CHANGE OF CONTROL AGREEMENT

This Agreement is made this 16th day of July 2002, by and between:
.I.Oakland, California, a municipal corporation ("the City");
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.2. AT&T Broadband HC of Delaware, LLC. a Delaware corporation

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("Franchisee");
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.3. AT&T Comcast Corporation, a Pennsylvania Corporation ("AT&T
Comcast");
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.4. AT&T Comcast and Franchisee may be referred to jointly herein as
"Companies."

RECITALS
WHEREAS, Franchisee is the current holder of a franchise to provide cable
television service in the City pursuant to Ordinance No. 10399, as this document may have
been and/or may in the future be lawfully amended from time to time in accordance within
the parameters set forth in the Franchise and applicable law (collectively the "Franchise
Documents"); and
WHEREAS, AT&T Corp. ("AT&T"), the indirect corporate parent of Franchisee, and
Comcast Corporation, a Pennsylvania Corporation ("Comcast"), have announced their
intention to merge and create a new public company to be known as AT&T Comcast
pursuant to the terms of an Agreement and Plan of Merger dated December 19,2001 by
and among AT&T, AT&T Broadband Corp., Comcast and certain of their respective
affiliates, and a Separation and Distribution Agreement dated December 19, 2001 by and
between AT&T and AT&T Broadband Corp. (the "Merger"); and
WHEREAS, in connection with the Merger, AT&T will spin-off as an independent
entity AT&T Broadband Corp. ("Broadband"), which will hold the cable and broadband
properties of AT&T, and Broadband and Comcast will merge with and become whollyowned subsidiaries of the new entity, AT&T Comcast, thereby resulting in a change of
control of Franchisee from AT&T to AT&T Comcast (the "Change of Control"); and
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WHEREAS, after the Merger is consummated, Franchisee will be controlled by

AT&T Comcast, but will continue to operate the cable system serving the franchise area for
the City and will continue to hold and be responsible for performance of the cable franchise;
and
WHEREAS, the Franchise Documents provide that prior approval of the City is
required for change of control of the Franchisee; and
WHEREAS, AT&T Franchisee and AT&T Comcast filed with the City an FCC
Form 394 pursuant to the 1992 Cable Act and FCC regulations, and have requested that
the City approve the application for a change of control of Franchisee from AT&T to AT&T
Comcast (the "Application"); and
WHEREAS, Franchisee has agreed that, following the Change of Control, it will
continue to be bound by and to comply with all of its commitments, duties and obligations
under the Franchise Documents and all applicable federal, state and local laws, to the
maximum extent required by law;
WHEREAS, the Franchisee and the City have, in a separate agreement, noted the
existence of certain identified issues, and agreed to a resolution of certain of those identified
issues.
NOW, THEREFORE, in consideration of the City's consent to the Change of Control,
and subject to the terms and conditions of this Agreement and of the City's Resolution
granting consent to the Change of Control, THE PARTIES DO HEREBY AGREE as follows:
1.

CHANGE OF CONTROL OF FRANCHISEE

1.1

The City Council's consent to the Change of Control, through the Change of

Control Resolution, is a condition precedent to this Change of Control Agreement. This

Change of Control Agreement will automatically become null and void if the City Council
does not approve the Application by adopting the Change of Control Resolution in
substantially the form attached hereto.

2.

AFFIRMATION OF FRANCHISE OBLIGATIONS

2.1

Franchisee hereby accepts, acknowledges and agrees that, after the Change

of Control, it will continue to be bound by all the commitments, duties, and obligations,
present, continuing and future, of the Franchisee embodied in the Franchise Documents, to
the maximum extent required by law, and that neither the Merger nor the City's approval of
the Application and Change of Control will have any effect on these obligations.

2.2

Franchisee agrees, and AT&T Comcast acknowledges, that neither the

Merger nor the City's approval of the Application and Change of Control shall in any respect
relieve the Franchisee or any of its successors in interest of any responsibility it may have
for past acts or omissions, known or unknown, including any liability for any and all
previously accrued but unfulfilled obligations to the City under the Franchise Documents
and applicable law, for all purposes, including but not limited to review of past performance
for purposes of determining whether the Franchise should be renewed. Neither the Merger
nor this Change of Control Agreement shall modify the rights of the Franchisee and/or the
City under or related to the Franchise Documents as compared to those that could have
been exercised by the Franchisee and/or the City prior to the Merger. This Agreement shall
have no bearing whatsoever on the rights of the City to ensure compliance under the
Franchise Documents, and the Franchisee shall raise no claim to the contrary.

2.3

The City agrees that this Agreement is without prejudice to Franchisee's

rights to defend any claim of default or non-compliance with the Franchise Documents on
the basis that such default or non-compliance has not occurred, or has been cured or from
raising any other defense.

3.

ADDITIONAL CONDITIONS
3.1

Within forty-five (45) days of the closing of the Merger described in the

Application, AT&T Comcast submit to the City its signature to this Agreement in the form
attached hereto as Exhibit A. If AT&T Comcast fails to do so, then the City may within
sixty (60) days unilaterally revoke its consent to the Change of Control, and the Application
and Change of Control shall be deemed timely denied. No request, notice or other action

by the City is required to prompt AT&T Comcast to provide the valid and binding Exhibit A
within the above forty-five (45) days.
3.2

In the event the Merger described in the Application does not close by

March 1, 2003, or closes on terms that are,in any material respect different from the terms
disclosed to the City in writing, then any City consent to the Change of Control shall be
voidable at the City's sole discretion and of no force or effect, in which event and the
Application and Change of Control will be deemed to have been timely denied.

3.3

Franchisee and AT&T Comcast hereby waive any and all claims that they

may have that any denial of the Change of Control that results from this Section 3 fails to
satisfy the deadlines established by applicable law including, without limitation, claims
based on, arising out of, or relating to 47 USC 9 3 7 , as amended, and agree that they shall
be deemed to have agreed to an extension of time to act on the Application as required to
make any denial effective.

4.

ADDITIONAL AGREEMENTS OF THE PARTIES

4.1

The City reserves all rights not expressly granted in this Agreement. In

particular and without limitation:

4.1.1 Neither this Agreement, nor any other action or omission by the City at
or before the execution of this Agreement, shall be construed to grant the City's consent to
any future transfer of the Franchise and/or the System, and/or change in ownership and/or
control of the Franchise and/or the System, or to mean that the City's consent to any future
transaction is not required. Without limiting the foregoing, the approval of the Application
does not itself authorize or permit the Companies to lease or use the cable system to
provide services other than cable services, or to install non-cable facilities.
4.1.2 The City's consent to the Change of Control to AT&T Comcast shall not
constitute a waiver or release any of the City's rights with respect to Franchisee's
compliance (or non-compliance) with the terms, conditions, requirements and obligations
set forth in the Franchise Documents including the City's right to compel Franchisee to
comply with the Franchise Documents. The City's approval of the Application shall in no

way be deemed a representation by the City that the Franchisee is in compliance with all of
its obligations under the Franchise Documents.
4.1.3 Franchisee shall not contend that the City is barred, by reason of its
consent to the Change of Control, from considering or raising any claim based on the
Franchisee's past or present failure to comply with any term or condition of the Franchise
Documents or any other agreements between the Franchisee and the City or any of its
departments or applicable law, including, without limitation: any unpaid franchise fees
lawfully due the City from the Franchisee, any known and unresolved consumer complaints,
and any construction, security or facility requirements of the Franchise Documents that are
unsatisfied.
4.1.4 Except as otherwise expressly provided for herein, this section is
without prejudice to Franchisee's and AT&T Comcast's rights to defend any claim of default
or non-compliance with the Franchise Documents on the basis that such default or noncompliance did not occur, or has been cured, or from raising any other defense.
4.2

Franchisee will continue to comply with the privacy requirements of the Cable

Act and other applicable state and federal laws, if any.

5.

RATES
5.1

Franchisee agrees that regulated rates will continue to be set in conformance

with FCC regulations. Franchisee further agrees that the Change of Control, the consent
process, the City's Ordinance granting consent, and this Change of Control Agreement do
not provide any basis for increasing the amounts paid by subscribers through cost
pass-throughs as so-called "external costs" or as new requirements and the consent
process and ordinance granting consent do not provide any basis for increasing the
amounts paid by subscribers in any manner.
6.

REPRESENTATIONS AND WARRANTIES

6.1

The Franchisee acknowledges the City's representation that its consent to the

Change of Control is made in reliance upon the representations, documents, and

information provided by Franchisee, AT&T and Comcast in connection with the Application

and supplemental information thereto, and each of the Companies is liable for its own
representations and warranties.
6.2

Franchisee and AT&T Comcast hereby represent and warrant that at the time

of the execution of this Agreement (or, in the case of AT&T Comcast execution of the
document attached hereto as Exhibit A): (a) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction iT! which it is organized; (b) the executioc and
delivery of, and performance by such company under, this Agreement and the Franchise
Documents, where applicable, are within such company's power and authority without the
joinder or consent of any other party and have been duly authorized by all requisite
corporate or partnership action on the part of such company's partnership agreement,
charter, bylaws, and/or other organizational documents; and (c) the execution and delivery
of this Agreement does not contravene, result in a breach of, or constitute a default under,
any contract or agreement to which any of them is a party or by which any of them or any of
their properties may be bound (nor would such execution and delivery constitute such a
default with the passage of time or the giving of notice or both), and does not violate or
contravene any law, order, decree, rule, regulation or restriction to which any of them is
subject; and (d) no representation made to the City by such company in connection with the
Application or supplemental information thereto is untrue or inaccurate in any material
respect.
6.3

Franchisee and AT&T Comcast represent and warrant that they understand

that the Franchise is scheduled to expire on July 31, 2002 unless renewed or extended; that
the Merger is not based on any representation by the City, other than as provided by federal
and state law, that the Franchise will be renewed or extended; and that they take all risks
associated with any future non-renewal or non-extension of the Franchise.
6.4

The Companies represent and warrant that the Proposed Transaction will not

in any respect adversely affect Franchisee's ability to meet the lawful and valid
requirements of the Franchise Documents.
6.5

Franchisee agrees that it will not file a request under Section 625 of the Cable

Act with the City seeking modification of any existing franchise requirements as a result of

any increase in debt service, debt service coverage or equity requirements incurred to fund
the Merger.

6.6

AT&T Comcast acknowledges and agrees that, from and after the Change of

Control, it will not take any action that prevents the Franchisee's full performance of the
terms and conditions set forth in the Franchise Documents and this Agreement, provided
that nothing herein prevents the Companies from asserting a claim that a term or condition
of the Franchise Documents is unlawful.

6.7

AT&T Comcast and Franchisee represent and warrant that the Franchisee

will not be an obligor for any debt that may be incurred by the Companies to meet cash
funding requirements of the Merger Agreement and that no assets of the System will be
encumbered as a result thereof.

7.

INDEMNIFICATION
7.1

Franchisee agrees to indemnify and hold the City harmless against any loss,

claim, damage liability or expense (including, without limitation, reasonable attorneys' fees)
proximately caused by any representation or warranty made by Franchisee, AT&T or AT&T
Comcast herein which proves to be untrue or inaccurate in any material respect.

8. BREACHES

8.1

Any breach of this Change of Control Agreement shall be deemed a breach

of the Franchise Documents.

9.

MISCELLANEOUS PROVISIONS
9.1

Effective Date: This Agreement shall be effective and binding upon the

signatories once it has been signed by all signatories.

9.2

Entire Agreement: This Agreement constitutes the entire agreement of the

parties with respect to the settlement of the matters addressed herein. No statements,
promises or inducements inconsistent with this Agreement made by any party shall be valid
or binding, unless in writing and executed by all parties. This Agreement may only be
modified by written amendments hereto signed by all parties.

9.3

Binding Acceptance: This Agreement shall bind and benefit the parties

hereto and their respective heirs, beneficiaries, administrators, executors, receivers,

trustees, successors and assigns, and the promises and obligations herein shall survive the
expiration date hereof. Any purported assignment of this Agreement is void without the
express written consent of the signatories.

9.4

Voluntary Agreement: This Agreement is freely and voluntarily agreed to by

each party, without any duress or coercion, and after each party has consulted with its
counsel. Each party has carefully and completely read all of the terms and provisions of
this Agreement. Neither any of the Companies, nor any of their affiliates, nor the City, will
take any action to challenge any provision of this Change of Control Agreement; nor will
they participate with any other person or entity in any such challenge.

9.5

Drafting: This Agreement is a product of common negotiation among the

parties and shall not be construed against any party on grounds relating to drafting,
revision, review or recommendation by any agent or representative of such party.

9.6

Severability: If any term, condition, or provision of this Agreement shall, to

any extent, be held to be invalid, preempted, or unenforceable, the remainder shall be valid
in all other respects and continue to be effective.

9.7

Counterparts: This Agreement may be executed in several counterparts,

each of which when so executed shall be deemed to be an original copy, and all of which
together shall constitute one agreement binding on all parties hereto, notwithstanding that
all parties shall not have signed the same counterparts.

9.8

Governing Law: This Agreement shall be governed in all respects by the law

of the State of California.

9.9

Time of Essence: In determining whether a party has substantially complied

with this Agreement, the parties agree that time is of the essence.

9.10

Captions and References: The captions and headings of sections throughout

this Agreement are intended solely to facilitate reading and reference to the sections and

provisions of this Agreement. Such captions shall not affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Transfer Agreement
as of the day and year first above written.

APPROVED:

City of Oakland

AT&T Broadband HC of Delaware, LLC

By:
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APPROVED AS TO FORM: