                        6

<PAGE>

Liabilities that are not prohibited hereby; (iii) increase the stated applicable
pre-default or post-default interest rate margin by more than 2.00% per annum
above the respective stated margin set forth in the Senior Subordinated Debt
Agreements as in effect on the date hereof; or (iv) shorten the maturity of the
Senior Subordinated Notes as in effect on the date hereof, except to the extent
that the shortening of such maturity results solely from a change in the
maturity date under the Senior Subordinated Debt Agreements. Without limiting
the foregoing, each Junior Subordinated Creditor waives any and all notice of
the creation, amendment, extension, acceleration, compromise, continuation,
waiver, surrender, release or modification of any nature of any Senior
Obligations, and notice of or proof of reliance by the holders of Senior
Obligations upon the subordination provided for herein. The Senior Obligations
shall conclusively be deemed to have been created, contracted or incurred in
reliance upon the provisions of this Agreement.

     2.9 Right To Retain Payment Received. Any payment in respect of the
Subordinate Liabilities which is not required to be held in trust for the
benefit of, or paid over to, the holders of Senior Obligations pursuant to
Section 2.3 or Section 2.5 hereof, and which is received by the holders of the
Subordinate Liabilities shall become the sole and absolute property of the
holders of Subordinate Liabilities and shall not, by virtue of the provisions of
this Agreement or otherwise, be subject to any payment over or any distribution
to or claim by any holders of Senior Obligations or any other person.

Section 3. Notices.

     3.1 By the Senior Subordinated Creditors to the Junior Subordinated
Creditors. The Trustee shall endeavor to provide the Junior Subordinated
Creditors with notice of any Senior Event of Default by the Company under the
Senior Subordinated Debt Agreements simultaneously with giving notice to the
Company, provided, however, that the Senior Subordinated Creditors shall have no
liability to the Junior Subordinated Creditors for the Trustee's failure to
provide the Junior Subordinated Creditors with any such notice(s), and further
provided, that the failure to give such notice(s) shall not alter, amend, or
affect the subordination provisions of this Agreement.

     3.2 By the Junior Subordinated Creditors to the Senior Subordinated
Creditors. Each Junior Subordinated Creditor shall endeavor to provide the
Trustee with notice of any default under the Junior Subordinated Debt Documents
to which it is a party simultaneously with giving notice to the Company,
provided, however, that no Junior Subordinated Creditor shall have any liability
to the Senior Subordinated Creditors for such Junior Subordinated Creditor's
failure to provide any notice required under this Section 3.2.

     3.3 By the Company to the Senior Subordinated Creditors. The Company shall
provide the Senior Subordinated Creditors with copies of all notices of any
default received by it from any Junior Subordinated Creditor immediately upon
its receipt thereof.

     3.4 By the Company to the Junior Subordinated Creditors. The Company shall
provide the Junior Subordinated Creditors with copies of all notices of any
default received by it from any Senior Subordinated Creditors immediately upon
its receipt thereof.

                                        7

<PAGE>

Section 4. Representations and Warranties.

     4.1 By the Company. The Company represents and warrants as follows:

          (a) Junior Subordinated Debt Documents. Attached hereto as Exhibit A
are true, correct and complete copies of the Junior Subordinated Debt Documents.

          (b) No Assignment or Participation in Junior Subordinated Notes. The
Junior Subordinated Creditors are the registered owners of the Junior
Subordinated Notes and the Junior Warrants.

          (c) Authorization and Enforceability. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary
corporate action on the part of the Company, and this Agreement constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.

          (d) Subordinated Notes Legended. The Company has caused the Junior
Subordinated Notes and the Junior Warrants issued to and held by the Junior
Subordinated Creditors to be affixed with a legend referencing this Agreement
and the subordination provisions hereof.

     4.2 By the Junior Subordinated Creditors.

          (a) Each Junior Subordinated Creditor hereby represents and warrants
that it has not sold (in whole or in part) or granted any assignments of or
participations in the Junior Subordinated Notes and the Junior Warrants; nor has
such Junior Subordinated Creditor granted or permitted to exist any lien or
encumbrance of any nature on such notes and warrants.

          (b) Each Junior Subordinated Creditor hereby acknowledges that this
Agreement is a "subordination agreement" within the meaning of Section 501(a) of
the United States Bankruptcy Code, 11 U.S.C. (S)510(a).

Section 5. Covenants of the Subordinated Creditors.

     5.1 Amendment of Junior Subordinated Purchase Agreement and Junior
Subordinated Notes. Neither the Company nor the Junior Subordinated Creditors
will, without the prior written consent of the Trustee acting on behalf of the
Senior Subordinated Creditors, amend or consent to the amendment of the Junior
Subordinated Debt Documents if such amendment would (i) increase the principal
amount payable by the Company in respect of the Junior Subordinated Notes
(except increases in principal amount or interest rate of the Junior
Subordinated Notes as a result of payment-in-kind interest), and/or the amount
of the Subordinate Liabilities; (ii) expressly prohibit the Company from making
any amendments or modifications to the documents relating to the Senior
Obligations that are not prohibited hereby; or (iii) increase the stated
applicable pre-default or post-default interest rate margin by more than 2.00%
per annum above the respective stated margin set forth in the Junior
Subordinated Debt Documents as in effect on the date hereof; or (iv) shorten the
amortization period of the Junior Subordinated Notes as in effect on the date
hereof.

                                        8

<PAGE>

     5.2 Validity and Enforceability of Senior Subordinated Debt Agreements. The
Junior Subordinated Creditors will not in any proceeding, whether in connection
with a bankruptcy or insolvency or other event described in Section 2.2 or
otherwise, (i) challenge the validity or enforceability of the Senior
Subordinated Debt Agreements, or any provisions thereof or (ii) take any other
action that could be reasonably expected to interfere with the commercially
reasonable exercise of the Senior Subordinated Creditors' rights with respect to
the Senior Obligations.

Section 6. Miscellaneous.

     6.1 Transfers. No Junior Subordinated Creditor shall sell, assign or
otherwise transfer, in whole or in part, any Subordinate Liabilities or any
interest therein, to any other person or entity (a "Transferee") unless such
Transferee first signs an acknowledgment in the form of Exhibit A hereto and
delivers a signed counterpart hereof to each other party hereto, whereby each
such Transferee shall become a party hereto and expressly acknowledges the
subordination provided for herein and agrees to be bound by all of the terms
hereof. The Company hereby agrees that any such transfer shall not affect its
obligations under this Agreement and that it will promptly execute and deliver
any such counterpart when requested to do so.

     6.2 Modifications. No amendment, modification, termination or waiver of any
provision of this Agreement, or consent to any departure therefrom, shall in any
event be effective without the written concurrence of the Trustee and the
holders of at least a majority of the Junior Subordinated Notes then
outstanding.

     6.3 Termination; Reinstatement. This Agreement shall remain in full force
and effect until the payment in full in cash of all Senior Obligations,
provided, that this Agreement shall continue to be effective or be reinstated
(as the case may be) if at any time payment of any of the Senior Obligations is
refunded or rescinded or must otherwise be returned by the Senior Subordinated
Creditors upon a bankruptcy, arrangement, reorganization or similar proceeding
for relief of debtors under state or federal law or otherwise, all as though
such payment had not been made.

     6.4 Notices. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and shall be deemed to have been given and received the (i) day of sending if
delivered by hand delivery, telegram, telecopy or telex, receipt confirmed, (ii)
one (1) day after being sent, if sent by Federal Express, Express Mail, or other
similar nationally known overnight delivery service, or (iii) three (3) days
after being deposited in the mails, registered or certified with postage
prepaid, and properly addressed. For the purposes hereof, the address of each
party hereto is as set forth under its name on the signature pages hereof, or
such other address as such party may specify by written notice to each other
party.

     6.5 Third Party Rights. This Agreement is solely for the benefit of the
Senior Subordinated Creditors, the Junior Subordinated Creditors and the
Company, and no other person shall have any right, benefit, priority or other
interest under, or because of the existence of, this Agreement.

                                        9

<PAGE>

     6.6 Counterparts. This Agreement and any amendments, waivers, consents, or
supplements may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute one and the same instrument.

     6.7 Governing Law. This Agreement shall be governed by the laws of the
State of New York. The Company and each of the Junior Subordinated Creditors, to
the extent that they may lawfully do so, hereby consent to service of process,
and to be sued, in the State of New York and consent to the jurisdiction of the
federal courts of the United States of America or the courts of the State of New
York, in each case located in The City of New York, as well as to the
jurisdiction of all courts to which an appeal may be taken from such courts, for
the purpose of any suit, action or other proceeding arising out of this
Agreement or any of their respective obligations hereunder or with respect to
the transactions contemplated hereby, and expressly waive any and all objections
they may have as to venue in any such courts. The Company and the Junior
Subordinated Creditors further agree that a summons and complaint commencing an
action or proceeding in any of such courts shall be properly served and shall
confer personal jurisdiction if served personally or by certified mail to it at
its address set forth below or as otherwise provided under the laws of the State
of New York. The Company and the Junior Subordinated Creditors irrevocably waive
all right to a trial by jury in any suit, action or other proceeding instituted
by or against the Company and/or the Junior Subordinated Creditors in respect of
their respective obligations hereunder or the transactions contemplated hereby.

     6.8 Descriptive Headings. The descriptive headings of this Agreement are
for convenience only and shall have no legal effect.

                            [Signature pages follow]

                                       10

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as an
instrument under seal as of the date first above written.

                                  SUBORDINATED CREDITOR:

                                  THE NORTHWESTERN MUTUAL
                                  LIFE INSURANCE COMPANY

                                  By: /s/ Mark E. Kishler
                                      ------------------------------------------
                                  Name: Mark E. Kishler
                                  Title: Authorized Representative

                                  The Northwestern Mutual Life Insurance Company
                                  720 East Wisconsin Avenue
                                  Milwaukee, WI 53202
                                  Attention: Securities Department
                                  Fax: (414) 665-7124

                                  with a copy to:

                                  The Northwestern Mutual Life Insurance Company
                                  720 East Wisconsin Avenue
                                  Milwaukee, WI 53202
                                  Attention: Timothy Otto, Legal Department
                                  Fax: (414) 665-7016

                                  COMPANY:

                                  MONITRONICS INTERNATIONAL, INC.

                                  By: /s/ Michael R. Meyers
                                      ------------------------------------------
                                      Michael R. Meyers
                                      Vice President and Chief Financial Officer
                                      12801 Stemmons Freeway, Suite 821
                                      Dallas, TX 75234

                                  with a copy to:

                                  Vinson & Elkins L.L.P.
                                  3700 Trammell Crow Center
                                  2001 Ross Avenue
                                  Dallas, TX 75201
                                  Attention:  Christine Hathaway, Esq.

<PAGE>

                                  TRUSTEE:

                                  THE BANK OF NEW YORK TRUST
                                  COMPANY OF FLORIDA, N.A.

                                  By: /s/ Patrick Giordano
                                      ------------------------------------------
                                  Name: Patrick Giordano
                                  Title: Vice President

                                  The Bank of New York Trust Company of Florida,
                                  N.A.
                                  Corporate Trust Division
                                  600 North Pearl Street, Suite 420
                                  Dallas, Texas 75201
                                  Attention: Patrick T. Giordano

<PAGE>

                                    EXHIBIT A

                                 ACKNOWLEDGMENT

     The undersigned purchaser, assignee, or transferee of the Subordinate
Liabilities described in Schedule 1 attached hereto, hereby acknowledges the
terms of this Intercreditor and Subordination Agreement and the subordination
provided for herein and agrees to be bound by all of the terms hereof. This
Agreement will be attached to and become part of the Intercreditor and
Subordination Agreement.

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

                                      By:
                                          --------------------------------------
                                      Its:
                                           -------------------------------------
                                      Date:
                                            ------------------------------------

                                      Notice Address:

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

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

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

                                      Attention:
                                                --------------------------------
                                      Telecopy Number:
                                                       -------------------------

Acknowledged and Agreed:

MONITRONICS INTERNATIONAL, INC.

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

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