First Modification Of Installment Payment Plan Note

License No.: CWB269F


FIRST MODIFICATION OF
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INSTALLMENT PAYMENT PLAN NOTE
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FOR BROADBAND PCS F BLOCK
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THIS FIRST MODIFICATION OF INSTALLMENT PAYMENT PLAN NOTE ("First Modification") is executed on the _____ day of _______________, 1998, and is intended to be effective for all purposes as of the 31st day of July, 1998 ("Effective Date"), by and between: (i) MERCURY PCS II, L.L.C., a ___________________ ("Maker"); and (ii) FEDERAL COMMUNICATIONS COMMISSION, an independent regulatory agency of the United States ("Payee" or "Commission").


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


R-1. Reference is made to that certain Installment Payment Plan Note made by Maker, payable to the order of the Commission, in the original principal amount of $ 377,404.80 ("Original Note"). The Original Note is secured by, amongst other things: (i) that certain Security Agreement by and between the Maker and the Commission ("Security Agreement"); and (ii) those certain Financing Statements related thereto (collectively, "Financing Statements"). The Original Note, Security Agreement, Financing Statements and all other documents evidencing, governing or securing the Original Note, together with any and all amendments, modifications or supplements thereto, are hereinafter collectively referred to as the "Loan Documents". All of the terms, conditions and provisions of the Loan Documents are hereby incorporated herein and made a part hereof in their entireties by this reference.


R-2. The Security Agreement and Financing Statements created a first lien security interest in the "License" and the "Collateral" (as those terms are defined in the Security Agreement).


R-3. Pursuant to that certain Public Notice, DA 97-883 (rel. April 28, 1997) ("Suspension Order"), the Commission suspended the deadline for payment of installment payments required to be made under the Original Note. Pursuant to that certain Second Report and Order and Further Notice of Proposed Rule Making adopted September 25, 1997 and released October 16, 1997 ("Second Report and Order"), the Commission rescinded the Suspension Order and ordered the reinstatement of payments under the Original Note effective March 31, 1998 and agreed to a schedule for payment of all accrued and unpaid interest due under the Original Note. The Second Report and Order was subsequently modified by that certain Order on Reconsideration of the Second Report and Order adopted March 23, 1998 and released March 24, 1998 ("Order on Reconsideration"). Pursuant to the Order on Reconsideration and the Public Notice, DA-98-741 (rel. April 17, 1998), the date for the


resumption of payments under the Original Note was changed to July 31, 1998 as well as certain other modifications to the terms contained in the Second Report and Order.


R-4. Maker and the Commission are entering into this First Modification for the purpose of modifying the Original Note to provide for the repayment of all accrued and unpaid interest due under the Original Note and to make certain other conforming changes to the Original Note as provided herein. It is the intention of the Maker and the Payee that except as specifically modified by this First Modification, the Original Note shall continue in full force and effect.


NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the sum of Ten dollars ($10.00) and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned parties hereby covenant and agree and amend the Original Note as follows:


1. The foregoing Recitals, including all terms defined therein, are hereby incorporated in this First Modification to the same extent as if they had been herein stated in full. The documents referred to in the Original Note shall include the documents referred to therein, as well as any and all modifications, amendments, additions and/or supplements thereto and/or replacements thereof.


2. This First Modification shall amplify and modify where specifically provided herein but shall not replace the Original Note. Except as specifically modified herein, all of the terms, conditions and obligations of the Original Note shall remain in full force and effect, and all of the rights and remedies provided for therein shall be preserved to the Commission. If there is any conflict between the provisions of this First Modification and the provisions of the Original Note, the provisions of this First Modification shall govern and prevail. THE COMMISSION AND MAKER COVENANT AND AGREE THAT THIS FIRST MODIFICATION ONLY MODIFIES THE TERMS OF THE ORIGINAL NOTE AND IS NOT A NOVATION OF THE ORIGINAL NOTE.


3. The Security Agreement and Financing Statements will continue to encumber the License and Collateral with a first lien security interest. The Original Note, as modified by this First Modification (hereinafter collectively referred to as the "Note"), and all extensions, renewals, modifications and amendments and consolidations thereof or substitutions therefore shall continue to be secured by the Security Agreement and all other documents, instruments, certifications, security agreements and financing statements executed and delivered in connection therewith by the Maker or by its successors. The Original Note and this First Modification shall be entitled to the benefits of, and to the security required to be provided by, the aforesaid documents, some of which contain provisions for the acceleration of the maturity of the Note upon the happening of certain stated events.


4. The Amortization Schedule attached to the Original Note as Schedule A is hereby deleted in its entirety. All references in the Original Note to Schedule A are hereby deleted. All payments under the Note shall continue to be made in accordance with the terms of the Original Note, as modified by the provisions of this First Modification.


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5. Maker and the Commission covenant and agree that pursuant to the terms of the Suspension Order and the Second Report and Order, interest payments under the Original Note were suspended for the period effective as of April 28, 1997 through and including March 31, 1998. The entire amount of unpaid interest that accrued during the period beginning with the grant date of the License through and including March 31, 1998 is hereinafter referred to as the "Suspension Interest". All Suspension Interest is to be repaid in eight (8) equal payments with the first such payment being due on the Effective Date. In addition, pursuant to the terms of the Order on Reconsideration, (i) all interest accrued on the Original Note from April 1, 1998 through the Effective Date ("Deferred Interest") is due and payable in full on the Effective Date, (ii) all payments under the Note were reinstated as of the Effective Date, and (iii) the schedule for making quarterly interest and/or principal payments under the Note was changed to require quarterly payments on October 31, January 31, April 30 and July 31 of each year without any modification to the amounts for each payment as provided in the Original Note, with the first such payment being due and payable on October 31, 1998. Based upon the foregoing, the Original Note is hereby amended to p ...