WAIVER AND FIRST AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT
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     THIS WAIVER AND FIRST AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT (the
"Amendment"),  dated  as  of  December  17,  1999,  among MURDOCK COMMUNICATIONS
CORPORATION,  as  the  Issuer,  PRIORITY INTERNATIONAL COMMUNICATIONS, INC., ATN
COMMUNICATIONS,  INC.,  INCOMEX,  INC. and MCC ACQUISITION CORP., as Guarantors,
and  NEW  VALLEY  CORPORATION,  as  purchaser.

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

     RECITALS:

     A.     The  Issuer,  the  Guarantors  and the Purchaser have entered into a
certain  Note  and  Warrant  Purchase  Agreement, dated as of June 21, 1999 (the
"Note  Purchase  Agreement").

     B.     The  Issuer,  the  Guarantors  and the Purchaser have entered into a
certain  Security  Agreement,  dated  as  of  August  21,  1999  (the  "Security
Agreement";  capitalized  terms used herein and not otherwise defined shall have
the  meanings  ascribed  to  such  terms  in  the Note Purchase Agreement or the
Security  Agreement).

     B.     The  Issuer,  the  Guarantors  and the Purchaser desire to amend the
Note  Purchase  Agreement to make various changes thereto, and the Purchaser has
agreed  to  so  amend the Note Purchase Agreement on the terms and condition set
forth  herein.

     NOW,  THEREFORE,  the  parties  hereto  agree  as  follows:

     SECTION  1.     Amendment to Section 2.4.  Section 2.4 of the Note Purchase
                     ------------------------
Agreement  is  hereby amended by replacing such Section in its entirety with the
following:

          Section  2.4.     Maturity  of  the  Notes;  Prepayments.
                            --------------------------------------

          (a)     The  outstanding  principal amount of the Notes, together with
accrued  and  unpaid  interest  thereon,  shall  become  due  and payable on the
seventeenth  (17th)  day  of  each month (each, a "Monthly Payment Date") as set
forth  below:

     Monthly  Payment  Date     Monthly  Principal  Payment
     ----------------------     ---------------------------

     January  17,  2000                 $200,000

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     February  17,  2000                $200,000
     March  17,  2000                   $200,000
     April  17,  2000                   $200,000
     May  17,  2000                     $200,000
     June  17,  2000                  $1,000,000

          (b)     Upon  the  occurrence  of  a  Financing  Transaction,  the
outstanding  principal amount of all Notes shall be due and payable in an amount
equal  to  the  lesser  of (i) the outstanding principal amount of the Notes and
(ii)  the  aggregate  gross  cash  proceeds  from  such  Financing  Event.

          (c)     The  Issuer  may  prepay  the Notes in whole or in part at any
time, provided that (i) the Issuer provides at least one (1) days' prior written
notice  to  the Purchasers of such proposed prepayment, and (ii) such prepayment
is  accompanied  by all accrued and unpaid interest on the amount prepaid to the
date  of  prepayment.

     SECTION  2.     Amendment to Section 3.2.  Section 3.2 of the Note Purchase
                     ------------------------
Agreement  is  hereby amended by replacing such Section in its entirety with the
following:

     Section 3.2.     Default Rate of Interest.  If the Issuer shall fail to pay
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on  the  due date therefor, whether on the Monthly Payment Date, by acceleration
or otherwise, any principal owing under the Notes, then, in lieu of the interest
rate  otherwise  applicable, interest shall accrue on such unpaid principal from
the  due  date to but excluding the date on which such principal is paid in full
at  a rate per annum equal to fourteen percent (14%) (interest accruing pursuant
to  this  Section  3.2, the "Default Rate").  Interest calculated at the Default
Rate  shall  be  due  and  payable  upon  demand  by  the  Purchasers.

     SECTION  3.     Amendment  to  Article  3  of  the Note Purchase Agreement.
Article  3  of  the  Note  Purchase Agreement is hereby amended by inserting the
following  new  Section  3.6:

     Section  3.6.     Conversion  of  Notes.  The  Notes  are  convertible into
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shares  of Common Stock of the Issuer at the option of the Purchaser pursuant to
the  terms  and  conditions  of  this  Section  3.6.


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     Section  3.6.1.     Right  to  Convert.
                         ------------------

     Subject to and upon compliance with the provisions of this Section 3.6, the
Purchaser  shall  have the right, at his option, at any time before the close of
business  on  the  last  Business Day prior to the Maturity Date, to convert the
outstanding  principal amount of any such Note, or any portion of such principal
amount  which  is  $1,000  or  an integral multiple thereof, into that number of
fully  paid and non-assessable shares of Common Stock (as such shares shall then
be constituted) obtained by dividing the principal amount of the Note or portion
thereof  surrendered  for  conversion  by the Conversion Price in effect at such
time,  by  surrender  of  the Note so to be converted in whole or in part in the
manner provided in Section 3.6.2. the Purchaser is not entitled to any rights of
a  Purchaser  of  Common  Stock  until  the Purchaser has converted his Notes to
Common  Stock,  and  only  to  the  extent  such  Notes  are deemed to have been
converted  to  Common  Stock  under  this  Section  3.6.

     Section  3.6.2.     Exercise  of  Conversion  Privilege; Issuance of Common
                         -------------------------------------------------------
Stock  on  Conversion.
---------------------

     In order to exercise the conversion privilege with respect to any Note, the
Purchaser  shall  surrender  such  Note, duly endorsed, to the Issuer, and shall
give  written  notice  of  conversion to the Issuer that the Purchaser elects to
convert  such Note or the portion thereof specified in said notice.  Such notice
shall  also  state  the  name  or names (with address or addresses) in which the
certificate  or  certificates for shares of Common Stock which shall be issuable
on  such  conversion shall be issued.  Each such Note surrendered for conversion
shall,  unless  the  shares  issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Issuer duly executed by, the
Purchaser  or  his  duly  authorized  attorney.

     As  promptly  as  practicable  after  satisfaction  of the requirements for
conversion  set  forth  above,  subject  to  compliance with any restrictions on
transfer  if shares issuable on conversion are to be issued in a name other than
that  of the Purchaser (as if such transfer were a transfer of the Note or Notes
(or  portion thereof) so converted), the Issuer shall issue and shall deliver to
such  Purchaser  a  certificate or certificates for the number of full shares of
Common  Stock  issuable  upon  the conversion of such Note or portion thereof in
accordance  with  the  provisions  of  this  Section  3.6 and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon  such  conversion,  as  provided  in  Section 3.6.3.  In case any Note of a
denomination  greater  than  $1,000 shall be surrendered for partial conversion,
the  Issuer  shall  execute  and  deliver  to  the  Purchaser  of  the  Note  so
surrendered,  without  charge  to  him,  a  new  Note  or  Notes  in  authorized
denominations  in an aggregate principal amount equal to the unconverted portion
of  the  surrendered  Note.


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     Each  conversion  shall be deemed to have been effected as to any such Note
(or  portion  thereof)  on the date on which the requirements set forth above in
this  Section  3.6.2.  have been satisfied as to such Note (or portion thereof),
and  the  Person  in  whose  name  any certificate or certificates for shares of
Common  Stock  shall  be  issuable  upon such conversion shall be deemed to have
become  on  said date the Purchaser of record of the shares represented thereby;
provided,  however,  that any such surrender on any date when the stock transfer
books  of  the  Issuer shall be closed shall constitute the Person in whose name
the  certificates  are  to  be  issued  as  the record Purchaser thereof for all
purposes on the next succeeding day on which such stock transfer books are open,
but  such conversion shall be at the Conversion Price in effect on the date upon
which  such  Note  shall  be  surrendered.

     Section  3.6.3.     Cash  Payments  in  Lieu  of  Fractional  Shares.
                         ------------------------------------------------

     No fractional share of Common Stock or scrip representing fractional shares
shall  be  issued  upon  conversion  of  Notes.  If  more than one Note shall be
surrendered for conversion at one time by the same Purchaser, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the  aggregate  principal  amount of the Notes (or specified portions thereof to
the  extent  permitted hereby) so surrendered.  If any fractional share of stock
would  be  issuable  upon  the conversion of any Note or Notes, the Issuer shall
make  an  adjustment  and  payment  therefor in cash at the current market value
thereof  to  the  Purchaser  of  Notes.  The  current market value of a share of
Common Stock shall be the Closing Price on the last Trading Day prior to the day
on  which  the  Notes  (or  specified  portions thereof) are deemed to have been
converted.

     Section  3.6.4.     Conversion  Price.
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     Subject to adjustment as provided in this Section 3.6, the conversion price
shall  be  $3.00  (herein  called  the  "Conversion  Price").

     Section  3.6.5.     Effect  on  Reclassification,  Consolidation, Merger or
                         -------------------------------------------------------
Sale.
----

          In  the  event  of  (i)  any reclassification or change of outstanding
shares  of  Common Stock (other than a change in par value, or from par value to
no  par  value, or from no par value to par value, or as a result of subdivision
or  combination),  (ii)  any  consolidation, merger or combination of the Issuer
with  another  corporation  or  entity as a result of which holders of shares of
Common  Stock  shall  be  entitled  to  receive  securities  or  other  property
(including  cash)  with  respect  to or in exchange for such shares or (iii) any
sale  or  conveyance  of  the property of the Issuer as, or substantially as, an
entirety  to  any  other  corporation  or entity as a result of which holders of
shares of Common Stock shall be entitled to receive securities or other property
(including cash) with respect to or in exchange for such shares, then the Issuer
or  the successor or purchasing corporation or entity, as the case may be, shall
enter  into  a  supplemental  agreement  providing  that  the

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<PAGE>
Notes  shall  be  convertible  into  the  kind and amount of securities or other
property  (including  cash)  receivable  upon  such  reclassification, exchange,
consolidation,  merger,  combination, sale or conveyance by a holder of a number
of  shares  issuable  upon  conversion  of  the  Notes immediately prior to such
reclassification,  exchange,  consolidation,  merger,  combination,  sale  or
conveyance.  Such  supplemental  agreement  shall  provide for adjustments which
shall  be as nearly equivalent as may be practicable to the adjustments provided
for  in  this  Section  3.6.  The  above  provision  of this Section 3.6.5 shall
similarly  apply  to  successive  reclassifications,  exchanges, consolidations,
mergers,  combinations,  sales  or  conveyances.

     Section  3.6.6.     Registration  Rights.
                         --------------------

     All  shares  of  Common  Stock issued upon conversion of the Notes shall be
treated  as  Warrant  Shares  for purposes of the Registration Rights Agreement.

     SECTION  4.     Amendment  to  Section  8.2(a).  Section 8.2(a) of the Note
                     ------------------------------
Purchase  Agreement  is hereby amended by replacing such Section in its entirety
with  the  following:

     Section  8.2.     Remedies on Default.  (a)  Upon the occurrence and during
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the  continuation  of  an  Event  of  Default  (other  than  an Event of Default
described  in clause (d) or (e) of Section 8.1 hereof), the Requisite Purchasers
may  declare  any  or  all  amounts  payable by the Issuer under the Notes to be
forthwith  due  and  payable and the same shall thereupon become immediately due
and  payable without demand, presentment, protest or further notice of any kind,
all  of  which  are  hereby  expressly  waived.

     SECTION  5.     Amendment  to  Exhibit  A.  Exhibit  A to the Note Purchase
                     -------------------------   ----------
Agreement  is  hereby  amended  by replacing such Exhibit A with the Exhibit A-1
attached  hereto.

     SECTION 6.     Waiver.  The Purchaser hereby waives any and all Defaults or
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Events of Default existing as of the date hereof arising pursuant to Section 2.4
of  the  Note  Purchase  Agreement or arising with respect to any transaction or
event  disclosed  in  any  filing  made  by  the  Issuer with the Securities and
Exchange  Commission  on  or before the date hereof.  After giving effect to the
Waivers set forth herein, the Issuer hereby represents and warrants to Purchaser
that  all  Representations  and  Warranties  set  forth in Article 5 of the Note
Purchase  Agreement  are  true  and correct as if made on the date hereof, other
than  with  respect  to any event or transaction disclosed in any filing made by
the  Issuer  with  the Securities and Exchange Commission, and acknowledges that
the  Issuer  is  in  compliance with all of the terms and conditions of the Note
Purchase  Agreement.  In  reliance  on  such  representation  and  warranty  and
acknowledgement,  the Purchaser hereby acknowledges that, as of the date hereof,
no  other  Default  or  Event  of  Default  exists.

     SECTION  7.     Continuing  Effectiveness  of Note Purchase Agreement.  The
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Note Purchase Agreement and each of the other Transaction Documents shall remain
in  full  force  and

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<PAGE>
effect in accordance with their respective terms, except as expressly amended or
modified  by  this  Amendment.

     SECTION  8.     Cost  and  Expenses.  The  Issuer  agrees  to  pay  all
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out-of-pocket  expenses  of  the  Purchaser  for  the  negotiation, preparation,
execution and delivery of this Amendment (including fees and expenses of counsel
to  the  Purchaser).

     SECTION  9.     Effectiveness.  This  Amendment shall become effective upon
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the  prior  or  concurrent receipt by the Purchaser of a copy of this Amendment,
duly  executed  by  each  of  the  Issuer  and  the  Purchaser,  a  copy  of the
Participation  Agreement,  duly  executed  by  the  Purchaser and MCC Investment
Company,  LLC and payment to the Purchaser of all amounts required to be paid as
of  the date hereof pursuant to the terms of the Participation Agreement, a duly
executed  Amended  and  Restated  Fixed  Rate Senior Note Due June 17, 2000, and
payment  of  all accrued and unpaid fees and expenses reimbursable to New Valley
pursuant  to the terms of the Participation Agreement, including but not limited
to  fees  and  expenses  of  King  &  Spalding  in the amount of $44,195.05 paid
pursuant  to  the  wire  instructions  set  forth  on  Schedule  1  hereto.

     SECTION  10.     Headings.  The  various  headings  of  this  Amendment are
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inserted for convenience only and shall not affect the meaning or interpretation
of  this  Amendment  or  any  provision  hereof.

     SECTION  11.     Counterparts.  This  Amendment  may  be  executed  by  the
                      ------------
parties  hereto  in several counterparts, each of which shall be deemed to be an
original  and  all  of  which  shall  constitute  together  but one and the same
agreement.  This  Amendment  shall  become  effective  when  counterparts hereof
executed  on  behalf  of  the  Issuer  and  the  Purchaser  (or  notice  thereof
satisfactory  to  the  Purchaser)  shall have been received by the Purchaser and
notice  thereof  shall  have  been  given  by  the  Purchaser  to  the  Issuer.

     SECTION  12.     Governing  Law.  THIS  AMENDMENT  SHALL  BE DEEMED TO BE A
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CONTRACT  MADE  UNDER  AND  GOVERNED  BY THE INTERNAL LAWS OF THE STATE OF IOWA.

     SECTION  13.     Successors  and  Assigns.  This Amendment shall be binding
                      ------------------------
upon  and  shall inure to the benefit of the parties hereto and their respective
successors  and  assigns;  provided,  however, that the Issuer may not assign or
transfer  its  rights  or  obligations  hereunder  or  under  the  Note Purchase
Agreement  except  in  accordance with the terms of the Note Purchase Agreement.


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<PAGE>
     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Amendment to be
executed  by  their  respective officers thereunto duly authorized as of the day
and  year  first  above  written.

                                     ISSUER:

                                     MURDOCK COMMUNICATION CORPORATION

                                     By/s/  Paul  Tunink
                                        --------------------------------
                                       Name:  Paul  Tunink
                                       Title:  Vice  President  and  CFO

                                     GUARANTORS:

                                     PRIORITY INTERNATIONAL COMMUNICATIONS, INC.

                                     By/s/  Thomas  E.  Chaplin
                                        --------------------------------
                                        Name:  Thomas  E.  Chaplin
                                        Title:  Chairman

                                     ATN  COMMUNICATIONS,  INC.

                                     By/s/  Thomas  E.  Chaplin
                                        --------------------------------
                                        Name:  Thomas  E.  Chaplin
                                        Title:  Chairman

                                     INCOMEX,  INC.

                                     By/s/  Thomas  E.  Chaplin
                                        --------------------------------
                                        Name:  Thomas  E.  Chaplin
                                        Title:  Chairman


             (SIGNATURE PAGE TO NOTE AND WARRANT PURCHASE AGREEMENT)

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<PAGE>

                                     MCC  ACQUISITION  CORP.

                                     By/s/  Thomas  E.  Chaplin
                                        --------------------------------
                                        Name:  Thomas  E.  Chaplin
                                        Title:  Chairman

                                     PURCHASER:

                                     NEW  VALLEY  CORPORATION

                                     By/s/  Richard  J.  Lampen
                                        --------------------------------
                                        Name:  Richard  J.  Lampen
                                        Title:  Executive Vice President



             (SIGNATURE PAGE TO NOTE AND WARRANT PURCHASE AGREEMENT)

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