Document:

<PAGE>

                                                                   Exhibit 10.21

                           SECOND AMENDMENT AGREEMENT

     This Second Amendment Agreement (the "Agreement") is executed and entered
into on May 19, 1997 by and among Monitronics International, Inc., a Texas
corporation (the "Company"), and the holders (the "Security Holders") of certain
obligations and securities of the Company whose names appear on the signature
pages to this Agreement.

                                    RECITALS:

     WHEREAS, the Company and certain of the Security Holders are parties to the
following agreements (collectively, the "Existing Agreements"): (i) Preferred
Stock Subordination Agreement, dated as of May 10, 1996, as amended by that
certain Amendment Agreement dated as of November 22, 1996 by and among the
Company and certain of the Security Holders (the "First Amendment Agreement")
(as so amended, the "Preferred Subordination Agreement"), by and among the
Company, Capital Resource Lenders II, L.P., a Delaware limited partnership ("CRL
II"), Austin Ventures Ill-A, L.P., a Delaware limited partnership ("Austin
Ill-A"), and Austin Ventures Ill-B, L.P., a Delaware limited partnership
("Austin Ill-B" and together with Austin Ill-A "Austin Ventures"); (ii) Stock
Purchase Agreement, dated as of October 21, 1994, as amended by Amendment to
Stock Purchase Agreement, dated November 10, 1994, Amendment No. 2 to Stock
Purchase Agreement, dated May 10, 1996, and by the First Amendment Agreement (as
so amended, the "Stock Purchase Agreement"), by and among the Company and Austin
Ventures; (iii) Amended and Restated Shareholders Agreement, dated as of May 10,
1996, as amended by the First Amendment Agreement (as so amended, the
"Shareholders Agreement"), by and among the Company, Austin Ventures, CRL II,
James R. Hull ("Hull") and Robert N. Sherman ("Sherman"); (iv) Amended and
Restated Registration Agreement, dated as of May 10, 1996, as amended by the
First Amendment Agreement (as so amended, the "Registration Agreement"), among
the Company, CRL II and Austin Ventures; (v) Amended and Restated Co-Sale
Agreement, dated as of May 10, 1996, as amended by the First Amendment Agreement
(as so amended, the "Hull Co-Sale Agreement"), among the Company, CRL II, Austin
Ventures and Hull; (vi) Amended and Restated Co-Sale Agreement, dated May 10,
1996, as amended by the First Amendment Agreement (as so amended, the "Sherman
Co-Sale Agreement") among the Company, CRL II, Austin Ventures and Sherman; and
(vii) Amended and Restated Affiliate Registration Agreement, dated May 10, 1996,
as amended by the First Amendment Agreement (as so amended, the "Affiliate
Registration Agreement"), between the Company and Hull;

     WHEREAS, the Company, CRL II and Austin Ventures have previously entered
into a Senior Subordinated Note and Warrant Purchase Agreement, dated as of May
10, 1996, as supplemented and modified by the Senior Subordinated Note and
Warrant Purchase Agreement dated as of November 22, 1996 (the "Original Note
Agreement"), pursuant to which the Company issued and sold to CRL II and Austin
Ventures (i) 12.0% Senior Subordinated Notes, due June 30, 2003, in the original
aggregate principal amount of$ 10,000,000 and (ii) Common Stock Purchase
Warrants for the purchase (subject to adjustment as provided therein) of an
aggregate of 467,201 shares of the Company's Class A Common Stock, $.0l par
value per share;

     WHEREAS, as a supplement to the Original Note Agreement, the Company
desires to enter into a new Senior Subordinated Note and Warrant Purchase
Agreement dated as of the date

<PAGE>

                                       -2-

hereof (the "New Note and Warrant Agreement") with CRL II and Austin Ventures,
pursuant to which the Company will issue and sell to CRL 11(i) an additional
12.0% Senior Subordinated Note, due June 30, 2003, in the original aggregate
principal amount of $2,000,000 (the "Additional Note") and (ii) additional
Common Stock Purchase Warrants (the "Additional Warrants") for the purchase
(subject to adjustment as provided therein) of up to an aggregate of 102,556
shares (the "Additional Warrant Shares") of the Company's Class A Common Stock,
$.01 par value per share;

     WHEREAS, the Company desires to enter into a Series B Preferred Stock and
Warrant Purchase Agreement dated as of the date hereof (the `Preferred Purchase
Agreement") with CRL II and Austin Ventures V, L.P. ("Austin V"), pursuant to
which the Company will issue and sell to CRL II and Austin V (i) an aggregate of
5,000,000 shares of the Company's Series B Preferred Stock, $.0l par value per
share (the "Series B Stock"), and (ii) Common Stock Purchase Warrants (the
"Preferred Warrants") for the purchase (subject to adjustment as provided
therein) of up to an aggregate of 961,700 shares of the Company's Class A Common
Stock, $.01 par value per share (the "Preferred Warrant Shares"); and

     WHEREAS, as a result of the transactions contemplated by the New Note and
Warrant Agreement and the Preferred Purchase Agreement, the parties hereto
desire to amend the Existing Agreements.

     NOW THEREFORE, in consideration of the premises and the agreements herein
contained, and intending to be bound hereby, the parties hereby agree as
follows:

     1. Addition of Austin V as a party to certain of the Existing Agreements.
The parties to this Agreement hereby consent to and approve of the addition of
Austin V as a party to the Preferred Subordination Agreement, the Shareholders
Agreement, the Registration Agreement, the Hull Co-Sale Agreement and the
Sherman Co-Sale Agreement, and acknowledge and agree that Austin V shall be
bound by all of the terms and conditions of such agreements, as amended hereby
and as from time to time in effect, and that such terms and conditions shall
inure to the benefit of Austin V.

     2. Amendments to Existing Agreements.

          (a) That all references to the term "Notes" in the Preferred
Subordination Agreement and the Stock Purchase Agreement shall be deemed to
include the Additional Note (as such term is defined herein).

          (b) That all references to the term "Warrants" in the Shareholders
Agreement, the Registration Agreement, the Hull Co-Sale Agreement, the Sherman
Co-Sale Agreement and the Affiliate Registration Agreement shall be deemed to
include the Additional Warrants and the Preferred Warrants (as such terms are
defined herein).

          (c) That all references to the term "Mezzanine Warrants" in the Stock
Purchase Agreement shall be deemed to include the Additional Warrants and the
Preferred Warrants (as such terms are defined herein).

<PAGE>

                                       -3-

          (d) That all references to the term "Warrant Shares" in the
Shareholders Agreement, the Registration Agreement, the Hull Co-Sale Agreement,
the Sherman Co-Sale Agreement and the Affiliate Registration Agreement shall be
deemed to include the Additional Warrant Shares and the Preferred Warrant Shares
(as such terms are defined herein).

          (e) That all references to the term "Mezzanine Warrant Shares" in the
Stock Purchase Agreement shall be deemed to include the Additional Warrant
Shares and the Preferred Warrant Shares (as such terms are defined herein).

          (f) That all references to the term "Note Agreement" in the Stock
Purchase Agreement, the Shareholders Agreement, the Registration Agreement, the
Hull Co-Sale Agreement, the Sherman Co-Sale Agreement and the Affiliate
Registration Agreement shall, as applicable, be deemed to include the New Note
and Warrant Agreement (as such term is defined herein).

          (g) That all references to the term "Purchase Agreement" in the
Preferred Subordination Agreement shall, as applicable, be deemed to include the
New Note and Warrant Agreement (as such term is defined herein).

          (h) That all references to the term "Purchase Agreement" in the
Shareholders Agreement, the Registration Agreement, the Hull Co-Sale Agreement,
the Sherman Co-Sale Agreement and the Affiliate Registration Agreement shall be
deemed to mean and include the Stock Purchase Agreement as amended by and
through the date hereof (as such term is defined herein).

          (i) That all references to the term "Preferred Stock" in the Preferred
Stock Subordination Agreement and the Shareholders Agreement shall be deemed to
include the Series B Stock (as such term is defined herein); provided, however,
that the term "Preferred Stock" in the Shareholders Agreement shall not be
deemed to include the Series B Stock (as such term is defined herein) for
purposes of the Recitals and part 3 of the Shareholders Agreement.

          (j) That all references to the terms "Purchasers" and "Austin
Ventures" in the Shareholders Agreement shall be deemed to include Austin V (as
such term is defined herein); provided, however, that the term "Purchasers" in
the Shareholders Agreement shall not be deemed to include Austin V (as such term
is defined herein) for purposes of the Recitals ~f the Shareholders Agreement.

          (k) That paragraph 4K of the Shareholders Agreement is hereby deleted
in its entirety and replaced with the following:

               "4K. Exception for Pledge. The parties acknowledge that pursuant
          to the terms of an Amended and Restated Pledge Agreement, dated as of
          May _____, 1997. (the "Pledge Agreement"), by and between Austin
          Ventures Ill-A, L.P., Austin Ventures Ill-B, L.P., Austin Ventures V,
          L.P., Capital Resource Lenders II, L.P. and James R. Hull,
          individually, Robert Sherman, individually, Michael Gregory,
          individually, Michael Meyers, individually and Stephen Hedrick,
          individually (collectively, the "Pledgors") and State Street Bank and
          Trust Company (the "Secured Party"), CJBC Inc., Heller Financial, Inc.
          and

<PAGE>

                                       -4-

          BankBoston, N.A. (collectively, the "Lenders") certain securities of
          the Company, as identified on Schedule I to the Pledge Agreement (the
          "Pledged Securities"), have been pledged by the Pledgors to the
          Secured Party for the benefit of the Lenders. The parties hereto
          acknowledge and consent to such pledge of the Pledged Securities and,
          notwithstanding any provision in this Agreement to the contrary,
          hereby agree that any purchaser of such Pledged Securities, including
          the Lenders, which acquire the Pledged Securities pursuant to the
          terms of the Pledge Agreement shall take the Pledged Securities free
          and clear of all terms of this Agreement and neither such persons nor
          such Pledged Securities shall thereafter be subject to any term or
          condition of this Agreement."

          (l) That subparagraph 1(c) of the Registration Agreement is hereby
deleted in its entirety and replaced with the following:

               "(c) Registrations on Forms S-2. S-3. Following its initial
          public offering of securities under the Securities Act, the Company
          shall use its commercially reasonable best efforts to qualify for
          registration on Forms S-2 or S3 or any comparable or successor form or
          forms. After the Company has qualified for the use of Forms S-2 or S-3
          or any comparable or successor form or forms, in addition to the
          rights contained in the paragraphs 1(a) and (b), each of (i) the
          holders of at least 25% of the Underlying Common Stock and (ii) the
          holders of at least 30% of the Common Stock issued and issuable upon
          exercise of the Warrants shall have the right at any time and from
          time to time to request registrations on Forms S-2 or S-3 or any
          comparable or successor form or forms; provided, that the Company
          shall not be obligated to effect more than two Registrations on Form
          S-2 or S-3 or any comparable or successor form or forms during any
          twelve-month period. Such requests shall be in writing and shall state
          the number of shares of Underlying Common Stock or Warrant Shares, as
          applicable, proposed to be disposed of and the intended method of
          distribution of such shares by such holder or holders."

     3. Miscellaneous.

          (a) Effect. Except as amended hereby, the Existing Agreements shall
remain in full force and effect.

          (b) Descriptive Headings. The descriptive headings in this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

          (c) Governing Law. The construction, validity and interpretation of
this Agreement will be governed by and construed in accordance with the domestic
laws of the State of Texas without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Texas or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Texas.

<PAGE>

                                       -5-

          (d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and each of the parties hereto may execute this Agreement by signing
any such counterpart.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

                                       -6-

     IN WITNESS WHEREOF, this Second Amendment Agreement has been executed by
the parties hereto as of the day and year first above set forth.

                                           COMPANY:

                                           MONITRONICS INTERNATIONAL, INC.

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

                                           SECURITY HOLDERS:

                                           AUSTIN VENTURES III-A, L.P.

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

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

                                           AUSTIN VENTURES III-B, L.P.

                                           By: AV Partners III, L.P.,
                                               Its 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

<PAGE>

                                       -7-

                                           CAPITAL RESOURCE LENDERS II, L.P.

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

                                           By: /s/ Fred C. Danforth
                                               ---------------------------------
                                               General Partner

                                           /s/ James R. Hull
                                           -------------------------------------
                                           James R. Hull

                                           /s/ Robert N. Sherman
                                           -------------------------------------
                                           Robert N. Sherman<PAGE>

                                                                   Exhibit 10.22

                  TRANSFER, ASSIGNMENT AND ASSUMPTION AGREEMENT
                          AND THIRD AMENDMENT AGREEMENT

     This Transfer, Assignment and Assumption Agreement and Third Amendment
Agreement (the "Agreement") is executed and entered into effective as of
December 31, 1997 by and among Monitronics International, Inc., a Texas
corporation (the "Company"), the holders (the "Security Holders") of certain
obligations and securities of the Company whose names appear on the signature
pages to this Agreement, and the Leaders (the "Lenders") to the Company under
various loan agreements whose names appear on the signature pages to this
Agreement.

                                    REC1TALS:

     WHEREAS, Austin Ventures V, L.P., a Delaware limited partnership ("Austin
V"), owns 4,000,000 shares of Series B-1 Preferred Stock, $.01 par value per
share, of the Company (the "B-1 Preferred Stock") and Common Stock Purchase
Warrants (the "Preferred Warrants") to purchase 769,360 shares of Class A Common
Stock, $.01 par value per share ("Class A Common Stock"), of the Company;

     WHEREAS, Austin V desires to transfer to Austin Ventures V Affiliates Fund,
L.P., a Delaware limited partnership ("Affiliates Fund"), at cost, 190,476
shares of the B-1 Preferred Stock and Preferred Warrants to purchase 36,636
shares of Class A Common Stock (collectively, the "Securities"); and

     WHEREAS, Affiliates Fund desires to purchase such Securities;

     WHEREAS, Austin V is a party to various agreements, and the Securities are
subject to various agreements, with the other parties to this Agreement and
Affiliates Fund desires to assume the duties, obligations and responsibilities
of Austin V under said various agreements as they relate to the Securities, and
desires to have all benefits and rights in favor of or attributable to the
Securities under said various agreements.

     WHEREAS, the Company entered into a Series B Preferred Stock and Warrant
Purchase Agreement dated May 19, 1997 (the "Preferred Purchase Agreement") with
Capital Resources Lenders II L.P., a Delaware limited partnership ("CRL II") and
Austin V, pursuant to which the Company issued and sold to CRL II and Austin V
(i) an aggregate of 5,000,000 shares of B-1 Preferred Stock, including the
190,476 shares of B-1 Preferred Stock being transferred to Affiliates Fund, and
(ii) Preferred Warrants for the purchase (subject to adjustment as provided
therein) of up to an aggregate of 961,700 shares of Class A Common Stock,
including the right to purchase 36,636 shares of Class A Common Stock being
transferred to Affiliates Fund, and

     WHEREAS, the Company and certain of the Security Holders are parties to the
following agreements (collectively, the "Existing Security Holder Agreements"):
(i) Preferred Stock Subordination Agreement dated as of May 10, 1996, as amended
by that certain Amendment Agreement dated as of November 22, 1996 by and among
the Company and certain of the Security Holders (the "First Amendment
Agreement") as further amended by that certain Second Amendment Agreement dated
as of May 19, 1997 by and among the Company and certain of the Security Holders
(the "Second Amendment Agreement") (as so amended, the "Preferred

                                       1

<PAGE>

Subordination Agreement"), by and among the Company, CRL II, Austin Ventures
HI-A, L.P., a Delaware limited partnership ("Austin III-A"), and Austin Ventures
III-B, L.P., a Delaware limited partnership ("Austin III-B" and together with
Austin III-A "Austin III"); (ii) Stock Purchase Agreement, dated as of October
21, 1994, as amended by Amendment to Stock Purchase Agreement, dated November
10, 1994, Amendment No. 2 to Stock Purchase Agreement, dated May 10, 1996, the
First Amendment Agreement, and the Second Amendment Agreement (as so amended,
the "Stock Purchase Agreement"), by and among the Company and Austin Ventures;
(iii) Amended and Restated Shareholders Agreement, dated as of May 10, 1996, as
amended by the First Amendment Agreement and by the Second Amendment Agreement
(as so amended, the "Shareholders Agreement"), by and among the Company, Austin
III, CRL II, Austin V, James R. Hull ("Hull") and Robert N. Sherman ("Sherman");
(iv) Amended and Restated Registration Agreement, dated as of May 10, 1996, as
amended by the First Amendment Agreement and by the Second Amendment Agreement
(as so amended, the "Registration Agreement"), among the Company, CRL II, Austin
III and Austin V; (v) Amended and Restated Co-Sale Agreement, dated as of May
10, 1996, as amended by the First Amendment Agreement and by the Second
Amendment Agreement (as so amended, the "Hull Co-Sale Agreement"), among the
Company, CRL II Austin III, Austin V and Hull; (vi) Amended and Restated Co-Sale
Agreement, dated May 10,1996, as amended by the First Amendment Agreement and by
the Second Amendment Agreement (as so amended, the "Sherman Co-Sale Agreement")
among the Company, CRL II, Austin III, Austin V and Sherman; and (vii) Amended
and Restated Affiliate Registration Agreement, dated May 10, 1996, as amended by
the First Amendment Agreement and by the Second Amendment Agreement (as so
amended, the "Affiliate Registration Agreement"), between the Company and Hull;

     WHEREAS, the Company, CRL II and Austin III have previously entered into a
Senior Subordinated Note and Warrant Purchase Agreement, dated as of May 10,
1996, as supplemented and modified by the Senior Subordinated Note and Warrant
Purchase Agreement dated as of November 22, 1996 (the "Original Note
Agreement"), pursuant to which the Company issued and sold to CRL II and Austin
Ventures (i) 12.0% Senior Subordinated Notes, due June 30, 2003, in the original
aggregate principal amount of $10,000,000 and (ii) Common Stock Purchase
Warrants for the purchase (subject to adjustment as provided therein) of an
aggregate of 467,201 shares of Class A Common Stock;

     WHEREAS, as a supplement to the Original Note Agreement, the Company
entered into a new Senior Subordinated Note and Warrant Purchase Agreement dated
May 19, 1997 (the "New Note and Warrant Agreement") with CRL II and Austin III,
pursuant to which the Company issued and sold to CRL II (i) an additional 12.0%
Senior Subordinated Note, due June 30, 2003, in the original aggregate principal
amount of $2,000,000 (the "Additional Note") and (ii) additional Common Stock
Purchase Warrants (the "Additional Warrants") for the purchase (subject to
adjustment as provided therein) of up to an aggregate of 102,556 shares (the
"Additional Warrant Shares") of Class A Common Stock;

     WHEREAS, the Company, the Lenders and the Security Holders are parties to
the following agreements (collectively "Existing Affected Lender Agreements"):
(i) Amended and Restated Pledge Agreement, dated as of May 19, 1997 (the "Pledge
Agreement"), and (ii)

                                       2

<PAGE>

Amended and Restated Affiliate Subordination Agreement, dated as of May 19, 1997
(the "Subordination Agreement"); and

     WHEREAS, as a result of the transactions contemplated by the transfer of
the Securities to Affiliates Fund, the parties hereto desire to amend the
Existing Security Holder Agreements, Preferred Purchase Agreement, Preferred
Warrants and Existing Affected Lender Agreements.

     NOW THEREFORE, in consideration of the premises and the agreements herein
contained, and intending to be bound hereby, the parties hereby agree as
follows:

1. Assignment. Assumption and Acknowledgment.

          (a) For good and valuable consideration in the aggregate amount of
$190,842.36, the receipt of which is hereby acknowledged, Austin V hereby
assigns arid transfers all its right, title and interest in the Securities,
including any tights permitted to be transferred with respect to such Securities
pursuant to the Existing Security Holder Agreements, the Preferred Purchase
Agreement, the Preferred Warrant and the Existing Affected Lender Agreements, to
Affiliates Fund effective as of the date of this Agreement (the "Effective
Date").

          (b) Affiliates Fund hereby assumes all of the obligations and
commitments of Austin V with respect to the Securities arising under the
Existing Security Holder Agreements, the Preferred Purchase Agreement, the
Preferred Warrants and the Existing Affected Lender Agreements accruing on or
after the Effective Date.

          (c) The Company hereby acknowledges arid consents to the transfer of
the Securities as set forth above and agrees to take all necessary action to
reflect such transfer in its books and records. The Company further acknowledges
that Affiliates Fund hereby agrees to be bound by the terms arid conditions of
the Preferred Purchase Agreement and Preferred Warrants and to make the
representations and warranties of Purchasers set forth therein, and that
Affiliates Fund shall have the same rights with respect to such Securities as
were granted to the original Purchasers of the Securities under the Preferred
Purchase Agreement and Preferred Warrants.

          (d) Each of Austin V, Affiliates Fund, and the Company agrees to
execute any further instruments or perform any such acts which are or may become
reasonably necessary to carry out the intent of this Agreement, including,
without limitation, execution of any documents required by the Preferred
Purchase Agreement and Preferred Warrants to complete the foregoing transfers
and the cancellation and reissuance of certificates representing such
Securities.

          (e) Affiliates Fund hereby makes the representations and warranties of
a Purchaser under the Preferred Purchase Agreement and Preferred Warrants with
respect to the Securities.

2. Addition of Affiliates Fund as a party to Certain of the Existing Security
Holder Agreements and Existing Affected Lender Agreements. The parties to this
Agreement hereby consent to and approve of the addition of Affiliates Fund as a
party to the Preferred Purchase Agreement, Preferred Warrants, Preferred
Subordination Agreement, the Shareholders Agreement, the Registration Agreement,
the Hull Co-Sale Agreement, the Sherman Co-Sale Agreement, the Pledge Agreement
and the Subordination Agreement, and acknowledge and

                                       3

<PAGE>

agree that Affiliates Fund shall be bound by all of the terms and conditions of
such agreements, as amended hereby arid as from time to time in effect, and that
such terms and conditions shall inure to the benefit of Affiliates Fund, in each
case, to the extent applicable to Affiliates Fund with respect to the Securities
or as the owner of the Securities.

3. Amendments to Existing Security Holder Agreements and Existing Affected
Lender Agreements.

          (a) That all references to the terms "Purchasers" and "Austin
Ventures" in the Shareholders Agreement shall be deemed to include Affiliates
Fund (as such term is defined herein); provided, however, that the term
"Purchasers" in the Shareholders Agreement shall not be deemed to include
Affiliates Fund (as such term is defined herein) for purposes of the Recitals of
the Shareholders Agreement.

          (b) That paragraph 4K of the Shareholders Agreement is hereby amended
to add Affiliates Fund to the list of named "Pledgers" and to include the
190,476 shares of B-1 Preferred Stock as "Pledged Securities".

          (c) That the Pledge Agreement is amended to include Affiliate Fund as
a "Pledgor" and the definition of "Pledged Stock" thereunder, as well as
Schedule I thereof, is amended to include the 190,476 shares of B-1 Preferred
Stock transferred by Austin V to Affiliates Fund and that the number of shares
of Pledged Stock appearing on Schedule I pledged by Austin V is reduced by the
corresponding number of shares.

          (d) That the Subordination Agreement is amended to include Affiliates
Fund as a "Subordinated Creditor" thereunder.

4. Miscellaneous.

          (a) Effect. Except as amended hereby, the Existing Security Holder
Agreements, the Existing Affected Lender Agreements, the Preferred Purchase
Agreement and the Preferred Warrants shall remain in full force and effect.

          (b) Return of Stock Certificate and Warrants. Austin V hereby requests
that the Lenders deliver Certificate No. 1, representing 4,000,000 shares of B-1
Preferred Stock issued in the name of Austin V, to the Company so that the
Company may issue two new certificates, one in the amount of 190,476 shares of
B-1 Preferred Stock in the name of Affiliates Fund and the other for 3,809,524
shares of B-1 Preferred Stock issued in the name of Austin V. Austin V hereby
appoints the Company as its agent to cause such transfer and reissuance of
certificates to be accomplished. Austin V and Affiliates Fund hereby agree to
execute and deliver to State Street Bank and Trust Company the forms of Stock
Power of Attorney attached to this Agreement. State Street Bank and Trust
Company, Austin V and Affiliates Fund hereby direct the Company to deliver the
two new stock certificates directly to State Street Bank and Trust Company upon
their issuance.

          (c) Austin V agrees to return the original Preferred Warrant to the
Company with the Form of Assignment appropriately completed to cause the
re-issuance of two Preferred Warrants by the Company, one issued to Affiliates
Fund representing the right to purchase

                                       4

<PAGE>

36,636 shares of Class A Common Stock, and the other issued to Austin V
representing the right to purchase 732,724 shares of Class A Common Stock,
whereupon the original Preferred Warrant representing the right to purchase
769,360 shares of Class A Common Stock shall be canceled by the Company.

          (d) Waivers. Each of the parties hereto waives (i) any right of first
refusal to purchase any of the Securities or any right to object to the transfer
of the Securities from Austin V to Affiliates Fund and (ii) the provisions of
Section 9B(i) of the Preferred Purchase Agreement.

          (e) Descriptive Headings. The descriptive headings in this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

          (f) Governing Law. The construction, validity and interpretation of
this Agreement will be governed by and construed in accordance with the domestic
laws of the State of Texas without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of' Texas or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Texas.

          (g) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one arid the same
instrument, and each of the parties hereto may execute this Agreement by signing
any such counterpart.

     IN WITNESS WHEREOF, this Transfer, Assignment arid Assumption Agreement and
Third Amendment Agreement has been executed by the parties hereto as of the day
and year first above set forth.

                                      COMPANY:

                                      MONITRONICS INTERNATIONAL, INC.

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

                                       5

<PAGE>

                                      SECURITY HOLDERS:

                                      AUSTIN VENTURES III-A, L.P.

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

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

                                      AUSTIN VENTURES III-B, L.P.

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

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

                                      AUSTIN VENTURES V, L.P.

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

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

                                      AUSTIN VENTURES AFFILIATES FUND, L.P.

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

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

                                       6

<PAGE>

                                      CAPITAL RESOURCE LENDERS II, L.P.

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

                                      By: /s/ Fred C. Danforth
                                          --------------------------------------
                                          General Partner

                                      /s/ James R. Hull
                                      ------------------------------------------
                                      James R. Hull

                                      /s/ Robert N. Sherman
                                      ------------------------------------------
                                      Robert N. Sherman

                                      /s/ Michael Meyers
                                      ------------------------------------------
                                      Michael Meyers

                                      /s/ Stephen Hedrick
                                      ------------------------------------------
                                      Stephen Hedrick

                                      /s/ Michael Gregory
                                      ------------------------------------------
                                      Michael Gregory

                                       7

<PAGE>

                                      LENDERS:

                                      CANADIAN IMPERIAL BANK OF COMMERCE, AS
                                      ADMINISTRATIVE AGENT

                                      By: /s/ Amy Kothari
                                          --------------------------------------
                                          Amy Kothari
                                          Executive Director
                                          CIBC Oppenheimer Corp., as Agent

                                      CIBC INC.
                                      AS LENDER

                                      By: /s/ Amy Kothari
                                          --------------------------------------
                                          Amy Kothari
                                          Executive Director
                                          CIBC Oppenheimer Corp., as Agent

                                      STATE STREET BANK AND TRUST COMPANY,
                                      INDIVIDUALLY AND AS DOCUMENTATION AGENT

                                      By: /s/ Gregory Spurr, III
                                          --------------------------------------
                                          Gregory Spurr, III
                                          Vice President

                                      HELLER FINANCIAL, INC.

                                      By: /s/ illegible signature
                                          --------------------------------------
                                          Brad Ament
                                          Vice President

                                      BANKBOSTON, N.A.

                                      By: /s/ Jeffrey G. Millman
                                          --------------------------------------
                                          Jeffrey G. Millman
                                          Vice President

                                       8

<PAGE>

                             Stock Power of Attorney

     The undersigned assigns and transfer to State Street Bank and Trust
Company, 190,476 shares of Class B Preferred Stock, Series B-1, $0.01 par value,
of Monitronics International, Inc., a Texas corporation (the "Company"),
standing in its name on the books of the Company and represented by certificate
number ___, and irrevocably appoints ______________________ agent to transfer
such shares on the books of the Company. The agent may substitute another to act
for it.

Date:_____________________, 199__.

                                      AUSTIN VENTURES V AFFILIATES FUND, L.P.

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

                                      By: ______________________________________
                                          Blaine F. Wesner,
                                          General Partner

                                        9

<PAGE>

                             Stock Power of Attorney

     The undersigned assigns and transfer to State Street Bank and Trust
Company, 3,809,524 shares of Class B Preferred Stock, Series B-1, $0.01 par
value, of Monitronics International, Inc., a Texas corporation (the "Company"),
standing in its name on the books of the Company and represented by certificate
number ___, and irrevocably appoints _____________________ agent to transfer
such shares on the books of the Company. The agent may substitute another to act
for it.

Date:_____________________, 199__.

                                      AUSTIN VENTURES V, L.P.

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

                                      By: ______________________________________
                                          Blaine F. Wesner,
                                          General Partner

                                       10

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