EXECUTION COPY
                                                                  --------------



                      AGREEMENT AND PLAN OF REORGANIZATION




                           dated as of August 11, 2000



                                      among



                              COMCAST CORPORATION,



            COMCAST CABLE COMMUNICATIONS, INC., COMCAST CCCI II, LLC,
                 COMCAST TELEPORT, INC., COMCAST HERITAGE, INC.,
                    COMCAST COMMUNICATIONS PROPERTIES, INC.,



                                       and



                                   AT&T CORP.





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                                Table of Contents

                                                                            Page
                                                                            ----

1.       DEFINITIONS...........................................................1
         1.1.     1992 Cable Act...............................................1
         1.2.     Affiliate....................................................1
         1.3.     Agreement....................................................2
         1.4.     AT&T Assets..................................................2
         1.5.     AT&T's Cable Business........................................2
         1.6.     AT&T Cable Subsidiaries......................................2
         1.7.     AT&T Common Stock............................................2
         1.8.     AT&T Parties.................................................3
         1.9.     AT&T Required Consents.......................................3
         1.10.    AT&T Service Area............................................3
         1.11.    AT&T Shares..................................................3
         1.12.    AT&T Systems.................................................3
         1.13.    AT&T Transferable Service Area...............................3
         1.14.    Basic Services...............................................3
         1.15.    Books and Records............................................4
         1.16.    Business Day.................................................4
         1.17.    Cable Act....................................................4
         1.18.    Closing......................................................4
         1.19.    Closing Time.................................................4
         1.20.    Code.........................................................4
         1.21.    Combined Tax.................................................4
         1.22.    Comcast Parties..............................................4
         1.23.    Comcast Required Consents....................................4
         1.24.    Comcast's PHONES Transaction.................................4
         1.25.    Communications Act...........................................4
         1.26.    Consolidated Tax Return......................................4
         1.27.    Contract.....................................................5
         1.28.    Deposits.....................................................5
         1.29.    Disqualified Shares..........................................5
         1.30.    Documented Employee Performance Case.........................5
         1.31.    Environmental Law............................................5
         1.32.    Equivalent Basic Subscriber..................................5
         1.33.    ERISA........................................................6
         1.34.    ERISA Affiliate..............................................6
         1.35.    Existing Affiliate...........................................6
         1.36.    Expanded Basic Services......................................6
         1.37.    FCC..........................................................6
         1.38.    Federal Tax..................................................6
         1.39.    Governmental Authority.......................................6
         1.40.    Hazardous Substances.........................................6
         1.41.    Hired Employee...............................................7

                                       i

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         1.42.    HSR Act......................................................7
         1.43.    Hunter Shares................................................7
         1.44.    Intellectual Property........................................7
         1.45.    Judgment.....................................................7
         1.46.    Knowledge....................................................7
         1.47.    Leased Property..............................................7
         1.48.    Legal Requirement............................................7
         1.49.    Lien.........................................................8
         1.50.    Litigation...................................................8
         1.51.    Losses.......................................................8
         1.52.    MVPD.........................................................8
         1.53.    Original Shares..............................................8
         1.54.    OSHA.........................................................8
         1.55.    Other Employees..............................................8
         1.56.    Other Intangibles............................................8
         1.57.    Other Real Property Interests................................8
         1.58.    Owned Property...............................................8
         1.59.    Parent.......................................................8
         1.60.    Parties......................................................9
         1.61.    Pay TV.......................................................9
         1.62.    Permitted Liens..............................................9
         1.63.    Person.......................................................9
         1.64.    Post-Closing Tax Period......................................9
         1.65.    Pre-Closing Tax Period.......................................9
         1.66.    Qualified Shares.............................................9
         1.67.    Recently Purchased Shares....................................9
         1.68.    Required Consents...........................................10
         1.69.    Retained Entities...........................................10
         1.70.    Seller Tax Group............................................10
         1.71.    Senior Managers.............................................10
         1.72.    Six-Month Date..............................................10
         1.73.    Straddle Period.............................................10
         1.74.    Straddle Period Tax Return..................................10
         1.75.    Subsidiary..................................................10
         1.76.    Systems Contracts...........................................10
         1.77.    Systems Franchises..........................................10
         1.78.    Systems Licenses............................................10
         1.79.    Tangible Personal Property..................................11
         1.80.    Tax Proceeding..............................................11
         1.81.    Tax Return..................................................11
         1.82.    Tax Sharing Agreements......................................11
         1.83.    Taxes.......................................................11
         1.84.    Third Party.................................................11
         1.85.    Transaction Documents.......................................12
         1.86.    Transfer....................................................12
         1.87.    Transfer Taxes..............................................12

                                       ii

<PAGE>

         1.88.    Transferred Entities........................................12
         1.89.    Other Definitions...........................................12
         1.90.    Usage.......................................................15

2.       THE INTERNAL RESTRUCTURING AND THE REORGANIZATION....................15
         2.1.     The Internal Restructuring..................................15
         2.2.     The Reorganization..........................................16

3.       ALIGNMENT MECHANISM..................................................16
         3.1.     Calculation of Values.......................................16
         3.2.     Working Capital Adjustment..................................17
         3.3.     Preliminary Alignment of Systems............................18
         3.4.     Determination of Final System Values and Working Capital
                  Adjustment Amounts..........................................20

4.       ASSUMED LIABILITIES AND EXCLUDED ASSETS..............................21
         4.1.     AT&T Excluded Assets........................................21
         4.2.     Comcast Assumed Obligations and Liabilities.................22

5.       COMCAST REPRESENTATIONS AND WARRANTIES...............................23
         5.1.     Organization and Qualification..............................23
         5.2.     Authority and Validity......................................24
         5.3.     No Conflict; Required Consents..............................24
         5.4.     Ownership of AT&T Shares....................................24
         5.5.     Reorganization..............................................24
         5.6.     Finders and Brokers.........................................25
         5.7.     Purchase Price of Recently Purchased Shares.................25

6.       AT&T'S REPRESENTATIONS AND WARRANTIES................................25
         6.1.     Organization and Qualification..............................25
         6.2.     Authorization and Validity..................................26
         6.3.     Capitalization..............................................26
         6.4.     No Conflict; Required Consents..............................27
         6.5.     Reorganization..............................................27
         6.6.     Assets......................................................28
         6.7.     AT&T Systems Franchises, AT&T Systems Licenses, AT&T
                  Systems Contracts and AT&T Other Real Property Interests....29
         6.8.     Real Property...............................................32
         6.9.     Environmental...............................................32
         6.10.    Compliance with Legal Requirements..........................34
         6.11.    Intellectual Property.......................................37
         6.12.    Financial Statements........................................37
         6.13.    Absence of Certain Changes or Events........................37
         6.14.    Litigation..................................................37
         6.15.    Tax Returns; Other Reports..................................38
         6.16.    Employment Matters..........................................38

                                      iii
<PAGE>

         6.17.    AT&T Systems Information....................................39
         6.18.    Finders and Brokers.........................................40
         6.19.    Related-Party Transactions..................................40
         6.20.    Bonds.......................................................40
         6.21.    Undisclosed Material Liabilities............................40

7.       ADDITIONAL COVENANTS.................................................41
         7.1.     Access to Premises and Records..............................41
         7.2.     Continuity and Maintenance of Operations; Certain
                  Deliveries and Notice.......................................41
         7.3.     Comcast Covenants...........................................44
         7.4.     No Transfer of Qualified Shares.............................44
         7.5.     Employees...................................................44
         7.6.     Leased Vehicles; Other Capital Leases.......................50
         7.7.     Required Consents; Franchise Renewal........................50
         7.8.     Title Commitments and Surveys...............................52
         7.9.     HSR Act Notification........................................52
         7.10.    Sales and Transfer Taxes....................................53
         7.11.    Programming.................................................53
         7.12.    Retention of Books and Records..............................53
         7.13.    Use of Name and Logo........................................54
         7.14.    Transitional Billing Services...............................54
         7.15.    Confidentiality and Publicity...............................54
         7.16.    Bulk Transfer...............................................55
         7.17.    Lien Searches...............................................55
         7.18.    Reasonable Best Efforts; Further Assurances.................55
         7.19.    Cooperation as to Rates.....................................56
         7.20.    Cooperation as to Late Fee Cases............................57
         7.21.    Distant Broadcast Signals...................................58
         7.22.    Offers......................................................58
         7.23.    @Home.......................................................58
         7.24.    Cooperation with Financial Statements.......................58
         7.25.    Accounts Payable and Franchise Fees.........................58
         7.26.    Termination of Certain Affiliate Contracts..................59
         7.27.    Capital Management Committee................................59
         7.28.    Reorganization..............................................59
         7.29.    Tax Sharing Agreements......................................59
         7.30.    Tax Matters.................................................60
         7.31.    Adjustment Event............................................66
         7.32.    Losses Relating to Failure to Obtain Franchise Consents.....68
         7.33.    Cooperation with respect to Section 8.1.2...................68

8.       CONDITIONS PRECEDENT.................................................68
         8.1.     Conditions to Each Party's Obligations......................68
         8.2.     Conditions to Comcast's Obligations.........................69
         8.3.     Conditions to AT&T's Obligations............................70

                                       iv
<PAGE>
9.       THE CLOSING..........................................................71
         9.1.     The Closing; Time and Place.................................71
         9.2.     AT&T's Delivery Obligations.................................71
         9.3.     Comcast's Delivery Obligations..............................72

10.      TERMINATION AND DEFAULT..............................................72
         10.1.    Termination Events..........................................72
         10.2.    Effect of Termination.......................................73

11.      SURVIVAL; INDEMNIFICATION............................................73
         11.1.    Indemnification by AT&T.....................................73
         11.2.    Indemnification by Comcast..................................73
         11.3.    Third Party Claims..........................................74
         11.4.    Limitations on Indemnification..............................75
         11.5.    Payments for Indemnification Amounts........................76
         11.6.    Exclusive Remedy............................................76
         11.7.    Tax Indemnification.........................................76

12.      MISCELLANEOUS PROVISIONS.............................................76
         12.1.    Parties Obligated and Benefited.............................76
         12.2.    Notices.....................................................76
         12.3.    Right to Specific Performance...............................77
         12.4.    Waiver......................................................77
         12.5.    Captions....................................................78
         12.6.    Governing Law...............................................78
         12.7.    Time........................................................78
         12.8.    Late Payments...............................................78
         12.9.    Counterparts................................................78
         12.10.   Entire Agreement............................................78
         12.11.   Severability................................................78
         12.12.   Construction................................................78
         12.13.   Expenses....................................................79
         12.14.   Risk of Loss................................................79
         12.15.   Jurisdiction................................................79
         12.16.   WAIVER OF JURY TRIAL........................................80

                                       v

<PAGE>

                      AGREEMENT AND PLAN OF REORGANIZATION


     This AGREEMENT AND PLAN OF  REORGANIZATION  is dated as of this 11th day of
August,  2000,  by and among  COMCAST  CORPORATION  ("Comcast"),  COMCAST  CABLE
COMMUNICATIONS,  INC.,  COMCAST CCCI II, LLC, COMCAST  TELEPORT,  INC.,  COMCAST
HERITAGE,  INC. and COMCAST  COMMUNICATIONS  PROPERTIES,  INC. (each, a "Comcast
Entity" and, collectively, the "Comcast Entities"), and AT&T CORP. ("AT&T").

                                    RECITALS

     A. The Boards of Directors of AT&T,  the AT&T Cable  Subsidiaries,  Comcast
and the Comcast  Entities each have  determined that it is in the best interests
of their  respective  stockholders  for AT&T to redeem shares of common stock of
AT&T  held  by the  Comcast  Entities,  in  consideration  of the  transfer  and
distribution to Comcast Cable  Communications,  Inc. ("CCCI"),  as agent for the
other Comcast  Entities,  of all of the issued and outstanding  capital stock of
the AT&T Cable Subsidiaries (the "Reorganization").

     B. AT&T and Comcast  have  entered  into a letter  agreement,  dated May 4,
1999, as amended,  providing for, among other things,  the  Reorganization  (the
"Letter Agreement").

     C. The purpose of this Agreement is to set forth the definitive  terms upon
which the Reorganization will take place.

     D. AT&T,  MediaOne Group, Inc.  ("MediaOne Group") and Meteor  Acquisition,
Inc. ("Meteor") entered into an Agreement and Plan of Merger, dated as of May 6,
1999,  pursuant to which  MediaOne Group merged with and into Meteor on June 15,
2000.

     E. For federal income tax purposes,  it is intended that the Reorganization
will qualify as tax-free to Comcast and AT&T under Code  Sections  355(a) (as to
Comcast) and 355(c) (as to AT&T).

                                   AGREEMENTS

     In  consideration  of the covenants and agreements set forth herein and for
other good and  valuable  consideration,  the receipt and  adequacy of which are
hereby acknowledged, the parties hereby agree as follows:

1.  DEFINITIONS.  In addition to the terms defined  elsewhere in this Agreement,
the following  capitalized  terms or terms  otherwise  defined in this Article 1
shall have the meanings set forth below:

     1.1.   1992  Cable  Act. The  Cable  Television   Consumer  Protection  and
Competition Act of 1992, as amended,  and the rules and regulations  promulgated
thereunder.

     1.2.   Affiliate. With respect to any Person, any other Person controlling,
controlled  by or  under  common  control  with  such  Person.  As  used in this
Agreement,  "control"  means the



<PAGE>

ownership,  directly or indirectly,  of voting securities representing the right
generally  to elect a majority  of the  directors  (or similar  officials)  of a
Person or the possession,  by contract or otherwise,  of the authority to direct
the management and policies of a Person.  For purposes of this Agreement (except
Section  6.19),  At Home  Corporation  and its  subsidiaries  and Liberty  Media
Corporation  and its  subsidiaries  will not be treated as Affiliates of AT&T or
the  AT&T  Cable  Subsidiaries.   For  purposes  of  this  Agreement,  the  term
"Affiliate"  with  respect to AT&T will  include  any entity that is at any time
prior to Closing an Affiliate of AT&T.

     1.3.   Agreement. This Agreement and Plan of  Reorganization,  as it may be
amended from time to time.

     1.4.   AT&T Assets.  All of AT&T's or the  Transferred  Entities'  or their
Affiliates'  right,  title and  interest in the assets,  privileges,  contracts,
licenses,  permits,  franchises,  authorizations,  rights, interests, claims and
other properties,  real and personal, tangible and intangible, of every type and
description,  (a) primarily held for,  primarily used in or primarily  necessary
for,  AT&T's Cable Business,  (b) in which AT&T or the  Transferred  Entities or
their  Affiliates  have any right,  title or interest  and (c) that are not AT&T
Excluded  Assets,  including the  following  items that are within the foregoing
definition:

            (1) Tangible Personal Property ("AT&T Tangible Personal Property");

            (2) Owned Property ("AT&T Owned Property");

            (3) Leased Property ("AT&T Leased Property");

            (4)  Other  Real  Property  Interests  ("AT&T  Other  Real  Property
Interests");

            (5) Systems Franchises ("AT&T Systems Franchises");

            (6) Systems Licenses ("AT&T Systems Licenses");

            (7) Systems Contracts ("AT&T Systems Contracts");

            (8) Books and Records; and

            (9) Other Intangibles.

     1.5.   AT&T's Cable Business.  The cable television business and related or
ancillary businesses (including advertising sales and the provision of Internet,
wireline  telephony  and  high-speed  data  services)  conducted  by  AT&T,  the
Transferred  Entities or their Affiliates through or in connection with the AT&T
Systems.

     1.6.   AT&T Cable Subsidiaries. The corporations  which (i) pursuant to the
Internal  Restructuring,  will be the  owners,  directly or  indirectly  through
wholly-owned  Subsidiaries,  of the AT&T Assets as of the Closing  Date and (ii)
are to be  transferred  at  Closing  to CCCI,  as agent  for the  other  Comcast
Entities, by a direct transfer of 100% of the capital stock thereof.

     1.7.   AT&T Common Stock. Common Stock, par value $1.00 per share, of AT&T.

                                       2
<PAGE>

     1.8.   AT&T Parties. AT&T and the AT&T Cable Subsidiaries.

     1.9.   AT&T Required Consents.  Any and all  consents,  authorizations  and
approvals  under  or in  connection  with the AT&T  Assets  (including  the AT&T
Systems Franchises, the AT&T Systems Licenses and the AT&T Systems Contracts) or
any  Contract,  Lien or Legal  Requirement  by which any  Transferred  Entity or
Retained Entity or any of their Affiliates or their respective Assets are bound,
required (a) to consummate the transactions  contemplated by this Agreement, (b)
for the Transferred  Entities after the Closing to operate the AT&T Systems, and
to own,  lease,  use and  operate  the AT&T  Assets and the AT&T  Systems at the
places and in the manner in which the AT&T Assets are used and the AT&T  Systems
are operated as of the date of this Agreement and as of the Closing, (c) for any
Transferred Entity to assume and perform the AT&T Systems  Franchises,  the AT&T
Systems Licenses,  and the AT&T Systems Contracts assigned to it and the Comcast
Assumed  Obligations and Liabilities assumed by it, in each case in the Internal
Restructuring,  or (d) for the  representations  set forth in Section  6.4 to be
true as if made at Closing  disregarding  any  exceptions  thereto  set forth on
Schedule 6.4 and  disregarding  the Material  Adverse Effect exception set forth
therein.

     1.10.  AT&T Service Area.  With respect to any AT&T System,  any geographic
area in which the  owner of such AT&T  System is  authorized  to  provide  cable
television  service  pursuant to a System Franchise or provides cable television
service in which a System Franchise is not required pursuant to applicable Legal
Requirements.

     1.11.  AT&T Shares. Shares of AT&T Common Stock, subject to Section 7.31.

     1.12.  AT&T  Systems.  The cable  television  systems that are set forth on
Schedule  1.12.  The AT&T Systems are also  sometimes  referred to herein as the
"Systems." To the extent that any cable  televisions  systems or franchise areas
are removed  from the  Reorganization  pursuant to Section  3.3.5 or 7.33,  such
cable television  systems or franchise areas shall cease to be "AT&T Systems" or
"Systems"  for all  purposes  of this  Agreement,  and the  Schedules  shall  be
adjusted accordingly.

     1.13.  AT&T Transferable Service Area. An AT&T Service Area with respect to
which:  (i) either (a) no  franchise  or similar  authorization  is  required or
issued for the provision of cable television  service in such AT&T Service Area,
(b) no AT&T  Required  Consent is  necessary  for the  transfer  of or change of
control of any AT&T System  Franchise  for such AT&T Service Area in  connection
with the consummation of the transactions contemplated by this Agreement, or (c)
if an AT&T  Required  Consent is necessary for the transfer or change of control
of any AT&T System  Franchise for such AT&T Service Area in connection  with the
consummation of the  transactions  contemplated by this Agreement,  an effective
consent or  approval  reasonably  acceptable  to the Comcast  Entities  has been
obtained  (and is in effect) or shall be deemed to have been  obtained  and (ii)
any AT&T System Options are not exercisable  after transfer or change of control
in  respect  of  the  transactions   contemplated  by  this  Agreement  and  the
Transaction Documents.

     1.14.  Basic Services. The lowest tier of service offered to subscribers of
a System.

                                       3

<PAGE>

     1.15.  Books and Records. All engineering  records,  files, data, drawings,
blueprints, schematics, reports, lists, plans and processes, and all other files
of  correspondence,  lists,  records and  reports,  including  those  concerning
subscribers and prospective  subscribers of the applicable AT&T Systems,  signal
and program carriage and dealings with Governmental  Authorities with respect to
the  applicable  AT&T  Systems,  including all reports filed with respect to the
applicable  AT&T  Systems  with the FCC and  statements  of  account  filed with
respect to the  applicable  AT&T Systems  with the U.S.  Copyright  Office,  but
excluding  all  documents,  reports  and  records  relating  to the AT&T  System
Employees.

     1.16.  Business  Day.  Any day other  than a  Saturday,  Sunday or a day on
which the banking  institutions  in New York,  New York or Denver,  Colorado are
required to be closed.

     1.17.  Cable Act. The Cable Communications  Policy Act of 1984, as amended,
and the rules and regulations promulgated thereunder.

     1.18.  Closing.  The  closing of the  Reorganization  contemplated  by this
Agreement, which shall take place at the Closing Time.

     1.19.  Closing Time. 11:59 p.m., local time at the place of the Closing, on
the Closing Date.

     1.20.  Code. The Internal Revenue Code of 1986, as amended.

     1.21.  Combined  Tax.  Any income or  franchise  Tax  payable to any state,
local or foreign taxing  jurisdiction in which any Transferred  Entity has filed
or  will  file a Tax  Return  with  a  member  of the  Seller  Tax  Group  on an
affiliated, consolidated, combined or unitary basis with respect to such Tax.

     1.22.  Comcast Parties. Comcast and the Comcast Entities.

     1.23.  Comcast Required Consents. Any and all consents,  authorizations and
approvals under or in connection with any Contract, Lien or Legal Requirement by
which Comcast or the Comcast  Entities,  or any of their  Affiliates  are bound,
required (a) to consummate the  transactions  contemplated  by this Agreement or
(b) for the  representations  set forth in Section  5.3 to be true as if made at
Closing  disregarding  any  exceptions  thereto  set forth on  Schedule  5.3 and
disregarding the material adverse effect exception set forth therein.

     1.24.  Comcast's PHONES  Transaction.  The offering by Comcast on March 12,
1999 of 8,700,000 PHONES (exchangeable  extendable  subordinated  debentures due
2029).

     1.25.  Communications Act. The Communications Act of 1934, as amended,  and
the rules and regulations promulgated thereunder.

     1.26.  Consolidated   Tax  Return.   Any  Tax  Return  that   includes  any
Transferred  Entity,  on the one hand,  and AT&T or any Subsidiary of AT&T other
than a Transferred Entity, on the other hand.

                                       4
<PAGE>

     1.27.  Contract. Any contract,  mortgage,  deed of trust, bond,  indenture,
lease, license, note, franchise,  certificate,  option,  warrant, right or other
instrument, document, obligation or agreement, whether written or oral.

     1.28.  Deposits.  With  respect  to any  System,  all  monies  which are on
deposit  with  Third  Parties  as of the  Closing  Time  for  the  account  of a
Transferred  Entity,  or  as  security  for  such  party's  performance  of  its
obligations (other than (i) any deposits which are AT&T Excluded Assets and (ii)
other  deposits  to the extent the benefit of which will not be  available  to a
Transferred  Entity following the Closing),  including deposits on real property
leases and deposits for utilities.

     1.29.  Disqualified  Shares.  Any  AT&T  Shares  owned  by  Comcast  or its
Affiliates that are not Qualified Shares.

     1.30.  Documented Employee Performance Case. Any Other Employee who has (a)
received a written  performance  warning  during the  period  beginning  six (6)
months before the date hereof and ending on the Closing Date, (b) had any active
involvement  in a  formal  performance  monitoring  program  during  the  period
beginning  six (6) months  before the date hereof and ending on the Closing Date
or (c) been designated by Comcast as a possible Documented Employee  Performance
Case after its review of the personnel  records during the period  beginning six
(6) months before the date hereof and ending on the Closing Date.

     1.31.  Environmental  Law. Any Legal  Requirement  relating to pollution or
the protection of human health and safety or the environment,  including CERCLA,
OSHA and RCRA.

     1.32.  Equivalent Basic  Subscriber.  An active customer for Basic Services
either in a single household,  in a commercial  establishment or in a multi-unit
dwelling  (including  a hotel  unit);  provided,  however,  that the  number  of
customers  in a multi-unit  dwelling or  commercial  establishment  that obtains
service  on a  "bulk-rate"  basis  shall be  determined  by  dividing  the gross
bulk-rate  billings for both (i) Basic Services and (ii) Expanded Basic Services
(but not billings from new product tiers ("Enhanced Services"), a la carte tiers
(including  pay per view  services),  premium  services,  installation  or other
non-recurring charges,  converter rental, or from any outlet or connection other
than such  customer's  first or from any  pass-through  charges for sales Taxes,
line-itemized  franchise  fees, late fees, fees charged by the FCC and the like)
attributable to such multi-unit dwelling or commercial  establishment during the
most recent billing period ended prior to the date of calculation (but excluding
billings in excess of a single month's  charge) by the  predominant  retail rate
charged in that franchise area by a System (or headend, as applicable) as of May
4, 1999 to individual  households for combined Basic Services and Expanded Basic
Services (excluding Enhanced Services,  a la carte tiers (including pay per view
services),  premium  services,   installation  or  other  nonrecurring  charges,
converter  rental,  or from any outlet or connection  other than such customer's
first or from any pass-through charges for sales Taxes,  line-itemized franchise
fees,  late fees,  fees  charged by the FCC and the like).  For purposes of this
definition, an "active customer" shall mean any Person, commercial establishment
or multi-unit  dwelling at any given time that is paying for and receiving Basic
Services (or Basic Services and one or more other services) from an AT&T System.
For  purposes  of this  definition,  an "active  customer"  does not include any
Person,  commercial

                                       5

<PAGE>

establishment  or multi-unit  dwelling that, as of the date of calculation,  has
never  paid  in  full  the  applicable  AT&T  System's   regular  basic  monthly
subscription   rate  for  Basic  Services   (excluding   installation  or  other
nonrecurring charges) without discount (other than discounts offered pursuant to
selling or marketing campaigns or promotional activities engaged in by such AT&T
System in the ordinary course of business,  consistent with past practices,  and
other than bulk accounts paying the contract rate) for at least one month.

     1.33.  ERISA.  The Employee  Retirement  Income  Security  Act of 1974,  as
amended,  and the rules and  regulations  promulgated  thereunder  and published
interpretations with respect thereto.

     1.34.  ERISA Affiliate. As to any Person, any trade or business, whether or
not  incorporated,  which,  together with such Person,  would be deemed a single
employer within the meaning of Section 4001 of ERISA.

     1.35.  Existing  Affiliate.  With  respect to any Person at any given time,
any other Person at such time controlling, controlled by or under common control
with such Person.  For purposes of this Agreement (except Section 6.19), At Home
Corporation  and  its  subsidiaries  and  Liberty  Media   Corporation  and  its
subsidiaries  will not be treated  as  Existing  Affiliates  of AT&T or the AT&T
Cable Subsidiaries.

     1.36.  Expanded Basic Services. Any video programming provided over a cable
television system, regardless of service tier, other than Basic Services and Pay
TV.

     1.37.  FCC. The U.S. Federal Communications Commission.

     1.38.  Federal Tax. Any Tax with  respect to which any  Transferred  Entity
has filed or will file a Tax  Return  with a member of the Seller Tax Group on a
consolidated basis pursuant to Section 1501 of the Code.

     1.39.  Governmental  Authority.  The United  States of America,  any state,
commonwealth,  territory or  possession  of the United States of America and any
political  subdivision  or  quasi-governmental  authority  of any  of the  same,
including  any  court,  tribunal,   quasi-governmental  authority,   department,
commission, board, bureau, agency, body, county, municipality, province, parish,
or other instrumentality of any of the foregoing.

     1.40.  Hazardous   Substances.   Any  pollutant,   contaminant,   chemical,
industrial,  toxic, or hazardous substance,  material or waste that is regulated
under, or forms the basis for liability under, any Environmental  Law, including
(a) any  petroleum  or  petroleum  compounds  (refined  or crude),  derivatives,
byproducts or other hydrocarbons, flammable substances, explosives, radioactive,
toxic,  ignitable,  corrosive or reactive  materials  or any other  materials or
pollutants which pose a significant  hazard or potential  significant  hazard to
the environment or Persons; (b) any "hazardous waste" as defined by the Resource
Conservation  and  Recovery  Act of 1976 as amended  on or prior to the  Closing
Date, and the rules and regulations  promulgated  thereunder ("RCRA") (42 U.S.C.
Section  6901);  (c) any "hazardous  substance" as defined by the  Comprehensive
Environmental Response,  Compensation and Liability Act of 1980 as amended on or
prior to the Closing Date, and the rules and regulations  promulgated thereunder
("CERCLA") (42 U.S.C.  9601 et seq.);  (d) any substance  regulated by the Toxic
Substances

                                       6

<PAGE>

Control Act (42 U.S.C.  Section 2601 et seq.) or the Insecticide,  Fungicide and
Rodenticide Act (7 U.S.C.  Section 136 et seq.), each, as amended on or prior to
the Closing Date,  and the rules and  regulations  promulgated  thereunder;  (e)
asbestos  or  asbestos-containing   material  of  any  kind  or  character;  (f)
polychlorinated  biphenyls; (g) any substances regulated under the provisions of
Subtitle I of RCRA relating to underground  storage tanks;  (h) any materials or
substances designated as "hazardous substances" pursuant to the Clean Water Act,
and the rules and regulations  promulgated thereunder (33 U.S.C. Section 1251 et
seq.);  (i) any substance the presence,  use,  handling,  treatment,  storage or
disposal of which is regulated or prohibited by any  Environmental  Law; and (j)
any other substance which by any  Environmental  Law requires special  handling,
reporting or  notification  of any  Governmental  Authority  in its  collection,
storage, use, treatment or disposal.

     1.41.  Hired Employee.  Any AT&T System Employee who is offered and accepts
employment by a Transferred Entity or is an employee of a Transferred Entity, in
either case in accordance with Section 7.5.

     1.42.  HSR Act. The Hart-Scott-Rodino  Antitrust  Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.

     1.43.  Hunter  Shares.  The 260,298  AT&T Shares  owned by an  Affiliate of
Comcast, which became a wholly-owned Affiliate of Comcast in connection with the
acquisition  of CalPERS'  interest in the Maclean  Hunter  system on February 9,
2000.

     1.44.  Intellectual Property. Any (a) trademarks, trade dress, trade names,
service marks, logos and other similar proprietary rights, (b) domain names, (c)
copyrights,  (d) patents and patentable know-how,  inventions and processes, and
(e)  any  other  intellectual  property  rights,  and any  registrations  for or
applications for registration of any of the foregoing.

     1.45.  Judgment. Any judgment, writ, order, injunction,  award or decree of
any court, judge, justice or magistrate, including any bankruptcy court or judge
or the  arbitrator  in any  binding  arbitration,  and  any  order  of or by any
Governmental Authority.

     1.46.  Knowledge.  With respect to any AT&T System, the actual knowledge of
a  particular  matter of the  general  manager of the AT&T  System or the actual
knowledge of managers or officers of AT&T (or any of its  subsidiaries  that are
Existing  Affiliates)  senior to such general manager.  "AT&T's Knowledge" means
Knowledge with respect to the AT&T Systems.

     1.47.  Leased  Property.  Leaseholds  of real  property  or, as the context
requires, the real property demised under such leaseholds.

     1.48.  Legal Requirement. Applicable common law and any statute, ordinance,
code or other law, rule,  regulation,  order,  restriction,  judicial  decision,
judgment,  decree, permit,  technical or other written standard,  requirement or
procedure enacted, adopted, promulgated, applied or followed by any Governmental
Authority,   including  any  Judgment  and  any  written   agreement   with  any
Governmental Authority, other than a Systems Franchise.

                                       7
<PAGE>

     1.49.  Lien. With respect to any property or asset, any security  interest,
security agreement,  financing statement filed with any Governmental  Authority,
conditional sale,  capital lease or other title retention  agreement relating to
such property or asset, any lease, consignment or bailment given for purposes of
security, any mortgage, lien (including any lien for Taxes), indenture,  pledge,
option,  charge,  encumbrance,  adverse  interest,  constructive  trust or other
trust,  claim,  attachment,  or  exception  to,  defect  in, or other  condition
adversely affecting title or other ownership interest  (including  reservations,
rights  of  entry,  possibilities  of  reverter,   encroachments,   protrusions,
easements, rights-of-way, rights of first refusal, restrictive covenants, leases
and  licenses) of any kind,  which  constitutes  an interest in or claim against
property,  whether arising pursuant to any Legal  Requirement,  Systems License,
Systems Franchise, Systems Contract or otherwise.

     1.50.  Litigation.  Any  claim,  action,  suit,  proceeding,   arbitration,
investigation,  hearing or any other  similar  activity or procedure  that could
reasonably be expected to result in a Judgment.

     1.51.  Losses. Any claims, losses, liabilities,  damages,  penalties, costs
and expenses,  including  interest that may be imposed in connection  therewith,
reasonable  expenses of  investigation,  reasonable  fees and  disbursements  of
counsel and other experts,  and, as applicable,  the cost to any Person making a
claim or seeking  indemnification  under this  Agreement  with  respect to funds
expended  by such  Person  by  reason  of the  occurrence  of any  event  or the
existence or assertion of any Liens (other than Permitted Liens) with respect to
which  indemnification  is  sought  or by reason  of its  enforcing  its  rights
hereunder.

     1.52.  MVPD. Any Person who makes available for purchase, by subscribers or
customers, multiple channels of video programming.

     1.53.  Original Shares.  The 39,601,980 AT&T Shares owned by Comcast or its
wholly-owned Affiliates on May 4, 1999, and identified as such on Schedule 1.53.

     1.54.  OSHA. Occupational Safety and Health Act.

     1.55.  Other  Employees.   All  AT&T  Systems  Employees,   including  term
employees, who are not Senior Managers.

     1.56.  Other  Intangibles.  All intangible  assets,  other than the Systems
Franchises, the Systems Licenses and the Systems Contracts, including subscriber
lists,  claims  (excluding  any claims to the extent  relating to the applicable
AT&T Excluded Assets), and Intellectual Property.

     1.57.  Other Real Property Interests. Easements and rights of access (other
than those  relating to multiple  dwelling  units) and other  interests  in real
property.

     1.58.  Owned  Property.  Fee  interests in real property and all towers and
other improvements thereon and appurtenances thereto.

     1.59.  Parent. AT&T or Comcast, as the context requires.

                                       8
<PAGE>

     1.60.  Parties.  Comcast,  the  Comcast  Entities,  AT&T and the AT&T Cable
Subsidiaries.

     1.61.  Pay  TV.  Premium  programming  services  selected  by and  sold  to
subscribers on a per-channel or per-program basis.

     1.62.  Permitted Liens.  (a) Liens for Taxes,  assessments and governmental
charges,  in each case, not yet due and payable or being contested in good faith
(and for which adequate  accruals or reserves,  if any, have been  established),
(b) customary zoning laws or ordinances or any similar Legal  Requirements,  (c)
customary rights reserved to any Governmental Authority to regulate the affected
property,  (d) Liens described on Schedule 6.6.1, all of which Liens (except for
those  marked with an asterisk (*) on such  Schedule or otherwise  agreed by the
Parties in writing) will be  terminated,  released or, in the case of the rights
of first refusal listed on such Schedule, waived, as appropriate, at or prior to
the Closing,  (e) as to Leased  Property or Tangible  Personal  Property that is
leased,  (i) the  interests of the lessors  thereof and (ii) any Lien granted by
any lessor to secure indebtedness of such lessor, (f) Liens arising from Comcast
Assumed  Obligations  and  Liabilities,  (g) as to AT&T Owned  Property and AT&T
Other Real Property Interests,  any Lien (other than Liens securing indebtedness
or  arising  out of the  obligation  to pay  money)  that does not and would not
reasonably be expected to,  individually  or in the  aggregate  with other Liens
(other  than  Permitted  Liens in clauses  (a)-(f)  above and clause (h) below),
interfere with the right or ability to own, use, enjoy or operate the AT&T Owned
Property or AT&T Other Real Property  Interests in the manner  currently used or
operated  or  materially   detract  from  their  value,  and  (h)  any  inchoate
materialmen's, mechanics', workmen's, repairmen's or other like Liens arising in
the  ordinary  course of  business;  provided  that  "Permitted  Liens" will not
include any Lien (other than any Lien described in clause (e) above) which could
prevent or materially interfere with the conduct of the business of the affected
System.

     1.63.  Person.  Any natural person,  Governmental  Authority,  corporation,
general or limited partnership, limited liability company, joint venture, trust,
association or unincorporated entity of any kind.

     1.64.  Post-Closing Tax Period.  Any Tax period beginning after the Closing
Date;  and,  with  respect to a Tax period  that begins on or before the Closing
Date and ends  thereafter,  the portion of such Tax period  beginning  after the
Closing Date.

     1.65.  Pre-Closing  Tax  Period.  Any Tax  period  ending on or before  the
Closing  Date;  and,  with  respect to a Tax period that begins on or before the
Closing Date and ends  thereafter,  the portion of such Tax period ending on the
Closing Date.

     1.66.  Qualified Shares.  32,993,983 of the Original Shares, and identified
as such on Schedule 1.66.

     1.67.  Recently  Purchased Shares.  Any AT&T Shares owned by Comcast or its
Affiliates  that are  neither  Original  Shares nor Hunter  Shares and that were
acquired by Comcast or its Affiliates after May 4, 1999.

                                       9

<PAGE>

     1.68.  Required  Consents.  The  AT&T  Required  Consents  or  the  Comcast
Required Consents, as the context requires.

     1.69.  Retained  Entities.  Any Affiliate of AT&T, other than a Transferred
Entity, that, as of the date of this Agreement,  or at any time between the date
hereof and the Closing, owns AT&T Assets.

     1.70.  Seller Tax Group.  With  respect to Federal  Taxes,  the  affiliated
group of corporations  (as defined in Section 1504(a) of the Code) of which AT&T
is a member, and with respect to Taxes other than Federal Taxes, any affiliated,
consolidated,  combined or unitary group of which AT&T or any of its  Affiliates
is a member.

     1.71.  Senior Managers.  AT&T Systems  Employees who are managers or senior
to managers.

     1.72.  Six-Month  Date.  The date that is six (6) months  after the Closing
Date.

     1.73.  Straddle  Period.  Any  taxable  period  for  which a Tax  Return is
required  to be filed or a payment of Tax is required to be made which as to any
Transferred  Entity  includes,  but does not end on, the Closing  Date,  but not
including any taxable period for which a Consolidated Tax Return is filed.

     1.74.  Straddle Period Tax Return.  Any Tax Return of a Transferred  Entity
for a taxable period that begins before and ends after the Closing Date.

     1.75.  Subsidiary. As to any Person, any other Person of which at least 50%
of the equity and voting  interests are owned,  directly or indirectly,  by such
Person.

     1.76.  Systems Contracts.  All Contracts (other than Systems Franchises and
Systems  Licenses),  including lease agreements for Tangible Personal  Property,
pole line or joint line agreements,  underground  conduit  agreements,  crossing
agreements,  retransmission consent agreements,  multiple dwelling, bulk billing
or commercial  service  agreements,  Contracts with ServiceCo LLC and/or At Home
Corporation or any of their Affiliates,  Contracts  documenting  Leased Property
and Other Real Property Interests,  capital leases, must-carry elections, system
specific  programming  agreements or signal supply  agreements,  agreements with
community groups or similar Third Parties,  partnership,  joint venture or other
similar  agreements  or  arrangements,  agreements  relating to the provision of
telephone  or  high-speed  data  services,  and  any  advertising   interconnect
agreements.

     1.77.  Systems Franchises. Franchises,  permits and similar  authorizations
issued by  franchising  authorities,  and all rights and  benefits to the extent
pertaining thereto,  including the rights and benefits arising under Section 626
of the Cable Act to the extent applicable to a Systems Franchise.

     1.78.  Systems Licenses. Intangible cable television  channel  distribution
rights,  cable  television  relay  service  ("CARS"),  business  radio and other
licenses,  earth  station  registrations,  authorizations,  consents  or permits
issued  by the FCC or any  other  Governmental  Authority  (other  than  Systems
Franchises), and all rights and benefits to the extent pertaining thereto.

                                       10
<PAGE>

     1.79.  Tangible  Personal   Property.   All  tangible  personal   property,
including  towers (other than towers on Owned Property that are fixtures thereon
and a  part  thereof),  tower  equipment,  aboveground  and  underground  cable,
distribution systems, headend amplifiers, line amplifiers,  microwave equipment,
converters,  testing equipment, motor vehicles, office equipment,  computers and
billing equipment,  furniture,  fixtures, supplies, inventory and other physical
assets,  and  petty  cash  that is  remaining  and to be  Transferred  with  the
applicable AT&T System.

     1.80.  Tax Proceeding. Any audit, examination, contest, litigation or other
proceeding relating to Taxes.

     1.81.  Tax  Return.  Any  return,  report,   information  return  or  other
statement or document  (including  any related or  supporting  information,  any
schedule or attachment  thereto and any amendment  thereof) filed or required to
be  filed  with any  federal,  state,  local  or  foreign  taxing  authority  in
connection with the  determination,  assessment,  collection,  administration or
imposition of any Tax.

     1.82.  Tax Sharing  Agreements.  All existing  agreements  or  arrangements
(whether or not  written)  binding  upon any of the  Transferred  Entities  that
provide for the  allocation,  apportionment,  sharing or  assignment  of any Tax
liability  or  benefit,  or the  transfer  or  assignment  of income,  revenues,
receipts, or gains for the purpose of determining any Person's Tax liability.

     1.83.  Taxes.  (i) Levies and  assessments of any kind or nature imposed by
any Governmental Authority,  including all income, sales, use, ad valorem, value
added,  franchise,  severance,  net or  gross  proceeds,  withholding,  payroll,
employment,  excise or property taxes and levies,  assessments or other payments
required  to be made to any  state  abandoned  property  administrator  or other
public official  pursuant to an abandoned  property,  escheat or similar law (an
"Escheat  Payment"),  together  with any  interest  thereon  and any  penalties,
additions to tax or additional amounts applicable  thereto,  (ii) in the case of
the  Transferred  Entities,  liability for the payment of any amount of the type
described  in clause (i) as a result of being or having  been before the Closing
Date a member of an affiliated,  consolidated,  combined or unitary group,  or a
party to any  agreement or  arrangement,  as a result of which  liability of the
Transferred  Entities to a  Governmental  Authority is  determined or taken into
account  with  reference  to the  activities  of any  other  Person,  and  (iii)
liability of the Transferred  Entities for the payment of any amount as a result
of being party to any Tax Sharing  Agreement  or with  respect to the payment of
any  amount  imposed  on any  person of the type  described  in (i) or (ii) as a
result of any existing express or implied  agreement or arrangement  (including,
but not limited to, an indemnification  agreement or arrangement).  For purposes
of this Agreement, an Escheat Payment shall be attributable to a Pre-Closing Tax
Period if the relevant  abandoned or unclaimed property was either accrued as an
unclaimed  property  liability  for purposes of  calculating  the Final  Working
Capital Adjustment Amount or first proffered by the relevant  Transferred Entity
or any of its affiliates at least one year before the Closing Date.

     1.84.  Third  Party.  Any  Person  other  than AT&T and its  Affiliates  or
Comcast and its Affiliates.

                                       11
<PAGE>

     1.85.  Transaction  Documents.  All instruments and documents  described in
Sections 9.2 and 9.3 that are executed and  delivered by or on behalf of an AT&T
Party or a Comcast Party in connection  with this Agreement or the  transactions
contemplated hereby.

     1.86.  Transfer.  With respect to any asset or  liability,  the transfer of
such asset or liability  through the transfer of ownership of the entity holding
such asset or liability or of an entity owning,  directly or indirectly,  of all
the equity interests in the entity holding such asset or liability.

     1.87.  Transfer Taxes. Any transfer,  sales, use, excise and similar Taxes,
but not any Taxes measured by or based on gross or net income.

     1.88.  Transferred Entities. The AT&T Cable Subsidiaries,  any Subsidiaries
of the  AT&T  Cable  Subsidiaries  immediately  prior  to the  Closing  and  any
Subsidiaries  of AT&T that, as of the Closing,  have been merged into AT&T Cable
Subsidiaries or any Subsidiary of the AT&T Cable  Subsidiaries,  or to which the
AT&T Cable  Subsidiaries or any Subsidiaries of the AT&T Cable Subsidiaries is a
successor under applicable law as of the Closing.

     1.89.  Other  Definitions.  The following other terms have the meanings set
forth in the Sections indicated in the table below:

             Term                                                Section
             ----                                                -------

Action                                                             11.3
Adjustment Event                                                   7.31
Agent's Fees                                                       5.6
Agreed Share Value                                                 3.1.1
ALTA                                                               7.8
Antitrust Division                                                 7.9
Approved Leave of Absence                                          7.5.3
Arbitrator                                                         3.4.2
AT&T Cable Subsidiaries                                            Preamble
AT&T Cable Subsidiaries Shares                                     2.2
AT&T Cap                                                           11.4(a)
AT&T Credited Estimated Tax Payment                                7.30.2(f)
AT&T Excluded Assets                                               4.1
AT&T Excluded Liabilities                                          4.2
AT&T Financial Statements                                          6.12
AT&T Leased Property                                               1.4(3)
AT&T Minimum Damage Requirement                                    11.4(a)
AT&T 90% Threshold                                                 8.2.5(a)
AT&T Other Real Property Interests                                 1.4(4)
AT&T Owned Property                                                1.4(2)
AT&T Plans                                                         6.16.2
AT&T Retained Franchise                                            7.7.5
AT&T System Employee                                               6.16.3
AT&T System Option                                                 6.7.4

                                       12

<PAGE>
             Term                                                Section
             ----                                                -------

AT&T Systems Contracts                                             1.4(7)
AT&T Systems Franchises                                            1.4(5)
AT&T Systems Licenses                                              1.4(6)
AT&T Tangible Personal Property                                    1.4(1)
AT&T Tax Breach                                                    7.30.2(b)
AT&T Tax Indemnitee                                                7.30.2(b)
AT&T Tax Indemnitees                                               7.30.2(b)
AT&T's Knowledge                                                   1.46
Average Price                                                      3.3.4(a)
CARS                                                               1.78
CCCI                                                               Recital A
CERCLA                                                             1.40
Change in Tax Law                                                  8.1.1
Closing Date                                                       3.3.3
Comcast                                                            Preamble
Comcast Assumed Obligations and Liabilities                        4.2
Comcast Cap                                                        11.4(b)
Comcast Consolidated Tax Return                                    7.30.1(b)
Comcast Entities                                                   Preamble
Comcast Entity                                                     Preamble
Comcast Minimum Damage Requirement                                 11.4(b)
Comcast Tax Breach                                                 7.30.2(a)
Comcast Tax Indemnitee                                             7.30.2(a)
Comcast Tax Indemnitees                                            7.30.2(a)
Comcast Taxes                                                      7.30.2(a)
Condition Satisfaction Date                                        3.3.1
Confidential Information                                           7.15.1
control                                                            1.2
Controlling Party                                                  7.30.4(a)(i)
Cost of Service                                                    6.10.4
Cushion Shares                                                     3.3.4(a)
Cushion Value                                                      3.3.2
Designated Conditions                                              3.3.4
Determination                                                      7.28.3
Disclosing Party                                                   7.1
Distribution                                                       7.31(a)(i)
Enhanced Services                                                  1.32
Escheat Payment                                                    1.83
Final Aggregate Value                                              3.4.3(a)(ii)
Final Report                                                       3.4.1
FTC                                                                7.9
GAAP                                                               1.90
Indemnified Party                                                  11.3
Indemnifying Party                                                 11.3
Inspecting Party                                                   7.1

                                       13

<PAGE>

             Term                                                Section
             ----                                                -------

Internal Restructuring                                             2.1
Internal Restructuring Documents                                   9.2.7
Letter Agreement                                                   Recital B
List                                                               7.5.3
Lower Tier Cable Shares                                            6.3.2
Material Adverse Effect                                            6.1
Material AT&T Systems Contracts                                    6.7.1
MediaOne Group                                                     Recital D
Meteor                                                             Recital D
New Consideration                                                  7.31(a)(iii)
Noncontrolling Party                                               7.30.4(a)(i)
Number Cap                                                         3.3.4(a)
Permitted Liens                                                    1.62(h)
POFS                                                               7.7.3
Pre-Closing Taxes                                                  7.30.2(a)
Preliminary Aggregate Value                                        3.3.2
Preliminary Report                                                 3.3.2
Pullout Shares                                                     3.3.4
RCRA                                                               1.40
Removed Systems                                                    3.3.5
Reorganization                                                     Recital A
Reorganization Tax Proceeding                                      7.30.4(b)
Representatives                                                    7.15.1
Retained Employees                                                 7.5.1
Settlement Agreement                                               7.20.1(a)
Separate Tax Proceeding                                            7.30.4(c)
Severance Benefits                                                 7.5.9
Share Report                                                       3.3.4
Straddle Period Tax Proceeding                                     7.30.4(a)
Subscriber Cap                                                     3.1.2
Surveys                                                            7.8
System Employee                                                    6.16.3
System Employee on Leave Status                                    7.5.3
System Value                                                       3.1.2
Systems                                                            1.12
Taking                                                             12.14
Tax Indemnified Loss                                               7.30.2(h)
Tax Indemnified Party                                              7.30.2(h)
Tax Indemnifying Party                                             7.30.2(h)
Tax Indemnitee                                                     7.30.2(h)
Title Commitments                                                  7.8
Title Company                                                      7.8
Title Defect                                                       7.8
Total Closing Shares                                               3.3.6
Tracking Shares                                                    7.31(a)(i)

                                       14

<PAGE>

             Term                                                Section
             ----                                                -------

Transitional Billing Services                                      7.14
Value Cap                                                          3.3.4(b)
WARN                                                               6.16.1
Working Capital Adjustment Amount                                  3.2

     1.90.  Usage. The definitions in this Article 1 shall apply equally to both
the  singular and plural  forms of the terms  defined.  Whenever the context may
require,  any pronoun shall include the  corresponding  masculine,  feminine and
neuter  forms.  All  references  herein  to  Articles,  Sections,  Exhibits  and
Schedules  shall be deemed to be  references  to Articles  and  Sections of, and
Exhibits and Schedules  to, this  Agreement  unless the context shall  otherwise
require. All Exhibits and Schedules attached hereto shall be deemed incorporated
herein as if set forth in full herein and,  unless  otherwise  defined  therein,
each term used in any  Exhibit or Schedule  shall have the  meaning  ascribed to
such term in this  Agreement.  The words  "include,"  "includes" and "including"
shall be deemed to be followed  by the phrase  "without  limitation."  The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement  shall refer to this  Agreement  as a whole and not to any  particular
provision  of  this  Agreement  unless  the  context  shall  otherwise  require.
Reference to any  Transferred  Entity's  Assets or AT&T's Cable Business will be
deemed to refer to the portion of the AT&T Assets or AT&T's Cable Business owned
or operated by such  Transferred  Entity.  Unless otherwise  expressly  provided
herein, any agreement, instrument or statute defined or referred to herein or in
any  agreement or  instrument  that is referred to herein means such  agreement,
instrument  or statute as from time to time amended,  modified or  supplemented,
including (in the case of agreements  or  instruments)  by waiver or consent and
(in the case of statutes) by  succession of  comparable  successor  statutes and
references to all attachments thereto and instruments  incorporated therein. All
accounting terms not otherwise  defined in this Agreement will have the meanings
ascribed to them under generally acceptable  accounting  principles as in effect
from time to time in the United States ("GAAP").

2.   THE INTERNAL RESTRUCTURING AND THE REORGANIZATION.

     2.1.   The Internal Restructuring. AT&T will, and will cause its Affiliates
to, effect an internal  restructuring (the "Internal  Restructuring") to achieve
the following results immediately prior to the Closing Time:

            (a) Each AT&T Asset existing  immediately  prior to Closing shall be
owned by a Transferred Entity, subject to Section 7.7.

            (b) No Transferred  Entity shall own (i) any AT&T Excluded Assets or
(ii) any other  assets  except for AT&T Assets and  ownership  interests  in any
other Transferred Entity.

            (c) Each of the Comcast Assumed Obligations and Liabilities shall be
assumed by a Transferred Entity (to the extent not already an obligation of such
entity).

            (d) No Transferred Entity shall have (i) any AT&T Excluded Liability
or (ii) any other  liabilities  except for the Comcast  Assumed  Obligations and
Liabilities.

                                       15
<PAGE>

            (e) Each Hired  Employee  shall be employed by a Transferred  Entity
subject to Section 7.5.

            (f) No Transferred  Entity shall have any employees except for Hired
Employees.

         With respect to any entity that owns any AT&T Assets, but that is not a
Party to this  Agreement,  AT&T  will  cause  such  entity  to  comply  with the
obligations,  covenants  and terms of this  Agreement  in  respect  of such AT&T
Assets as if such entity were a Party to this Agreement.

     2.2.   The Reorganization.  Subject  to the  terms and  conditions  of this
Agreement,  on the  Closing  Date,  AT&T shall  redeem all of the Total  Closing
Shares in  consideration  of the transfer and distribution to CCCI, as agent for
the other Comcast Entities,  of all of the issued and outstanding  capital stock
of the AT&T  Cable  Subsidiaries  (the  "AT&T  Cable  Subsidiaries  Shares")  as
follows:

            2.2.1. AT&T shall assign,  transfer,  convey and deliver to CCCI, as
agent for the other Comcast Entities, all of the AT&T Cable Subsidiaries Shares,
free and clear of all Liens and any other  limitation or restriction  (including
any  restriction  on the right to sell,  vote or  otherwise  dispose of the AT&T
Cable Subsidiaries Shares). Such assignment,  transfer,  conveyance and delivery
shall  be  evidenced  by  duly  endorsed  in  blank  share  certificates  or  by
instruments of transfer,  with any required  transfer  stamps  affixed  thereto,
reasonably satisfactory in form and substance to Comcast and its counsel; and

            2.2.2.  The Comcast  Entities  shall  assign,  transfer,  convey and
deliver to AT&T all of the Total Closing Shares, free and clear of all Liens and
any other  limitation or restriction  (including any restriction on the right to
sell, vote or otherwise  dispose of the Total Closing Shares).  Such assignment,
transfer,  conveyance  and delivery shall be evidenced by duly endorsed in blank
share  certificates  or by instruments of transfer,  with any required  transfer
stamps affixed  thereto,  reasonably  satisfactory in form and substance to AT&T
and its counsel.

3.   ALIGNMENT MECHANISM. Each Party hereto agrees as follows:

     3.1.   Calculation of Values.

            3.1.1. For purposes of this Agreement, (i) each Original Share shall
be valued at $54.41,  (ii) each Recently  Purchased Share shall be valued at the
purchase price paid by Comcast or its  wholly-owned  Affiliate for such Recently
Purchased Share and (iii) each Hunter Share shall be valued at $48.8125. In each
case,  such share values shall be subject to  adjustment  as provided in Section
7.31. The term "Agreed Share Value" means,  with respect to any AT&T Share,  the
per share value  specified  in the first  sentence  of this  Section  3.1.1,  as
adjusted pursuant to Section 7.31.

            3.1.2.  For the purposes of this  Agreement,  the "System Value" for
each System shall equal (a) $4,591  multiplied  by (b) the number of  Equivalent
Basic Subscribers served by such System as of the month end prior to the Closing
Date (or, in the case of any franchise area located in Wildwood, New Jersey, the
average  number of  Equivalent  Basic  Subscribers  in such area for the  twelve
(12)-month period ending on the month end prior to the Closing Date,

                                       16

<PAGE>

calculated by (x) adding together the number of Equivalent Basic  Subscribers in
such area at the end of each of the thirteen (13) months ending on the month end
prior to the Closing Date and (y)  dividing  that  aggregate  number by thirteen
(13)); provided that, with respect to each such System, the number of Equivalent
Basic  Subscribers  in such System shall not exceed the number (the  "Subscriber
Cap") set forth for such System in Schedule 3.1.2-A.

     3.2.   Working  Capital  Adjustment.  A working capital  adjustment  amount
shall be calculated for each AT&T System on an AT&T System-by-AT&T  System basis
as follows, which adjustments will be made without duplication of any amount (in
each case,  the  "Working  Capital  Adjustment  Amount").  The  Working  Capital
Adjustment Amount for each System shall initially be zero and shall be increased
by the amount of current assets (other than inventory) being  Transferred to the
Comcast Entities with respect to such AT&T System and decreased by the amount of
liabilities  being  Transferred  to such Comcast  Entities  with respect to such
System as of the Closing Time. Current assets shall include, but are not limited
to, petty cash, prepaid expenses,  funds of Transferred Entities on deposit with
Third Parties to the extent being  Transferred  to the Comcast  Entities  (other
than those that are or relate to AT&T  Excluded  Assets or the  benefit of which
will not be available to the Transferred Entity following Closing), and accounts
receivable,  and  liabilities  shall  include,  but are not limited to,  accrued
expenses  (including  accrued real and personal  property  taxes,  but not other
Taxes, and including copyright fees or non-programming license fees or charges),
unearned  income and advance  payments  (including  subscriber  prepayments  and
deposits for converters,  encoders,  cable television service and related sales)
and interest,  if any,  required to be paid on advance  payments,  in each case,
related  to  AT&T's  Cable  Business  conducted  through  such  System,  all  as
determined in accordance  with GAAP, to reflect the principle  that all expenses
and income  attributable  to AT&T's Cable  Business  for the period  through and
including  the  Closing  Time  are for  the  account  of AT&T or its  applicable
subsidiary,  and all expenses and income  attributable  to AT&T's Cable Business
for the  period  after  the  Closing  Time are for the  account  of the  Comcast
Entities (through ownership of the Transferred  Entities).  AT&T will receive no
credit for (i) the  portion of any  account  receivable  resulting  from  cable,
telephony or Internet  service sales that is sixty (60) days or more past due as
of the Closing Date (cash received subsequent to the billing cutoff prior to the
Closing  Time will be  applied  to the  active  aged  receivables  on a pro rata
basis),  (ii) the portion of any national  agency account  receivable  resulting
from advertising sales that is one hundred twenty (120) days or more past due as
of the Closing Date, (iii) any non-national agency account receivable  resulting
from advertising sales any portion of which is ninety (90) days or more past due
as of the Closing Date,  (iv) accounts  receivable from customers whose accounts
are inactive as of the Closing  Date, or (v) any accounts  receivable  that have
not arisen from a bona fide transaction in the ordinary course of business.  For
purposes of making "past due"  calculations  under this Section 3.2, the billing
statements  of a System will be deemed to be due and payable on the first day of
the period during which the service is provided to which such billing statements
relate.  Notwithstanding the foregoing, no adjustment will be made for any items
of income or  expense  to the extent  related  to AT&T  Excluded  Assets or AT&T
Excluded  Liabilities.  In  furtherance of the  foregoing,  the Working  Capital
Adjustment Amount for each System shall be decreased without  duplication by the
economic  value of  vacation  time  pursuant  to Section  7.5.8(a) to the extent
earned as of the Closing  Time and  permitted to be taken after the Closing Time
by the AT&T System  Employees  employed at such AT&T System who (i) are employed
by  a  Transferred  Entity  at  Closing  or  (ii)  will  become  employees  of a
Transferred  Entity,  after being released from a leave of absence in accordance

                                       17

<PAGE>

with Section 7.5.3. It is understood that the Working Capital  Adjustment Amount
will not  reflect any  intercompany  receivables  or  payables,  long-term  debt
(including the current  portion  thereof) or related accrued  interest,  accrued
programming  expense,  accounts  payable,  franchise fees or deferred  taxes, as
these items will not be Transferred with the AT&T Systems.

     3.3.   Preliminary Alignment of Systems.

            3.3.1.  After the date  hereof,  Comcast and AT&T will  consult with
each  other  from  time  to time  regarding  the  progress  being  made  towards
satisfaction  of the conditions to Closing set forth in Article 8. The date upon
which all the  conditions  to the  Closing set forth in such  Article  have been
satisfied or (to the extent legally  permissible)  waived or are then capable of
being satisfied, and one Parent has delivered the other Parent a notice thereof,
is  referred  to as the  "Condition  Satisfaction  Date."  Except  as  otherwise
provided herein, a Party may (to the extent legally  permissible)  conditionally
waive  one  or  more  conditions  to its  obligations,  subject  to the  Closing
occurring on the last  Business Day of the month after the month in which notice
of the Condition Satisfaction Date is provided.

            3.3.2.  Within 10 Business  Days after the end of the month in which
the Condition  Satisfaction Date occurs,  AT&T shall deliver to Comcast a report
(a  "Preliminary  Report"),  certified  as to  completeness  and  accuracy by an
authorized  officer of AT&T,  showing in  reasonable  detail for each AT&T Cable
Subsidiary a good faith  preliminary  determination  of (i) the System Value for
each  System  owned or to be owned  at  Closing  by the  applicable  AT&T  Cable
Subsidiary or by any of its Subsidiaries that is a Transferred  Entity, (ii) the
Working Capital  Adjustment  Amount of each such System,  (iii) the aggregate of
items (i) and (ii) for all AT&T Cable  Subsidiaries (the "Preliminary  Aggregate
Value"),  in each case together with appropriate  documents  substantiating  the
estimates  proposed in its Preliminary  Report and (iv) an amount  determined by
AT&T (the "Cushion Value"),  which Cushion Value shall not exceed $25 million or
be less than zero.

            3.3.3.  The Closing will occur on the last Business Day of the month
during which the  Preliminary  Report must be delivered  (the  "Closing  Date");
provided  that if the  Closing  does not  occur on such  date as a result of the
failure  of the  conditions  set forth in Article 8 to be  satisfied  or (to the
extent  legally  permissible)  waived,  the provisions of this Section 3.3 shall
continue  to  apply  as if the  original  Condition  Satisfaction  Date  had not
occurred;  and  provided  further  that the  Parents may  mutually  agree upon a
different Closing Date.

            3.3.4.  The Comcast Entities shall deliver to AT&T at Closing in the
aggregate a number of AT&T Shares with a value (based on the Agreed Share Value)
equal to the Preliminary Aggregate Value; provided that the following conditions
shall be satisfied  (and if they are not  satisfied,  the procedure set forth in
Section 3.3.5 shall apply):

            (a) the total number of  Disqualified  Shares (i) shall be less than
the total  number of  Qualified  Shares  (the  "Number  Cap") and (ii)  shall be
further  reduced by a number of AT&T Shares (the "Cushion  Shares") equal to the
Cushion Value  divided by the average daily closing price (the "Average  Price")
per AT&T Share for the five (5) day  trading  period  ending on the  trading-day
prior to the delivery of the Preliminary  Report (as reported in the Wall Street
Journal, or if no market price for an AT&T Share (or element thereof) existed on
any such

                                       18

<PAGE>

trading day, the price for an AT&T Share (or such  element) as estimated in good
faith by AT&T); and

            (b) the total value of the Disqualified  Shares (based on the Agreed
Share Value) (i) shall be less than the total value of Qualified  Shares  (based
on the Agreed Share  Value) (the "Value Cap") and (ii) shall be further  reduced
by the Cushion Value.

     During  the  period  from the date  upon  which the  Preliminary  Report is
required to be delivered through no later than the close of business on the 20th
day (or, if the 20th day is not a Business  Day, the previous  Business  Day) in
that same calendar month,  Comcast or its Affiliates will acquire (to the extent
not previously  acquired) additional AT&T Shares to achieve (based on the Agreed
Share Value),  to the maximum extent possible,  the Preliminary  Aggregate Value
consistent  with the conditions set forth in clauses (a) and (b) of the previous
sentence (the "Designated Conditions"),  less a number of AT&T Shares determined
by Comcast  (the  "Pullout  Shares")  which  number  will not exceed $23 million
divided by the Average Price.  By no later than the first Business Day after the
end of such period,  Comcast shall deliver to AT&T a report (a "Share  Report"),
certified as to  completeness  and accuracy by an authorized  officer of Comcast
showing  in  reasonable  detail  (i) all AT&T  Shares  owned by  Comcast  or its
wholly-owned  Affiliates,  (ii) the share  prices  paid for  Recently  Purchased
Shares and (iii)  sufficient  information  to  demonstrate  whether  such shares
achieve  the  Preliminary   Aggregate   Value  and  sufficient   information  to
demonstrate  that such shares,  together with the Pullout Shares,  if any, would
satisfy the Designated Conditions.

     In accordance  with Section  7.31,  the Parties agree that after the record
date for a Distribution, any reference in this Agreement to "AT&T Share", "Total
Closing  Share,"  "Original  Share",  "Hunter  Share",  "Disqualified  Share" or
"Qualified  Share", or the price or value thereof,  shall include the applicable
Tracking  Share(s)  (or  portion  thereof)  and  the  price  or  value  thereof,
respectively.

            3.3.5.  If, based on the Share  Report,  the  Preliminary  Aggregate
Value cannot be achieved consistent with the Designated Conditions,  within four
Business  Days after  delivery of the Share Report AT&T shall select one or more
Systems or franchise areas, at its option subject to the following  proviso,  to
be removed from and not  Transferred  pursuant to this  Agreement  (the "Removed
Systems"),  such that the  revised  Preliminary  Aggregate  Value  (based on the
Preliminary  Aggregate  Value  without  the  Removed  Systems  and  based on the
information  set forth in the Share  Report) is achievable  consistent  with the
Designated  Conditions;  provided  that AT&T shall remove  Systems and franchise
areas such that,  after giving effect to such removal,  the revised  Preliminary
Aggregate  Value shall be no less than (x) the  aggregate  Agreed Share Value of
all AT&T  Shares  reflected  in the Share  Report  plus (y) the  Pullout  Shares
multiplied  by the  Average  Price  minus  (z) $23  million.  The  Parties  will
cooperate in good faith and take all necessary  action to effect the adjustments
contemplated by this Section 3.3.5,  including  exchanging a revised Preliminary
Report and a revised  Share  Report to reflect  such  adjustments  and  amending
Schedule  2.1. The Parties will  negotiate in good faith and enter into mutually
acceptable  arrangements on commercially  reasonable terms to address all issues
and concerns  regarding the separation of the Removed Systems from the remaining
Systems that will result at Closing because of this Section 3.3.5, including the
terms on which the applicable  Parent's  Affiliates,  from and after the Closing
Date,  would  provide to the other  Parent's  Affiliates  such

                                       19

<PAGE>

signal  delivery,  management and other support  services as may be necessary or
appropriate due to such separation.

            3.3.6. At Closing, the AT&T Shares delivered by the Comcast Entities
to AT&T  shall  have a value  (based on the  Agreed  Share  Value)  equal to the
Preliminary  Aggregate  Value (as adjusted  pursuant to Section 3.3.5) and shall
satisfy all of the Designated  Conditions (the "Total Closing  Shares"),  as set
forth in a final share report  delivered by Comcast at Closing (the "Final Share
Report"),  certified as to completeness and accuracy by an authorized officer of
Comcast. The Total Closing Shares shall be deemed to include any Tracking Shares
which are issued after the Closing  pursuant to a record date occurring prior to
Closing  in respect  of shares  delivered  by the  Comcast  Entities  to AT&T at
Closing.  The  Comcast  Entities  shall  deliver  such  Tracking  Shares to AT&T
promptly upon receipt thereof.

     3.4.   Determination of Final System Values and Working Capital  Adjustment
Amounts.

            3.4.1. Within ninety (90) days after the Closing,  AT&T will deliver
to Comcast a report (the  "Final  Report"),  certified  as to  completeness  and
accuracy by an authorized  officer of AT&T, showing in full detail for each AT&T
Cable  Subsidiary  transferred at Closing AT&T's final  determination of (i) the
System Value for each System owned at the Closing by such AT&T Cable  Subsidiary
or by any of its  Subsidiaries  that is a Transferred  Entity,  (ii) the Working
Capital  Adjustment Amount of each such System, and (iii) the aggregate of items
(i) and (ii) for all AT&T Cable Subsidiaries,  which may include any adjustments
that were not  calculated as of the Closing Time or which are  corrective of any
estimated  adjustments  contained  in  the  Preliminary  Report,  together  with
appropriate  documents  substantiating the determinations  proposed in its Final
Report.  Comcast will provide  AT&T with  reasonable  access to all records that
Comcast has in its or its Affiliates' possession and that are necessary for AT&T
to prepare the Final Report.

            3.4.2. Within sixty (60) days after receipt of the Final Report from
AT&T, Comcast will give AT&T written notice of Comcast's objections,  if any, to
the Final  Report.  The Parents  shall  negotiate  in good faith for a period of
thirty (30) days,  or such longer  period of time as agreed by the  Parents,  to
resolve any disputed items.  If, after such thirty (30) day period (as extended,
if applicable),  the Parents fail so to resolve such disputed items, the Parents
shall submit all  then-outstanding  disputed  items for resolution by a national
accounting  firm  acceptable to each Parent (or, if the Parents cannot agree, an
arbitrator   appointed   by   the   American   Arbitration   Association)   (the
"Arbitrator").  As to each item in dispute,  the  Arbitrator's  decision must be
within the range of values proposed by the Parents.  The Arbitrator shall render
a decision within thirty (30) days after its selection,  which decision shall be
final and binding on the Parties  hereto.  Comcast and AT&T shall share  equally
the expenses of the Arbitrator.

            3.4.3. (a) Based upon a final determination of each item relating to
the Final Report  (determined  either (x) as set forth in the Final  Report,  if
Comcast  raised no  objection  or (y) by agreement of the Parents or decision of
the  Arbitrator as set forth above),  the Parties shall  calculate for each AT&T
Cable  Subsidiary  (i) the System  Value for each System owned at the Closing by
such AT&T Cable Subsidiary or by any of its  Subsidiaries  that is a Transferred
Entity

                                       20

<PAGE>

and (ii) the  Working  Capital  Adjustment  Amount of each such System (for each
AT&T Cable Subsidiary and its  Subsidiaries,  the "Final Aggregate  Value").  If
with respect to any given AT&T Cable Subsidiary and its Subsidiaries,  the Final
Aggregate  Value exceeds the portion of the  Preliminary  Aggregate Value (as it
may have been  adjusted  pursuant to Section  3.3.5)  attributable  to such AT&T
Cable Subsidiary and its Subsidiaries,  such AT&T Cable Subsidiary will pay AT&T
cash in an amount equal to such excess.  If with respect to any given AT&T Cable
Subsidiary  and its  Subsidiaries,  the value of the portion of the  Preliminary
Aggregate  Value  (as it may have  been  adjusted  pursuant  to  Section  3.3.5)
attributable  to such AT&T Cable  Subsidiary  and its  Subsidiaries  exceeds the
Final  Aggregate  Value,  AT&T will pay such AT&T  Cable  Subsidiary  cash in an
amount equal to such excess. Any such adjusting payments shall be made, together
with  interest  thereon  calculated  from the Closing  Date  through the date of
payment at the Prime Rate and paid in cash as set forth in this  Section  3.4.3,
within three (3) Business Days after  calculation of the Final Aggregate  Value.
Notwithstanding any other provision of this Agreement,  no AT&T Cable Subsidiary
shall make any payment to AT&T pursuant to this Section 3.4.3(a) unless and only
to the extent  instructed  to do so by AT&T and AT&T shall be  entitled  to rely
upon the Final Share  Report in  determining  whether to instruct any AT&T Cable
Subsidiary to make such payment.

            (b) The  Parties  agree  to  treat  any  payment  made to or by AT&T
pursuant to Section 3.4.3(a) as a pre-Closing  distribution from or contribution
to the appropriate AT&T Cable Subsidiary, respectively.

4.   ASSUMED LIABILITIES AND EXCLUDED ASSETS.

     4.1.   AT&T Excluded  Assets.  Except  as set forth on  Schedule  4.1 or on
Schedule  6.6.4(g),  for  purposes  of this  Agreement  the term "AT&T  Excluded
Assets" means all:

            (a) programming  Contracts (including music programming  Contracts),
cable guide Contracts, master Contracts to which the AT&T Parties or one or more
of  their  Affiliates  are  parties  (such  as  master  retransmission   consent
agreements,  master multiple  dwelling unit agreements,  master billing,  master
collection and similar master agreements), retransmission consent agreements and
local  programming  agreements  (other  than  any  such  retransmission  consent
agreements and local programming agreement listed in Schedule 6.6.4(g));

            (b) AT&T Plans;

            (c) insurance policies and rights and claims  thereunder,  except as
set forth in Section 12.14;

            (d) bonds,  letters of credit,  surety instruments and other similar
items;

            (e) except for petty cash to the extent  Transferred  to the Comcast
Entities or as set forth in Section 12.14, cash and cash equivalents,  including
cash relating to subscriber prepayments and deposits, and notes receivable;

            (f) subject to Section 7.13,  Intellectual Property held by the AT&T
Parties or any of their Affiliates;

                                       21
<PAGE>

            (g) subscriber  billing Contracts and related equipment if not owned
by the AT&T Parties or any of their Existing Affiliates;

            (h)  assets,  rights  or  properties  of the AT&T  Parties  or their
Affiliates used or held for use other than primarily in connection with the AT&T
Systems;

            (i) except for (1) accounts  receivable,  (2) any other claim, right
or interest to the extent reflected in the Working Capital Adjustment Amount and
(3) as set forth in Section 12.14,  claims,  rights,  and interest in and to any
refunds of, or amounts credited  against,  Taxes or fees of any nature, or other
claims against Third Parties,  relating to (A) the operation of the AT&T Systems
prior to the  Closing  Time and (B) the  Transferred  Entities  with  respect to
taxable periods ending on or prior to the Closing Time;

            (j) account  books of original  entry,  general  ledgers,  financial
records  and  personnel  files  and  records  used in  connection  with the AT&T
Systems;

            (k) capital and vehicle leases;

            (l) advertising sales agency or representation  Contracts  providing
any Third Party or  Affiliate  of AT&T the right to sell  available  advertising
time for an AT&T  System  other  than  any  such  Contract  listed  on  Schedule
6.6.4(g);

            (m)  proprietary  software of the AT&T  Parties or any  Affiliate of
AT&T and licenses  relating to Third Party software and  maintenance  agreements
with respect thereto;

            (n)  Contracts  for  any  fiber  or  fiber  capacity  lease  or  use
arrangements  that  provide to any Third Party or Affiliate of AT&T the right to
use any fiber or capacity of an AT&T System  other than those listed in Schedule
6.6.4(g);

            (o) Contracts for Internet access or on-line  services  arrangements
that  provide  to any  Third  Party or  Affiliate  of AT&T the  right to use the
transmission  capacity  of an AT&T  System to provide  Internet  access or other
on-line  services  over such AT&T  System,  other than those  listed in Schedule
6.6.4(g);

            (p)  Contracts  and related  accounts  receivable  for providing DMX
service to commercial accounts via direct broadcast satellite;

            (q) intercompany receivables; and

            (r)  Contracts  and/or  assets  specifically  described  in Schedule
4.1(r).

     4.2.   Comcast  Assumed  Obligations  and  Liabilities.   Pursuant  to  the
Internal  Restructuring,  effective prior to the Closing Time, each  Transferred
Entity will assume (to the extent not already an  obligation of such entity) and
after the Closing Time will (and Comcast  shall cause the  Transferred  Entities
to) pay, discharge and perform the following (collectively, the "Comcast Assumed
Obligations  and  Liabilities")  with  respect to each AT&T System owned by such
Transferred  Entity at Closing:  (a) those obligations and liabilities  accruing
after the Closing  Time under or with  respect to the AT&T  Assets  owned by the
Transferred  Entity at

                                       22

<PAGE>

the Closing,  except for obligations and liabilities arising from or relating to
any breach or default  under any of the  foregoing  occurring on or prior to the
Closing Time; (b) those  obligations and liabilities of such Transferred  Entity
for subscriber  prepayments and deposits related to such AT&T System existing at
the Closing  Time only to the extent  such  amounts  were used to  decrease  the
Working  Capital  Adjustment  Amount  with  respect to such  System  pursuant to
Section 3.2; (c) other  obligations and liabilities of such  Transferred  Entity
only to the extent that such  obligations and liabilities  were used to decrease
the Working Capital  Adjustment Amount with respect to such AT&T System pursuant
to Section  3.2; and (d) all other  obligations  and  liabilities  to the extent
relating  to the  period  after  the  Closing  Time  and  arising  out  of  such
Transferred  Entity's ownership,  use or operation of the AT&T Assets (including
those items  listed or described on Schedule  4.1) or its  operation  of, or the
conduct of business through,  such AT&T System after the Closing (including with
respect to late fees that may be charged by such  Transferred  Entity  after the
Closing to  subscribers  of such AT&T  System),  except to the extent  that such
obligations or  liabilities  relate to any AT&T Excluded  Asset.  Except for the
Comcast Assumed Obligations and Liabilities,  all obligations and liabilities of
AT&T or its  Affiliates  or arising out of or relating to the AT&T  Assets,  the
AT&T Systems or AT&T's Cable  Business,  including  all  long-term  indebtedness
classified as such in accordance with GAAP (and the portion  thereof  classified
as current in accordance with GAAP) will be assumed by (to the extent previously
a liability or obligation of a Transferred  Entity),  and be the obligations and
liabilities  solely of, the Retained  Entities  ("AT&T  Excluded  Liabilities").
Except to the extent  reflected  in the  Working  Capital  Adjustment,  the AT&T
Excluded Liabilities shall include any obligation,  liability or claims relating
to or arising pursuant to (t) any AT&T Excluded Asset, (u) any breach or default
under any AT&T Asset  occurring  on or before  the  Closing  Time,  (v) both any
Environmental  Law and actions to the extent  relating to the period on or prior
to the Closing Time (including  matters disclosed or required to be disclosed in
Schedule 6.9), (w) Taxes,  franchise fees,  intercompany  payables and any other
accounts  payables,  in each case  incurred  in or  attributable  to  periods or
portions  thereof  ending on or prior to the Closing Time, (x) refunds of rates,
charges or late fees with respect to periods  through and  including the Closing
Time, (y) Litigation commenced, to the extent related to the period, on or prior
to the Closing Time, or (z) credit,  loan or other agreements  pursuant to which
AT&T or the Transferred  Entities or their  Affiliates  have created,  incurred,
assumed or guaranteed  indebtedness  for borrowed  money or under which any Lien
securing such indebtedness has been or may be imposed on any AT&T Asset. No AT&T
Excluded  Liability  shall be taken into  account  in  calculating  the  Working
Capital Adjustment Amount.

5.   COMCAST REPRESENTATIONS AND WARRANTIES.

     Comcast  represents  and warrants to AT&T as set forth in this Article 5 as
of the date hereof.

     5.1.   Organization  and Qualification.  Each of the  Comcast  Parties is a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of its  jurisdiction  of  incorporation,  a general
partnership  that has been duly formed and is validly existing under the laws of
its jurisdiction of formation, or a limited liability company that has been duly
formed and is validly existing under the laws of its jurisdiction of formation.

                                       23

<PAGE>

     5.2.   Authority  and  Validity.  Each  Comcast  Party  has  all  requisite
corporate  or limited  liability  company  power and  authority  to execute  and
deliver,  to perform its obligations  under,  and to consummate the transactions
contemplated  by, this  Agreement  and the  Transaction  Documents to which such
Comcast  Party is a party.  The execution and delivery by each Comcast Party of,
its performance under and its consummation of the transactions  contemplated by,
this  Agreement and the  Transaction  Documents to which such Comcast Party is a
party  have been duly and  validly  authorized  by all action by or on behalf of
such Comcast Party.  This Agreement has been, and when executed and delivered by
each Comcast  Party the  Transaction  Documents to which such Comcast Party is a
party will be, duly and validly  executed and  delivered by such Comcast  Party,
and the valid and binding obligations of such Comcast Party, enforceable against
such Comcast Party,  in accordance  with their terms,  except as the same may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar  laws  now  or  hereafter  in  effect  relating  to the  enforcement  of
creditors'  rights  generally or by  principles  governing the  availability  of
equitable remedies.

     5.3.   No Conflict; Required Consents. Except as set forth on Schedule 5.3,
and assuming the  expiration or earlier  termination of the waiting period under
the HSR Act has  occurred,  the execution and delivery by each Comcast Party of,
its performance under and its consummation of the transactions  contemplated by,
this  Agreement and the  Transaction  Documents to which such Comcast Party is a
party do not and will not:  (a)  conflict  with or violate any  provision of the
organizational documents of such Comcast Party; (b) violate any provision of any
Legal Requirement,  except for such violations as would not,  individually or in
the aggregate,  reasonably be expected to have a material  adverse affect on the
ability of the Comcast Parties to perform their obligations under this Agreement
or  the  Transaction  Documents;  or  (c)  require  any  consent,   approval  or
authorization of, or filing of any certificate,  notice, application,  report or
other document with, any Governmental Authority or other Person, except for such
consents,  approval or  authorizations,  the failure of which to obtain, or such
filings  the  failure  of which  to  make,  would  not,  individually  or in the
aggregate,  reasonably  be  expected  to have a material  adverse  effect on the
ability of the Comcast Parties to perform their obligations under this Agreement
or the Transaction Documents.

     5.4.   Ownership  of AT&T  Shares.  The  Comcast  Entities  own, or will at
Closing own,  record and  beneficial  title to all of the Total Closing  Shares,
free and clear of all Liens and any other  limitation or restriction  (including
any  restriction  on the right to sell,  vote or otherwise  dispose of the Total
Closing  Shares) and, at the Closing,  the Comcast  Entities  shall transfer the
Total  Closing  Shares  to AT&T,  free  and  clear of all  Liens  and any  other
limitation or restriction  (including any restriction on the right to sell, vote
or otherwise dispose of the Total Closing Shares).

     5.5.   Reorganization.

            5.5.1.  Without  regard to payments made under Section  3.4.3(a) and
assuming that Comcast's  PHONES  Transaction  will have no effect on its holding
period for any AT&T  Shares  under  Section  355(d) of the Code (a) less than 50
percent  (measured  by  relative  value and voting  power) of the Total  Closing
Shares will  represent  "disqualified  stock" within the meaning of Code Section
355(d)(3); and (b), at the time of and immediately following the Reorganization,
Comcast will not hold,  directly or indirectly,  "disqualified  stock" of any of
the AT&T Cable

                                       24

<PAGE>

Subsidiaries, within the meaning of Code Section 355(d)(3), constituting a fifty
percent (50%) or greater interest in any of the AT&T Cable Subsidiaries.

            5.5.2.  Comcast  has no  plan  or  intention  to,  nor  any  plan or
intention to cause its  Subsidiaries  or  Affiliates  to, (i) sell,  exchange or
otherwise  dispose  of any of the  AT&T  Cable  Subsidiaries  Shares  after  the
Reorganization or (ii) liquidate, merge out of existence or sell any interest in
any of the AT&T Cable Subsidiaries after the  Reorganization,  in each case in a
manner that would  cause the  Reorganization  to fail to be tax-free  under Code
Section 355(c).

            5.5.3.  Comcast  has no  plan  or  intention  to,  nor  any  plan or
intention  to cause its  Subsidiaries  or  Affiliates  to,  sell,  exchange,  or
otherwise  dispose of the Assets of the Systems  held by any of the  Transferred
Entities as of the Closing  Date,  in each case in a manner that would cause the
Reorganization to fail to be tax-free under Code Section 355(c).

            5.5.4.  Comcast  has no  plan  or  intention  to,  nor  any  plan or
intention  to cause its  Subsidiaries  or  Affiliates  to, take any action which
would cause any of the AT&T Cable Subsidiaries to fail to be engaged immediately
after the Reorganization in the active conduct of a trade or business within the
meaning of Code Section 355(b)(1)(A).

            5.5.5.  The  Reorganization  is not  part of a plan  (or  series  of
related transactions),  within the meaning of Code Section 355(e)(2)(A)(ii),  on
the part of Comcast (or any Subsidiary or Affiliate of Comcast) that would cause
the  Reorganization  to constitute a  distribution  to which Code Section 355(e)
would apply.

     5.6.   Finders  and  Brokers.  No  Comcast  Party and no  Affiliate  of any
Comcast  Party has entered into any Contract with any Person that will result in
the  obligation of any AT&T Party or any Affiliates of any AT&T Party to pay any
finder's fees, investment banker, brokerage or agent's commissions or other like
payments  (collectively,  "Agent's  Fees") in connection  with the  negotiations
leading to this Agreement or the consummation of the  transactions  contemplated
hereby.

     5.7.   Purchase  Price  of  Recently  Purchased  Shares.  Comcast  and  its
wholly-owned  Affiliates  shall have  purchased  all of the  Recently  Purchased
Shares in arm's-length transactions.

6.   AT&T'S REPRESENTATIONS AND WARRANTIES.

     AT&T  represents  and warrants to Comcast as set forth in this Article 6 as
of the date hereof.

     6.1.   Organization and Qualification. AT&T is and, as of the Closing, each
Transferred Entity shall be a corporation duly organized,  validly existing, and
in  good  standing  under  the  laws of its  jurisdiction  of  incorporation,  a
partnership  that has been duly formed and is validly existing under the laws of
its jurisdiction of formation, or a limited liability company that has been duly
formed and is validly  existing under the laws of its jurisdiction of formation.
As of the Closing,  each  Transferred  Entity shall have all requisite power and
authority to own, lease and use the AT&T Assets owned,  leased or used by it and
to conduct AT&T's Cable Business as it is currently being conducted by it. As of
the Closing,  each Transferred Entity shall be duly qualified to do business and
in good standing  under the laws of each  jurisdiction  in which the

                                       25

<PAGE>

ownership,  leasing or use of the AT&T Assets owned, leased or used by it or the
nature  of its  activities  in  connection  with its  AT&T  Systems  makes  such
qualification  necessary,  except for such matters as would not, individually or
in the aggregate,  reasonably be expected to have a Material Adverse Effect. For
purposes of this Agreement,  "Material  Adverse Effect" means a material adverse
effect on the business,  assets, financial condition or results of operations of
AT&T's Cable  Business,  taken as a whole  (excluding such effects to the extent
relating to the  liabilities  or assets to be retained  by any  Retained  Entity
after Closing  under this  Agreement or the Internal  Restructuring  Documents),
without giving effect to the  transaction  contemplated by this Agreement or the
announcement  thereof or changes in conditions  that are applicable to the cable
television  industry in  general.  On or prior to the  Closing,  AT&T shall have
provided to Comcast true and complete copies of the certificate of incorporation
and bylaws (or other organizational  documents) of each Transferred Entity as in
effect on such date.

     6.2.   Authorization  and  Validity. (a) Each AT&T Party has all  requisite
corporate,  partnership  or limited  liability  company  power and  authority to
execute and deliver,  to perform its  obligations  under,  and to consummate the
transactions  contemplated  by, this Agreement and the Transaction  Documents to
which it is a party.  The  execution  and  delivery  by each AT&T  Party of, its
performance under and its consummation of the transactions contemplated by, this
Agreement and the Transaction Documents to which such AT&T Party is a party have
been  duly and  validly  authorized  by all  action by or on behalf of such AT&T
Party.  This  Agreement  has been,  and when executed and delivered by each AT&T
Party the  Transaction  Documents  to which  such AT&T Party is a party will be,
duly and validly  executed  and  delivered  by such AT&T Party and the valid and
binding  obligations of such AT&T Party,  enforceable against such AT&T Party in
accordance  with their  terms,  except as the same may be limited by  applicable
bankruptcy,  insolvency,  reorganization,  moratorium  or  similar  laws  now or
hereafter in effect relating to the enforcement of creditors'  rights  generally
or by principles governing the availability of equitable remedies.

            (b) As of the  Closing,  each  Transferred  Entity  shall  have  all
requisite  corporate,   partnership  or  limited  liability  company  power  and
authority  to execute and  deliver,  to perform its  obligations  under,  and to
consummate the transactions  contemplated by the Transaction  Documents to which
it is a party.  On or prior to the Closing,  the  execution and delivery by each
Transferred  Entity  of,  its  performance  under  and its  consummation  of the
transactions  contemplated by, the Transaction Documents to which such Person is
a party  shall  have been duly and  validly  authorized  by all  action by or on
behalf of such Person.  When executed and delivered by each Transferred  Entity,
the  Transaction  Documents  to which such  Person is a party will be,  duly and
validly  executed  and  delivered  by such  Person  and the  valid  and  binding
obligations of such Person,  enforceable  against such Person in accordance with
their  terms,  except  as the  same may be  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or similar  laws now or  hereafter  in
effect  relating  to  the  enforcement  of  creditors'  rights  generally  or by
principles governing the availability of equitable remedies.

     6.3.   Capitalization.

            6.3.1. As of the Closing, no shares of capital stock will be held in
the AT&T Cable Subsidiaries' treasuries.

                                       26

<PAGE>

            6.3.2. As of the Closing,  AT&T will own record and beneficial title
to all of the AT&T Cable  Subsidiaries  Shares,  and the AT&T Cable Subsidiaries
will (either directly or through one or more wholly owned Transferred  Entities)
own record and beneficial  title to all of the issued and outstanding  shares of
capital stock of (or other ownership interests in) each other Transferred Entity
(the  "Lower Tier Cable  Shares"),  in each case free and clear of all Liens and
any other  limitation or restriction  (including any restriction on the right to
sell, vote or otherwise  dispose of such interest).  As of the Closing Date, the
AT&T Cable  Subsidiaries  Shares and the Lower Tier Cable  Shares  shall be duly
authorized,  validly  issued  and fully  paid.  Except as set forth in  Schedule
6.3.2,  there are outstanding  (a) no securities of the Transferred  Entities or
AT&T or any of its  Affiliates  convertible  into  or  exchangeable  for  equity
interests  of the  Transferred  Entities  and (b) no options or other  rights to
acquire  and no  obligation  of the  Transferred  Entities or AT&T or any of its
Affiliates to issue any such equity  interests.  At Closing,  AT&T will transfer
and deliver to the Comcast  Entities valid title to the AT&T Cable  Subsidiaries
Shares  free and  clear of all Liens and any  other  limitation  or  restriction
(including any  restriction on the right to sell,  vote or otherwise  dispose of
such interest).

     6.4.   No Conflict; Required Consents. Except as set forth on Schedule 6.4,
and assuming the  expiration or earlier  termination of the waiting period under
the HSR Act has occurred,  the execution and delivery by each AT&T Party of, its
performance under and its consummation of the transactions contemplated by, this
Agreement and the Transaction Documents to which such AT&T Party is a party (the
execution and delivery by each other  Transferred  Entity and AT&T Party of, its
performance  under and its consummation of the transactions  contemplated by the
Transaction  Documents to which such Person is a party) do not and will not: (a)
conflict with or violate any provision of the  organizational  documents of such
AT&T  Party or any  Transferred  Entity or  Retained  Entity;  (b)  violate  any
provision  of any Legal  Requirement;  (c)  require  any  consent,  approval  or
authorization of, or filing of any certificate,  notice, application,  report or
other  document  with, any  Governmental  Authority or other Person;  or (d) (i)
without regard to  requirements  of notice,  lapse of time or elections of other
Persons or any combination thereof,  conflict with, violate,  result in a breach
of or  constitute  a default  under,  (ii) permit or result in the  termination,
suspension or modification  of, (iii) result in the acceleration of (or give any
Person the right to accelerate) the performance of any AT&T Party or Transferred
Entity or Retained Entity under, or (iv) otherwise  adversely  affect the rights
or obligations of any AT&T Party or other Transferred  Entity or Retained Entity
under any AT&T Systems Contract, AT&T Systems Franchise or AT&T Systems License;
or (e) result in the creation or  imposition  of any Lien upon any AT&T Asset or
any  securities  of any  Transferred  Entity,  subject  to such  exceptions  for
purposes of clauses (b), (c), (d) and (e) above as would not, individually or in
the  aggregate,  reasonably be expected to have a Material  Adverse  Effect or a
material  adverse effect on the ability of the Transferred  Entities or the AT&T
Parties to perform their  obligations  under this  Agreement or the  Transaction
Documents.

     6.5.   Reorganization.

            6.5.1. As of the Closing,  each of the AT&T Cable Subsidiaries shall
qualify to be  distributed  in a tax-free  transaction  pursuant to Code Section
355(a) and Code Section 355(c).

            6.5.2.  AT&T did not  acquire,  and as of the Closing  will not have
acquired,  any of the  stock of the AT&T  Cable  Subsidiaries  by  reason of any
transaction  which  occurred  within

                                       27

<PAGE>

five (5) years prior to the Closing Date in which gain or loss was recognized in
whole or in part within the meaning of Code Section 355(a)(3)(B).

            6.5.3. AT&T will be engaged  immediately after the Reorganization in
the active  conduct of a trade or business  within the  meaning of Code  Section
355(b)(1)(A).

            6.5.4.  Each  of  the  AT&T  Cable   Subsidiaries  will  be  engaged
immediately prior to and at the time of the Reorganization in the active conduct
of a trade or business within the meaning of Code Section 355(b)(1)(A).

            6.5.5. To the knowledge of the management of AT&T,  there is no plan
or intention on the part of any  shareholder  or security  holder of AT&T (other
than Comcast or any of its Affiliates) to sell, exchange or otherwise dispose of
any of its stock or securities in AT&T following the  Reorganization  other than
in public market  transactions in the ordinary course of business and other than
in  transactions  unrelated  to the  Reorganization  which  would  not cause the
Reorganization  to fail to qualify as  tax-free  to Comcast  under Code  Section
355(a).

            6.5.6.  Neither  AT&T nor any of the AT&T Cable  Subsidiaries  is an
investment company as defined in Code Sections 368(a)(2)(F)(iii) and (iv).

     6.6.   Assets.

            6.6.1. Immediately prior to the Closing, subject to Section 7.7.4(b)
and except as described in Schedule 6.6.1,  the Transferred  Entities shall have
good,  marketable  title to (or, in the case of Assets  that are  leased,  valid
leasehold interests in) all of the material AT&T Assets (as existing immediately
prior to Closing),  free and clear of all Liens,  except Permitted Liens. Except
as described on Schedule 6.6.1 and except as would not,  individually  or in the
aggregate,  reasonably be expected to have a Material  Adverse Effect,  the AT&T
Tangible Personal Property (which, for this purpose, shall include all towers on
AT&T Owned  Property) is in good operating  condition and repair  (ordinary wear
and tear and routine  failures  excepted),  and is usable and  adequate  for the
operation of AT&T's Cable Business.

            6.6.2. Subject to Section 7.7.4(b), except for items included in the
AT&T Excluded Assets and the Removed Systems,  (i) the AT&T Assets constitute in
all material  respects all the assets of the AT&T Cable  Subsidiaries  and their
Affiliates  primarily  held for, used in or necessary for AT&T's Cable  Business
and (ii) the right,  title and interest  therein to be  Transferred  pursuant to
this  Agreement  will be  sufficient to permit the  Transferred  Entities in all
material  respects (a) to conduct AT&T's Cable Business as it is being conducted
and in compliance with all Legal  Requirements,  (b) to operate the AT&T Systems
as  they  are  being  operated  and in  compliance  with  all  applicable  Legal
Requirements,  and  (c) to  perform  all the  Comcast  Assumed  Obligations  and
Liabilities.

            6.6.3.  Except as described on Schedule 6.6.3, and other than direct
broadcast  satellite  and  satellite  master  antenna  television:  (i) no cable
television  system or other MVPD other than an AT&T System is  operating  in any
areas in which the AT&T Systems currently provide cable television service; (ii)
no local  franchising  authority  for a  community  in which any AT&T  System is
operating has awarded a cable  television  franchise or other similar  operating
authority to any Person other than an AT&T Cable Subsidiary; and (iii) to AT&T's
Knowledge,

                                       28

<PAGE>

no MVPD has applied for a franchise  or other  similar  operating  authority  to
serve any such community.

            6.6.4. All of the material AT&T Tangible Personal Property is listed
on  Schedule  6.6.4(a).  All of the AT&T Owned  Property  is listed on  Schedule
6.6.4(b). All of the AT&T Leased Property is listed on Schedule 6.6.4(c). All of
the AT&T Other Real Property Interests are listed on Schedule  6.6.4(d).  All of
the AT&T  System  Franchises  are listed on Schedule  6.6.4(e).  All of the AT&T
System Licenses are listed on Schedule 6.6.4(f). All of the material AT&T System
Contracts are listed on Schedule 6.6.4(g).

     6.7.   AT&T  Systems  Franchises,   AT&T  Systems  Licenses,  AT&T  Systems
            Contracts and AT&T Other Real Property Interests.

            6.7.1.  Except  as  described  on  Schedules   6.6.4(c),   6.6.4(d),
6.6.4(e),  6.6.4(f)  and  6.6.4(g),  or,  in the case of  Section  6.6.1(g),  as
separately  provided by AT&T to Comcast and except for the AT&T Excluded Assets,
as of the date hereof neither AT&T nor any of its Affiliates is, and at Closing,
no  Transferred  Entity will be, bound or affected by any of the following  that
relate, primarily or in whole, to AT&T's Cable Business:

            (a) leases of real property or material personal property, including
all capital leases;

            (b)  franchises  and  similar  authorizations  or  permits  for  the
construction or operation of cable television  systems,  or Systems Contracts of
substantially equivalent effect;

            (c) licenses, authorizations, consents or permits of the FCC;

            (d)  licenses,  authorizations,  consents  or  permits  of any other
Governmental Authority;

            (e) crossing agreements, easements or rights-of-way;

            (f) pole  line or  joint  line  agreements  or  underground  conduit
agreements;

            (g) bulk  service,  commercial  service or  multiple  dwelling  unit
agreements (except access agreements for buildings that are not bulk billed);

            (h) any must-carry elections or retransmission  consents relating to
the AT&T Systems or the AT&T Assets;

            (i)   Contracts   which  would  be  binding  upon  any  AT&T  System
post-Closing  with AT&T,  ServiceCo  LLC and/or At Home  Corporation  or Liberty
Media Corporation or any of their Affiliates;

            (j)  system  specific   programming   agreements  or  signal  supply
agreements;

            (k)  agreements  with the FCC or any  other  Governmental  Authority
relating to the operation or construction of the AT&T Systems that are not fully
reflected in the AT&T

                                       29

<PAGE>

Systems  Franchises,  or any agreements  with community  groups or similar Third
Parties  restricting or limiting the types of  programming  that may be shown on
any of the AT&T Systems;

            (l)  partnership,  joint  venture  or other  similar  agreements  or
arrangements;

            (m)  any  agreement  that  limits  the  freedom  of the  Transferred
Entities to compete in any line of business or with any Person or in any area or
which  would so limit the  freedom of the  Transferred  Entities  or the Comcast
Entities after the Closing;

            (n) any Systems  Contract  relating to the use of the AT&T Assets to
provide,  or the provision by the AT&T Systems of,  telephone or high-speed data
services;

            (o) any advertising interconnect agreements;

            (p) any agreement with any AT&T System Employee; or

            (q) any Systems Contract that is not the subject matter of any other
clause of this Section  6.6.1 which (i) will remain  effective for more than one
year after Closing,  (ii) contemplates  payments by or to any Transferred Entity
exceeding one hundred and fifty  thousand  dollars  ($150,000)  under any single
contract or the termination or expiration of which would  reasonably be expected
to have a Material  Adverse  Effect or (iii) is  otherwise  material to the AT&T
Systems.

All of the foregoing types of Systems Contracts are referred to as the "Material
AT&T Systems Contracts".

            6.7.2.  Schedules 6.6.4(e) and 6.6.4(f) list all of the AT&T Systems
Franchises  and all AT&T Systems  Licenses,  respectively.  Complete and correct
copies of the AT&T Systems  Franchises,  all AT&T Systems Licenses issued by the
FCC and any other material AT&T Systems  Licenses have been provided to Comcast.
Except as set forth on Schedule 6.7.2, the AT&T Systems  Franchises  contain all
of the  commitments and  obligations of the  Transferred  Entities,  AT&T or its
Affiliates to the applicable  Governmental  Authority granting such AT&T Systems
Franchises with respect to the construction, ownership and operation of the AT&T
Systems, including any commitment to any local franchising authority to make any
material  expenditure  or  capital  addition  or  betterment  to any of the AT&T
Systems or AT&T  Assets that will not be  fulfilled  or  satisfied  prior to the
Closing  Time.  The AT&T  Systems  Franchises  and  AT&T  Systems  Licenses  are
currently  in full force and effect,  are not in default and are valid under all
applicable  Legal  Requirements  according to their terms. No event has occurred
that, with notice or lapse of time or both, would constitute a breach, violation
or default by any  Transferred  Entity,  and to AT&T's  Knowledge,  no event has
occurred that, with notice or lapse of time or both,  would constitute a breach,
violation or default by any other Person, of any material  obligations under any
of the AT&T Systems Franchises or AT&T Systems Licenses, and would, individually
or in the aggregate,  reasonably be expected to have a Material  Adverse Effect.
Except for routine  filings  with  Governmental  Authorities  or as described on
Schedule 6.7.2, there are no material  applications relating to any AT&T Systems
Franchise or AT&T Systems  License  pending before any  Governmental  Authority.
Since  January 1, 1999,  no AT&T Systems  Franchise or AT&T Systems  License has
been  surrendered  or  has  otherwise  terminated

                                       30
<PAGE>

without the issuance of a  replacement  AT&T  Systems  Franchise or AT&T Systems
License,  respectively.  There is no legal  action,  governmental  proceeding or
investigation pending or, to AT&T's Knowledge,  threatened to terminate, suspend
or modify any AT&T  Systems  Franchise or AT&T  Systems  License.  Except as set
forth on  Schedule  6.7.2,  each AT&T  System is  operating  pursuant to a valid
franchise  or  similar   authorization  or  permit  issued  by  the  appropriate
Governmental  Authority in every market in which such System is supplying  cable
television  service.  Prior to the date  hereof,  AT&T  has  provided  a list to
Comcast of the date on which each AT&T System  Franchise will expire.  Such list
is  correct  and  accurate  in all  material  respects.  Neither  AT&T,  nor any
Transferred Entity or Retained Entity has received, nor does it have notice that
it will receive, from any Governmental  Authority a preliminary  assessment that
an AT&T Systems Franchise should not be renewed as provided in Section 626(c)(1)
of the Cable Act.  Neither any  Transferred  Entity or  Retained  Entity nor any
Governmental  Authority  has  commenced  or  requested  the  commencement  of an
administrative proceeding concerning the renewal of an AT&T Systems Franchise as
provided in Section 626(c)(1) of the Cable Act. The Transferred  Entities or the
Retained  Entities have timely filed  notices of renewal in accordance  with the
Cable Act with all  Governmental  Authorities  with  respect to each of the AT&T
Systems  Franchises  expiring within  thirty-six (36) months of the date of this
Agreement.  Such  notices of  renewal  have been  filed  pursuant  to the formal
renewal procedures established by Section 626(a) of the Cable Act. Except as set
forth on Schedule 6.7.2, and except for such matters as would not,  individually
or in the aggregate,  reasonably be expected to have a Material  Adverse Effect,
the AT&T Systems are being  operated in material  compliance  with the terms and
conditions of all AT&T Systems  Franchises  and AT&T Systems  Licenses and other
applicable  requirements of all Governmental  Authorities (including the FCC and
the United States Copyright Office) relating to such AT&T Systems Franchises and
AT&T Systems  Licenses,  including all  requirements for  notification,  filing,
reporting, posting and maintenance of logs and records.

            6.7.3. AT&T has delivered to Comcast true and complete copies of all
Material AT&T Systems  Contracts,  including any amendments  thereto (or, in the
case of oral  Contracts  that are  Material  AT&T  Systems  Contracts,  true and
complete  written  summaries  thereof) and each document  evidencing or insuring
ownership of the AT&T Owned Property.  Except as described on Schedule 6.7.3 and
except  for  such  matters  as  would  not,  individually  or in the  aggregate,
reasonably be expected to have a Material  Adverse Effect,  (i) each Transferred
Entity has fulfilled when due, or has taken all action necessary to enable it to
fulfill when due, all of such  Person's  obligations  under each of its Material
AT&T Systems  Contracts,  (ii) to AT&T's  Knowledge,  there has not occurred any
default (without regard to requirements of notice,  lapse of time,  elections of
other  Persons  or any  combination  thereof)  by  any  Person  of any  material
obligations  under  any  Material  AT&T  Systems  Contracts  and (iii) to AT&T's
knowledge,  the Material AT&T Systems Contracts are valid and binding agreements
of the  applicable  Third Party to the  Material  AT&T Systems  Contracts,  and,
assuming  that the  Material  AT&T  Systems  Contracts  are  valid  and  binding
agreements on the applicable  Third Party,  the Material AT&T Systems  Contracts
are valid and binding agreements of the applicable Transferred Entity and are in
full force and effect.

            6.7.4.  Except as  disclosed  on  Schedule  6.7.4,  none of the AT&T
Systems or material  AT&T Assets are subject to any  purchase  option,  right of
first  refusal or similar  arrangement  which  would be  triggered  by the sale,
transfer,  change of control or other  disposition of such Systems or Assets (an
"AT&T System Option").

                                       31
<PAGE>

            6.7.5.  Set forth on Schedule  6.7.5 is each lease for  vehicles and
each  capital  lease that,  in either  case,  would be an AT&T Asset but for the
effect of Section 7.6.

     6.8.   Real Property. All the AT&T Owned Property, AT&T Leased Property and
material AT&T Other Real Property Interests are described on Schedules 6.6.4(b),
6.6.4(c) and 6.6.4(d).  Except for ordinary wear and tear and routine repairs or
as set forth on Schedule 6.8 or for such matters as would not,  individually  or
in the aggregate,  reasonably be expected to have a Material Adverse Effect, all
of the improvements,  leasehold  improvements and the premises of the AT&T Owned
Property  and  the  premises  demised  under  the  leases  and  other  documents
evidencing the AT&T Leased  Property are in reasonable  operating  condition and
repair and are suitable for the purposes used.  Except for such matters as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse  Effect,  each  parcel of AT&T Owned  Property  and each  parcel of AT&T
Leased  Property (a) has access to and over public streets or private streets or
property for which an Affiliate of AT&T has, and a  Transferred  Entity will, at
Closing,  have a valid right of ingress  and egress,  (b) except as set forth on
Schedules  6.6.4(b),  6.6.4(c)  and  6.6.4(d),  conforms  in  its  current  use,
occupancy  and  operation to all zoning  requirements  without  reliance  upon a
variance issued by a Governmental Authority or a classification of the parcel in
question as a  nonconforming  use,  (c)  conforms in all respects in its current
use,  occupancy and  operation to all  restrictive  covenants,  if any, or other
Liens  affecting all or part of such parcel,  and (d) is available for immediate
use in the conduct of the business or operations of the AT&T Systems.  There are
no pending condemnation, expropriation, eminent domain or similar proceedings of
which AT&T or any Transferred Entity or Retained Entity has received notice, or,
to AT&T's Knowledge,  affecting,  in any material respect, all or any portion of
the AT&T Owned  Property,  AT&T  Leased  Property  or  material  AT&T Other Real
Property Interests.

     6.9.   Environmental.

            6.9.1.  Except as  described  on  Schedule  6.9 and  except for such
matters as would not,  individually or in the aggregate,  reasonably be expected
to have a Material  Adverse Effect,  an Affiliate of AT&T has, and a Transferred
Entity  will,  at Closing,  have  obtained or caused to be obtained  all permits
necessary  for its  operations  to  comply  with  Environmental  Laws  and is in
compliance with the terms of such permits and all Environmental  Laws insofar as
they relate to the AT&T  Assets.  Except as described on Schedule 6.9 and except
for such matters as would not,  individually or in the aggregate,  reasonably be
expected to have a Material  Adverse  Effect,  neither AT&T nor any  Transferred
Entity or Retained Entity has received any notice of or has Knowledge of (i) any
release or threatened release of any Hazardous Substances from or on or relating
to  activities or  operations  conducted on the AT&T Owned  Property or the AT&T
Leased  Property or any  property  previously  owned,  leased or operated by any
Transferred  Entity or Retained  Entity in connection with AT&T's Cable Business
or the AT&T  Assets,  or (ii) any  liability  under,  or any  violation  of, any
Environmental  Laws or permits in connection  with AT&T's Cable Business or AT&T
Assets. Except as described on Schedule 6.9 and except for such matters as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect,  neither AT&T nor any Transferred  Entity or Retained Entity has
received  any notice  of,  and has no  Knowledge  of,  any  events,  conditions,
circumstances,  activities, practices or incidents (including the presence, use,
generation,   manufacture,  disposal,  release  or  threatened  release  of  any
Hazardous  Substances from or on the AT&T Owned

                                       32
<PAGE>

Property or AT&T Leased  Property or any property  previously  owned,  leased or
operated by any Transferred  Entity or Retained Entity in connection with AT&T's
Cable  Business  or the AT&T  Assets)  which  could  interfere  with or  prevent
compliance with any  Environmental  Law, or which are reasonably  likely to give
rise or have given rise to any liability, whether accrued, contingent, absolute,
determined, determinable or otherwise under any Environmental Law, in each case,
in  connection  with the AT&T Owned  Property  or AT&T  Leased  Property  or any
property  previously  owned,  leased or  operated by any  Transferred  Entity or
Retained Entity in connection with AT&T's Cable Business or the AT&T Assets.

            6.9.2.  Except as  described  on  Schedule  6.9 and  except for such
matters as would not,  individually or in the aggregate,  reasonably be expected
to have a Material  Adverse Effect (a) no  aboveground  or  underground  storage
tanks are  currently  or have been  located on any AT&T Owned  Property  or AT&T
Leased  Property,  (b) no AT&T Owned  Property or AT&T Leased  Property has been
used at any  time as a  gasoline  service  station  or any  other  facility  for
storing,  pumping,  dispensing  or  producing  gasoline  or any other  petroleum
products or wastes; and (c) no polychlorinated biphenyls,  radioactive material,
lead,  asbestos-containing  material,  incinerator,  sump, surface  impoundment,
lagoon, landfill,  septic,  wastewater treatment or other disposal system are or
have been  present  at,  on or under  any AT&T  Owned  Property  or AT&T  Leased
Property or any  property  now or  previously  owned,  leased or operated by any
Transferred  Entity or Retained  Entity in connection with AT&T's Cable Business
or the AT&T Assets.

            6.9.3.  Except as  described  on  Schedule  6.9 and  except for such
matters as would not,  individually or in the aggregate,  reasonably be expected
to have a Material Adverse Effect,  no Hazardous  Substance has been discharged,
disposed of, dumped, injected,  pumped, deposited,  spilled, leaked, emitted, or
released at, on or under any AT&T Owned Property or AT&T Leased  Property or any
other property now or previously  owned,  leased or operated by any  Transferred
Entity or Retained  Entity in connection  with AT&T's Cable Business or the AT&T
Assets.  Except as  described  on Schedule  6.9, no AT&T Owned  Property or AT&T
Leased Property and no property now or previously  owned,  leased or operated by
any  Transferred  Entity or Retained  Entity in  connection  with  AT&T's  Cable
Business or the AT&T  Assets,  nor any  property to which  Hazardous  Substances
located on or resulting  from the use of any AT&T Owned  Property or AT&T Leased
Property or operations of any Transferred Entity have been transported,  nor any
property  to  which  any  Transferred   Entity  has,   directly  or  indirectly,
transported or arranged for the  transportation  of any Hazardous  Substances is
listed or, to AT&T's Knowledge,  proposed for listing on the National Priorities
List promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or on any
similar federal,  state, local or foreign list of sites requiring  investigation
or cleanup.

            6.9.4.  Complete  and correct  copies of (a) all  studies,  reports,
surveys or other similar written  materials in AT&T's or any Transferred  Entity
or Retained  Entity's  possession or to which AT&T or any Transferred  Entity or
Retained  Entity has access relating to  environmental  matters at, on, under or
affecting the AT&T Owned Property or AT&T Leased Property or otherwise  relating
to the AT&T Cable  Business or AT&T  Assets,  including  the presence or alleged
presence of Hazardous  Substances,  (b) all notices (other than general  notices
made by general  publication)  in AT&T's or any  Transferred  Entity or Retained
Entity's  possession  or to which any such Person has access that were  received
from any  Governmental

                                       33
<PAGE>

Authority  having the power to  administer  or enforce  any  Environmental  Laws
relating  to  current  or past  ownership,  use or  operation  of the AT&T Owned
Property or AT&T Leased  Property or  activities  at the AT&T Owned  Property or
AT&T Leased Property, and (c) all notices and related materials in AT&T's or any
Transferred  Entity or Retained Entity's  possession or to which any such Person
has access relating to any Litigation  related to any AT&T System concerning any
Environmental  Law or written  allegation by any private Third Party  concerning
any  Environmental  Law and any AT&T System have been provided to Comcast (other
than those materials constituting attorney-client privileged communications).

            6.9.5. Except as set forth on Schedule 6.9.5, as of the date hereof,
none of the AT&T  Owned  Property  or AT&T  Leased  Property  or AT&T Other Real
Property Interests is located in New Jersey or Connecticut.

     6.10.  Compliance with Legal Requirements.

            6.10.1.  Except as set forth on  Schedule  6.10 and  except for such
matters as would not,  individually or in the aggregate,  reasonably be expected
to have a Material Adverse Effect,  the operation of the AT&T Systems and AT&T's
Cable  Business  as  currently  conducted  does not  violate  or  infringe,  any
applicable  Legal  Requirements  (other  than Legal  Requirements  described  in
Sections 6.9, 6.10.3 and 6.10.4, as to which the  representations and warranties
set forth in those subsections will apply) or the grounding  requirements of the
National Electrical Safety Code. Except as set forth on Schedule 6.10 and except
for such matters as would not,  individually or in the aggregate,  reasonably be
expected to have a Material  Adverse Effect,  no Transferred  Entity or Retained
Entity has  received  any notice of, and to AT&T's  Knowledge  there is not, any
violation by any of the AT&T Systems of any Legal Requirement  applicable to the
installation,   ownership  and  operation  of  the  AT&T  Systems  as  currently
conducted.

            6.10.2.  Except as set forth on  Schedule  6.10,  and  except to the
extent  that it would not  reasonably  be  expected  to have a Material  Adverse
Effect, without limiting the generality of the foregoing,  since the acquisition
of such AT&T Systems by AT&T or any of its Affiliates: there have been submitted
to the  FCC  all  required  filings,  including  cable  television  registration
statements,  annual  reports and  aeronautical  frequency  usage notices and all
regulatory  fees that are required  under the rules and  regulations of the FCC;
the operation of the AT&T Systems has been and is in  compliance  with the rules
and  regulations  of the FCC,  and neither  AT&T nor any  Transferred  Entity or
Retained  Entity has  received  any notice from the FCC of any  violation of its
rules and regulations;  each  Transferred  Entity (and any Affiliate of AT&T who
was a predecessor  owner) is and since 1991 has been  certified as in compliance
with the FCC's equal  employment  opportunity  rules and has received no written
notices with respect to  noncompliance  with such rules; the AT&T Systems are in
compliance  with  all  signal  leakage  criteria  prescribed  by the FCC and all
required  FCC Forms 320 for the AT&T  Systems  have been  filed for the last two
reporting  periods,  and all such  Forms 320 show  "passing"  or  "satisfactory"
signal leakage  scores.  Each AT&T System holds all licenses,  registrations  or
permits from the FCC for business  radio,  satellite,  earth  station  receiving
facilities  and CARS or  private  fixed-service  microwave  facilities  that are
necessary  or  appropriate  to carry on the  business  of such  AT&T  System  as
conducted  on the date  hereof.  Each AT&T  System  has  provided  all  required
subscriber privacy notices to new subscribers, at the time of installation,  and
to all  subscribers,  on an  annual  basis,  and the  AT&T  Systems  have  taken
commercially

                                       34
<PAGE>

reasonable  steps to  prevent  unauthorized  access to  personally  identifiable
information. The AT&T Systems have provided all customer notices required by the
Communications Act, including notices of customer service, availability of Basic
Services and  equipment  compatibility.  No AT&T System has received any request
for  commercial  leased  access with respect to such AT&T System within the past
one hundred  twenty (120) days,  except for those requests set forth on Schedule
6.10.  There are no complaints or other  proceedings  instituted  before the FCC
concerning  commercial leased access,  program access or any other aspect of the
AT&T Systems' operations, except as set forth on Schedule 6.10. Each Transferred
Entity  (and  any  Affiliate  of AT&T  who was a  predecessor  owner)  has  used
commercially  reasonable  efforts to comply in all  material  respects  with any
customer  service  standards  applicable to it with respect to the AT&T Systems.
Neither AT&T nor any Transferred  Entity or Retained Entity has received written
notice with  respect to the AT&T  Systems  from any  Governmental  Authority  to
establish  customer  service  standards  with  respect to the AT&T  Systems that
exceed the FCC standards  promulgated  pursuant to the Cable Act,  except as set
forth on Schedule 6.10. For each relevant semi-annual reporting period since the
acquisition of such AT&T System by AT&T or any of its  Affiliates,  the owner of
such  System  has  timely  filed with the  United  States  Copyright  Office all
required  Statements of Account in true and correct form,  has paid when due all
required  copyright royalty fee payments in correct amount relating to such AT&T
System's  carriage  of  television   broadcast  signals,  and  is  otherwise  in
compliance with the requirements of the compulsory  license described in Section
111 of the  Copyright  Act and  all  applicable  rules  and  regulations  of the
Copyright  Office.  Except as set forth on  Schedule  6.10 and  except  for such
matters as would not,  individually or in the aggregate,  reasonably be expected
to have a Material  Adverse  Effect,  AT&T,  the  Transferred  Entities  and the
Retained Entities have no Knowledge, with respect to any AT&T System acquired by
any AT&T  Affiliate  since January 1, 1994, of any previous  owner's  failure to
comply with the copyright licensing requirements with respect to any AT&T System
or any  written  claim or  inquiry  from any  Person  that  questions  such AT&T
System's failure to comply. AT&T has delivered to Comcast copies of all reports,
filings  and  correspondence  made or filed with the FCC or  pursuant to the FCC
rules and  regulations  for the past year with respect to the AT&T Systems,  and
all reports,  filings and  correspondence  made or filed with the United  States
Copyright  Office  or  pursuant  to United  States  Copyright  Office  rules and
regulations for the past three years with respect to the AT&T Systems.

            6.10.3.  Except  as set  forth on  Schedule  6.10  and as  otherwise
provided  in this  Section  6.10.3  and  except  for rate  regulation  (which is
addressed  under  Section  6.10.4),  each of the owners of the AT&T  Systems has
complied  with the  provisions  of the Cable Act and the 1992  Cable Act as such
Legal Requirements relate to the operation of the AT&T Systems,  except for such
matters as would not,  individually or in the aggregate,  reasonably be expected
to have a  Material  Adverse  Effect.  Except  for such  matters  as would  not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse Effect, with respect to the AT&T Systems, each of the owners of the AT&T
Systems has  complied in all respects  with the  must-carry  and  retransmission
consent provisions of the 1992 Cable Act including (i) duly and timely notifying
"local  commercial   television  stations"  of  inadequate  signal  strength  or
increased copyright liability, if applicable,  (ii) to the extent required, duly
and timely notifying non-commercial  educational stations of the location of its
AT&T Systems' principal headends, (iii) duly and timely notifying subscribers of
changes  in the  channel  alignment  on its AT&T  Systems,  (iv) duly and timely
notifying  "local  commercial  and  non-commercial  television  stations" of the
broadcast  signals  carried on AT&T  Systems and their  channel  positions,  (v)
maintaining the requisite

                                       35
<PAGE>

public file identifying  broadcast signal carriage,  (vi) carrying the broadcast
signals after  December 31, 1996, on its AT&T Systems for all "local  commercial
television  stations" which are entitled to must-carry  status and, if required,
up to two  "qualified  low power  stations,"  (vii)  complying  with  applicable
channel placement obligations and (viii) obtaining  retransmission  consents for
all  broadcast  signals  carried on its AT&T  Systems  after  December 31, 1996,
except for the non-exempt signals carried pursuant to a must-carry  election and
for signals carried with implied consent while  conducting  negotiations for the
renewal of expired retransmission consent agreements. No must-carry complaint is
pending  against any AT&T System at the FCC,  nor, to AT&T's  Knowledge,  is any
threatened,  except as set forth on Schedule 6.10. AT&T has delivered to Comcast
copies of any pending petitions AT&T, any Transferred  Entity or Retained Entity
has on file  with  the FCC,  including  requests  for  market  modifications  or
petitions  for  special  relief or any market  modification  requests or special
relief  petitions  affecting any AT&T System that have been served on AT&T,  any
Transferred  Entity or Retained Entity. The FCC has not issued any decision with
respect to a  must-carry  complaint  finding any AT&T System in violation of the
must-carry  rules,  except as set forth on Schedule  6.10.  Each AT&T System has
complied  with  all  written   requests   which  it  has  received  for  network
nonduplication,  syndicated exclusivity and sports blackout protection which are
applicable to such AT&T System.

            6.10.4.  The  owners  of the AT&T  Systems  have  used  commercially
reasonable  efforts to establish rates charged and a la carte packages  provided
to subscribers of the AT&T Systems that are currently  allowable under the rules
and  regulations  promulgated  by the FCC  under  the 1992  Cable  Act,  and any
authoritative interpretation thereof, to the extent such rates (on any tier) are
presently  subject to regulation or, as of the date such rates were implemented,
were subject to regulation,  by any Governmental Authority.  Notwithstanding the
foregoing,  neither AT&T nor any AT&T Cable Subsidiary makes any  representation
or  warranty  that  either the rates  charged to  subscribers  or the a la carte
packages  provided are allowable  under any rules and regulations of the FCC, or
any  authoritative  interpretation  thereof,  promulgated  after the date of the
Closing.  AT&T has delivered to Comcast  complete and correct  copies of all FCC
Forms 328, 329, 393, 1200,  1205,  1210,  1215,  1220 and 1240 and any other FCC
rate  forms  filed  with the local  franchising  authority  and/or  the FCC with
respect to the AT&T Systems (and will deliver,  as soon as  available,  all such
FCC forms that are  prepared  with respect to the AT&T  Systems),  copies of all
correspondence  with any  Governmental  Authority  relating  to rate  regulation
generally or specific rates charged to subscribers to the AT&T Systems (FCC Form
329) or certifications to regulate rates (FCC Form 328), including copies of any
complaints  filed with the FCC with respect to any rates charged to  subscribers
of the  AT&T  Systems  which  are  pending  at the  FCC,  and any  documentation
supporting an exemption  from the rate  regulation  provisions of the 1992 Cable
Act claimed  with respect to the AT&T  Systems.  Except as set forth on Schedule
6.10,  neither AT&T nor any  Transferred  Entity or Retained Entity has made any
election with respect to any cost-of-service  proceeding conducted in accordance
with Part 76.922 of Title 47 of the Code of Federal  Regulations  or any similar
proceeding (a "Cost of Service Election") with respect to any AT&T Systems.

            6.10.5.  Except as set forth on Schedule 6.10, all necessary Federal
Aviation Administration approvals have been obtained and all necessary FCC tower
registrations  have been filed with respect to the height and location of towers
used in connection  with the operation of the AT&T Systems,  and such towers are
being  operated in compliance in all material  respects with  applicable FCC and
Federal Aviation  Administration rules. The ownership,  height (with

                                       36

<PAGE>

and without appurtenances),  location (address,  latitude,  longitude and ground
elevation),  structure  type and FCC call signs of each tower used in connection
with the operation of the AT&T Systems are correctly described on Schedule 6.10.
To the extent applicable,  AT&T has delivered to Comcast true and correct copies
of the FAA final determinations and FCC registrations for all such towers.

     6.11.  Intellectual  Property.  Except as set forth on  Schedule  6.11,  to
AT&T's Knowledge,  the AT&T Systems and AT&T's Cable Business have been operated
in such a manner so as not to violate or infringe upon the rights,  or give rise
to any rightful  claim of any Person for  copyright,  trademark,  service  mark,
patent or license or other Intellectual Property right infringement.

     6.12.  Financial  Statements.  With respect to each AT&T  System,  AT&T has
delivered  to Comcast  correct and complete  copies of (a) an  unaudited  system
balance sheet and related unaudited system statement of operations for and as of
the year ended December 31, 1999 and (b) an unaudited system balance sheet as of
June 30, 2000, and a related  unaudited  system  statement of operations for the
six-month (6) period then ended (collectively, the "AT&T Financial Statements").
The AT&T Financial Statements are management reports that fairly present, in all
material  respects,  such AT&T  System's  financial  position,  and  results  of
operations  as of the dates and for the  periods  indicated,  subject  to normal
adjustments,  allocations  and  accruals  (none of which will be material to the
financial  position or operating  results of the  systems) and  exclusive of the
final allocation of AT&T's purchase price to acquire  Tele-Communications,  Inc.
and MediaOne.  Such purchase price  allocations would primarily effect franchise
costs, property and equipment, depreciation and amortization.  Audited financial
statements as of and for the year ended December 31, 1998 have been provided for
the United Cable  Television of Baltimore  Limited  Partnership  (the  Baltimore
system).

     6.13.  Absence  of  Certain  Changes  or  Events.  Except  as set  forth on
Schedule 6.13, since May 4, 1999, there has been no (i) Material Adverse Effect,
nor has any event or  events  (other  than any  affecting  the cable  television
industry  generally)  occurred that,  individually  or in the  aggregate,  would
reasonably be expected to result in a Material Adverse Effect, and (ii) material
change in  accounting  principles  or  practices  with  respect to AT&T's  Cable
Business or revaluation of AT&T Assets for financial reporting,  property tax or
other  purposes.  From May 4, 1999 to the date of this  Agreement,  AT&T's Cable
Business has been  conducted  only in the usual,  regular and  ordinary  course,
except as  disclosed  on  Schedule  6.13,  except  where the  failure to conduct
business in such manner would not have a Material  Adverse  Effect or a material
adverse  effect on the ability of the AT&T Cable  Subsidiaries  to perform their
obligations  under this  Agreement  and except  where  such  conduct  out of the
ordinary course was effected to carry out and comply with this Agreement.

     6.14.  Litigation.  Except as set forth on Schedule  6.14:  (a) there is no
Litigation pending against any Transferred Entity or any of its Affiliates,  nor
has any  Transferred  Entity or Retained  Entity or AT&T received any notice of,
and to AT&T's Knowledge there is no, threatened Litigation, and (b) there is not
in existence any Judgment requiring any Transferred Entity or Retained Entity or
AT&T or any of its Affiliates to take any action of any kind with respect to the
AT&T Assets or the  operation of any AT&T Systems,  or to which any  Transferred
Entity or Retained Entity or AT&T (with respect to the AT&T Systems), any of the
AT&T

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<PAGE>

Systems or AT&T  Assets are subject or by which they are bound or  affected,  in
the case of either clause (a) or (b) above, that would reasonably be expected to
(i) have a Material  Adverse Effect or a material  adverse effect on the ability
of the AT&T Parties to perform their obligations  under this Agreement,  or (ii)
result  in  the  modification,  revocation,  termination,  suspension  or  other
limitation  of any AT&T Systems  Franchises,  AT&T Systems  Licenses or Material
AT&T Systems Contracts.

     6.15.  Tax Returns; Other Reports.

            6.15.1. The Transferred Entities and the Retained Entities have duly
and timely  filed in proper form all  federal,  and  material  state,  local and
foreign  Tax  Returns  required  to be filed with the  appropriate  Governmental
Authorities.  At the time of filing,  such Tax Returns and reports were true and
complete in all material respects.  All Taxes due and payable by the Transferred
Entities and the Retained Entities have been timely paid, except such amounts as
are being  contested  diligently  and in good faith and are not in the aggregate
material.

            6.15.2.  No consent  under Code  Section  341(f) has been filed with
respect to any of the Transferred Entities, or by any Retained Entity that would
be binding on the Transferred Entities.

            6.15.3. None of the Transferred Entities has or will have any income
reportable for any Post-Closing Tax Period that is attributable to a transaction
(for  example,  an  installment  sale)  occurring  in, or a change in accounting
method made with respect to any Pre-Closing Tax Period.

     6.16.  Employment Matters.

            6.16.1.  Except to the  extent  that any  noncompliance  would  not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse  Effect,  the  Transferred  Entities  (and any  predecessor  that was an
Affiliate of AT&T) have complied in all material  respects  with all  applicable
Legal  Requirements  relating to the  employment of labor,  including the Worker
Adjustment and  Retraining  Notification  Act (29 U.S.C.  Section 2101, et seq.)
("WARN"),  continuation coverage requirements with respect to group health plans
and  those  relating  to  wages,  hours,  collective  bargaining,   unemployment
insurance,  workers' compensation,  equal employment opportunity, age, sex, race
and  disability   discrimination,   immigration  control  and  the  payment  and
withholding of Taxes.

            6.16.2.  For  purposes of this  Agreement,  "AT&T  Plans" means each
employee  benefit  plan  (as  defined  in  Section  3(3) of  ERISA)  or  benefit
arrangement,   including  each  pension  or  welfare  benefit  plan,  employment
agreement,  incentive compensation arrangement or multiemployer plan (as defined
in Section 3(37) of ERISA) with respect to which the Transferred Entities or any
of  their  ERISA  Affiliates  has any  liability  or in which  any  AT&T  System
Employees  (as  defined  below)  participate.  The AT&T  Plans in which any AT&T
System Employee  participates  are set forth on Schedule 6.16,  which separately
identifies  each  AT&T  Plan,  if any,  of  which a  Transferred  Entity  is the
principal or exclusive  sponsor.  Except to the extent that any violation  would
not  reasonably  be  expected  to have a Material  Adverse  Effect,  none of the
Transferred Entities, any of their ERISA Affiliates,  any AT&T Plan other than a

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<PAGE>

multiemployer  plan (as defined in Section 3(37) of ERISA),  or to the Knowledge
of AT&T or any of its ERISA  Affiliates,  any AT&T Plan that is a  multiemployer
plan (as defined in Section  3(37) of ERISA) is in violation of any provision of
ERISA or the Code.  No material  (i)  "reportable  event"  described in Sections
4043(c)(1),  (2), (3), (5),  (6), (7), (10) and (13) of ERISA,  (ii)  non-exempt
"prohibited  transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code), (iii) "accumulated  funding deficiency" (as defined in Section 302 of
ERISA) or (iv) "withdrawal  liability" (as determined under Section 4201 et seq.
of ERISA) has occurred or exists and is continuing with respect to any AT&T Plan
other than a  multiemployer  plan (as defined in Section 3(37) of ERISA),  or to
the  Knowledge of AT&T or any of its ERISA  Affiliates,  any AT&T Plan that is a
multiemployer  plan (as defined in Section  3(37) of ERISA).  After the Closing,
neither  the  Transferred  Entities  nor any of their ERISA  Affiliates  will be
required,  under  ERISA,  the Code or any  collective  bargaining  agreement  to
establish,  maintain  or  continue  any AT&T Plan  currently  maintained  by the
Transferred Entities or any of their ERISA Affiliates.  Since May 4, 1999, there
has been no change in the  benefits  or level of  compensation  provided to AT&T
System Employees that would  materially  increase the cost of operating the AT&T
Systems.

            6.16.3.  Except  as  set  forth  on  Schedule  6.16,  there  are  no
collective  bargaining  agreements  applicable  to any  Person  employed  by any
Transferred  Entity or Retained Entity or AT&T who primarily renders services in
connection  with the AT&T  Systems  (an  "AT&T  System  Employee"  or a  "System
Employee") and neither AT&T nor any Transferred  Entity or Retained Entity has a
duty to bargain  with any labor  organization  with  respect to any such Person.
Except as set forth on Schedule  6.16,  there are not  pending any unfair  labor
practice charges against any Transferred  Entity or Retained Entity or AT&T, any
demand for recognition or any other request or demand from a labor  organization
for  representative  status with respect to any AT&T System Employee.  Except as
described on Schedule 6.16,  neither AT&T nor any Transferred Entity or Retained
Entity has any  employment  agreements,  either  written or oral,  with any AT&T
System Employee.  Each of the employment  agreements  listed on Schedule 6.16 is
terminable at will without  payment or penalty.  Except as described on Schedule
6.16,  none of  such  agreements  requires  AT&T or any  Transferred  Entity  or
Retained Entity, or will require Comcast or any of its Affiliates, to employ any
Person after the Closing.

     6.17.  AT&T  Systems  Information.  Schedule  6.17  sets  forth a true  and
accurate description in all material respects of the following information as of
the date of this Agreement unless otherwise specified:

            (a) as of the date set forth in the Schedule, the approximate number
of miles of co-axial plant and fiber plant,  and aerial and  underground and the
technical capacity of such plant expressed in MHZ, included in the AT&T Assets;

            (b) (i) as of  April  30,  1999,  the  number  of  Equivalent  Basic
Subscribers  served by each AT&T  System  (other  than the AT&T  Systems  in the
Philadelphia  DMA) and (ii) the aggregate of (A) for the franchise  area located
in the Philadelphia DMA (other than the franchise area located in Wildwood,  New
Jersey),  the aggregate number of Equivalent Basic Subscribers in such franchise
areas as of April 30, 1999 plus (B) for the franchise  area located in Wildwood,
New Jersey,  the average number of Equivalent Basic Subscribers in such area for
the 12-month  period ending on April 30, 1999  calculated by (x) adding together
the number of

                                       39

<PAGE>

Equivalent  Basic  Subscribers  in such areas at the end of each of the thirteen
(13) months ending April 30, 1999 and (y) dividing that aggregate number by 13;

            (c)  a  description  of  the  Basic  Services,  the  Expanded  Basic
Services,  Pay TV and a la carte services  available from each AT&T System,  and
the rates  charged  by the  applicable  Transferred  Entity or  Retained  Entity
therefor, including all rates, tariffs and other charges for cable television or
other services provided by each AT&T System;

            (d) the  stations  and signals  carried by each such AT&T System and
the channel  position of each such signal and station,  and whether each station
carried is carried pursuant to a retransmission or must-carry consent; and

            (e) the cities,  towns,  villages,  boroughs and counties  served by
each AT&T Systems.

     6.18.  Finders and  Brokers.  Neither  AT&T nor any of its  Affiliates  has
entered into any Contract with any Person that will result in the  obligation of
Comcast or any of its Affiliates or the Transferred  Entities to pay any Agent's
Fees in  connection  with the  negotiations  leading  to this  Agreement  or the
consummation of the transactions contemplated hereby.

     6.19.  Related-Party  Transactions.  Set  forth  on  Schedule  6.19 are the
Contracts,  agreements,  arrangements  or  understandings  as of the date hereof
between any owner of an AT&T System and AT&T or any of its  Affiliates  included
in or  related  to the AT&T  Assets or the AT&T  Systems.  Schedule  6.19  shall
include, as of the date hereof, all matters in which a Transferred Entity or any
other owner of an AT&T System is a party to any business arrangement or business
relationship with any of its Affiliates. Except as otherwise provided in Section
7.7.4(b) and except for the AT&T Excluded Assets, at Closing, no Retained Entity
or any Affiliate of a Retained  Entity will own any property or right,  tangible
or  intangible,  that is used  principally  in the business or operations of the
AT&T Systems.

     6.20.  Bonds. Schedule 6.20 contains a list of all franchise, construction,
fidelity,  performance  or other  bonds,  security  accounts,  escrow  accounts,
guarantees  and copies of all letters of credit posted by AT&T or its Affiliates
in connection with the AT&T Systems or AT&T Assets.

     6.21.  Undisclosed  Material  Liabilities.  There are no liabilities of the
Transferred  Entities or relating to the AT&T  Systems or the AT&T Assets of any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or  otherwise,  and  there  is  no  existing  condition,  situation  or  set  of
circumstances  which would reasonably be expected to result in such a liability,
other than:

            (a) liabilities disclosed on Schedule 6.21;

            (b)  liabilities  disclosed in the AT&T Financial  Statements or the
notes thereto;

            (c)  liabilities  arising in the ordinary  course of business of the
AT&T Systems since May 4, 1999; and

                                       40
<PAGE>

            (d) other liabilities of the AT&T Systems which,  individually or in
the aggregate,  are not reasonably  likely to have a Material  Adverse Effect on
AT&T's Cable Business.

7.   ADDITIONAL COVENANTS.

     7.1.   Access to Premises and Records.  Between the date of this  Agreement
and the Closing, the AT&T Cable Subsidiaries and their Affiliates (collectively,
the   "Disclosing   Party")  (a)  will  give  to  Comcast  and  its   Affiliates
(collectively,  the "Inspecting Party") and their counsel, accountants and other
representatives   reasonable  access  during  normal  business  hours  and  upon
reasonable  advance  notice to all the  premises and books and records of AT&T's
Cable Business  (including all account books of original entry,  general ledgers
and financial  records) and to all of the AT&T Assets and the personnel  engaged
in the  management  or  operation of the AT&T  Systems;  (b) will furnish to the
Inspecting  Party  and  such  representatives  all  such  documents,   financial
information and other  information  regarding AT&T's Cable Business and the AT&T
Assets and the  Transferred  Entities as the Inspecting  Party from time to time
reasonably  may request;  and (c) instruct the  management  employees,  counsel,
accountants  and other  authorized  representatives  of the Disclosing  Party to
cooperate  reasonably  with the Inspecting  Party in its  investigation  of such
Systems,   AT&T  Assets  and  the   Transferred   Entities;   provided  that  no
investigation  will  affect or limit  the  scope of any of the  representations,
warranties,  covenants and indemnities of the Disclosing Party in this Agreement
or in any  Transaction  Document or limit liability for any breach of any of the
foregoing.

     7.2.   Continuity and  Maintenance of  Operations;  Certain  Deliveries and
Notice.  Except as set forth on Schedule 7.2 or as Comcast may otherwise consent
in writing (which consent shall not unreasonably be withheld),  between the date
of this Agreement and the Closing,  each  Transferred  Entity (and each Retained
Entity to the extent  owning a System  prior to  Closing)  will with  respect to
AT&T's Cable Business, the AT&T Systems and the AT&T Assets:

            7.2.1.  conduct  AT&T's Cable Business in good faith and operate the
AT&T Systems only in the usual,  regular and ordinary  course,  including making
capital  expenditures,  completing ongoing and planned line extensions,  placing
conduit  or  cable  in  new  developments,  commencing  and  continuing  planned
upgrades, fulfilling installation requests, completing disconnection work orders
and  disconnecting  and  discontinuing  service to customers  whose accounts are
delinquent,  and (a) use its  reasonable  best  efforts to preserve  its current
business  intact  in  all  material  respects,   including  preserving  existing
relationships  with  franchising  authorities,  suppliers,  customers and others
having  business  dealings with the AT&T Systems,  (b) use its  reasonable  best
efforts to keep  available  the services of its  employees and agents taken as a
whole,  providing services in connection with AT&T's Cable Business, but will be
under no  obligation  to incur costs to do so, (c) not,  outside of the ordinary
course of business  consistent  with normal  salary  reviews,  grant or agree to
grant an  increase  in the  rate of  compensation  of,  or any  increase  in any
severance, profit sharing, retirement, deferred compensation, insurance or other
compensation  or  benefits  for,  such System  employees,  except as a result of
amendments  or  modifications  to employee  compensation  and benefit  plans and
programs of AT&T which benefit broad classes of AT&T's employees generally,  (d)
make customary marketing,  advertising and promotional expenditures with respect
to AT&T's Cable Business,  and (e) use its

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<PAGE>

commercially  reasonable  efforts to operate  AT&T's Cable  Business in material
compliance with all Legal Requirements;

            7.2.2.  maintain the AT&T Assets in good operating repair, order and
condition, ordinary wear and tear excepted; maintain equipment and inventory for
its Systems at normal  historical  levels consistent with its past practices (as
adjusted to account for  abnormally  high  inventory  levels related to periodic
rebuild  activity);  maintain,  in full force and effect,  policies of insurance
with respect to AT&T's  Cable  Business in such amounts and with respect to such
risks as are currently in effect for the AT&T  Systems;  and maintain its books,
records and accounts  with  respect to the AT&T Assets and the  operation of the
AT&T  Systems in the usual,  regular and ordinary  manner on a basis  consistent
with its past practices;

            7.2.3. not: (a) enter into, amend, modify, terminate, renew, suspend
or abrogate any Contract with an Affiliate, which Contract would be binding upon
any System or Transferred Entity  post-Closing;  (b) enter into, amend,  modify,
terminate, renew, suspend or abrogate any Contract with ServiceCo LLC or At Home
Corporation  or Liberty Media  Corporation  or any of their  Affiliates,  to the
extent it relates to any AT&T System,  which  Contract would be binding upon any
AT&T System or Transferred Entity  post-Closing;  (c) other than in the ordinary
course of business, amend, modify, terminate,  renew, suspend or abrogate in any
material  respect  any  Material  AT&T  Systems  Contract  (other than a Systems
Franchise or Systems License); or other than in the ordinary course of business,
amend, modify, terminate,  renew, suspend or abrogate any AT&T Systems Franchise
or AT&T Systems  License;  or (d) other than in the ordinary  course of business
consistent with past practices  engage in any material  transaction with respect
to AT&T's Cable Business;

            7.2.4.  promptly deliver to Comcast, as reasonably  available,  true
and complete copies of all monthly statements of income and such other financial
statements,  subscriber  counts,  management  reports and other operational data
regularly  prepared  with respect to the AT&T Systems or the operation of AT&T's
Cable Business for the period from January 1, 2000, through the Closing;

            7.2.5.  give or cause to be given to Comcast,  as soon as reasonably
possible  but in any event prior to the date of  submission  to the  appropriate
Governmental Authority,  to the extent practicable,  (i) copies of all FCC Forms
1200,  1205,  1210,  1215,  1220,  1225,  1235 and 1240 or any  other  FCC forms
required to be filed with any  Governmental  Authority  under the 1992 Cable Act
with respect to rates and  prepared  with respect to any of the AT&T Systems and
(ii) copies of all copyright  returns to be filed in connection  with any of the
AT&T  Systems;  and before  such Forms or returns are filed,  the  Parties  will
consult in good faith concerning the contents thereof;

            7.2.6.  duly and timely file a valid notice of renewal under Section
626 of the Cable Act with the appropriate Governmental Authority with respect to
any AT&T System Franchise included among the AT&T Assets that will expire within
thirty-six  (36) months after any date between the date of the Agreement and the
Closing Date;

            7.2.7. promptly,  after obtaining Knowledge thereof,  notify Comcast
of any fact,  circumstance,  event or action by it or otherwise  the  existence,
occurrence  or taking of which

                                       42

<PAGE>

would  reasonably  be expected to result in the  condition  set forth in Section
8.2.1 not being  satisfied  on the  Closing,  and will use its  reasonable  best
efforts to remedy the same to the extent  such  remedy is within the  reasonable
control  of the AT&T  Parties,  and to satisfy  such  condition  to the  Comcast
Parties'  obligation  to  consummate  the  transactions   contemplated  by  this
Agreement;

            7.2.8.  use its reasonable best efforts to challenge and contest any
Litigation  brought  against or otherwise  involving AT&T or any of its Existing
Affiliates  that could  reasonably  be expected to result in the  imposition  of
Legal  Requirements that could reasonably be expected to cause the conditions to
the Closing not to be satisfied;

            7.2.9.  except  pursuant to the  Internal  Restructuring,  not sell,
assign,  transfer or otherwise dispose of any of the AT&T Assets,  except in the
ordinary  course of business and except for (i) the  disposition  of obsolete or
worn-out equipment,  or (ii) dispositions with respect to which such AT&T Assets
are replaced  with current or long term assets,  as the case may be, of at least
equal fair market value;

            7.2.10.  not enter into any Contract or commitment of any kind which
would be binding on any Transferred  Entity or Comcast Entity or any of the AT&T
Systems after the Closing and which (i) would  involve an aggregate  expenditure
or  receipt in excess of  $1,000,000  in any case;  (ii)  would be  outside  the
ordinary  course of  business  and which would have a term in excess of one year
unless  terminable  without  payment or penalty upon thirty (30) days' (or less)
notice;  (iii)  would  limit the  freedom of  Comcast  or any of its  Affiliates
(including  any  Transferred  Entity) to compete in any line of business or with
any Person or in any area; (iv) would be outside the ordinary course of business
and which is a must-carry election or retransmission consent; (v) relates to the
use of the AT&T  Assets to provide,  or the  provision  by the AT&T  Systems of,
telephone or high-speed data services; or (vi) is not on arm's-length terms;

            7.2.11.  except as disclosed in writing to Comcast prior to the date
hereof,  not make any Cost of Service  Election or hardship  election  under the
rules and regulations adopted under the 1992 Cable Act;

            7.2.12.  not  mortgage,  pledge or subject to any material Lien that
would survive the Closing (other than Permitted Liens) any of the AT&T Assets or
the AT&T Systems;

            7.2.13. not enter into any local or AT&T System-specific programming
agreement relating to the AT&T Systems or the AT&T Assets;

            7.2.14.  not add or delete any  channels  from any AT&T  System,  or
change the  channel  lineup in any AT&T System or commit to do so in the future,
except as set forth in Schedule 7.2.14);

            7.2.15. other than pursuant to the Internal Restructuring, (i) adopt
or propose any change in the certificate of  incorporation  or bylaws,  or other
organizational  documents,  of any Transferred Entity, or amend any terms of the
outstanding  securities of any  Transferred  Entity;  (ii) cause any Transferred
Entity to merge or  consolidate  with any other  Person  or  acquire a  material
amount  of stock or assets  from any  other  Person;  or (iii)  issue,  deliver,
pledge,

                                       43

<PAGE>

encumber or sell any shares of capital stock of any Transferred  Entity,  or any
securities  convertible into such shares, or any rights,  warrants or options to
acquire such shares;

            7.2.16.  not do any of the  following:  (i) make or  change  any Tax
election,  (ii) change any annual Tax accounting  period,  (iii) adopt or change
any method of Tax accounting, in the case of each of clauses (i), (ii) and (iii)
in a manner  inconsistent  with  past  practice  (including  by way of filing an
amended tax return or a claim for refund).

            7.2.17.  not make or cause to be made any  payment of, or in respect
of, any Tax relating to any Transferred Entity to any person or any Governmental
Authority,  except to the extent such payment is in respect of a Tax that is due
or payable or has been properly  estimated in accordance  with applicable law as
applied in a manner consistent with past practice of such Transferred Entity;

            7.2.18.  not agree to do anything that would violate the  foregoing;
and

            7.2.19.  cause its appropriate  Affiliates to be bound by and comply
with the  provisions  of this  Section  7.2 to the extent such  Affiliates  own,
operate or manage any of the AT&T Assets or AT&T Systems.

     7.3.   Comcast Covenants.  Except as AT&T may otherwise  consent in writing
(which  consent shall not be  unreasonably  withheld),  between the date of this
Agreement and the Closing, the Comcast Parties:

            7.3.1. will promptly, after obtaining Knowledge thereof, notify AT&T
of any fact,  circumstance,  event or action by it or otherwise  the  existence,
occurrence  or taking of which  would  reasonably  be  expected to result in the
condition  set forth in Section  8.3.1 not being  satisfied on the Closing,  and
will use its  reasonable  best  efforts to remedy  the same to the  extent  such
remedy is within the reasonable  control of the Comcast Parties,  and to satisfy
such condition to AT&T's obligation to consummate the transactions  contemplated
by this Agreement; and

            7.3.2. will use its reasonable best efforts to challenge and contest
any  Litigation  brought  against or otherwise  involving any Comcast Party that
could  reasonably be expected to result in the imposition of Legal  Requirements
that could  reasonably be expected to cause the conditions to the Closing not to
be satisfied.

     7.4.   No Transfer of Qualified  Shares.  Until Closing (or  termination of
this  Agreement),  the  Comcast  Parties  will not  sell,  assign,  transfer  or
otherwise  dispose of any of the Qualified  Shares other than in connection with
the  transactions  contemplated  in this  Agreement  or  corporate  transactions
engaged in by AT&T.

     7.5.   Employees.

            7.5.1. No later than November 15, 2000, which date may be amended by
mutual agreement of the Parties, AT&T shall provide to Comcast a list of all the
AT&T System Employees by work location as of a recent date, showing the original
hire date, the  then-current  positions,  the rates of  compensation,  rate type
(hourly or salary), schedule hours per week,

                                       44
<PAGE>

whether the AT&T  System  Employee is subject to an  employment  agreement  or a
collective  bargaining agreement or is represented by a labor organization,  and
if the  employee  is a term  employee  or Senior  Manager.  The list  shall also
indicate which of the AT&T System  Employees,  AT&T or its Affiliates  desire to
retain as employees (the "Retained Employees") after the Closing.  Comcast shall
maintain such list in strict confidence. Such list shall be updated as necessary
to reflect new hires or other personnel changes.

            7.5.2. AT&T agrees, and shall cause AT&T's  appropriate  Affiliates,
to  cooperate  in all  reasonable  respects  with  Comcast  to allow  Comcast or
Comcast's  Affiliates to evaluate the AT&T System Employees  including the right
to review  personnel files and the right to interview the AT&T System  Employees
during normal  working  hours so long as such  interviews  are  conducted  after
notice to AT&T and do not unreasonably interfere with AT&T's operations and such
investigations  and  interviews  do not  violate any law or  contract.  AT&T and
Comcast will cooperate on the timing of such evaluation and interviews but agree
that such  evaluation will begin no earlier than the date AT&T delivers the list
required  of AT&T  pursuant  to Section  7.5.1.  AT&T  shall use its  reasonable
commercial efforts to resolve (or to cause its Affiliates to resolve) at its own
expense each Documented Employee Performance Case.

            7.5.3. The Transferred Entities shall employ commencing  immediately
after the  Closing  (or  immediately  after the return to active  service or, if
earlier,  following  expiration  of the Approved  Leave of Absence,  as provided
below for Employees on Approved Leave of Absence) all Other Employees, excluding
Retained  Employees,  employees on long-term  disability as of the Closing Date,
and excluding any employee whose employment was previously  terminated for cause
by AT&T or an  Affiliate  of AT&T.  The  Transferred  Entities,  as  directed by
Comcast,  may, but are not required to, employ Senior Managers commencing on the
date set forth in the  preceding  sentence.  In connection  therewith,  AT&T and
Comcast agree that, no later than January 15, 2001 (which date may be amended by
mutual  consent of the  Parties),  Comcast shall give AT&T a list of AT&T System
Employees  (still  employed  by AT&T or an  affiliate  of AT&T at the  time)  (a
"List") to whom Comcast intends to employ or cause the  Transferred  Entities to
employ  pursuant to the  preceding  sentences.  Comcast  may, if it wishes,  and
subject to  applicable  law,  condition  such  employment  of those AT&T  System
Employees on the List by the Transferred  Entities upon the AT&T System Employee
being in active service on the Closing Date, the AT&T System Employee's  passing
a  pre-employment   drug  screening  test,  the  completion  of  a  satisfactory
background  check,  and resolution of any Documented  Employee  Performance Case
identified pursuant to Section 7.5.2, provided,  however, that the determination
of whether a Documented  Employee  Performance  Case has been resolved  shall be
made in the sole  discretion of Comcast.  Comcast shall bear the expense of such
examination but AT&T shall, upon reasonable notice,  cooperate in the scheduling
of such  examinations so long as the examinations do not unreasonably  interfere
with AT&T's operations.  Comcast shall direct the Transferred Entities to retain
or  offer  each  such  AT&T  System   Employee  on  the  List   employment  with
substantially  similar  responsibilities,  at a  geographic  location  within  a
35-mile  radius  of  such  Employee's  primary  place  of  employment  and  base
compensation  at  least  equal to the  employee's  base  compensation  as of the
Closing  Date,  provided,  however,  that Comcast  shall direct the  Transferred
Entities to offer each such Employee benefits and total cash compensation  that,
in each case, are no less  favorable  than the employee  benefits and total cash
compensation,  respectively,  that Comcast or Comcast's  Affiliates provides for
its  similarly  situated  employees  with  comparable  experience  and length of
service. In connection with the foregoing, as of the

                                       45
<PAGE>

Closing Time (i) AT&T shall cause all AT&T System Employees who are on the List,
who  satisfy  the  conditions  for  employment  as  described  above and who are
employed  by AT&T or an  Existing  Affiliate  of AT&T at Closing to be or remain
employees  of the  Transferred  Entities,  as  directed by Comcast and (ii) AT&T
shall cause the Transferred Entities to terminate or transfer all employees that
are not described in clause (i) above so that such employees are not employed by
the Transferred Entities. As of the Closing,  neither Comcast nor its Affiliates
(including  the  Transferred  Entities)  shall have any  obligation to AT&T, its
Affiliates or to the AT&T System  Employees,  with regard to any Senior  Manager
and Other Employees  Comcast has determined,  based on such evaluations prior to
Closing, not to hire or retain.  Notwithstanding any of the foregoing,  from the
date hereof until the Closing,  Comcast and each of its Affiliates agrees not to
solicit for employment that would commence prior to the Closing Date (other than
through advertisements directed at the relevant general population), without the
written consent of AT&T, any Senior Manager.  Comcast and each of its Affiliates
agrees,  for a period of one year from the  Closing  Date,  not to  solicit  the
performance  of  services  by any  Retained  Employee,  and AT&T and each of its
Existing  Affiliates agrees, for a period of one year from the Closing Date, not
to solicit the performance of services by any Hired Employee; provided, however,
that the  foregoing  provision  will not  prevent  any  Person  from  hiring any
Retained   Employee  or  Hired   Employee   as  a  result  of  placing   general
advertisements in trade journals,  newspapers or similar  publications which are
not directed at such Retained  Employees or Hired Employees.  In the case of any
AT&T System Employee  (other than a Retained  Employee) who is on Approved Leave
of Absence as of the Closing  Date (a "System  Employee on Leave  Status")  whom
Comcast or its Affiliates  desires or is required to hire, an Existing Affiliate
of AT&T other than a Transferred  Entity shall employ such AT&T System  Employee
on Leave Status prior to the Closing  Date,  and upon the  Employee's  return to
active  service within sixteen (16) weeks after the Closing Date or, if earlier,
on the first Business Day following  expiration of the Employee's Approved Leave
of Absence a  Transferred  Entity  shall  employ such  System  Employee on Leave
Status. For purposes of this Agreement, employees on "Approved Leave of Absence"
means employees absent from work on the Closing Date and unable to perform their
regular  job  duties by reason of  illness  or injury  under  approved  plans or
policies of the employer (other than  employee's  absence for less than ten (10)
days due to short term illness or injury not requiring  written  approval by the
employer) or otherwise  absent from work under approved or unpaid leave policies
of employer.

            7.5.4.  As of the Closing Date,  AT&T shall be responsible  for, and
shall cause to be discharged and satisfied in full, all amounts due and owing to
each of the AT&T System  Employees  with respect to and in  accordance  with the
terms of all compensation or benefit plans or arrangements,  including,  without
limitation,  any  salaries,  commissions,   deferred  compensation,   severance,
insurance,  pension, profit sharing,  disability payment, medical, holiday, sick
pay, accrued and unused vacation in excess of the amount the Comcast Entities or
their  Affiliates  assume  pursuant to this Section 7.5, and payments  under any
incentive compensation or bonus agreement, in each case, which has accrued prior
to the Closing  Date (and,  for System  Employees on Leave  Status,  until their
termination by AT&T or its appropriate  Existing Affiliate,  or their employment
by Comcast,  or its appropriate  Affiliate,  as set forth in Section 7.5.3).  In
addition,  AT&T shall retain all liabilities and obligations associated with its
employees,  including Systems  Employees,  who are not employed by a Transferred
Entity at Closing.

                                       46
<PAGE>

            7.5.5.  After the Closing Date,  AT&T shall cause each of its former
employees  who becomes a Hired  Employee to be  permitted  to elect to receive a
distribution of the full account balances of such former employee under any Code
Section 401(k) plan  maintained by AT&T or its  Affiliate,  and Comcast shall in
each case permit to the extent allowed by Code Section 402(c) the Hired Employee
to roll over any amounts so  distributed in cash into a Code Section 401(k) plan
maintained by Comcast or its Affiliate.

            7.5.6. Except as expressly stated to the contrary herein, all claims
and obligations under,  pursuant to or in connection with any welfare,  medical,
insurance,  disability or other employee benefit plans of AT&T or its Affiliates
or  arising  under  any Legal  Requirement  affecting  employees  of AT&T or its
Affiliates  to the  extent  arising  before  the  Closing  Date will  remain the
responsibility  of AT&T,  or its  Affiliate,  whether or not such  employees are
retained or hired by a Transferred  Entity,  Comcast or any of its Affiliates as
of or after the  Closing.  Comcast  will not have nor assume any  obligation  or
liability  under  or in  connection  with  any  such  plan of AT&T or any of its
Affiliates. For purposes of this Agreement, the following claims and liabilities
shall  be  deemed  to  be  incurred  as  follows:  (i)  medical,  dental  and/or
prescription  drug benefits when the treatment is provided,  except with respect
to  such  benefits   provided  in  connection   with  a  continuous   period  of
hospitalization, which shall be deemed to be arising at the time of admission to
the hospital;  (ii) life, accidental death and dismemberment and business travel
accident insurance benefits and workers' compensation benefits,  upon the death,
disability  or  accident  giving  rise  to  such  benefits;   and  (iii)  salary
continuation or other short-term  disability benefits,  or long-term disability,
upon  commencement  of the  disability  giving rise to such benefit.  AT&T shall
promptly  satisfy any legal  obligation  with respect to  continuation  of group
health coverage  required  pursuant to Section 4980B of the Code or Section 601,
et seq.,  of ERISA.  In regard  to any  System  Employee  on Leave  Status,  all
liability for benefit  coverage of such  Employee,  and liability for payment of
benefits,  shall remain that of AT&T,  or its  appropriate  Existing  Affiliate,
until such Employee  becomes an employee of Comcast or its  Affiliate  after the
Closing pursuant to Section 7.5.3.

            7.5.7. AT&T or its Affiliate will remain solely responsible for, and
will  indemnify  and hold harmless  Comcast and its  Affiliates  (including  the
Transferred  Entities)  from and against all Losses arising from or with respect
to, all salaries,  commissions,  deferred  compensation,  severance,  insurance,
pension,  profit  sharing,  disability  payment,  medical,  sick  pay,  holiday,
vacation  (except  for  accrued  vacation  time and sick  time  included  in the
calculation  of  the  Working  Capital  Adjustment  Amount),  medical,  holiday,
continuation  coverage and other compensation or benefits to which its employees
may be entitled,  whether or not such  employees  may be hired by a  Transferred
Entity,  Comcast  or any of its  Affiliates,  to the extent  arising  from their
employment by AT&T or any of its Affiliates on or prior to the Closing Date, the
termination  of  their   employment  on  or  prior  to  the  Closing  Date,  the
consummation  of  the  transactions  contemplated  hereby  or  pursuant  to  any
applicable  Legal  Requirement  or  otherwise  to the extent  arising from their
employment prior to the Closing Date (and, for System Employees on Leave Status,
until  their  termination  by  AT&T,  or its  appropriate  Affiliate,  or  their
employment by a Transferred Entity,  Comcast, or its appropriate  Affiliate,  as
set forth in  Section  7.5.1).  Any  liability  under  WARN  with  regard to any
employee  terminated  on or  prior  to  the  Closing  Date,  or not  hired  by a
Transferred  Entity,  Comcast or its  Affiliates  on or after the Closing  Date,
shall, as a matter of contract  between the Parties,  be the  responsibility  of
AT&T or its Affiliates. Each Parent and such Parent's Affiliates shall cooperate
with the other Parent

                                       47

<PAGE>

and the other Parent's Affiliates,  if requested,  in the giving of WARN notices
on behalf of the other Parent.

            7.5.8. (a)  Notwithstanding  anything to the contrary herein, on and
after the Closing Date Comcast will cause each Transferred Entity to:

                        (i) upon receipt of a schedule  showing the vacation and
            sick  balances  and value of such  balances of each Hired  Employee,
            which schedule shall be delivered by AT&T to Comcast within ten (10)
            days after the  Closing,  credit each Hired  Employee  the amount of
            vacation and sick time permitted to be accrued by similarly situated
            employees of Comcast in accordance with Comcast's standard practices
            (to a maximum of four weeks for vacation and seven (7) days for sick
            time) accrued and unused by him or her as a System  Employee of AT&T
            through and  including  the  Closing  Date to the extent the Working
            Capital  Adjustment  Amount is  decreased  pursuant to Section  3.2;
            provided,  however, that, if any Hired Employee has accrued vacation
            and sick time in excess of the amount so credited by the Transferred
            Entity,  then AT&T shall,  and shall cause its appropriate  Existing
            Affiliate  to, pay to such  employee any amount due to such employee
            in respect of such excess and the Transferred  Entity shall not have
            any liability or obligation in respect of such excess;

                        (ii) give each  Hired  Employee  credit  for such  Hired
            Employee's  past service with AT&T and AT&T's  Affiliates  as of the
            Closing  Date  (including  past  service  with  any  prior  owner or
            operator  of the AT&T  Systems  or AT&T's  Cable  Business)  (A) for
            purposes of  eligibility  to  participate  in  Comcast's  applicable
            employee  welfare  benefit  plans to the same  extent  as  similarly
            situated  employees of Comcast and their dependents are permitted to
            participate;  and (B) for purposes of  eligibility  to  participate,
            vesting and benefit  accrual  under any  applicable  post-retirement
            medical or life insurance benefit plan which Comcast maintains or in
            which Comcast participates;

                        (iii)  give each  Hired  Employee  credit for such Hired
            Employee's  past service with AT&T and AT&T's  Affiliates  as of the
            Closing  Date  (including  past  service  with  any  prior  owner or
            operator of the AT&T Systems or AT&T's Cable  Business) for purposes
            of eligibility  for  participation  and vesting under the applicable
            401(k) plan, or any other applicable  retirement plan and stock plan
            in which Comcast  participates to the same extent as other similarly
            situated employees of Comcast;

                        (iv) give each  Hired  Employee  credit  for such  Hired
            Employee's  past service with AT&T as of the Closing Date (including
            past service with any prior owner or operator of the AT&T Systems or
            AT&T's Cable  Business)  for any waiting  periods under the employee
            benefit plans,  including any applicable group health and disability
            plans,  in  which  Comcast  participates,  to  the  same  extent  as
            similarly situated  employees of Comcast,  except to the extent such
            employees  were  subject  to such  limitations  under  the  employee
            benefit plans of AT&T or any Affiliate of AT&T;  and not subject any
            Hired  Employees to any

                                       48
<PAGE>

            limitations  on benefits for any  preexisting  conditions,  provided
            that the  treatment is covered  under the  applicable  Comcast group
            health plans; and

                        (v) credit each Hired  Employee  under any group  health
            plan for any deductible amount previously met by such Hired Employee
            as of the Closing  Date under any of the group  health plans of AT&T
            or any of AT&T's  Affiliates for the plan year in which the transfer
            of employment occurs.

            (c) Notwithstanding anything set forth in Section 7.5.8(a),  Comcast
and its Affiliates (including the Transferred Entities) shall have no obligation
to the AT&T System Employees who are Employees on Leave Status until they become
employees of Comcast or its and its Affiliate pursuant to Section 7.5.3.

            7.5.9.  Except  with  respect to term  employees  listed on Schedule
7.5.9 who become Hired Employees,  if a Transferred Entity or Comcast discharges
any Hired Employee  without cause within one hundred eighty (180) days after the
Closing,  then Comcast  shall pay severance  benefits to such Hired  Employee in
accordance with AT&T's severance benefit plan (the "Severance  Benefits") at the
Closing  Date and counting  the period of  employment  with AT&T and Comcast for
purposes of calculating  benefits under such plan on the Closing Date; provided,
however,  that if  Comcast  discharges  any  Hired  Employee  who was an  "Other
Employee"  without cause within sixty (60) days after  Closing,  then AT&T shall
reimburse the Hiring Party for the Severance  Benefits.  Following  such 180-day
period,  such Hired Employee shall be covered under Comcast's  severance benefit
plan  counting the period of  employment  with the AT&T and its  Affiliates  and
Comcast for  purposes  of  calculating  benefits  under such plan on the Closing
Date.  Schedule  7.5.9 sets forth the terms of such  severance  benefit  plan in
effect on the date hereof,  and AT&T will promptly notify Comcast of any changes
in the terms of such plan  occurring  between  the date  hereof and the  Closing
Date.  AT&T agrees that between the date of this Agreement and the Closing Date,
AT&T will not increase the benefits  provided under such severance plan,  except
as a result of, and  consistent  with,  increases made by AT&T on a company-wide
basis in the benefits  provided under its severance  plans. For purposes of this
Section 7.5.9,  "cause" shall have the meaning set forth in Comcast's employment
policies,  procedures  or agreements  applicable to Comcast's  employees who are
situated similarly to the discharged Hired Employee.

            7.5.10. If AT&T or its Affiliate has, or acquires, a duty to bargain
with any labor organization in respect of the AT&T System Employees prior to the
Closing  Date,  then AT&T will (i) give  prompt  written  notice of such fact or
development  to  Comcast,  including  notice  of  the  date  and  place  of  any
negotiating  sessions as they are planned or contemplated  and permit Comcast to
have a  representative  present  at all  negotiating  sessions  with such  labor
organization and at all meetings preparatory thereto (including making Comcast's
representative  a  representative  of its  delegation  if  required by the labor
organization),  and (ii) not, without Comcast's written consent,  enter into any
Contract with such labor  organization that binds or purports to bind Comcast or
its Affiliates  (including the  Transferred  Entities),  including any successor
clause or other  clause  that would have this  purpose  or effect.  Except  with
respect to AT&T's NCE Agreement,  AT&T and its Affiliates  acknowledge and agree
that Comcast and its Affiliates  (including the  Transferred  Entities) have not
agreed to be bound,  and will not be bound,  without an explicit  assumption  of
such liability or responsibility by Comcast,  by any

                                       49

<PAGE>

provision of any collective  bargaining  agreement or similar  Contract with any
labor  organization  to which  AT&T or any of its  Affiliates  is or may  become
bound.

            7.5.11.  Nothing in this Section 7.5 or elsewhere in this  Agreement
shall be deemed to make any employee of AT&T, Comcast or any of their Affiliates
a third party beneficiary of this Agreement.

            7.5.12.  The  Parties  agree to  cooperate  with  each  other and to
exchange all  information  required to implement the  provisions of this Section
7.5.

     7.6.   Leased  Vehicles; Other Capital Leases.  AT&T will pay the remaining
balances on any leases for vehicles or capital  leases that would be included in
the AT&T Assets but for the effect of this Section  7.6, and will deliver  title
to such vehicles and other Tangible  Personal  Property  included among the AT&T
Assets,  free and  clear of all  Liens  (other  than  Permitted  Liens),  to the
Transferred Entities immediately prior to the Closing.

     7.7.   Required Consents; Franchise Renewal.

            7.7.1.  Each Party will use its commercially  reasonable  efforts to
(i) obtain in writing,  as promptly as possible and at its  expense,  all of the
Required Consents of such Party, other than consents in connection with multiple
dwelling  unit  agreements,  required to be obtained by such Party in connection
with the transactions  contemplated by this Agreement,  and deliver to the other
Parent copies of such Required Consents and such other consents,  authorizations
or approvals  promptly after they are obtained by such Party,  and (ii) give any
required written notice in connection with the transactions;  provided that such
Party will afford the other Parent the opportunity to review, and comment on the
form of letter or application  proposed to request the Required  Consent or form
of written  notice prior to delivery to the Person whose consent is sought or to
whom such  notification is required.  All documents  delivered or filed with any
Governmental  Authority or any Person by or on behalf of such Party  pursuant to
this Section  7.7.1,  when so delivered or filed,  will be correct,  current and
complete in all  material  respects.  Each Party will  cooperate  with the other
Parties to obtain all Required  Consents and no Party shall  intentionally  take
any action or steps that would  prejudice  or  jeopardize  the  obtaining of any
Required Consent.

            7.7.2. AT&T and its Affiliates will not accept or agree or accede to
any  modifications  or amendments  to, or the imposition of any condition to the
transfer  of, any of the AT&T System  Franchises,  AT&T System  Licenses or AT&T
System Contracts that are not reasonably acceptable to Comcast.  Notwithstanding
the  foregoing,  Comcast and its  Affiliates  will  cooperate  with AT&T and its
Affiliates,  and AT&T and its Affiliates and Comcast and its Affiliates will use
commercially reasonable efforts to complete, execute and deliver, or cause to be
completed,  executed and delivered, to the appropriate Governmental Authority, a
FCC Form 394 to the extent not  previously  filed  with  respect to each  System
Franchise  included among the AT&T Assets within thirty (30) days after the date
of this Agreement. Without the prior consent of Comcast, AT&T and its Affiliates
shall not agree with any  Governmental  Authority  to extend or to toll the time
limits applicable to such Governmental Authority's consideration of any FCC Form
394 filed with such Governmental Authority.

                                       50
<PAGE>

            7.7.3.  Notwithstanding  the provisions of Sections 7.7.1 and 7.7.2,
AT&T will not have any further obligation to obtain AT&T Required Consents:  (a)
with  respect to  license  agreements  relating  to pole  attachments  where the
licensing  authority  will not consent to an  assignment or change of control of
such license agreement but requires that the Transferred Entity enter into a new
agreement  with such licensing  authority on terms that are not materially  less
favorable  in the  aggregate  to the  Transferred  Entity,  in  which  case  the
Transferred  Entity shall use its commercially  reasonable efforts to enter into
such  agreement,  provided such  agreement is reasonably  acceptable to Comcast,
prior to the  Closing  or as soon as  practicable  thereafter,  and AT&T and its
Existing  Affiliates  will cooperate with and assist the  Transferred  Entity in
obtaining  such  agreements;  (b) for any business  radio license or any private
operational  fixed service ("POFS")  microwave license which would reasonably be
expected to be obtained  within one hundred  twenty (120) days after the Closing
and so long as a  conditional  temporary  authorization  (for a  business  radio
license) or a special temporary  authorization (for a POFS microwave license) is
obtained by the  Transferred  Entity under FCC rules with respect  thereto;  (c)
with respect to Contracts evidencing AT&T Leased Property,  if, with the consent
of Comcast,  AT&T causes the  applicable  Transferred  Entity to obtain and make
operational prior to the Closing substitute Leased Property that is, and that is
leased on terms that are, reasonably  satisfactory to Comcast;  (d) with respect
to Contracts  evidencing leased AT&T Tangible Personal Property that is material
to AT&T's  Cable  Business,  if, with the  consent of  Comcast,  AT&T causes the
applicable  Transferred  Entity  to  obtain  and make  operational  prior to the
Closing   substitute  AT&T  Tangible   Personal   Property  that  is  reasonably
satisfactory to Comcast.

            7.7.4. (a) Upon the written request of Comcast, if and to the extent
that any  Required  Consents  have not been  obtained on or prior to the Closing
(whether or not any Party shall have waived satisfaction of the condition to the
Closing set forth in Section 8.2.5 or Section 8.3.5), subsequent to the Closing,
AT&T will continue to use commercially  reasonable efforts to obtain in writing,
as promptly as possible,  such AT&T Required Consents and will deliver copies of
the  same,  reasonably  satisfactory  in form and  substance,  to  Comcast.  The
obligations set forth in this Section 7.7.4 will survive the Closing.

            (b) This  Agreement  shall not  constitute an agreement to assign to
any Transferred  Entity in the Internal  Restructuring any Asset or any claim or
right or any benefit  arising  thereunder  or  resulting  therefrom  without the
consent of a Third Party thereto if such  assignment  without such consent would
constitute a breach or other contravention of such Asset or in any way adversely
affect the rights of the  Transferred  Entity  thereunder.  If any AT&T Required
Consent (except AT&T Required Consents for AT&T Systems Franchises), relating to
the  assignment  of an AT&T Asset to a  Transferred  Entity  shall not have been
obtained  prior to  Closing,  AT&T and  Comcast  will  cooperate  in a  mutually
agreeable  arrangement  under which, to the extent  practicable and permitted by
such  agreement  and  applicable  law,  the  Transferred  Entity will obtain the
benefits  and be  responsible  for  the  obligations  in  accordance  with  this
Agreement  in respect  of such AT&T  Asset or any claim or right or any  benefit
arising  thereunder  the  assignment  of which  without the consent of the Third
Party  thereto  would  constitute a breach or other  contravention  of such AT&T
Asset or in any way  adversely  affect  the  rights  of the  Transferred  Entity
thereunder,  including  sub-contracting,  sub-licensing,  or  sub-leasing to the
Transferred  Entity,  or under  which AT&T will  enforce  for the benefit of the
Transferred  Entity,  with  the  Transferred  Entity  assuming  AT&T's  and  its
Affiliates'  obligations,  any and all rights of AT&T and its Affiliates against
the Third Party in question.  AT&T and its  Affiliates  will

                                       51

<PAGE>

promptly pay to the Transferred  Entity,  when received,  all monies received by
AT&T and its  Affiliates in respect of any such AT&T Asset or any claim or right
or any benefit arising  thereunder and the Transferred Entity shall promptly pay
or perform any obligations in respect of any such AT&T Asset.

            7.7.5.  AT&T and its  Affiliates  shall not be  required to make any
payment  (other than  customary  filing and similar  fees) to a Person from whom
consent  is sought in order to obtain  such  consent  and  Comcast  shall not be
obligated to reimburse AT&T or any of its Affiliates for any payment so made.

     7.8.   Title  Commitments  and  Surveys.  Comcast  will have the  option to
obtain,  at  its  own  expense,  (i)  commitments  of  title  insurance  ("Title
Commitments") issued by a nationally recognized title insurance company selected
by Comcast (the "Title  Company") and  containing  policy limits and other terms
reasonably  acceptable  to  Comcast,  and  photocopies  of  all  recorded  items
described as exceptions  therein  committing to insure fee or leasehold title in
the applicable  Transferred Entity to each parcel of AT&T Owned Property or AT&T
Leased Property owned by or to be transferred to such  Transferred  Entity under
the Internal  Restructuring,  by American Land Title Association ("ALTA") (1992)
owner's or lessee's policies of title insurance,  and (ii) current ALTA as-built
surveys of each such parcel as is necessary to obtain the title  insurance to be
issued pursuant to the Title  Commitments with the standard  printed  exceptions
relating to survey matters deleted (the "Surveys"), certified to Comcast and the
Title Company issuing a Title Commitment. If Comcast notifies AT&T within twenty
(20) days after the date of this Agreement or, if later,  of its receipt of both
the Title  Commitments and the Surveys of any Lien (other than a Permitted Lien)
or other  matter  affecting  title to such AT&T Owned  Property  or AT&T  Leased
Property  which prevents or materially  interferes  with (or presents a material
risk of  preventing  or  interfering  with) the use of any such  parcel  for the
purposes for which it is  currently  used or operated  (each a "Title  Defect"),
AT&T will,  at its own  expense,  exercise  commercially  reasonable  efforts to
remove or,  with the consent of  Comcast,  cause the Title  Company to commit to
insure over, each such Title Defect prior to the Closing.

     7.9.   HSR Act Notification. If any event  (including  the passage of time)
occurs which  subjects the  transactions  contemplated  by this Agreement to any
further requirements under the HSR Act, then as promptly as practicable, Comcast
and AT&T will each complete and file, or cause to be completed and filed, at its
own cost and expense, any notification and report required to be filed under the
HSR Act with respect to the  transactions  contemplated by this  Agreement,  and
each such filing shall request early  termination  of the waiting period imposed
by the HSR Act. The Parties shall use their respective  commercially  reasonable
efforts to respond,  as promptly as  reasonably  practicable,  to any  inquiries
received  from the  Federal  Trade  Commission  (the  "FTC")  and the  Antitrust
Division of the Department of Justice (the "Antitrust  Division") for additional
information  or  documentation,  and  to  respond,  as  promptly  as  reasonably
practicable,  to all inquiries and requests received from any other Governmental
Authority in  connection  with  antitrust  matters.  The Parties shall use their
respective  commercially reasonable efforts to overcome any objections which may
be raised by the FTC, the Antitrust Division or any other Governmental Authority
having jurisdiction over antitrust matters. Each Party shall (i) promptly notify
the other Party of any  written  communication  to that Party from the FTC,  the
Antitrust  Division,  any  State  Attorney  General  or any  other  Governmental
Authority and,  subject to applicable  law,  permit the other Party to review in

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advance any proposed  written  communication  to any of the foregoing;  (ii) not
agree  to  participate  in  any  substantive  meeting  or  discussion  with  any
Governmental  Authority  in respect  of any  filings,  investigation  or inquiry
concerning  this  Agreement or the  transactions  contemplated  hereby unless it
consults  with the other Party in advance  and, to the extent  permitted by such
Governmental  Authority,  gives the other  Party the  opportunity  to attend and
participate  thereat;  and (iii)  furnish  the other  Party  with  copies of all
correspondence,  filings,  and  communications  (and memoranda setting forth the
substance  thereof)  between  them and their  Affiliates  and  their  respective
representatives  on the one hand,  and any  Government  Authority  or members or
their  respective  staffs on the other hand,  with respect to this Agreement and
the transactions contemplated hereby. Notwithstanding the foregoing, Comcast and
its  Affiliates  shall not be  required  to make any  significant  change in the
operations  or  activities of their  business (or any material  assets  employed
therein) or the AT&T Cable  Business if,  Comcast  determines in good faith that
such change would be materially  adverse to the  operations or activities of the
business  (or any  material  assets  employed  therein) of Comcast or any of its
Affiliates or any of the Transferred  Entities,  having significant  assets, net
worth or revenue.

     7.10.  Sales and Transfer Taxes. Comcast and AT&T shall each, respectively,
pay one-half of (i) all Transfer  Taxes arising from or payable by reason of the
transfer of any of the AT&T Assets and (ii) all Transfer  Taxes or  assessments,
and any  transfer  fees  and  similar  assessments  for or  under  AT&T  Systems
Franchises,  AT&T Systems Licenses and AT&T Systems  Contracts,  arising from or
payable  by reason  of the  transfer  of the AT&T  Assets.  Notwithstanding  the
foregoing,  all Transfer  Taxes or  assessments,  and transfer  fees and similar
assessments arising from or payable by reason of the Internal Restructuring will
be borne by AT&T.

     7.11.  Programming.  AT&T or its  applicable  Affiliate  will  execute  and
deliver  letters  substantially  in the form  attached as Exhibit 7.11 as may be
reasonably  requested  by Comcast to Persons  that are  parties to AT&T's or its
applicable Affiliate's programming agreements.

     7.12.  Retention of Books and Records. Following the Closing,  AT&T and its
Existing Affiliates shall give access to Comcast,  its counsel,  accountants and
other authorized  representatives during normal business hours to AT&T's and its
Existing Affiliates' materials, books, records and documents which relate to the
operations  of  AT&T's  Cable  Business  prior  to the  Closing  Time  as may be
reasonably  necessary in connection with any legitimate  purpose  (including the
preparation  of tax  reports  and  returns  and  the  preparation  of  financial
statements).  Such access will be subject to the applicable  document  retention
policies  of AT&T  and its  Existing  Affiliates  (provided  that  AT&T  and its
Existing Affiliates will use commercially  reasonable efforts (i) not to destroy
any such  records  without  first  notifying  Comcast  and  giving  Comcast  the
opportunity to make copies and (ii) to obtain copies of, or provide  Comcast and
its representatives access to, any materials,  books, records and documents that
relate to the  operations of AT&T's Cable Business prior to the Closing Time and
that are held by an Affiliate of AT&T that is not then an Existing  Affiliate of
AT&T), shall be subject to reasonable advance written notice,  will be conducted
in a manner  that is not  disruptive  of  AT&T's  and its  Existing  Affiliates'
business and will be subject to any other reasonable limitations imposed by AT&T
and its Existing Affiliates. Comcast shall have the right to make copies of such
materials at its own expense.

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<PAGE>

     7.13.  Use of Name and Logo.  For a period of one hundred eighty (180) days
after the  Closing,  each  Comcast  Entity and each  Transferred  Entity will be
granted a non-exclusive,  non-transferable license to use the trademarks,  trade
names,  service marks,  service names,  logos and similar  proprietary rights of
AT&T and its Existing  Affiliates to the extent  incorporated  in or on the AT&T
Assets  Transferred at the Closing on a royalty-free  basis,  provided that each
Comcast Entity and each Transferred Entity will exercise commercially reasonable
efforts to remove all such names, marks, logos and similar proprietary rights of
AT&T and its Affiliates  (except to the extent  otherwise  permitted by AT&T and
its Affiliates) from such AT&T Assets as soon as reasonably practicable,  and in
any  event  within  one  hundred  eighty  (180)  days,  following  the  Closing.
Notwithstanding  the  foregoing,  nothing in this Section 7.13 will require each
Comcast Entity or any Transferred Entity to remove or discontinue using any such
name or mark that is affixed to converters  or other items already  installed in
or to be used in customer  homes or properties  and  Transferred to each Comcast
Entity as of the  Closing,  or as are  already  installed  and used in a similar
fashion as of the Closing making such removal or discontinuation impracticable.

     7.14.  Transitional Billing Services. AT&T and its Existing Affiliates will
provide to the Transferred Entities, upon written request delivered a reasonable
amount of time in  advance,  access to and the right to use its  billing  system
computers,  software  and related  fixed assets in  connection  with the Systems
Transferred  for a period of up to one hundred  eighty (180) days  following the
Closing to allow for  conversion  of existing  billing  arrangements,  including
billing and related arrangements (such as refunds) regarding internet access and
telephony  services  being provided to customers of a System on the Closing Date
("Transitional Billing Services"). Comcast will notify AT&T at least thirty (30)
days prior to the Closing as to whether it desires the  Transferred  Entities to
have Transitional  Billing Services from AT&T and its Existing  Affiliates.  All
Transitional  Billing  Services,  if any,  that are requested by Comcast will be
provided on terms and conditions  reasonably  satisfactory  to Comcast and AT&T;
provided,  however, that the amount to be paid by Comcast receiving Transitional
Billing Services will not exceed the cost to AT&T and its Existing Affiliates of
providing such Transitional  Billing Services.  AT&T and its Existing Affiliates
will notify Comcast of the cost of providing such Transitional  Billing Services
within ten (10) Business Days after receiving  Comcast's  notice  requesting the
provision of such  Transitional  Billing  Services.  The Parties  agree that the
Parties' respective rights to receive  Transitional Billing Services pursuant to
this Section 7.14 have nominal value.

     7.15.  Confidentiality and Publicity.

            7.15.1.  Prior to the  Closing,  each  Inspecting  Party  will  keep
confidential  any non-public  information  that such Inspecting Party may obtain
from the Disclosing Party in connection with this Agreement,  and, following the
Closing, each Inspecting Party will keep confidential any non-public information
that such  Inspecting  Party may obtain from the Disclosing  Party in connection
with  this  Agreement  unrelated  to  AT&T's  Cable  Business  and  the  Systems
Transferred by the Disclosing  Party pursuant to this  Agreement.  Following the
Closing,   AT&T  and  its  Affiliates  will  keep   confidential  any  nonpublic
information in the  possession of such Persons  related to AT&T's Cable Business
or the AT&T Systems (and such Persons will be treated as an  "Inspecting  Party"
and Comcast the "Disclosing Party" with respect to such information for purposes
of this  Section  7.15.1).  Any  information  that a Person is  required to

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<PAGE>

keep  confidential  pursuant to the foregoing  sentences shall be referred to as
"Confidential  Information".   Each  Inspecting  Party  will  not  disclose  any
Confidential Information to any other Person (other than its directors, officers
and employees  and  representatives  of its advisers and lenders  (collectively,
"Representatives"),  in each case, whose knowledge thereof is necessary in order
to facilitate the consummation of the transactions contemplated hereby, in which
event such  Inspecting  Party shall be responsible  for any breach hereof by any
such  Person)  or use such  Confidential  Information  to the  detriment  of the
Disclosing  Party;  provided that (i) such Inspecting Party may use and disclose
any such  Confidential  Information  once it has been publicly  disclosed (other
than  by  such  Inspecting  Party  or  its  Representatives  in  breach  of  the
obligations  under this  Section  7.15.1) or which,  in the case of  information
provided  by the  Disclosing  Party,  has  come  into  the  possession  of  such
Inspecting  Party  (other  than from the  Disclosing  Party and other  than from
another Person in violation of any duty or obligation of  confidentiality  known
to the Inspecting  Party) and (ii) to the extent that such Inspecting Party may,
in the opinion of its counsel,  be compelled by Legal  Requirements  to disclose
any of such  Confidential  Information,  such Inspecting Party may disclose such
Confidential  Information  if it uses all  reasonable  efforts,  and affords the
Disclosing Party the opportunity,  to obtain an appropriate  protective order or
other  satisfactory  assurance of confidential  treatment,  for the Confidential
Information  compelled  to be  disclosed.  In the event of  termination  of this
Agreement,  each  Inspecting  Party will cause to be delivered to the Disclosing
Party,  and retain no copies of, any documents,  work papers and other materials
obtained by such  Inspecting  Party or on its behalf from the other,  whether so
obtained before or after the execution hereof.

            7.15.2.  No Parent nor its Affiliates  will issue any press releases
or  make  any  other  public  announcement  concerning  this  Agreement  and the
transactions  contemplated  hereby,  except  as  required  by  applicable  Legal
Requirements or by any national  securities exchange or quotation system without
the prior written  consent and approval of the other  Parent,  which consent and
approval may not be unreasonably withheld.

     7.16.  Bulk Transfer. AT&T waives  compliance by Comcast and its Affiliates
with  Legal   Requirements   relating  to  bulk  transfers   applicable  to  the
transactions contemplated hereby.

     7.17.  Lien  Searches.  AT&T will,  at its expense,  obtain and disclose to
Comcast the results of a Lien search conducted by a professional  search company
of records in the offices of the  secretaries  of state in each state and county
clerks in each county  where there exist any of the AT&T Owned  Property or AT&T
Tangible Personal Property included among the AT&T Assets,  and in the state and
county where each Transferred  Entity's and Retained Entity's  principal offices
are located,  including copies of all financing statements or similar notices or
filings (and any continuation statements) discovered by such search company.

     7.18.  Reasonable Best Efforts;  Further  Assurances.  Subject to the terms
and conditions of this Agreement, each Party will use reasonable best efforts to
take,  or cause to be taken,  all  actions  and to do, or cause to be done,  all
things  necessary or desirable to satisfy all  conditions  and to consummate the
transactions  contemplated  by this  Agreement.  AT&T and Comcast agree to cause
each of its  Affiliates  party  hereto to  perform,  pay and satisfy all of such
Affiliate's  obligations under this Agreement. At or after the Closing, AT&T and
Comcast and their  Affiliates  party hereto at the request of the other  Parent,
will promptly execute and deliver, or cause to be executed and delivered, to the
other Parent all such documents and instruments,  in

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<PAGE>

addition to those otherwise  required by this  Agreement,  in form and substance
reasonably  satisfactory  to the other Parent as the other Parent may reasonably
request  in order to carry out or  evidence  the terms of this  Agreement  or to
collect any  accounts  receivable  or other  claims  included in the AT&T Assets
Transferred to Comcast or its Affiliates.

     7.19.  Cooperation as to Rates.

            7.19.1.  AT&T and its  Affiliates  will  cooperate  with and  assist
Comcast  by  providing,  upon  reasonable  request,  all  information  in  their
possession (and not previously made available to Comcast)  relating  directly to
the rates set forth on Schedule 6.17, as applicable, or on any of FCC Form 1200,
1205, 1210, 1220, 1225, 1235 or 1240 or any other FCC Form filed with respect to
the  Systems  that  Comcast  may  reasonably  require to  justify  such rates in
response to any inquiry, order or requirements of any Governmental Authority.

            7.19.2. Prior to the Closing,  neither AT&T nor its Affiliates shall
settle or permit to be settled any rate  (including  late fees)  proceeding with
respect to its Systems without  consulting with Comcast;  provided that AT&T and
its  Affiliates  shall not agree to any  forward-looking  rate  adjustment  with
respect to the Systems without the prior written consent of Comcast.

            7.19.3. After the Closing,  AT&T and its Existing Affiliates will be
responsible  for and follow to  conclusion  any rate  order of any  Governmental
Authority or proceeding  with respect to rates  (including  late fees) of any of
its Systems charged by the Retained Entities or Transferred Entities immediately
prior to the Closing;  provided,  however, that with respect to the Systems AT&T
and its Affiliates shall not: (i) agree to any refund of past overcharges;  (ii)
submit any refund plan to a  Governmental  Authority;  (iii)  appeal or take any
other action with regard to such  proceeding,  in each case  without  consulting
with Comcast; or (iv) agree to any  forward-looking  rate adjustment without the
prior written  consent of Comcast.  AT&T and its Affiliates  will cooperate with
and assist Comcast by providing,  upon  reasonable  request,  all information in
their possession (and not previously made available to Comcast) that Comcast may
reasonably require to justify rates,  charges, late fees and similar payments in
response to any inquiry, order or requirements of any Governmental Agency.

            7.19.4.  If, following the Closing,  any System is required pursuant
to any Legal  Requirement,  settlement or otherwise to refund to subscribers any
payments,  in whole or in part, made by such  subscribers  prior to the Closing,
including fees for cable television  service,  equipment charges,  late fees and
similar payments,  then, at the election of Comcast:  (i) AT&T must fulfill such
refund obligation through a one time cash payment to subscribers,  in which case
AT&T shall  provide funds for such payment to Comcast,  Comcast shall  cooperate
with AT&T or implement and  administer  such refund  payment  through  Comcast's
billing  system,  and AT&T shall reimburse  Comcast for all reasonable  expenses
incurred by Comcast and its Affiliates  (including the Transferred  Entities) in
connection therewith; or (ii) Comcast may fulfill such refund obligation through
a cash  payment,  credit  or  in-kind  or other  form of  consideration,  at its
discretion and subject to any required approval by a Governmental Authority, and
AT&T shall  reimburse  Comcast in the amount of any  payment or in the amount of
the cost to Comcast or its  Affiliates of any credit or in-kind or other form of
consideration and all reasonable  expenses incurred by Comcast or its Affiliates
in connection  therewith.  Without limiting the foregoing,

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Comcast will provide AT&T with all  information  in Comcast's and its Affiliates
(including the Transferred  Entities)  possession that is reasonably required by
AT&T in connection with such reimbursement.

            7.19.5.  If Comcast or any of its Affiliates is permitted  following
the Closing to pass through to  subscribers  of Systems  Transferred at Closing,
the  amount  of any  "franchise  fees on  franchise  fees"  paid by AT&T and its
Affiliates  (including  the  Transferred  Entities)  to  the  appropriate  local
franchising  authority with respect to the period prior to the Closing,  Comcast
agrees that it will collect,  for the benefit of AT&T, such amounts specified no
later than the Six-Month  Date as paid by AT&T and,  except as specified  below,
will promptly remit such amounts to AT&T; provided, however, that, if Comcast is
provided by counsel with an opinion that the pass through to subscribers of such
fees  under the  rules and  regulations  of the FCC and the  Communications  Act
(either with respect to the cable industry as a whole or the particular  Systems
in question) is subject to administrative or judicial review, then Comcast shall
not remit the fees to AT&T but shall hold such fees  until the final  resolution
of such  administrative  or judicial  proceedings.  After such final resolution,
Comcast  will remit to AT&T as  appropriate,  such fees.  AT&T agrees to provide
Comcast with such  documentation  as necessary to demonstrate the payment of the
"franchise  fees on  franchise  fees" and to enable  Comcast to collect the pass
through amounts from subscribers.  No amount collectible for the benefit of AT&T
under this Section 7.19.5 will be taken into account in determining  the Working
Capital Adjustment Amount.

     7.20.  Cooperation as to Late Fee Cases.

            7.20.1.  (a)  Notwithstanding  anything  to  the  contrary  in  this
Agreement, and without limiting any other provisions of this Agreement, from and
after Closing,  Comcast will cause the Transferred Entities to comply with their
obligations  under paragraph 18 of the Settlement  Agreement and Release entered
into  effective as of March 17, 2000,  a final  executed  copy of which has been
provided to Comcast (the "Settlement Agreement"), to the extent such obligations
relate to Systems that are "Class  Systems" within the meaning of the Settlement
Agreement and to litigation  that is covered by the Settlement  Agreement.  AT&T
will  reimburse  the  Transferred  Entities  for  any  payments  made by them to
subscribers in accordance  with the terms of the Settlement  Agreement,  for any
direct  out-of-pocket  costs to them of providing any credit or in-kind or other
form of  consideration  to  subscribers  in  accordance  with  the  terms of the
Settlement  Agreement and for their reasonable  expenses  incurred in connection
with  fulfilling  their  obligations  under this Section.  Comcast will keep the
Retained   Entities  and  their   Affiliates   fully   informed   regarding  the
implementation  of Section 18 of the Settlement  Agreement insofar as it relates
to the Systems,  will provide the Retained  Entities and their  Affiliates  with
such  information as they may reasonably  request in connection  therewith,  and
will be subject to the general  direction of the Retained Entities in connection
therewith.  Comcast  acknowledges  that it has  received  a copy  of the  final,
executed Settlement Agreement.

            (b) In regard to Baltimore,  Maryland,  if  necessary,  Comcast will
similarly  assist and cooperate in  connection  with the Order  Regarding  Final
Implementation  of  Final  Judgment  entered  on  January  20,  2000  (regarding
Baltimore),  and  regarding  the state of  Maryland,  excluding  Baltimore,  and
Holdren v. TCI  Cablevision  of Maryland,  Inc., et al.,  pending in the Circuit
Court of Worcester County, Maryland.

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<PAGE>

     The  provisions of paragraph (a) above  (including as to  reimbursement  of
payments,  costs and  expenses)  will apply mutatis  mutandis to any  settlement
agreement  entered into with respect to any matter  addressed in this  paragraph
(b); provided that as to any such matter, neither AT&T nor any of its Affiliates
will enter into any settlement  agreement that would govern the operation of the
Systems after the Closing, unless Comcast has given its prior written consent to
such settlement agreement.

     7.21.  Distant Broadcast Signals. Unless otherwise restricted or prohibited
by any Governmental  Authority,  applicable Legal Requirements or Contract, AT&T
and its Existing Affiliates will, if requested by Comcast,  delete, prior to the
Closing,  any distant broadcast signals which Comcast  determines will result in
unacceptable  liability  on the part of  Comcast  for  copyright  payments  with
respect to continued  carriage of such signals  after the Closing.  Comcast will
use reasonable  efforts to deliver notice of the requested  deletions to AT&T at
least sixty (60) days prior to the Closing.

     7.22.  Offers.  AT&T and its  Affiliates  party  hereto  (and its and their
directors, officers, employees,  representatives and agents) shall not, directly
or  indirectly,  (i) offer  AT&T's  Cable  Business  or Systems  for sale,  (ii)
solicit,  encourage  or  entertain  offers for  AT&T's  Cable  Business  or such
Systems, (iii) initiate negotiations or discussions for the sale of AT&T's Cable
Business or such Systems or (iv) make information about AT&T's Cable Business or
such Systems  available to any Third Party in connection  with the possible sale
of AT&T's Cable  Business or such Systems  prior to the Closing Date or the date
this  Agreement  is  terminated  in  accordance  with its terms.  The  foregoing
limitations  relate  specifically  to the AT&T Systems and AT&T's Cable Business
and shall not limit in any way AT&T's ability to engage in transactions relating
to AT&T or AT&T Broadband  generally that do not have a Material  Adverse Effect
or materially adversely effect the consummation of the transactions contemplated
hereby.

     7.23.  @Home. The applicable Transferred Entity will assume, from and after
the Closing, all rights and obligations of the AT&T Cable Subsidiaries under the
@Home Distribution  Agreement between Intermedia  Partners and @Home Corporation
dated  January 1, 1999 to the extent  such  agreement  applies to the  Nashville
System, other than warrants relating to the Upgraded Homes Test (as set forth in
the At Home  Corporation  Warrant  Term Sheet dated  January 1, 1999) which will
remain with AT&T.

     7.24.  Cooperation with Financial Statements. AT&T agrees to use reasonable
efforts to provide  Comcast  with  information  about the AT&T  Systems,  to the
extent  needed (but only to the extent  needed)  for  preparation  of  financial
statements  to be included in  Comcast's  filings with  Securities  and Exchange
Commission under federal  securities laws;  provided that Comcast shall bear all
costs  (including  any  internal  cost)  associated  with the  provision of such
information.

     7.25.  Accounts  Payable  and  Franchise  Fees.  (a) AT&T  shall pay in the
ordinary  course of  business,  consistent  with past  practices,  all  accounts
payables and franchise fees incurred in or  attributable  to periods or portions
thereof  ending on or prior to the Closing Time with respect to the Systems that
it Transfers (which accounts payables and franchise fees will not

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be Transferred with the Systems), subject to contesting any payments pursuant to
a bona fide dispute.

            (b) All long-term debt of any  Transferred  Entity and  intercompany
payables owed by or intercompany receivables owed to any Transferred Entity will
be paid or otherwise assumed by a Retained Entity prior to the Closing Time.

     7.26.  Termination of Certain Affiliate Contracts.  All contracts listed on
Schedule 7.26 will be terminated prior to Closing.

     7.27.  Capital Management Committee.  AT&T and Comcast agree that a capital
management  committee  will be formed to  efficiently  and  effectively  monitor
capital spending in the affected Systems and to address capital budget issues as
they arise.

     7.28.  Reorganization.

            7.28.1.  From and after the Closing  Date until the date that is two
years after the Closing  Date,  (i)  neither  Comcast nor any of its  Affiliates
shall sell,  exchange or otherwise dispose of any of the AT&T Cable Subsidiaries
shares  or any of the  Assets  of the  Systems  held  by any of the  Transferred
Entities as of the Closing Date in a manner that would cause the  Reorganization
to fail to be tax-free under Sections  355(a) and (c); (ii) neither  Comcast nor
any of its Affiliates  shall cause the  liquidation or merger of any of the AT&T
Cable Subsidiaries in a manner that would cause the Reorganization to fail to be
tax-free  under Section  355(a) and (c);  (iii)  neither  Comcast nor any of its
Affiliates  shall take or cause to be taken, or fail to take or fail to cause to
be taken,  any action  which would cause any of the AT&T Cable  Subsidiaries  to
fail to be  engaged  in the active  conduct  of a trade or  business  within the
meaning of Code Section 355(b)(1)(A) in connection with the Reorganization;  and
(iv) neither  Comcast nor any of its Affiliates  shall enter into any agreement,
option,  understanding or arrangement,  or initiate or conduct any negotiations,
in each case in  connection  with any of the actions  prohibited by clauses (i),
(ii) and (iii) of this Section 7.28.1.

            7.28.2.  Neither AT&T nor any of its Affiliates  shall take or cause
to be taken, or fail to take or fail to cause to be taken, any action subsequent
to the date hereof  (including,  for the  avoidance of doubt,  after the Closing
Date), that would cause the  representation in Section 6.5.1 or 6.5.3 to fail to
be true if made at the time of such action or inaction.

            7.28.3.  Unless otherwise  required by a "determination"  within the
meaning of Code  Section  1313(a) (a  "Determination"),  AT&T and Comcast  shall
report (and,  shall take no action or position  inconsistent  with the treatment
of) the  Reorganization  for income Tax  purposes  as tax-free to Comcast and to
AT&T under Code  Sections  355(a) (as to Comcast) and 355(c) (as to AT&T) (other
than with respect to income or gain,  if any,  required to be taken into account
by AT&T or any Subsidiary of AT&T under Treasury  Regulations Sections 1.1502-13
or 1.1502-19 as a result of the Reorganization).

     7.29.  Tax Sharing Agreements.  Any and all existing Tax Sharing Agreements
to which a  Transferred  Entity is a party shall be  terminated  with respect to
such Transferred  Entity as of the Closing Date. After the Closing Date, none of
the   Transferred   Entities  shall  have  any  further  rights  or  liabilities
thereunder.

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     7.30.  Tax Matters.

            7.30.1. Filing of Tax Returns. (a) AT&T shall be responsible for the
preparation  and filing of all Tax Returns of the  Transferred  Entities for all
taxable periods that end as to the Transferred Entities on or before the Closing
Date and all Consolidated Tax Returns,  including Tax Returns of the Transferred
Entities  for  taxable  periods  that end as to the  Transferred  Entities on or
before the Closing  Date but are due after the Closing  Date,  and AT&T shall be
responsible  for the  contents  of such Tax  Returns  and for the payment of all
Taxes due with respect  thereto  (subject to  indemnification  by Comcast to the
extent provided in Section 7.30.2) AT&T shall file or cause to be filed all such
Tax Returns  when due,  and shall remit or cause to be remitted any Taxes due in
respect  of such Tax  Returns.  All such Tax  Returns  will be filed when due in
accordance with all applicable  laws and as of the time of filing,  will be true
and  complete in all  material  respects.  AT&T shall  include  the  Transferred
Entities in its  Consolidated  Tax Return and in any Combined Tax Return through
the close of business on the Closing Date. AT&T shall have the sole authority to
deal  with  any  matters   (including  any  Tax  Proceeding)   relating  to  any
Consolidated  Tax Returns and any Tax Returns of the  Transferred  Entities  for
taxable periods ending as to the Transferred Entities on or prior to the Closing
Date,  except that AT&T shall not take any position,  make any election or adopt
any method that would reasonably be expected to adversely affect any Transferred
Entity or Comcast or any of its Affiliates with respect to the  Post-Closing Tax
Period and that is inconsistent with positions taken,  elections made or methods
used in  preparing  similar  Tax  Returns for prior  periods,  unless  otherwise
required by applicable law or pursuant to a Determination  and (ii) Comcast may,
at its  option,  cause each  Transferred  Entity to elect,  where  permitted  by
applicable law, to carry forward any tax asset that would, absent such election,
be carried back to a Pre-Closing Tax Period in which such Transferred Entity was
included in a consolidated,  combined or unitary Tax Return filed by AT&T or any
of its  Affiliates.  Comcast  shall,  and  shall  cause its  Affiliates  and the
Transferred  Entities to,  facilitate the exercise of AT&T's rights  pursuant to
the immediately preceding sentence, including by providing AT&T or its designees
with any reasonably requested power of attorney with respect to such Tax Returns
or Tax Proceedings.

            (b) Comcast shall be responsible  for the  preparation and filing of
all Tax Returns of the Transferred  Entities for all taxable periods that end as
to the Transferred Entities after the Closing Date (including Straddle Periods),
and Comcast  shall be  responsible  for the contents of such Tax Returns and the
payment of all Taxes due with respect  thereto  (subject to  indemnification  by
AT&T to the extent provided in Section  7.30.2);  provided,  however,  that with
respect to any Straddle  Period,  Comcast shall be responsible for Taxes for the
portion of such Straddle Period that ends on the Closing Date only to the extent
that  either  such  Taxes are taken  into  account  as  current  liabilities  in
computing  the  Working  Capital  Adjustment  Amount  pursuant to Section 3.2 or
Comcast is obligated to indemnify AT&T pursuant to Section 7.30.2. Comcast shall
file or cause to be filed all such  Straddle  Period Tax Returns  when due,  and
shall  remit or cause to be remitted  any Taxes due in respect of such  returns.
All such  Straddle  Period Tax Returns  shall be prepared  and filed in a manner
consistent  with past  practice of the  Transferred  Entities  (and the Retained
Entities  with respect to the Systems) and  consistent  with the manner in which
Tax Returns of the Transferred  Entities are prepared and filed by AT&T pursuant
to this Section 7.30.1,  and, on such Straddle  Period Tax Returns,  no position
shall be  taken,  election  made or method  adopted  that is  inconsistent  with
positions taken, elections made or methods used in preparing similar Tax Returns
for prior periods unless  otherwise  required by

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applicable law or pursuant to a Determination and except for manners, positions,
elections and methods  that, in the case of any Straddle  Period Tax Return that
includes any Transferred  Entity, on the one hand, and Comcast or any Subsidiary
of  Comcast  other than a  Transferred  Entity,  on the other  hand (a  "Comcast
Consolidated  Tax  Return"),  would be  applicable  to  entities  other than the
Transferred  Entities and, in the case of any other Straddle Period Tax Returns,
are  required  to be filed in  conformity  with such  Comcast  Consolidated  Tax
Returns.  Except as  provided  in Section  7.30.4,  Comcast  shall have the sole
authority to deal with any matters  (including any Tax  Proceeding)  relating to
Tax Returns of the  Transferred  Entities for taxable  periods  ending as to the
Transferred Entities after the Closing Date.

            (c) Except to the extent taken into account in computing the Working
Capital Adjustment Amount pursuant to Section 3.2, Comcast shall promptly pay or
cause to be paid to AT&T all refunds of Taxes and interest  thereon  received by
Comcast or any  Affiliate of Comcast  attributable  to Taxes paid by AT&T or any
Transferred  Entity with respect to any taxable period of any Transferred Entity
ending on or before  the  Closing  Date or with  respect  to the  portion of any
Straddle  Period ending on or prior to the Closing Date. AT&T shall promptly pay
or  cause to be paid to  Comcast  all  refunds  of Taxes  and  interest  thereon
received by AT&T or any Affiliate of AT&T  attributable to Taxes paid by Comcast
or the Transferred  Entities with respect to any taxable period ending after the
Closing Date.

            (d) Following the Closing Date,  Comcast shall cause the Transferred
Entities to empower,  by appropriate  powers of attorney,  if necessary,  one or
more  designees  of AT&T to sign all Tax Returns  for any taxable  period of any
Transferred  Entity that AT&T is required to file or cause to be filed  pursuant
to this Section 7.30.1.

            7.30.2.  Payment of Taxes;  Tax  Indemnification.  (a) AT&T shall be
liable for,  and shall hold  Comcast,  the  Transferred  Entities and each other
Affiliate of Comcast (each, a "Comcast Tax Indemnitee",  and, collectively,  the
"Comcast Tax Indemnitees")  harmless from and against, (a) any and all Taxes due
and  payable  with  respect  to the  Systems,  and (b) any and all  Taxes of the
Transferred  Entities, in the case of clauses (a) and (b) above, for any taxable
period  ending on or prior to the Closing Date and, with respect to any Straddle
Period,  for the portion of such period ending on and including the Closing Date
(other  than,  in the case of clauses  (a) and (b) above,  any Taxes  taken into
account as Current  Liabilities  in calculating  Working  Capital or the Working
Capital  Adjustment,  but only to the extent so taken into account,  and any and
all Taxes  resulting  from any acts of  Comcast  or any of its  Subsidiaries  or
Affiliates,  or  which  Comcast  or  any  of its  Affiliates  causes  any of the
Transferred  Entities  to take,  occurring  on the  Closing  Date and not in the
ordinary course of business after the Closing Time) (collectively,  "Pre-Closing
Taxes")  (c) any  and all  Taxes  described  in  clause  (ii)  or  (iii)  of the
definition  of Tax  and  (d)  any  and  all  Taxes  of any  of the  Comcast  Tax
Indemnitees  arising  out of or  resulting  from an AT&T  Tax  Breach  ("Comcast
Taxes") and any and all Losses  arising  out of or  incident to the  imposition,
assessment or assertion of any Tax described in (a), (b), (c) or (d);  provided,
however,  that AT&T shall not be liable for,  and shall not hold the Comcast Tax
Indemnitees  harmless from and against,  any Pre-Closing  Taxes or Comcast Taxes
resulting   from  a  breach  by  Comcast  or  any  of  its   Affiliates  of  any
representation  contained  in Section 5.5 or any  covenant  contained in Section
7.28 (a "Comcast Tax Breach").

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<PAGE>

            (b) Comcast shall be liable for, and shall hold AT&T,  each Retained
Entity and each other  Affiliate of AT&T (each, an "AT&T Tax  Indemnitee,"  and,
collectively, the "AT&T Tax Indemnitees") harmless from and against, (a) any and
all Taxes due and payable  with  respect to the Systems  other than  Pre-Closing
Taxes, (b) any and all Taxes of the Transferred  Entities other than Pre-Closing
Taxes,  (c) any Taxes taken into account as Current  Liabilities  in calculating
Working  Capital or the Working  Capital  Adjustment,  but only to the extent so
taken into account,  and (d) any Taxes resulting from any acts of Comcast or any
of its  Subsidiaries  or  Affiliates,  or which Comcast or any of its Affiliates
causes any of the  Transferred  Entities to take,  occurring on the Closing Date
and not in the  ordinary  course of business  after the Closing Time and any and
all Losses arising out of or incident to the imposition, assessment or assertion
of any Tax described in (a), (b), (c) or (d);  provided,  however,  that Comcast
shall not be liable for,  and shall not hold the AT&T Tax  Indemnitees  harmless
from and against any Taxes  described in clause (a),  (b), (c) or (d)  resulting
from a breach by AT&T or any of its Affiliates of any  representation  contained
in Section 6.5 or Section  6.15 or any  covenant  contained  in Section  7.2.16,
7.2.17, 7.28 or 7.29 (an "AT&T Tax Breach").

            (c) AT&T  shall be  liable  for,  and  shall  hold the  Comcast  Tax
Indemnitees  harmless  from  and  against,  any and all  Taxes  of the  Retained
Entities, other than any such Taxes resulting from a Comcast Tax Breach.

            (d)  Comcast  shall  be  liable  for,  and  shall  hold the AT&T Tax
Indemnitees  harmless from and against,  any Taxes  resulting from a Comcast Tax
Breach;  provided  that if the Comcast Tax Breach  results  from a breach of the
representation   contained  in  Section   5.5.1(b)   without  a  breach  of  the
representation contained in Section 5.5.1(a), Comcast shall be liable for 50% of
any Taxes of all AT&T Tax  Indemnitees  imposed by reason of the  application of
Code  Section  355(d)  resulting  from such breach;  and  provided  further that
Comcast shall not have any  liability  under this sentence in the event that the
Reorganization  does not qualify as tax-free  under Code Section 355(a) and such
failure is not  solely the result of a breach by Comcast of its  representations
contained in Sections 5.5.2, 5.5.3 or 5.5.4.

            (e) For purposes of this Section 7.30, in the case of any Taxes that
are imposed on a periodic  basis and are payable for a Tax period that  includes
(but does not end on) the Closing  Date,  the portion of such Tax related to the
portion of such Tax period ending on and including the Closing Date shall (i) in
the case of any Taxes  other than gross  receipts,  sales or use Taxes and Taxes
based upon or related to income,  be deemed to be the amount of such Tax for the
entire Tax period  multiplied by a fraction the numerator of which is the number
of days in the Tax  period  ending on and  including  the  Closing  Date and the
denominator of which is the number of days in the entire Tax period, and (ii) in
the case of any Tax based  upon or  related  to income  and any gross  receipts,
sales or use Tax,  be deemed  equal to the amount  which would be payable if the
relevant Tax period ended on and included the Closing Date. For the avoidance of
doubt,  for purposes of this Section 7.30,  the taxable year of each entity that
is a partnership or "flowthrough" entity, shall be treated as if it ended at the
close of business on the Closing Date and Taxes  attributable  to the income and
gain of such entities through the close of business on the Closing Date shall be
treated as Pre-Closing Tax Period Taxes.  All  determinations  necessary to give
effect to the allocation set forth in the foregoing clause (ii) shall be made in
a manner consistent with prior practice of the Transferred Entities.

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<PAGE>

            (f) Comcast shall use commercially  reasonable  efforts to submit to
AT&T not later than sixty (60) days prior to the due date (including extensions)
for filing such Tax Return,  and shall submit to AT&T not later than thirty (30)
days prior to the due date (including  extensions) for filing such Tax Return, a
copy (in the form  proposed  to be filed in all  material  respects)  of any Tax
Return required to be filed by it pursuant to this Section 7.30 for any Straddle
Period (and a calculation of the amount of Tax, if any, in connection  with such
Tax Return,  for which Comcast has determined  AT&T is  responsible) to AT&T for
AT&T's review and consent,  which consent  shall not be  unreasonably  withheld.
AT&T shall  provide any comments on such Tax Return and  calculation  to Comcast
within  twenty (20) days of receipt of such Tax Return.  Comcast shall file such
Tax Return in a manner that reflects any good faith  comments of AT&T, and shall
provide AT&T with a copy of such filed Tax Return promptly after such Tax Return
is filed;  provided,  however,  that if Comcast disagrees in good faith with any
such comments,  such  disagreement  shall be resolved  expeditiously by AT&T and
Comcast,  or, failing that, by a neutral  arbitrator,  mutually  selected by the
Parties,  but if such  disagreement  has not been  resolved  before the due date
(including  extensions)  for filing such Tax Return,  then Comcast may file such
Tax Return in a manner that  Comcast,  in its  reasonable  determination,  deems
appropriate and, following the final decision of such arbitrator,  Comcast shall
file an  amended  Tax  Return to the  extent  necessary  to  reflect  such final
decision.  If the  amount of Taxes with  respect  to such Tax Return  taken into
account as  liabilities  in  computing  Working  Capital or the Working  Capital
Adjustment Amount (plus, if applicable,  any estimated Tax payments made by AT&T
with respect to the portion of such  Straddle  Period ending on the Closing Date
if Comcast  is  entitled  to a credit for such  estimated  Tax  payments  on the
respective  Tax  Return  when such Tax  Return is filed and such  estimated  Tax
payments were not taken into account in computing Working Capital or the Working
Capital  Adjustment  ("AT&T Credited  Estimated Tax Payments")) is less than the
amount  of such  Taxes  with  respect  to such Tax  Return as so filed  (or,  if
applicable,  with  respect to the amended  return filed in  accordance  with the
decision of the arbitrator)  payable for the portion of the respective  Straddle
Period  ending on and  including  the  Closing  Date,  then AT&T  shall pay such
shortfall  to  Comcast  at least  one (1) day  prior to the due date  (including
extensions)  for filing the respective  Tax Return.  If the amount of Taxes with
respect  to such Tax  Return  taken  into  account  as  Current  Liabilities  in
computing  Working  Capital  or the  Working  Capital  Adjustment  plus any AT&T
Credited  Estimated  Tax  Payments is greater than the amount of such Taxes with
respect to such Tax Return as so filed payable for the portion of the respective
Straddle Period ending on and including the Closing Date, then Comcast shall pay
such excess (but not in excess of the Working  Capital  Adjustment  therefor) to
AT&T within five (5) days after filing the respective  Tax Return.  In the event
the  arbitration  procedure  described  in this  Section  7.30.2(f)  applies and
payment is required to be made hereunder  after the due date for filing such Tax
Return, then payment shall be made within thirty (30) days following the date of
the decision of the arbitrator, with interest pursuant to Section 7.30.2(i) from
the due date for such Tax Return.

            (g) Each of  Comcast  and AT&T shall  promptly  deliver to the other
party any  notice  (or the  relevant  portion  thereof)  from any Tax  authority
received  by it or any of its  Affiliates  relating to Taxes for which the other
party is or may be liable pursuant to this Agreement.

            (h) Except as otherwise  provided in this Section 7.30.2,  not later
than 30 days after  receipt  by  Comcast  or AT&T,  as the case may be (the "Tax
Indemnifying Party"), of

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written  notice from AT&T or Comcast,  as the case may be (the "Tax  Indemnified
Party"),  stating that any Tax, loss or other amount (a "Tax Indemnified  Loss")
for which the Tax  Indemnifying  Party is liable pursuant to this Section 7.30.2
has  been or  will be  incurred  by a  Comcast  Tax  Indemnitee  or an AT&T  Tax
Indemnitee,  as the case may be (the "Tax  Indemnitee"),  and the amount thereof
and of the  indemnity  payment  requested,  the  Tax  Indemnifying  Party  shall
discharge  its  obligation  to indemnify  such Tax  Indemnitee  against such Tax
Indemnified  Loss by paying to such Tax Indemnitee an amount equal to the amount
of  the  Tax  Indemnified  Loss.  Notwithstanding  the  foregoing,  if  the  Tax
Indemnified  Party provides the Tax Indemnifying  Party with written notice of a
Tax  Indemnified  Loss at least 30 days prior to the date on which the  relevant
Tax Indemnified  Loss is required to be paid by the Tax Indemnitee,  within that
30-day  period the Tax  Indemnifying  Party shall  discharge  its  obligation to
indemnify  such Tax  Indemnitee  against  such Tax  Indemnified  Loss by  making
payments to the  relevant  Governmental  Authority  or such Tax  Indemnitee,  as
directed by the Tax  Indemnified  Party,  in an  aggregate  amount  equal to the
amount of such Tax  Indemnified  Loss. The payment by such Tax Indemnitee of any
Tax  Indemnified  Loss  shall  not  relieve  the Tax  Indemnifying  Party of its
obligation  under this Section  7.30.2(h).  Disputes  arising under this Section
7.30.2(h)  and not  resolved  by mutual  agreement  as stated  therein  shall be
resolved by a neutral arbitrator,  mutually selected by the Parties, within five
days of the date on which  the  need to  choose  such  arbitrator  arises.  Such
arbitrator  shall  resolve any disputed  items within 30 days of having the item
referred to it pursuant to such  procedures as it may require.  The costs,  fees
and expenses of such arbitrator shall be borne equally by Comcast and AT&T.

            (i) If any  amount  payable  hereunder  is not paid when  due,  such
amount shall bear interest from the date such payment is due to the date payment
is made at the "underpayment rate" set forth in Code Section 6621.

            (j) The  representations  and warranties  contained in Sections 5.5,
6.5 and 6.15 as well as the  obligations  pursuant to Sections  7.2.16,  7.2.17,
7.28,  7.29 and this  Section  7.30  shall  survive  for the full  period of all
applicable statutes of limitations  (giving effect to any waiver,  mitigation or
extension thereof).

            7.30.3.  Cooperation  on Tax  Matters.  (a) AT&T and  Comcast  shall
cooperate fully, as and to the extent  reasonably  requested by the other party,
in connection  with the filing of Tax Returns  pursuant to this Section 7.30 and
any Tax Proceeding.  Such cooperation  shall include the retention and (upon the
other  party's  request)  the  provision  of records and  information  which are
reasonably  relevant  to any  such  Tax  Return  or Tax  Proceeding  and  making
employees  available  on a  mutually  convenient  basis  to  provide  additional
information and explanation of any material provided hereunder. AT&T and Comcast
agree (a) to retain all books and records with respect to Tax matters  pertinent
to the Transferred  Entities relating to any taxable period beginning before the
Closing Date until the  expiration  of the statute of  limitations  (and, to the
extent  notified by AT&T or Comcast,  any extensions  thereof) of the respective
taxable periods,  and to abide by all record retention  agreements  entered into
with any taxing  authority,  and (b) to give the other party reasonable  written
notice  prior to  transferring,  destroying  or  discarding  any such  books and
records  and, if the other party so requests,  AT&T or Comcast,  as the case may
be, shall allow the other party to take  possession of such books and records to
the extent they would otherwise be destroyed or discarded.

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<PAGE>

            (b)  AT&T  and  Comcast   further  agree,   upon  request,   to  use
commercially reasonable efforts to obtain any certificate or other document from
any Governmental  Authority or any other Person as may be necessary to mitigate,
reduce  or  eliminate  any  Tax  that  could  be  imposed  with  respect  to the
transactions contemplated hereby.

            7.30.4. Tax Audits. (a) In the case of a Tax Proceeding  relating to
a Straddle Period (a "Straddle Period Tax Proceeding"),  except in the case of a
Reorganization  Tax  Proceeding,  (i) Comcast shall control such Straddle Period
Tax Proceeding if the claims for which Comcast is responsible  exceed the claims
for which AT&T is  responsible  and AT&T shall control such Straddle  Period Tax
Proceeding  if the claims for which  AT&T is  responsible  exceed the claims for
which Comcast is responsible  (Comcast or AT&T  respectively,  the  "Controlling
Party," and AT&T or Comcast, respectively, the "Noncontrolling Party"), (ii) the
Controlling  Party  shall  provide  the  Noncontrolling  Party with a timely and
reasonably detailed account of each stage of such Straddle Period Tax Proceeding
and a copy of all  documents  (or portions  thereof)  relating to such  Straddle
Period Tax Proceeding which are relevant to any Tax for which the Noncontrolling
Party may be required to indemnify the Controlling Party or any Affiliate of the
Controlling Party or may otherwise be liable,  (iii) the Controlling Party shall
consult with the  Noncontrolling  Party before taking any significant  action in
connection with such Straddle Period Tax Proceeding that might adversely  affect
the Noncontrolling  Party and shall consult with the  Noncontrolling  Party with
respect to any written  submissions in connection  with such Straddle Period Tax
Proceeding which are relevant to any Tax for which the Noncontrolling  Party may
be  required  to  indemnify  the  Controlling  Party  or  any  Affiliate  of the
Controlling  Party or may otherwise be liable,  (iv) the Controlling Party shall
defend such Straddle  Period Tax  Proceeding in good faith and  diligently as if
the  taxpayer  whose Tax Return is at issue were the only party in  interest  in
connection  with such Straddle  Period Tax  Proceeding,  and,  before any court,
vigorously  and with a view to the merits,  (v) the  Noncontrolling  Party shall
have the right to participate in any conference with any Tax authority regarding
any Tax for which the  Noncontrolling  Party may be  required to  indemnify  the
Controlling  Party or any Affiliate of the Controlling Party or may otherwise be
liable,  (vi) the Noncontrolling  Party shall facilitate the Controlling Party's
exercise of control  over such  Straddle  Period Tax  Proceeding,  including  by
delivery of any reasonably  requested  powers of attorney with respect to such a
Straddle  Period Tax Proceeding,  and shall not impede the  Controlling  Party's
exercise of control  over such  Straddle  Period Tax  Proceeding,  and (vii) the
Controlling  Party shall not  settle,  compromise  or abandon any such  Straddle
Period Tax Proceeding without obtaining the prior written consent, which consent
shall not be unreasonably  withheld,  of the Noncontrolling  Party. In the event
that the  Noncontrolling  Party reasonably  withholds consent pursuant to clause
(vii) above, the Noncontrolling Party shall be entitled to assume the defense of
the  Straddle  Period Tax  Proceeding;  provided  that the  Controlling  Party's
liability in connection with the Straddle Period Tax Proceeding shall be limited
to the amount such liability would have been under the proposed settlement.

            (b) In the case of a Tax Proceeding or portion  thereof  relating to
the treatment of the  Reorganization  (such Tax Proceeding or portion thereof, a
"Reorganization  Tax  Proceeding") as tax-free to Comcast and/or AT&T under Code
Section 355(a) (as to Comcast) and Section 355(c) (as to AT&T), (i) the taxpayer
shall provide the other party with a timely and reasonably  detailed  account of
each stage of such Reorganization Tax Proceeding and a copy of all documents (or
portions  thereof)  relating to such  Reorganization  Tax  Proceeding,  (ii) the

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taxpayer shall consult with the other party before taking any significant action
in connection  with such  Reorganization  Tax  Proceeding  that might  adversely
affect the other party and shall  consult  with the other party with  respect to
any written  submissions in connection with such  Reorganization Tax Proceeding,
(iii) the other party shall have the right to  participate as an observer in the
portion of any conference  with any Tax authority  regarding the  Reorganization
Tax Proceeding, and (iv) the taxpayer shall have the power to settle, compromise
or abandon any such Reorganization Tax Proceeding; provided, however that if the
other party refuses to consent to such  settlement,  compromise or  abandonment,
then a neutral arbitrator  mutually selected by AT&T and Comcast shall determine
the extent, if any, to which such settlement, compromise or abandonment resulted
in a Tax liability related to the  Reorganization in excess of the amount of any
Tax liability  related to the  Reorganization  for which a court would have held
the taxpayer liable on the merits, and the other party's obligation to indemnify
the taxpayer shall be reduced to the extent of such excess.  Notwithstanding the
foregoing,  the other party shall be entitled to assume the defense of any claim
(or any  theory  of  liability  underlying  such  claim)  with  respect  to such
Reorganization  Tax Proceeding,  provided that the other party admits in writing
its liability to the taxpayer for any amounts  arising in  connection  with such
claim or theory and releases the taxpayer from an indemnity  obligation  arising
in  connection  with such  claim or theory.  In the event  that the other  party
assumes the defense of such Reorganization Tax Proceeding, the taxpayer shall be
entitled to the rights of the other party as described in clauses (i),  (ii) and
(iii) of this  Section  7.30.4 as if the other  party were the  taxpayer in such
clauses.

            (c) In the case of a Tax Proceeding other than a Straddle Period Tax
Proceeding or Reorganization  Tax Proceeding (a "Separate Tax Proceeding"),  the
taxpayer  shall  not  settle,  compromise  or  abandon  any  such  Separate  Tax
Proceeding without obtaining the prior written consent,  which consent shall not
be unreasonably  withheld, of the other party if such settlement,  compromise or
abandonment would adversely affect the liability for Taxes  (including,  without
limitation, the reduction of asset basis or cost adjustments, the lengthening of
any  amortization  or  depreciation  periods,  the  denial  of  amortization  or
depreciation  deductions,  or the  reduction  of loss of  credits)  of the other
party, any of its Affiliates,  or if Comcast is the other party, the Transferred
Entities,  for (i) the Pre-Closing Tax Period,  if AT&T or any of its Affiliates
is the other party, or (ii) the  Post-Closing  Tax Period,  if Comcast or any of
its  Affiliates  is the other party.  If the taxpayer  settles,  compromises  or
abandons such Separate Tax Proceeding  without obtaining such consent,  it shall
be liable for and hold the other party,  its  Affiliates  and, if Comcast is the
other party, the Transferred Entities harmless from and against any such adverse
effect.  The taxpayer may settle,  compromise  or abandon any such  Separate Tax
Proceeding  without obtaining such prior written consent if it agrees in writing
prior to such settlement, compromise or abandonment to be liable for and to hold
the other  party,  its  Affiliates  and,  if  Comcast  is the other  party,  the
Transferred Entities, harmless from and against any such adverse effect.

     7.31.  Adjustment Event.

            (a) In the event that,  after June 30, 1999 and prior to the date of
Closing,

                        (i) AT&T  shall  set a record  date that is prior to the
            Closing  for the  issuance  of any shares of AT&T  Common  Stock (or
            shares  of a  stock  that is  treated  as  capital  stock  of  AT&T)
            ("Tracking  Shares")  as a stock  dividend  or

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            distribution  to the holders of AT&T  Shares on a tax-free  basis (a
            "Distribution"),  the Comcast  Entities shall deliver  hereunder the
            Tracking Shares so issued along with the underlying AT&T Shares, and
            no adjustment shall be made to the Agreed Share Value;

                        (ii) AT&T  shall set a record  date that is prior to the
            Closing for the issuance of any other  dividend or  distribution  to
            holders of AT&T Shares (other than normal  quarterly  cash dividends
            as the same may be adjusted from time to time), the Comcast Entities
            shall deliver hereunder only the underlying AT&T Shares (and not the
            distributed property),  and the Agreed Share Value in respect of any
            AT&T  Shares  owned by  Comcast or its  Affiliates  on or before the
            record date for such dividend or distribution shall be appropriately
            adjusted;

                        (iii) AT&T  Shares are  changed on a tax-free  basis (by
            merger or otherwise) into other securities or property,  the Comcast
            Entities shall deliver  hereunder,  in lieu of the AT&T Shares,  the
            kind and  amount of  securities  or  property  that it  received  in
            respect to such AT&T Shares (the "New  Consideration"),  unless such
            delivery  would create a  substantial  risk that the  Reorganization
            would fail to be tax-free  under Code  Sections  355(a) and (c), and
            the New  Consideration  will be valued at the Agreed  Share Value of
            the share for which it was  received;  provided that if a portion of
            the New Consideration is received by Comcast on a tax-free basis and
            a portion on a taxable  basis,  only the tax-free  portion  shall be
            delivered  hereunder  and the Agreed  Share Value  thereof  shall be
            appropriately   adjusted,   unless  such  delivery  would  create  a
            substantial risk that the  Reorganization  would fail to be tax-free
            under Code  Sections  355(a)  and (c);  and any  reference  to "AT&T
            Shares" in this  Agreement  shall be deemed a  reference  to the New
            Consideration   required  to  be   delivered   under  this   Section
            7.31(a)(iii), except as the context otherwise requires;

                        (iv)  AT&T  shall  set a  record  date  that is prior to
            Closing to split or combine AT&T Shares,  the Comcast  Entities will
            deliver  hereunder all such AT&T Shares,  and the Agreed Share Value
            shall be  appropriately  adjusted  to reflect  such  stock  split or
            combination; and

                        (v) set a record  date that is prior to  Closing to make
            any other change in the AT&T Shares,  appropriate adjustment will be
            made in respect of such change.

The  adjustment  set forth in this  Section 7.31 shall apply only to AT&T Shares
acquired  by Comcast  or its  Affiliates  on or before  the record  date (or the
effective date, in the case of clause (iii)) of any action specified above.

            (b) If a record  date for any  Distribution  occurs  after  the date
hereof and prior to the Closing Date:

                        (i)  for  each  AT&T  Share  that  any  Comcast   Entity
            purchases  after such record date and  delivers to AT&T  pursuant to
            this Agreement, such

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            Comcast Entity shall also purchase and deliver to AT&T the number of
            Tracking Share(s) (or portion thereof) distributed in respect of one
            AT&T Share  pursuant to any such  Distribution  and any reference to
            "Agreed Share Value" shall include a reference to the purchase price
            paid by the Comcast  Entity for such  Tracking  Share(s) (or portion
            thereof); and

                        (ii) any  reference  to "AT&T  Share"  shall  include  a
            reference to the number of Tracking Share(s) (or portion thereof) so
            distributed.

     7.32.  Losses Relating to Failure to Obtain Franchise  Consents.  All costs
and other Losses  imposed by franchise  authorities  arising out of or resulting
from the  failure to obtain by the  Closing  Time any  consents  relating to the
Transfer of AT&T Systems  Franchises to the Comcast  Entities (i) will be shared
equally  between  Comcast and AT&T,  if the condition set forth in Section 8.2.5
has been  satisfied  at  Closing  or (ii) will be borne  solely by  Comcast,  if
Comcast waives the condition set forth in Section 8.2.5.

     7.33.  Cooperation  with respect to Section 8.1.2. If all conditions to the
Closing  set forth in Article 8 have been  satisfied  or (to the extent  legally
permissible)  waived,  other than the condition set forth in Section 8.1.2,  the
Parties will discuss in good faith  reducing the size of the  Reorganization  so
that the size of the  Reorganization is maximized to the extent  practicable and
the condition set forth in Section 8.1.2 would be satisfied  after giving effect
to such reduction, so long as such reduction would not create a substantial risk
that the Reorganization would fail to be tax-free under Code Sections 355(a) and
(c) or create a substantial risk that the Internal  Restructuring  would fail to
be tax-free.

8.   CONDITIONS PRECEDENT.

     8.1.   Conditions  to Each Party's  Obligations.  The  obligations  of each
Party hereto to consummate the transactions  contemplated by this Agreement will
be subject to the satisfaction or waiver of the following conditions:

            8.1.1.  Change in Tax Law. From the date of this  Agreement  through
the Closing Time, there shall have been no change in the Code, final,  temporary
or proposed  Treasury  regulations,  published  pronouncements  of the  Internal
Revenue Service having the same force and effect as final or temporary  Treasury
regulations,  case law or other relevant binding legal  authority,  in each case
relating to the taxation of spinoff or splitoff distributions  (collectively,  a
"Change in Tax Law"),  (i) that  would  reasonably  be  expected  to  materially
adversely  affect the ability of AT&T to distribute,  or of the Comcast Entities
to receive, the stock of the AT&T Cable Subsidiaries in a transaction qualifying
under  Sections  355(a) and (c) of the Code and (ii) the effects of which cannot
be avoided by  accelerating  the Closing Date of the  transactions  contemplated
hereby or by restructuring the transactions contemplated hereby, in each case in
a manner reasonably satisfactory to Comcast and AT&T.

            8.1.2. Franchise Consent Condition.  All AT&T Service Areas shall be
AT&T Transferable Service Areas except for AT&T Service Areas which, if not AT&T
Transferable  Service  Areas,  would  not  create a  substantial  risk  that the
Reorganization  would fail to be tax-

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free under Code Sections  355(a) and (c) or would not create a substantial  risk
that the Internal Restructuring would fail to be tax-free.

     8.2.   Conditions to Comcast's Obligations.  The obligations of the Comcast
Parties to consummate the  transactions  contemplated  by this Agreement will be
subject  to the  satisfaction,  at or  before  the  Closing,  of  the  following
conditions, one or more of which may be waived by the Comcast Parties:

            8.2.1.    Accuracy   of   Representations   and   Warranties.    The
representations  and warranties of AT&T in this Agreement and in the Transaction
Documents,  without giving effect to any materiality or Material  Adverse Effect
qualification  contained  therein and  without  giving  effect to any  scheduled
exceptions to such  representations and warranties,  shall be true, complete and
accurate as of the Closing (or, if given as of a specific date, as of such date)
with the same effect as if made at and as of the  Closing (or such date)  except
to the  extent  that  any  misstatements,  omissions  and  inaccuracies  to such
representations  and  warranties  would not,  individually  or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

            8.2.2.  Performance  of  Agreements.  The AT&T  Parties  shall  have
performed in all material  respects all material  obligations and agreements and
complied in all material respects with all material  covenants in this Agreement
and in any Transaction Document to be performed and complied with by them before
the Closing.

            8.2.3.  Deliveries.  The AT&T Parties shall have delivered the items
and  documents  required to be  delivered  by them  pursuant to this  Agreement,
including those required to be delivered to Comcast under Section 9.2.

            8.2.4.  Legal  Proceedings.  No material  Legal  Requirement  and no
judgment,  injunction, order or decree shall prohibit consummation of any of the
transactions contemplated by this Agreement.

            8.2.5. Consents.  (a) Franchise.  The aggregate number of Equivalent
Basic  Subscribers in the AT&T Service Areas of the AT&T Systems that are, as of
the Closing  Time,  AT&T  Transferable  Service  Areas shall be at least  ninety
percent (90%) of Equivalent  Basic  Subscribers in all AT&T Service Areas of the
AT&T  Systems  at such  time  (the  "AT&T 90%  Threshold");  provided  that this
condition  will be deemed not to have been  satisfied  until the earliest of (i)
the date upon which this condition would be satisfied if the percentage used for
the AT&T 90% Threshold was one hundred percent (100%) rather than ninety percent
(90%), (ii) thirty (30) days after the date upon which the AT&T 90% Threshold is
met and (iii) September 30, 2001.

            (b) FCC. All material AT&T Required Consents from the FCC shall have
been obtained in form and substance reasonably satisfactory to Comcast.

            (c)  Other.  All other AT&T  Required  Consents  identified  with an
asterisk (*) on Schedule 6.4 shall have been obtained; provided, however, if any
such Consents have not been obtained this condition  nonetheless  will be deemed
satisfied if either (i) Comcast agrees to waive such  condition,  in which case,
subject to Section 7.7,  Comcast  shall bear all costs and other Losses  arising
out of or  resulting  from the failure of such  Consent or Consents to have been

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obtained  or  (ii)  AT&T  provides  satisfactory   arrangements,   including  an
enforceable  indemnity  to the extent  monetary  damages is an adequate  remedy,
which are reasonably  acceptable to Comcast,  such that Comcast shall not suffer
any costs or other Losses  arising out of or resulting  from the failure of such
Consent or Consents to have been obtained.

            8.2.6. No Material  Adverse  Changes.  There shall not have been any
changes or occurrences that, individually or in the aggregate, have had or would
reasonably be expected to have, a Material Adverse Effect since May 4, 1999.

            8.2.7.  HSR Act. All filings  required  under the HSR Act shall have
been made and the  applicable  waiting period shall have expired or been earlier
terminated.

     8.3.   Conditions  to  AT&T's  Obligations.  The  obligations  of the  AT&T
Parties to consummate the  transactions  contemplated  by this Agreement will be
subject  to the  satisfaction,  at or  before  the  Closing,  of  the  following
conditions, one or more of which may be waived by the AT&T Parties:

            8.3.1.    Accuracy   of   Representations   and   Warranties.    The
representations  and  warranties  of  Comcast  in  this  Agreement  and  in  the
Transaction  Documents,  without  giving effect to any  materiality  or material
adverse effect qualification  contained therein and without giving effect to any
scheduled  exceptions to such  representations  and  warranties,  shall be true,
complete and accurate as of the Closing (or, if given as of a specific  date, as
of such date) with the same  effect as if made at and as of the Closing (or such
date) except to the extent that any misstatements, omissions and inaccuracies to
such representations and warranties would not, individually or in the aggregate,
reasonably be expected to have a material  adverse  effect on the ability of the
Comcast  Parties to  perform  their  obligations  under  this  Agreement  or the
Transaction Documents.

            8.3.2.  Performance  of Agreements.  The Comcast  Parties shall have
performed in all material  respects all material  obligations and agreements and
complied in all material respects with all material  covenants in this Agreement
and in any Transaction Document to be performed and complied with by them before
the Closing.

            8.3.3.  Deliveries.  The Comcast  Parties  shall have  delivered the
items and documents required to be delivered by them pursuant to this Agreement,
including those required to be delivered to AT&T under Section 9.3.

            8.3.4.  Legal  Proceedings.  No material  Legal  Requirement  and no
judgment,  injunction, order or decree shall prohibit consummation of any of the
transactions contemplated by this Agreement.

            8.3.5.  Consents.  (a) FCC. All material AT&T Required Consents from
the FCC shall have been obtained in form and substance  reasonably  satisfactory
to AT&T.

            (b) Other. All Comcast Required Consents identified with an asterisk
(*) on Schedule 5.3 shall have been  obtained;  provided,  however,  if any such
Comcast required Consents have not been obtained this condition nonetheless will
be deemed satisfied if either (i) AT&T agrees to waive such condition,  in which
case,  subject to Section 7.7,  the AT&T Parties

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shall  bear all costs and other  Losses  arising  out of or  resulting  from the
failure of such  Consent  or  Consents  to have been  obtained  or (ii)  Comcast
provides  satisfactory  arrangements,  including an enforceable indemnity to the
extent monetary damages is an adequate remedy,  which are reasonably  acceptable
to the AT&T Cable Subsidiaries,  such that the AT&T Cable Subsidiaries shall not
suffer any costs or other Losses arising out of or resulting from the failure of
such Consent or Consents to have been obtained.

            8.3.6.  HSR Act. All filings  required  under the HSR Act shall have
been made and the  applicable  waiting period shall have expired or been earlier
terminated.

9.   THE CLOSING.

     9.1.   The Closing; Time and Place. Subject to the terms and  conditions of
this  Agreement,  the Closing  shall be held at the office of Wachtell,  Lipton,
Rosen & Katz,  New York, New York (or be conducted via facsimile) at 10:00 a.m.,
local time, on the Closing  Date.  The  transactions  to be  consummated  at the
Closing shall be deemed to have been consummated as of the Closing Time.

     9.2.   AT&T's Delivery  Obligations.  At the Closing,  AT&T will deliver or
cause to be delivered to Comcast the following:

            9.2.1.  Delivery  of Cable  Subsidiary  Shares.  AT&T shall  assign,
transfer, convey and deliver to Comcast the AT&T Cable Subsidiaries Shares, free
and clear of all Liens and any other  limitation or  restriction  (including any
restriction on the right to sell, vote or otherwise dispose of such shares).

            9.2.2.  Evidence  of  Authorization  Actions.   Evidence  reasonably
satisfactory  to Comcast  that the AT&T  Parties  are in  existence  and in good
standing,  and have taken all action  necessary to authorize  the  execution and
delivery of this Agreement and the Transaction Documents and the consummation of
the transactions contemplated hereby.

            9.2.3. FIRPTA  Certificate.  A FIRPTA Non-Foreign Seller Certificate
certifying  that AT&T and the AT&T Cable  Subsidiaries  are not foreign  persons
(within the meaning of Section 1445 of the Code) reasonably satisfactory in form
and substance to Comcast.

            9.2.4. Officer's  Certificate.  A certificate executed by an officer
of AT&T,  dated the date of the  Closing,  reasonably  satisfactory  in form and
substance to Comcast certifying,  in his or her capacity as an officer, that the
conditions specified in Sections 8.2.1 and 8.2.2 have been satisfied.

            9.2.5.  Power of Attorney  for  Accounts  Receivable.  The  limited,
irrevocable  right,  in AT&T's and its  Affiliate's  name,  place and stead,  as
AT&T's  and its  Affiliate's  attorney-in-fact,  to cash,  deposit,  endorse  or
negotiate  checks  received on or after the Closing Date made out to AT&T or its
Affiliate in payment for cable television and related  services  provided by the
AT&T Systems and written  instructions  to AT&T's and its  Affiliate's  lock-box
service  provider  or similar  agents to forward to the  applicable  Transferred
Entity, as promptly as reasonably  practicable after processing,  all such cash,
deposits and checks representing accounts receivable of the AT&T Systems that it
may receive.  From and after the Closing,  neither AT&T

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nor its Affiliate  shall deposit but shall remit to the  applicable  Transferred
Entity any  payment  received by AT&T or its  Affiliate  on or after the Closing
Date in  respect of any such  account  receivable,  as  promptly  as  reasonably
practicable after processing.

            9.2.6. Lien Releases.  Evidence  reasonably  satisfactory to Comcast
that  all  Liens  (other  than  Permitted  Liens  that  are not  required  to be
terminated)  affecting  or  encumbering  the AT&T Assets  have been  terminated,
released or waived, as appropriate,  or original,  executed  instruments in form
and substance  reasonably  satisfactory to Comcast effecting such  terminations,
releases or waivers.

            9.2.7. Internal Restructuring Documents.  True, complete and correct
copies of all  documents  implementing  the  Internal  Restructuring  ("Internal
Restructuring Documents").

            9.2.8.  Other.  Such  other  documents  and  instruments  as  may be
necessary  to  effect  the  intent  of  this  Agreement  and to  consummate  the
transactions contemplated hereby.

     9.3.   Comcast's Delivery Obligations. At the Closing, Comcast will deliver
or cause to be delivered to AT&T the following:

            9.3.1.  Delivery of Total Closing Shares. The Comcast Entities shall
assign,  transfer,  convey and deliver to AT&T the Total Closing Shares (subject
to the last  sentence  of  Section  3.3.6),  free and clear of all Liens and any
other limitation or restriction (including any restriction on the right to sell,
vote or otherwise dispose of such shares).

            9.3.2.  Evidence  of  Authorization  Actions.   Evidence  reasonably
satisfactory to AT&T that Comcast is in existence and in good standing,  and has
taken all action  necessary  to  authorize  the  execution  and delivery of this
Agreement and the Transaction Documents and the consummation of the transactions
contemplated hereby.

            9.3.3. Officer's  Certificate.  A certificate executed by an officer
of Comcast, dated the date of the Closing,  reasonably  satisfactory in form and
substance to AT&T  certifying,  in his or her  capacity as an officer,  that the
conditions specified in Sections 8.3.1 and 8.3.2 have been satisfied.

            9.3.4.  Other.  Such  other  documents  and  instruments  as  may be
necessary  to  effect  the  intent  of  this  Agreement  and to  consummate  the
transactions contemplated hereby.

10.  TERMINATION AND DEFAULT.

     10.1.  Termination  Events.  This  Agreement  may  be  terminated  and  the
transactions contemplated hereby may be abandoned:

            10.1.1. At any time, by the mutual agreement of Comcast and AT&T;

            10.1.2.  By either Comcast or AT&T upon written notice to the other,
if any of the  conditions  to its or its  Affiliates'  obligations  set forth in
Sections 8.1, 8.2 and 8.3, respectively,  are not or could not be satisfied such
that  Closing  occurs on or before  October 31, 2001 for any reason other than a
breach  or  default  by  such  Parent  or its  Affiliates  of  their

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covenants,  agreements or other obligations under this Agreement, or any of such
Parent's  representations  herein not being true and accurate  when made or when
otherwise required by this Agreement to be true and accurate; or

            10.1.3.  By either  Comcast  or AT&T if an  injunction,  restraining
order or  decree  of any  nature  of any  Governmental  Authority  of  competent
jurisdiction   is  issued  that  prohibits  the   consummation  of  any  of  the
transactions  contemplated  hereby  and such  injunction,  restraining  order or
decree is final and nonappealable;  provided, however, that the Party seeking to
terminate  this Agreement  pursuant to this Section  10.1.3 has,  subject to the
terms hereof,  used  commercially  reasonable  efforts to have such  injunction,
order or decree vacated or denied.

     10.2.  Effect of Termination.  If this Agreement is terminated  pursuant to
Section  10.1,  all  obligations  of  the  Parties  under  this  Agreement  will
terminate,  except for the  obligations  set forth in  Sections  7.15 and 12.13.
Termination  of this  Agreement  pursuant to Sections  10.1.2 or 10.1.3 will not
limit or impair any remedies that AT&T or Comcast may have pursuant to the terms
of this  Agreement  with  respect  to a breach or  default by the other of their
covenants, agreements or obligations under this Agreement.

11.  SURVIVAL; INDEMNIFICATION.

     11.1.  Indemnification  by AT&T.  From and  after  the  Closing,  AT&T will
indemnify  and  hold  harmless   Comcast  and  its  Affiliates   (including  the
Transferred  Entities),  and its and their  respective  shareholders,  officers,
directors,  partners,  employees, agents, successors and assigns, and any Person
claiming by or through any of them, as the case may be, from and against any and
all Losses to the extent arising out of or resulting from:

            (a) any  representations  and  warranties  made by any AT&T Party in
this Agreement, except for those contained in Sections 6.5 and 6.15 hereof or in
any  Transaction  Document  not being true and  accurate  when made or as of the
Closing  (or, if given as of a certain  date,  not being true as of such certain
date) with the same effect as if made as of the Closing (or such date);

            (b) any failure by AT&T or its Affiliates or, prior to Closing,  any
Transferred Entity to perform any of its covenants,  agreements,  or obligations
in this  Agreement  or in any  Transaction  Document  (other  than Losses to the
extent arising out of or resulting from AT&T Excluded  Liabilities or covenants,
agreements,  or obligations contained in Sections 7.2.16, 7.2.17, 7.28, 7.29 and
7.30 hereof);

            (c) the AT&T Excluded Liabilities; and

            (d) the AT&T Excluded Assets.

     AT&T  will  not  make  any  claim  against  any   Transferred   Entity  for
reimbursement  of or contribution to any of AT&T's  indemnification  obligations
under this Agreement.

     11.2.  Indemnification by Comcast. From and after the Closing, Comcast will
indemnify  and  hold  harmless  AT&T  and its  Affiliates,  and  its  and  their
respective  shareholders,  officers,  directors,  partners,  employees,  agents,
successors  and assigns,  and any Person  claiming

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by or through  any of them,  as the case may be,  from and  against  any and all
Losses to the extent arising out of or resulting from:

            (a) any  representations and warranties made by any Comcast Party in
this  Agreement,  except for those  contained  in Section 5.5 hereof,  or in any
Transaction  Document not being true and accurate when made or as of the Closing
(or, if given as of a certain date, not being true as of such certain date) with
the same effect as if made as of the Closing (or such date);

            (b)  any  failure  by  any  Comcast  Party  or  its  Affiliates  or,
subsequent  to  the  Closing,  any  Transferred  Entity  to  perform  any of its
covenants,  agreements,  or obligations in this Agreement or in any  Transaction
Document (other than those contained in Sections 7.28 and 7.30 hereof); and

            (c) the Comcast Assumed Obligations and Liabilities.

     11.3.  Third  Party  Claims.  Upon  receipt  by any Person of notice of any
claim,  action,  suit  or  proceeding  by  any  Third  Party  (collectively,  an
"Action"),  which  Action is subject to  indemnification  under this Article 11,
such Person (the "Indemnified Party") will give reasonable written notice to the
Party from whom indemnification is claimed (the "Indemnifying Party");  provided
that the failure of any Indemnified Party to so deliver notice shall not relieve
the Indemnifying  Party of its obligations  under this Article 11, except to the
extent the  Indemnifying  Party is prejudiced by such failure.  The  Indemnified
Party will be entitled,  at the sole expense and  liability of the  Indemnifying
Party, to exercise full control of the defense,  compromise or settlement of any
such Action unless the  Indemnifying  Party,  within a reasonable time after the
giving of such notice by the  Indemnified  Party,  (i) notifies the  Indemnified
Party in writing of the Indemnifying  Party's  intention to assume such defense,
(ii) retains legal counsel  reasonably  satisfactory to the Indemnified Party to
conduct  the  defense  of  such  Action  and  (iii)  admits  in  writing  to the
Indemnified  Party the Indemnifying  Party's  liability to the Indemnified Party
for such Action to the extent provided in this  Agreement.  The other Party will
cooperate with the Party  assuming the defense,  compromise or settlement of any
such  Action in  accordance  with this  Agreement  in any manner that such party
reasonably  may  request.  The Party  controlling  the  defense,  compromise  or
settlement  of an Action  shall act in good faith with respect  thereto.  If the
Indemnifying  Party so assumes the defense of any such Action,  the  Indemnified
Party will have the right to employ separate  counsel and to participate in (but
not control) the defense,  compromise or settlement of the Action (in which case
the  Indemnifying  Party  shall  cooperate  in  providing   information  to  the
Indemnified  Party about the Action),  but the fees and expenses of such counsel
will be at the  expense of the  Indemnified  Party  unless (i) the  Indemnifying
Party has agreed to pay such fees and  expenses,  (ii) any relief other than the
payment of money damages is sought  against the  Indemnified  Party or (iii) the
Indemnified Party has been advised by independent  counsel that there may be one
or more defenses available to it which are different from or additional to those
available to the  Indemnifying  Party,  and in any such case that portion of the
fees and  expenses  of such  separate  counsel  that are  reasonably  related to
matters covered by the indemnity provided in this Article 11 will be paid by the
Indemnifying Party,  provided that the Indemnifying Party shall not be obligated
to pay the expenses of more than one separate  counsel in each  jurisdiction for
each Indemnified  Party so entitled to separate  counsel.  No Indemnified  Party
will  settle  or

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compromise  any such Action for which it is entitled  to  indemnification  under
this Agreement  without the prior written consent of the Indemnifying  Party. No
Indemnifying Party will settle or compromise any such Action in which any relief
other than the payment of money damages is sought against any Indemnified Party,
unless  the  Indemnified  Party  consents  in  writing  to  such  compromise  or
settlement.

     11.4.  Limitations  on  Indemnification.  (a) AT&T will  have no  liability
under  Section  11.1(a)  unless  the amount of Losses  otherwise  subject to its
indemnification  obligations  thereunder exceeds 0.55% of the Final System Value
for all Systems  (the "AT&T  Minimum  Damage  Requirement"),  in which case AT&T
shall be liable only for such  excess;  provided  that the AT&T  Minimum  Damage
Requirement  will not  apply to any  Losses  resulting  from or  arising  out of
breaches of the representations and warranties in Section 6.1, 6.2, 6.3, 6.4(a),
6.4(b),  or 6.18. The maximum  liability of AT&T under Section 11.1(a) shall not
exceed 4.7% of the Final System Value for all Systems (the "AT&T Cap"); provided
that  the AT&T Cap  shall  not  apply to  breaches  of the  representations  and
warranties in Sections 6.1, 6.2, 6.3, 6.4(a), 6.4(b), or 6.18.

            (b) Comcast will have no liability  under Section 11.2(a) unless the
amount of Losses otherwise subject to its indemnification obligations thereunder
exceeds  0.55% of the Final System Value for all Systems (the  "Comcast  Minimum
Damage  Requirement"),  in which  case  Comcast  shall be  liable  only for such
excess;  provided that the Comcast Minimum Damage  Requirement will not apply to
any Losses resulting from or arising out of breaches of the  representations and
warranties  in Section  5.1,  5.2,  5.3(a),  or 5.3(b),  5.4 or 5.6. The maximum
liability of Comcast  under  Section  11.2(a) shall not exceed 4.7% of the Final
System Value for all Systems (the "Comcast Cap");  provided that the Comcast Cap
shall not apply to breaches of the  representations  and  warranties  in Section
5.1, 5.2, 5.3(a), 5.3(b), 5.4 or 5.6.

            (c) The  representations  and  warranties  of  Comcast  and the AT&T
Parties in this Agreement and any Transaction  Document,  and the  corresponding
indemnification  obligations  under  Sections  11.1(a) and 11.2(a)  will survive
Closing for a period of nine months,  except for the representations in Sections
5.4 and 6.3,  which  shall  survive  indefinitely,  and  except  as set forth in
Section 7.30.  Notwithstanding the foregoing,  the liability of the parties will
extend beyond the nine-month  period following Closing with respect to any claim
which has been asserted in a bona fide written  notice before the  expiration of
such  nine-month   period   specifying  in  reasonable   detail  the  facts  and
circumstances giving rise to such right.

     The indemnification obligations under Sections 11.1(b) and 11.2(b) (in each
case, other than the covenants,  agreements and obligations which by their terms
are to be performed  after the Closing) and under  Section  11.1(c) will survive
Closing  for a period of twelve  (12)  months  (except,  in the case of  Section
11.1(c), for indemnification  obligations for AT&T Excluded Liabilities which do
not relate to the AT&T Systems or AT&T's  Cable  Business,  which shall  survive
indefinitely).  Notwithstanding the foregoing, the liability of the parties will
extend beyond the twelve (12)-month period following Closing with respect to any
claim  which  has  been  asserted  in a bona  fide  written  notice  before  the
expiration of such 12-month period specifying in reasonable detail the facts and
circumstances  giving rise to such right.  For this  purpose,  proper and timely
notice shall be deemed given by all indemnified  persons on the date hereof, and
no further notice shall be required,  with respect to all items set forth on the
disclosure

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<PAGE>

schedules  provided by the Parties in  connection  with this  Agreement and with
respect to  pre-Closing  accounts  payable and franchise  fees for which AT&T is
responsible under Section 7.25.

            (d) All Losses  resulting  from the failure to obtain by the Closing
Time any  consents  for the  Transfer of AT&T  Systems  Contracts to the Comcast
Entities  (by the  transfer of the stock of the AT&T Cable  Subsidiaries  to the
Comcast  Entities) (other than Systems Contracts that are identified with an "*"
on  Schedule  6.4) shall be borne  solely by  Comcast  up to an amount  equal to
$2,000,000 and thereafter shall be shared equally between Comcast and AT&T.

     11.5.  Payments for Indemnification Amounts.  Amounts payable by a Party in
respect of any Losses that are  subject to the  indemnification  obligations  of
such Party under Section 11.1 or 11.2 will be payable by the Indemnifying  Party
within  five  (5) days of  receiving  written  notice  of such  Losses  from the
Indemnified  Party,  and will bear interest at the Prime Rate plus three percent
(3%)  beginning on the sixth day after receipt of such written notice and ending
on the date of payment of indemnification by the Indemnifying Party.

     11.6.  Exclusive Remedy. The Parties hereby agree that the rights set forth
in this Article 11 shall be each Party's and its Affiliates'  sole and exclusive
remedies against the other Party and its Affiliates for any claims arising after
the Closing Time and relating to any  liability of an AT&T System  arising prior
to the Closing Time.

     11.7.  Tax Indemnification.  The above  provisions of this Article 11 shall
not  apply to Tax  indemnification  matters,  which  matters  shall  instead  be
governed by Section 7.30.

12.  MISCELLANEOUS PROVISIONS.

     12.1.  Parties  Obligated and  Benefited.  Subject to the  limitations  set
forth below,  this  Agreement will be binding upon each of the Parties and their
respective  assigns  and  successors  in interest  and will inure  solely to the
benefit of the Parties and their respective  assigns and successors in interest,
and no other  Person will be entitled to any of the  benefits  conferred by this
Agreement.

     12.2.  Notices.  Any notice, request, demand, waiver or other communication
required or permitted  to be given under this  Agreement to any Party will be in
writing and will be deemed to have been duly given only if  delivered  in person
or by first  class,  prepaid,  registered  or  certified  mail,  or delivered by
courier or, if receipt is confirmed, delivery by telecopier:

         To any AT&T Entity:
                                      295 North Maple Avenue
                                      Basking Ridge, New Jersey  07920
                                      Attention:  Marilyn Wasser
                                      Telecopy:   908-221-6618

                                       76

<PAGE>

         With a copy to:
                                      Wachtell, Lipton, Rosen & Katz
                                      51 West 52nd Street
                                      New York, New York  10019
                                      Attention:  Richard D. Katcher
                                                  Steven A. Rosenblum
                                      Telecopy:   212-403-2000

         With copies (which shall not constitute notice) addressed to:

                                      AT&T Broadband, LLC
                                      188 Inverness Drive West
                                      Englewood, CO  80112
                                      Attention:  Fred DiBlasio
                                      Telecopy:   303-858-5044

         To any Comcast Party:

                                      1500 Market Street
                                      Philadelphia, PA  19102-4735
                                      Attention:  General Counsel
                                      Telecopy:   215-981-7794

         With copies (which shall not constitute notice) to:

                                      Davis Polk & Wardwell
                                      450 Lexington Avenue
                                      New York, New York  10017
                                      Attention:  William L. Taylor
                                      Telecopy:   212-450-4800

     Any Party may change the address to which  notices are  required to be sent
by giving notice of such change in the manner provided in this Section 12.2. All
notices  will be deemed to have been given on the date of delivery  which in the
case of deliveries by telecopier  will be the date of the sender's  confirmation
(or, if delivered after business hours, on the next Business Day).

     12.3.  Right to  Specific  Performance.  Each Party  acknowledges  that the
unique nature of the Assets to be exchanged hereunder pursuant to this Agreement
renders money  damages an  inadequate  remedy for the breach by any Party of its
obligations  under this  Agreement,  and the Parties agree that, in the event of
such breach,  the Parties will upon proper action  instituted by either of them,
be entitled  to a decree of  specific  performance  of this  Agreement  or other
equitable relief.

     12.4.  Waiver.  This  Agreement or any of its  provisions may not be waived
except in writing.  The failure of any Party to enforce any right  arising under
this  Agreement on one or

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<PAGE>

more  occasions  will not operate as a waiver of that or any other right on that
or any other occasion.

     12.5.  Captions.  The captions of this Agreement are for  convenience  only
and do not constitute a part of this Agreement.

     12.6.  Governing Law. This Agreement  shall be governed by and construed in
accordance  with the laws of the  State of New  York  (other  than its  rules of
conflicts  of law to the  extent  that the  application  of the laws of  another
jurisdiction would be required thereby).

     12.7.  Time. Time is of the essence under this  Agreement.  If the last day
permitted for the giving of any notice or the performance of any act required or
permitted  under this Agreement  falls on a day which is not a Business Day, the
time  for the  giving  of such  notice  or the  performance  of such act will be
extended to the next succeeding Business Day.

     12.8.  Late Payments.  Except as otherwise  provided  herein,  if any Party
fails to pay the other any amounts  when due under this  Agreement,  the amounts
due will bear  interest  from the due date to the date of  payment  at the Prime
Rate plus two percent  (2%),  adjusted as and when changes in the Prime Rate are
made.

     12.9.  Counterparts.  This Agreement may be executed in counterparts,  each
of which will be deemed an original.

     12.10. Entire  Agreement.    This  Agreement   (including  the  Transaction
Documents and the Schedules and Exhibits  referred to in this  Agreement,  which
are  incorporated  in and  constitute  a part of this  Agreement),  contains the
entire  agreement of the Parties with respect to the subject matter hereof,  and
supersedes all prior oral or written agreements and understandings  with respect
to such subject matter, including, without limitation, (i) the letter agreement,
dated as of May 4, 1999 between AT&T and Comcast  (but shall not  supersede  the
following paragraphs thereof: paragraph 2 {Termination of the Merger Agreement},
paragraph 11.(b) {No Trading During Valuation  Period},  paragraph 12 {Telephony
Agreements} and, to the extent related to the foregoing,  paragraphs 14, 15, 17,
and 19-24) and (ii) the Amendment to such letter  agreement dated as of November
16, 1999 (but shall not supersede paragraph 4 thereof).  This Agreement does not
supersede the Asset Exchange  Agreement dated as of August 11, 2000 by and among
AT&T, the AT&T Parties (as defined therein), Comcast and the Comcast Parties (as
defined  therein)  to the  extent  relating  to the  transactions  with  respect
thereto.  This  Agreement  may not be amended or  modified,  except by a writing
signed by all of the Parties hereto.

     12.11. Severability.   Any  term or  provision  of this  Agreement  that is
invalid or unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining rights
of the Person intended to be benefited by such provision or any other provisions
of this Agreement.

     12.12. Construction.  This Agreement has been negotiated by the Parties and
their  respective  legal counsel,  and legal or other equitable  principles that
might  require the  construction  of this  Agreement  or any  provision  of this
Agreement  against  the  Party  drafting  this  Agreement  will not apply in any
construction or interpretation of this Agreement.

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<PAGE>

     12.13. Expenses.  Except as otherwise expressly provided in this Agreement,
each Party will pay all of its expenses,  including  attorneys' and accountants'
fees, in connection with the  negotiation of this Agreement,  the performance of
its obligations and the  consummation of the  transactions  contemplated by this
Agreement.

     12.14. Risk of Loss.   The risk of any loss or  damage  to the AT&T  Assets
resulting from fire, theft or other casualty  (except  reasonable wear and tear)
will be borne by the owner  thereof at all times prior to the Closing  Time.  In
the event of any such loss or damage  after May 4, 1999,  AT&T will  immediately
notify  Comcast in writing of that fact and the System Value for the  applicable
AT&T  System or AT&T  Systems  will be reduced  in the amount of the  deductible
under the casualty  insurance  policies insuring such Assets,  and all insurance
proceeds paid or payable as a result of the occurrence of the event resulting in
such loss or damage will be delivered at the Closing by AT&T to Comcast,  or the
rights thereto will be assigned,  if not yet paid over by the insurer,  to AT&T.
If such loss is not fully insured for  replacement  cost,  then the System Value
for the  applicable  AT&T System or AT&T  Systems will further be reduced by the
cost to repair or replace  such  Assets,  less any  insurance  proceeds  paid or
payable with respect thereto. In either case, the obligations under this Section
12.14 to make adjustment or pay or assign  insurance  proceeds will not apply to
the extent that any insurance  proceeds or deductibles are applied to replace or
restore such loss or damage prior to Closing.

     If, on or prior to the Closing Time,  all or any part of or interest in the
AT&T Assets, as appropriate, is taken or condemned as a result of a Governmental
Authority's  exercise  of its powers of  eminent  domain,  or if a  Governmental
Authority  having  such power  informs a Party that it intends to condemn all or
any part of the AT&T  Assets  (such  event  being  called,  in  either  case,  a
"Taking"),  then (i) Comcast may elect,  in the name of AT&T, to negotiate  for,
claim,  contest and receive all damages  with  respect to the Taking,  (ii) AT&T
will be relieved of its obligation to convey to Comcast those of its Assets that
were the  subject  of the  Taking,  (iii) at the  Closing,  AT&T will  assign to
Comcast all of its rights to damages payable as a result of the Taking, and will
pay to Comcast all damages  previously paid to it in connection with the Taking,
and (iv) following the Closing, AT&T will give to Comcast any further assurances
of such rights and assignment  with respect to the Taking as Comcast  reasonably
may request from time to time.

     No amount  payable  under this Section  12.14 will be taken into account in
calculating the Working Capital Adjustment Amount.

     12.15. Jurisdiction.   Except  as  otherwise  expressly  provided  in  this
Agreement,  the Parties  agree that any suit,  action or  proceeding  seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement, the Transaction Documents or the transactions contemplated
hereby or thereby  may be brought in the United  States  District  Court for the
Southern  District of New York or any other New York State court  sitting in New
York City, and each of the Parties hereby  consents to the  jurisdiction of such
courts (and of the  appropriate  appellate  courts  therefrom) in any such suit,
action or proceeding and irrevocably  waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit,  action or proceeding in any such court or that any such suit,
action or  proceeding  which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world,  whether within or without the  jurisdiction
of any such  court.  Without

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<PAGE>

limiting the foregoing,  each Party agrees that service of process on such Party
as provided in Section 12.2 shall be deemed effective service of process on such
Party.

     12.16.  WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS  AGREEMENT,  THE  TRANSACTION  DOCUMENTS OR THE  TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

              [the remainder of this page intentionally left blank]


                                       80
<PAGE>

The parties  have  executed  this  Agreement  as of the day and year first above
written.

                                   AT&T CORP.


                                   By: /s/ Michael Berg
                                       -----------------------------------------
                                       Name:       Michael Berg
                                             -----------------------------------
                                       Title:      Assistant Secretary
                                             -----------------------------------


                                   COMCAST CORPORATION


                                   By: /s/ Robert S. Pick
                                       -----------------------------------------
                                       Name:      Robert S. Pick
                                             -----------------------------------
                                       Title:     Senior Vice President
                                             -----------------------------------


                                   COMCAST CABLE COMMUNICATIONS, INC.


                                   By: /s/ Arthur R. Block
                                       -----------------------------------------
                                       Name:      Arthur R. Block
                                            ------------------------------------
                                       Title:     Senior Vice President
                                            ------------------------------------


<PAGE>
                                   COMCAST TELEPORT, INC.


                                   By: /s/ Judie Dionglay
                                       -----------------------------------------
                                       Name:     Judie Dionglay
                                            ------------------------------------
                                       Title:    Vice President
                                            ------------------------------------


                                   COMCAST HERITAGE, INC.


                                   By: /s/ Judie Dionglay
                                       -----------------------------------------
                                       Name:     Judie Dionglay
                                            ------------------------------------
                                       Title:    Vice President
                                             -----------------------------------


                                   COMCAST COMMUNICATIONS PROPERTIES, INC.


                                   By: /s/ Judie Dionglay
                                       -----------------------------------------
                                       Name:      Judie Dionglay
                                            ------------------------------------
                                       Title:     Vice President
                                             -----------------------------------


                                   COMCAST CCCI II, LLC


                                   By: /s/ Judie Dionglay
                                       -----------------------------------------
                                       Name:      Judie Dionglay
                                            ------------------------------------
                                       Title:     Vice President
                                             -----------------------------------



<PAGE>

Exhibits:

Exhibit 7.11        -   Form of Programming Letter

Schedules:

Schedule 1.12       -   AT&T Systems
Schedule 3.1.2A     -   Subscriber Cap
Schedule 4.1        -   Exceptions to AT&T Excluded Assets
Schedule 4.1(r)     -   AT&T Excluded Assets - Contracts
Schedule 5.3        -   Comcast Conflicts and Required Consents
Schedule 6.3.2      -   AT&T Ownership of AT&T Cable Subsidiaries Capital Stock
Schedule 6.4        -   AT&T Conflicts and Required Consents
Schedule 6.6        -   AT&T Owned Property Operating Conditions
Schedule 6.6.1      -   AT&T Cable Subsidiaries Assets Information
Schedule 6.6.3      -   Other Cable Operations
Schedule 6.6.4(a)   -   AT&T Tangible Personal Property
Schedule 6.6.4(b)   -   AT&T Owned Property
Schedule 6.6.4(c)   -   AT&T Leased Property
Schedule 6.6.4(d)   -   AT&T Other Real Property Interests
Schedule 6.6.4(e)   -   AT&T Systems Franchises
Schedule 6.6.4(f)   -   AT&T Systems Licenses
Schedule 6.6.4(g)   -   AT&T Systems Contracts
Schedule 6.7.2      -   AT&T Franchise Matters
Schedule 6.7.3      -   AT&T Contract Matters
Schedule 6.7.4      -   AT&T Systems Subject to AT&T System Options
Schedule 6.7.5      -   Vehicle and Capital Leases
Schedule 6.9        -   AT&T Environmental Matters
Schedule 6.9.5      -   Connecticut and New Jersey Properties
Schedule 6.10       -   AT&T Compliance with Legal Requirements
Schedule 6.11       -   AT&T Intellectual Property
Schedule 6.13       -   AT&T Changes and Events
Schedule 6.14       -   AT&T Litigation

<PAGE>

Schedule 6.16       -   AT&T Employees; Employee Matters
Schedule 6.17       -   AT&T Systems Information
Schedule 6.19       -   AT&T Related-Party Transactions
Schedule 6.20       -   AT&T Bonds
Schedule 6.21       -   Material Liabilities
Schedule 7.2        -   Continuity and Maintenance of Operations; Certain
                        Deliveries and Notice
Schedule 7.2.14     -   AT&T Systems Channel Alignment Changes
Schedule 7.5.9      -   Term Employees