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                                        EXHIBIT 10(b)
                                        Form 10-K for 1995
                                        File No. 1-11237



                                                         EXECUTION COPY



             FIRST AMENDMENT TO OPERATING AGREEMENT


         This First Amendment to Operating Agreement dated as of
January 5, 1996 (this "Amendment"), is entered into between AT&T CORP.
(formerly American Telephone and Telegraph Company), a New York
corporation ("AT&T"), and AT&T CAPITAL CORPORATION, a Delaware
corporation ("Capital"), and amends the Operating Agreement dated as of
June 25, 1993 (as amended hereby, the "Operating Agreement"), entered
into among AT&T and Capital.


                           W I T N E S S E T H:


         WHEREAS, the Board of Directors of AT&T has determined that it
is in the best interest of AT&T to separate AT&T's existing businesses
into three independent businesses;


         WHEREAS, as part of the foregoing, AT&T Global Information
Solutions, Inc. ("GIS") and NS-MPG Inc. ("NS-MPG") will enter into a
Separation and Distribution Agreement with AT&T which provides, among
other things, for the separation of the NS-MPG assets and NS-MPG
liabilities, and the distribution and the execution and the delivery of
certain other agreements in order to facilitate and provide for the
foregoing;


         WHEREAS, in connection with such reorganization, AT&T intends
(i) to spin-off GIS and NS-MPG in two or more transactions (including a
sale, spin-off or distribution of stock or assets to AT&T's shareowners
or to an unrelated Person or Persons) and (ii) to spin-off or sell its
interest in Capital (collectively, the "Spin-Off Transactions");


         WHEREAS, in contemplation of the Spin-Off Transactions, the
parties hereto desire to make certain amendments the Operating
Agreement;



 
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         NOW, THEREFORE, in consideration of the mutual promises herein
set forth and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and subject to the
conditions and upon the terms hereof, the parties hereto hereby agree
as follows:

         SECTION 1.  Defined Terms.  Terms defined in the
Operating Agreement not otherwise defined herein shall have the
meanings therein defined.

         SECTION 2.  Amendment to the Operating Agreement.  The
Operating Agreement is, effective as of the date hereof, hereby
amended as follows:



                             -2-

 

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         2.01 Article I of the Operating Agreement is amended by adding
the following new definitions thereto:

             "GIS Operating Agreement" means the Comparable Operating
   Agreement to be entered into between Capital and GIS, as such
   agreement is amended and supplemented from time to time in
   accordance with its terms.

             "NS-MPG Operating Agreement" means the Comparable
   Operating Agreement to be entered into between Capital and NS-MPG,
   as such agreement is amended and supplemented from time to time in
   accordance with its terms.

         2.02 Section 4.1(b) of the Operating Agreement is amended by
deleting clause (iii) in its entirety and replacing it with the
following:

         (iii) the AT&T Entities (including AT&T Universal Card
    Services Corporation) may issue credit cards; provided that the
    AT&T Entities shall not use such credit cards to offer programs for
    equipment leasing or other types of equipment Financing with
    respect to Products, asset remarketing or Finance-related equipment
    insurance in connection with Products that compete with programs
    for such services offered by the Capital Entities (it being
    understood that for purposes of this clause (iii) "Products" shall
    include Products (as defined in the Communications Systems and
    Technology Operating Agreement and as defined in the Computer
    Company Operating Agreement);

         2.03 The definition of "Captive Financing Trigger Event" in
Section 4.2 of the Operating Agreement is amended by (A) deleting the
following language beginning in the second line of such definition:
"each of the following conditions is met: (i) Capital ceases to be a
Subsidiary of AT&T; and (ii) "and (B) deleting "(ii)" in the tenth line
of such definition.

         SECTION 3. Representation Regarding Additional Aqreements.
Each of AT&T and Capital represents to the other that as of the date
hereof to the best of its knowledge no agreement has been entered into
between AT&T and Capital that would vary the terms of the Operating
Agreement as contemplated in Section 13.1 of the Operating Agreement.


                             -3-

 

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         SECTION 4.  Reference to and Effect on the Operating
Agreement.

         4.01 Upon the effectiveness of this Amendment, on and after
the date hereof, each reference in the Operating Agreement to "this
Agreement", "hereunder", "hereof" or words of like import, and each
reference in the Intercompany Agreement and the License Agreement to
the Operating Agreement, shall mean and be a reference to the Operating
Agreement as amended hereby.

         4.02 Except as specifically amended above, all of the terms of
the Operating Agreement shall remain unchanged and in full force and
effect.

         SECTION 5. Execution in Counterparts. This Amendment may be
executed and delivered in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed
and delivered shall be deemed an original and all of which taken
together shall constitute one and the same original agreement.

         SECTION 6.  Governing Law.  This Amendment shall be
governed by, and construed in accordance with, the laws of the
State of New York.


         IN WITNESS WHEREOF, this Amendment has been duly executed on
the date set forth above.

                             AT&T CORP.




                              By: /s/ S. Lawrence Prendergast
                                  ------------------------------------
                                    Name: S. Lawrence Prendergast
                                    Title: Vice President and Treasurer

                              AT&T CAPITAL CORPORATION




                              By: /s/ G. Daniel McCarthy
                                  ------------------------------------
                                    Name: G. Daniel McCarthy
                                    Title: Senior Vice President,
                                           General Counsel & Secretary


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