EXCITE@HOME REDOES DEAL WITH AT&T, RECEIVES $85 MILLION

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(June 20, 2001) -- Excite@Home, which has been suffering amid the broad downturn in Internet businesses, made several announcements Tuesday concerning its business.

The company, which earlier this month obtained $100 million in additional financing through the sale of convertible notes, said that it had received an additional $85 million through a renegotiation of its optical-fiber backbone capacity contract with AT&T.

The deal calls for the two companies to cancel their agreement under which Excite@home would have use of AT&T's capacity for 20 years. In return for a refund of $85 million, Excite@Home will pay AT&T $8.8 million for the next 18.5 years. The company said that it expected to have $175 million in cash at the end of the second quarter.

The company also said that it expected to reach an agreement with two of the cable operators with which it does business, Cox and Comcast, within the next several weeks. Excite@Home's mutual exclusivity agreements with both companies expires on Dec. 4. Though the company said that it expected to have relationships with both companies in the future, it wouldn't provide details on the negotiations.

In a conference call with analysts, Chairman-CEO Patti Hart indicated that it was unlikely the company would find buyers in the near-term for some subsidiaries, such as MatchLogic and the Excite portal business. Ms. Hart said the company would now look toward "operating the assets on a scaled-down basis."

The company also said it was looking for approval to consider a reverse stock split. The stock was at $1.90 at close Tuesday, down 32 cents. -- Catharine P. Taylor

Copyright June 2001, Crain Communications Inc.

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