<PAGE>

[LOGO OF MICRONPC.COM]

                               October 20, 2000

Jill D. Smith
17 Union Park
Boston, MA 02118

           Re:  Letter Agreement (Separation of Employment) - Final

Dear Jill:

     This letter confirms the acceptance by Micron Electronics, Inc. ("Micron"
or the "Company") of your resignation. This letter (the "Letter Agreement"), in
conjunction with your Employment, Severance, and Noncompete Agreement with the
Company, dated March 22, 1999 (the "Employment Agreement"), sets forth the terms
of your employment and departure from your current positions at Micron and
HostPro, Inc. ("HostPro"). The terms of this Letter Agreement are subject to
approval by the Boards of Directors of the Company and of HostPro, Inc.
("HostPro") to be sought upon your signing below.

     Your resignation as an officer and employee and your employment with Micron
and HostPro will terminate effective October 24, 2000 (the "Termination Date").
You will, as part of this Letter Agreement, provide letters in the form attached
as Attachment A covering the resignation of positions you have held as director
of any Company subsidiaries or affiliates, effective upon the Termination Date.

     Subject to the conditions stated elsewhere in this Letter Agreement and to
your signing and not revoking the Release of Claims attached as Attachment C,
you will be granted an option to purchase 125,000 shares of HostPro Common Stock
(the "Option") under HostPro's 2000 Equity Incentive Plan II (the "HostPro
Plan"). The Option will be granted pursuant to the Notice of Grant in the form
attached as Attachment B, subject to all of the terms and conditions of such
Notice of Grant and the Plan.

     You and the Company agree that no benefits, incentives, bonuses, or
severance compensation are owed to you pursuant to the Employment Agreement. The
foregoing notwithstanding, and subject to the conditions stated elsewhere in
this Letter Agreement and to your signing and not revoking the Release of Claims
attached as Attachment C, the Company agrees to pay to you base salary through
the Termination Date, plus severance compensation in the gross amount of
$404,600.00, less applicable federal, state and local withholdings and other
authorized deductions, if any, which severance compensation will be due as of
the Effective Date (as the term "Effective Date" is defined below) and paid as
soon as reasonably practicable thereafter.
<PAGE>

     After the Termination Date, you will not be entitled to any payment under
any Company or HostPro bonus, incentive, profit sharing, or pay for performance
plan or program. Except as specifically set forth in this Letter Agreement, all
employee benefits heretofore provided by the Company or HostPro will cease
immediately upon your Termination Date.

     The Company will assume the monthly rental obligation ($2,450.00 per month)
under your apartment lease in Los Angeles, 1840 S. Beverly Glen, Los Angeles,
California, 90025, for the remainder of the current lease term, or up to 7
months, whichever is less. The Company agrees to provide relocation services
through its regular provider of such services for the purpose of relocating your
car and your personal property and effects from Los Angeles, CA to Boston, MA,
up to a total expense of $8,000.00.

     Your health, dental and vision insurance benefits, if any, will continue
until October 31, 2000, at the levels presently being provided to you as of the
Termination Date, including, if applicable, the dependent coverage in effect as
of the Termination Date, subject to Company-wide adjustments, if any. During the
applicable period after the Termination Date, you will have the right, if in
accordance with applicable law, to elect COBRA benefits in the form of
"continuation coverage" as that term is defined in Section 602 of the Employee
Retirement Income Security Act, Title 29, Section 1162 of the United States Code
("ERISA"); provided, however, that you execute any necessary documents or do
such other acts as the Company or its insurers or administrators may require to
effect continuation coverage, including, without limitation, payment by you of
applicable premiums or fees.

     You understand that all of the stock options that the Company granted to
you under the Micron Electronics, Inc. 1995 Stock Option Plan (the "Option
Plan") will be governed in accordance with the terms and conditions of the
respective notices of grant and the Option Plan, including without limitation
the provisions with respect to vesting and expiration of the stock options. You
acknowledge that none of the stock options or any portion thereof will vest or
accelerate due to termination of your employment with Micron or pursuant to the
Employment Agreement.

     You agree to abide by and hereby reaffirm all of your obligations and
covenants under the Employment Agreement, including without limitation all of
the terms and conditions relating to your agreement not to compete or solicit.
You acknowledge that the twelve (12) month period referred to as part of the
"Period of Restriction" (as that term is defined in the Employment Agreement)
will begin on the "Termination Date" as defined in this Letter Agreement.

     You agree to return all Company and HostPro materials, equipment, documents
or other property, if any, in your possession on or before your last day of
work, or within a reasonable period of time thereafter which in any event shall
not extend beyond October 31, 2000; provided, however, that you will be allowed
to keep the laptop computer, desktop computer, and cellular telephone currently
in your possession, subject to the terms and conditions set forth below. You
understand and acknowledge that your obligations with respect to any
confidentiality or non-disclosure agreements with the Company and HostPro will
continue after your employment in accordance with the terms of such agreements.
<PAGE>

     The Company agrees to transfer to you ownership of (i) the laptop computer
(#2225599-0001), (ii) the desktop computer in Boston, MA (#145-0542-001), and
(iii) the cell phone (#25316029073) (without continuation of telephone or
connection services), which items you received from the Company for use during
your employment (collectively, the "Equipment").  You and the Company
acknowledge and agree that the fair market value of the Equipment will be set at
$750.00.  You understand and agree that the Company will issue an appropriate
tax form (Form 1099, W-2, or other) in order to properly account for the
transfer of the Equipment for compensation and tax purposes, as determined
necessary by the Company in its sole discretion.  You warrant and represent to
the Company that you will immediately remove or delete all Company confidential
information from the computers referenced above, except that you must return to
the Company any such information which is either solely in your possession or
critical to the performance of the Company's business.  You further warrant and
represent that you will be solely responsible for obtaining an appropriate
license for use or continued use of any software on the computers referenced
above, if necessary.

     THE EQUIPMENT IS PROVIDED "AS IS" AND THE COMPANY SPECIFICALLY DISCLAIMS
     ALL WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT
     LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
     PARTICULAR PURPOSE. IN NO EVENT WILL COMPANY BE LIABLE TO YOU OR OTHER
     PERSONS FOR ANY DAMAGES, INCLUDING LOSS OR PROFIT OR OTHER INCIDENTAL,
     SPECIAL OR CONSEQUENTIAL DAMAGES EVEN IF COMPANY HAS BEEN ADVISED OF THE
     POSSIBILITY OF SUCH DAMAGES.

     In consideration for the benefits outlined herein, the covenants and
conditions set forth in this Letter Agreement and the Employment Agreement, and
intending to be legally bound thereby, you agree to execute the Release of
Claims ("Release of Claims") in the form attached as Attachment C.  You promise
to execute and deliver the Release of Claims no later than twenty-two (22) days
from the date this Letter Agreement was presented to you. The obligation to
provide you with benefits and severance compensation under this Letter Agreement
is conditioned upon your execution and prior delivery of the originals of this
Letter Agreement and the Release of Claims, provided you have not revoked the
Release of Claims.

     Upon receipt from you of the executed originals of this Letter Agreement
and the Release of Claims, the Company and HostPro agree to release any and all
claims that either of them has or may have against you at any time on or before
your Termination Date.  The release provided to you pursuant to this paragraph
will not apply to any claims arising from or relating to this Letter Agreement,
the Employment Agreement, or the enforcement of any terms and conditions of this
Letter Agreement or the Employment Agreement.  On the Effective Date, the
Company will deliver to you a Release of Claims substantially in the form
attached as Attachment D.

     You agree to hold the terms of this Letter Agreement confidential.  You may
disclose the terms to your spouse, accountant, attorney, financial advisor, and
taxing authorities only as may be necessary to enforce any obligations of the
Company or HostPro hereunder or under the Option, for your legal and financial
affairs or as required by law.  Except for these disclosures, you agree not to
reveal the terms of this Letter Agreement.  You understand that the Company and
HostPro will have a legal obligation to, and will, disclose the terms of this
Letter Agreement, but will do so only to the extent required under applicable
law or regulation.
<PAGE>

     You on the one hand, and the Company's officers and directors on the other
hand, mutually agree not to disparage or defame each other or the other's
officers, directors, employees, agents, shareholders, parents, subsidiaries or
affiliates in any manner likely to be harmful to any of them or their business,
or their business reputation or personal reputation.  However, you and the
Company acknowledge that the other may respond accurately and fully to any
question, inquiry or request for information when required by legal process, or
applicable law or regulation.

     This Letter Agreement, the Employment Agreement, and the attachments to
this Letter Agreement contain the entire agreement and understanding between the
Company and you with respect to the subject matter therein, and supersede and
replace all prior negotiations and agreements among the parties.  You
acknowledge that you have not executed this Letter Agreement or the Release of
Claims in reliance upon any promise, representation or warranty not contained in
this Letter Agreement or in the Employment Agreement.

     You acknowledge that (a) you have been advised in writing to consult with
an attorney prior to executing this Letter Agreement and the Release of Claims;
(b) you have read the Release of Claims and understand the effect of your
releases and that you are releasing legal rights; (c) your releases do not apply
to any rights or claims that may arise after the date you sign the Release of
Claims; (d) you have twenty-two (22) days to consider this Letter Agreement and
the Release of Claims, and that if you sign it in less than twenty-two (22) days
you do so voluntarily; (e) you are aware of certain rights to which you may be
entitled under certain statutes and laws identified in the Release of Claims,
including without limitation the federal Age Discrimination in Employment Act;
and (f) as consideration for executing this Letter Agreement and the Release of
Claims, you have received additional consideration, benefits and compensation of
value to which you would not otherwise be entitled.

     By signing this Letter Agreement below, you acknowledge that you have been
given a period of at least twenty-one (21) days for your consideration of the
offer in this Letter Agreement.  You further acknowledge that you initially
received this Letter Agreement on October 18, 2000, and that any changes,
whether material or immaterial, to this Letter Agreement will not restart the
running of the twenty-one (21) day period.

     This Letter Agreement will be binding when executed by you.  Once you
execute the Release of Claims, however, you will have a period of seven (7) days
from the date immediately following the date of your execution of the Release of
Claims in which you may revoke, at your sole election, both this Letter
Agreement and the Release of Claims.  Notice of any revocation is requested in
writing, addressed to the Company's General Counsel.  In the event you do not
exercise your right to revoke this Letter Agreement and the Release of Claims,
the Letter Agreement will remain in effect and the Release of Claims will become
effective and irrevocable on the date immediately following the seven-day
revocation period described above (the "Effective Date").  If you elect to
revoke this Letter Agreement  or the Release of Claims,  you will not be
eligible for any of the benefits offered in this Letter Agreement, your
resignation will be effective, and you must repay and will lose the benefit of
any compensation and benefits you have received to date under this Letter
Agreement.
<PAGE>

     You agree that this Letter Agreement will be deemed to have been entered
into and will be construed and enforced in accordance with the laws of the State
of Idaho.

     You agree that this Letter Agreement may not be altered, amended, modified,
or otherwise changed in any respect except by another written agreement that
specifically refers to this Letter Agreement, duly executed by you and the CEO
of the Company or me.  To the extent that there is any inconsistency or conflict
between the express terms of this Letter Agreement and the express terms of the
Employment Agreement, we agree that the Letter Agreement shall control.

     This Letter Agreement may be executed in counterparts.  Executed originals
(or counterpart originals) of this Letter Agreement may be delivered by
telefacsimile transmission, which telefacsimile transmission copies shall be
deemed as effective as originals.

     If you have any questions concerning this Letter Agreement, please feel
free to contact me.  In order to reflect your agreement with these terms, please
sign and return the enclosed originals of this Letter Agreement and the Release
of Claims to me as set forth above.

                                      Sincerely,



                                      MICRON ELECTRONICS, INC.

                                      /s/

                                      Savino R. (Sid) Ferrales
                                      Sr. Vice President, Human Resources


Attachments:  Attachment A: Resignation Letter(s)
              Attachment B: Notice of Grant
              Attachment C: Release of Claims (by Company)
              Attachment D: Release of Claims (by Employee)
<PAGE>

ACCEPTANCE
----------

I hereby accept the Company's offer of benefits, severance compensation, and the
other terms and conditions of this Letter Agreement dated October 20, 2000.

Dated October 20, 2000


 /s/
-------------------------
Jill D. Smith (Signature)
<PAGE>

                                 Attachment A
                                 ------------

                            RESIGNATION LETTER FORM


                               October 23, 2000

To the Board of Directors of
Micron Electronics, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as Executive Vice
President and Chief Operating Officer of Micron Electronics, Inc.  My
resignation is effective immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith



                              October 23, 2000

To the Board of Directors of
HostPro, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as Acting General
Manager of HostPro, Inc.  My resignation is effective immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith
<PAGE>

                              October 23, 2000

To the Board of Directors of
Micron Commercial Computer Systems, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director of
Micron Commercial Computer Systems, Inc.  My resignation is effective
immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith



                              October 23, 2000

To the Board of Directors of
Micron PC, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director of
Micron PC, Inc.  My resignation is effective immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith
<PAGE>

                              October 23, 2000

To the Board of Directors of
Micron Government Computer Systems, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director of
Micron Government Computer Systems, Inc.  My resignation is effective
immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith



                              October 23, 2000

To the Board of Directors of
NetLimited, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director of
NetLimited, Inc.  My resignation is effective immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith
<PAGE>

                              October 23, 2000

To the Board of Directors of
Micron Internet Services, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director of
Micron Internet Services, Inc.  My resignation is effective immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith



                              October 23, 2000

To the Board of Directors of
LightRealm, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director of
LightRealm, Inc.  My resignation is effective immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith
<PAGE>

                              October 23, 2000

To the Board of Directors of
Worldwide Internet Publishing Corp.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director of
Worldwide Internet Publishing Corp.  My resignation is effective immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith



                              October 23, 2000

To the Board of Directors of
Bird on a Wire Networks, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director of Bird
on a Wire Networks, Inc.  My resignation is effective immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith
<PAGE>

                              October 23, 2000

To the Board of Directors of
Micron Electronics International, Inc.

     Re:  Notice of Resignation

Dear Board of Directors:

     Please accept this letter as notice of my resignation as a director and as
President of Micron Electronics International, Inc.  My resignation is effective
immediately.

                              Sincerely,

                              /s/

                              Jill D. Smith
<PAGE>

                                 Attachment B
                                 ------------

                                 HOSTPRO, INC.

                          2000 EQUITY INCENTIVE PLAN

                                NOTICE OF GRANT

     This Notice of Grant (the "Agreement") is made and entered into as of the
date of grant set forth below (the "Date of Grant") by and between HostPro,
Inc., a Delaware corporation (the "Company"), and the participant named below
(the "Participant").  Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company's 2000 Equity Incentive Plan II.

Participant:                 JILL D. SMITH
                             ---------------------------------------
Social Security Number:      ###-##-####
                             ---------------------------------------
Address:                     900 E. Karcher Road
                             ---------------------------------------
                             Nampa, Idaho 83687
                             ---------------------------------------
Total Option Shares:         125,000
                             ---------------------------------------
Exercise Price Per Share:    $1.41
                             ---------------------------------------
Date of Grant:               October 23, 2000
                             ---------------------------------------
First Vesting Date:          October 23, 2000
                             ---------------------------------------
Expiration Date:             October 23, 2001
                             ---------------------------------------
Type of Stock Option
(Check one):                 [  X  ] Incentive Stock Option to the
                                   maximum extent permitted by the Code
                             [     ] Nonqualified Stock Option

     1.   Grant of Option.  The Company hereby grants to Participant an option
          ---------------
(this "Option") to purchase the total number of shares of Common Stock, $0.01
par value per share, of the Company set forth above as Total Option Shares (the
"Shares") at the Exercise Price Per Share set forth above (the "Exercise
Price"), subject to all of the terms and conditions of this Agreement and the
Plan.  If designated as an Incentive Stock Option above, the Option is intended
to qualify as an "incentive stock option" (the "ISO") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), to
the extent possible in accordance with the provisions of that section.  To the
extent the option does not qualify as an ISO, it shall be treated by the Company
and the Participant as a Nonqualified Stock Option.

     2.   Exercise Period.
          ---------------

          2.1  Exercise Period of Option.  The Option will become vested and
               -------------------------
exercisable as to portions of the Shares as follows: (i) this Option shall not
vest nor be exercisable with respect to any of the Shares until the First
Vesting Date set forth on the first
<PAGE>

page of this Agreement (the "First Vesting Date"), and (ii) on the First Vesting
Date the Option will become vested and exercisable as to one hundred percent
(100%) of the Shares. Notwithstanding the foregoing, subject to earlier
termination of the Option as provided herein, this Option may not be exercised
prior to the earlier of (i) the issuance to the public of shares of Common Stock
pursuant to a Form S-1 Registration Statement under the Securities Act of 1933,
as amended (the "IPO"), or (ii) pursuant to Section 5(a), the occurrence of a
Corporate Transaction (in any such event, the "First Exercise Date").

          2.2  Expiration.  The Option shall expire on the Expiration Date set
               ----------
forth above.

     3.   No Employment Obligation.  Nothing in the Plan or this Agreement shall
          ------------------------
confer on Participant any right to continue in the employ of, or other
relationship with, the Company or any Parent or Subsidiary of the Company, or
limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Participant's employment or other relationship at any time,
with or without Cause.

     4.   Manner of Exercise.
          ------------------

          4.1  Stock Option Exercise Agreement.  To exercise this Option,
               -------------------------------
Participant (or in the case of exercise after Participant's death or incapacity,
Participant's executor, administrator, heir or legatee, as the case may be) must
deliver to the Company an executed stock option exercise agreement in such form
as may be approved by the Committee from time to time (the "Exercise
Agreement"), which shall set forth, inter alia, (i) Participant's election to
                                    ----- ----
exercise the Option, (ii) the number of Shares being purchased, (iii) any
restrictions imposed on the Shares and (iv) any representations, warranties and
agreements regarding Participant's investment intent and access to information
as may be required by the Company to comply with applicable securities laws.  If
someone other than Participant exercises the Option, then such person must
submit documentation reasonably acceptable to the Company verifying that such
person has the legal right to exercise the Option and such person shall be
subject to all of the restrictions contained herein as if such person were the
Participant.

          4.2  Limitations on Exercise.  The Option may not be exercised unless
               -----------------------
such exercise is in compliance with all applicable federal and state securities
laws, as they are in effect on the date of exercise.  The Option may not be
exercised as to fewer than one hundred (100) Shares unless it is exercised as to
all Shares as to which the Option is then exercisable.

          4.3  Payment.  The Exercise Agreement shall be accompanied by full
               -------
payment of the Exercise Price for the shares being purchased in cash (by check),
or where permitted by law:

          (a)  by cancellation of indebtedness of the Company to the
               Participant;

          (b)  by surrender of shares of the Company's Common Stock that (i)
               either (A) have been owned by Participant for more than six (6)
               months and have been paid for within the meaning of SEC Rule 144
               (and, if such shares
<PAGE>

               were purchased from the Company by use of a promissory note, such
               note has been fully paid with respect to such shares); or (B)
               were obtained by Participant in the open public market; and (ii)
               are clear of all liens, claims, encumbrances or security
               interests;

          (c)  by waiver of compensation due or accrued to Participant for
               services rendered;

          (d)  provided that a public market for the Company's stock exists: (i)
               through a "same day sale" commitment from Participant and a
               broker-dealer that is a member of the National Association of
               Securities Dealers (an "NASD Dealer") whereby Participant
               irrevocably elects to exercise the Option and to sell a portion
               of the Shares so purchased sufficient to pay for the total
               Exercise Price and whereby the NASD Dealer irrevocably commits
               upon receipt of such Shares to forward the total Exercise Price
               directly to the Company, or (ii) through a "margin" commitment
               from Participant and an NASD Dealer whereby Participant
               irrevocably elects to exercise the Option and to pledge the
               Shares so purchased to the NASD Dealer in a margin account as
               security for a loan from the NASD Dealer in the amount of the
               total Exercise Price, and whereby the NASD Dealer irrevocably
               commits upon receipt of such Shares to forward the total Exercise
               Price directly to the Company; or

          (e)  any other form of consideration approved by the Committee; or

          (f)  by any combination of the foregoing.

          4.4  Tax Withholding.  Prior to the issuance of the Shares upon
               ---------------
exercise of the Option, Participant must pay or provide for any applicable
federal, state and local withholding obligations of the Company.  If the
Committee permits, Participant may provide for payment of withholding taxes upon
exercise of the Option by requesting that the Company retain the minimum number
of Shares with a Fair Market Value equal to the minimum amount of taxes required
to be withheld; but in no event will the Company withhold Shares if such
withholding would result in adverse accounting consequences to the Company.  In
such case, the Company shall issue the net number of Shares to the Participant
by deducting the Shares retained from the Shares issuable upon exercise.

          4.5  Issuance of Shares.  Provided that the Exercise Agreement and
               ------------------
payment are in form and substance satisfactory to counsel for the Company, the
Company shall issue the Shares registered in the name of Participant,
Participant's authorized assignee, or Participant's legal representative, and
shall deliver certificates representing the Shares with the appropriate legends
affixed thereto.



          5.   CORPORATE TRANSACTIONS.
               ----------------------

          (a)  Assumption or Replacement of Options by Successor.  In the event
              -------------------------------------------------
of (i) a dissolution or liquidation of the Company, (ii) a merger or
consolidation in which the Company
<PAGE>

is not the surviving corporation (other than a merger or consolidation with a
wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the stockholders of the Company or their relative stock holdings and the Options
granted under the Plan are assumed, converted or replaced by the successor
corporation, which assumption will be binding on all Participants), (iii) a
merger in which the Company is the surviving corporation but after which the
stockholders of the Company immediately prior to such merger (other than any
stockholder that merges, or which owns or controls another corporation that
merges, with the Company in such merger) cease to own their shares or other
equity interest in the Company, or (iv) the sale of substantially all of the
assets of the Company (each, a "Corporate Transaction"), any or all outstanding
Options may be assumed, converted or replaced by the successor or acquiring
corporation (if any), which assumption, conversion or replacement will be
binding on all Participants. In the alternative, the successor or acquiring
corporation may substitute equivalent Options or provide substantially similar
consideration to Participants as was provided to shareholders (after taking into
account the existing provisions of the Options). The successor or acquiring
corporation may also issue, in place of outstanding unvested Shares of the
Company held by the Participant, substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Participant.
Notwithstanding anything in this Section 5(a) or Section 2.1 to the contrary,
the vesting and exercisability of one hundred percent (100%) of the Options held
by the Participant will accelerate on the liquidation of the Company into or the
merger or consolidation of the Company with Micron Electronics, Inc. ("MEI")
following the sale or disposition of substantially all of the personal computer
assets of MEI.

          In the event such successor or acquiring corporation (if any) refuses
to assume or substitute Options, as provided above, pursuant to a Corporate
Transaction described in this Subsection 5(a), then the vesting of such Options
will accelerate and the Options will become one hundred percent (100%) vested
and exercisable prior to the consummation of such event at such times and on
such conditions as the Committee determines, and if such Options are not
exercised prior to the consummation of the Corporate Transaction, they shall
terminate in accordance with the provisions of the Plan.

          (b) Other Treatment of Options.  Subject to any greater rights granted
              --------------------------
to Participants under the foregoing provisions of this Section 5, in the event
of the occurrence of any transaction described in Section 5(a) hereof, any
outstanding Options will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation or sale of assets.

          (c) Assumption of Options by the Company.  The Company, from time to
              ------------------------------------
time, also may substitute or assume outstanding options granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (i) granting an option under this Plan in substitution of
such other company's option or (ii) assuming such option as if it had been
granted under this Plan if the terms of such assumed option could be applied to
an option granted under this Plan.  Such substitution or assumption will be
permissible if the holder of the substituted or assumed option would have been
eligible to be granted an option under this Plan if the other company had
applied the rules of this Plan to such grant.  In the event the Company assumes
an option granted by another company, the terms and conditions of such option
will remain unchanged (except that the exercise price and the number and nature
<PAGE>

of shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code).  In the event the Company
elects to grant a new option rather than assuming an existing option, such new
option may be granted with a similarly adjusted Exercise Price.

     6.   Notice of Disqualifying Disposition of ISO Shares.  If the Option
          -------------------------------------------------
is an ISO, and if Participant sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (i) the date two (2)
years after the Date of Grant, and (ii) the date one (1) year after transfer of
such Shares to Participant upon exercise of the Option, Participant shall
immediately notify the Company in writing of such disposition.  Participant
agrees that Participant may be subject to income tax withholding by the Company
on the compensation income recognized by Participant from the early disposition
by payment in cash or out of the current wages or other compensation payable to
Participant.

     7.   Compliance with Laws and Regulations.  The exercise of the Option and
          ------------------------------------
the issuance and transfer of Shares shall be subject to compliance by the
Company and Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or
transfer.  Participant understands that the Company is under no obligation to
register or qualify the Shares with the SEC, any state securities commission or
any stock exchange to effect such compliance.

     8.   Nontransferability of Option.
          ----------------------------

          8.1  Nontransferability of Option.  The Option may not be transferred
               ----------------------------
in any manner other than by will or by the laws of descent and distribution or
as determined by the Committee.  The terms of the Option shall be binding upon
the executors, administrators, successors and assigns of Participant.

          8.2  All Options other than NQSO's.  All Options other than NQSO's
               ------------------------------
shall be exercisable: (i) during the Participant's lifetime, only by (A) the
Participant, or (B) the Participant's guardian or legal representative; and (ii)
after Participant's death, by the legal representative of the Participant's
heirs or legatees.

          8.3  NQSOs.  Unless otherwise restricted by the Committee, an NQSO
               -----
shall be exercisable: (i) during the Participant's lifetime only by (A) the
Participant, (B) the Participant's guardian or legal representative, (C) a
Family Member of the Participant who has acquired the NQSO by "permitted
transfer;" and (ii) after Participant's death, by the legal representative of
the Participant's heirs or legatees.  "Permitted transfer" means, as authorized
by this Plan and the Committee in an NQSO, any transfer effected by the
Participant during the Participant's lifetime of an interest in such NQSO but
only such transfers which are by gift or domestic relations order.  A permitted
transfer does not include any transfer for value and neither of the following
are transfers for value:  (a) a transfer of under a domestic relations order in
settlement of marital property rights or (b) a transfer to an entity in which
more than fifty percent of the voting interests are owned by Family Members or
the Participant in exchange for an interest in that entity.
<PAGE>

     9.   Company's Right of First Refusal.  Before any Vested Shares held by
          --------------------------------
Participant or any transferee of such Vested Shares may be sold or otherwise
transferred (including without limitation a transfer by gift or operation of
law), the Company and/or its assignee(s) shall have an assignable right of first
refusal to purchase the Vested Shares to be sold or transferred on the terms and
conditions set forth in the Exercise Agreement (the "Right of First Refusal").
The Company's Right of First Refusal will terminate when the Company's
securities become publicly traded.

     10.  Tax Consequences.  Set forth below is a brief summary as of the
          ----------------
Effective Date of the Plan of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares.  THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE.  PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.

          10.1 Exercise of ISO.   To the extent the Option qualifies as an ISO,
               ---------------
there will be no regular federal or California income tax liability upon the
exercise of the Option, although the excess, if any, of the Fair Market Value of
the Shares on the date of exercise over the Exercise Price will be treated as a
tax preference item for federal alternative minimum tax purposes and may subject
the Participant to the alternative minimum tax in the year of exercise.

          10.2 Exercise of Nonqualified Stock Option.  To the extent the Option
               -------------------------------------
does not qualify as an ISO, there may be a regular federal and California income
tax liability upon the exercise of the Option.  Participant will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price.  If Participant is a current or former
employee of the Company, the Company will be required to withhold from
Participant's compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.

          10.3 Disposition of Shares.  The following tax consequences may apply
               ---------------------
upon disposition of the Shares.

               (a) Incentive Stock Options.  If the Shares are held for more
                   -----------------------
than twelve (12) months after the date of purchase of the Shares pursuant to the
exercise of an ISO and are disposed of more than two (2) years after the Date of
Grant, any gain realized on disposition of the Shares will be treated as long
term capital gain for federal and California income tax purposes. If Shares
purchased under an ISO are disposed of within the applicable one (1) year or two
(2) year period, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price.

               (b) Nonqualified Stock Options.  If the Shares are held for more
                   --------------------------
than twelve (12) months after the date of purchase of the Shares pursuant to the
exercise of an NQSO, any gain realized on disposition of the Shares will be
treated as long term capital gain.
<PAGE>

               (c)   Withholding.  The Company may be required to withhold from
                     -----------
the Participant's compensation or collect from the Participant and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income.

               10.4  Timing of Exercise.  To the extent the Option otherwise
                    ------------------
would qualify as an ISO, if any, it will nonetheless not qualify as an ISO
unless the Participant is an employee of the Company or any parent or subsidiary
of the Company at all times from the Date of Grant through the day three months
before the date of exercise.

     11.  Privileges of Stock Ownership.  Participant shall not have any of the
          -----------------------------
rights of a stockholder with respect to any Shares until the Shares are issued
to Participant.

     12.  Interpretation.  Any dispute regarding the interpretation of this
          --------------
Agreement shall be submitted by Participant or the Company to the Committee for
review.  The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant for purposes of interpretation of this
Agreement.

     13.  Entire Agreement.  The Plan is incorporated herein by reference.  This
          ----------------
Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof; provided, however, that in the event of any inconsistency or
conflict between the terms of this Agreement and the terms of the Plan, the
Agreement will control, including, without limitations, as to exercisability,
and duration.

     14.  Notices.  Any notice required to be given or delivered to the Company
          -------
under the terms of this Agreement shall be in writing and addressed to the
Corporate Secretary of the Company at its principal corporate offices.  Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company.  All
notices shall be deemed to have been given or delivered upon:  (i) personal
delivery; (ii) three (3) days after deposit in the United States mail by
certified or registered mail (return receipt requested); (iii) one (1) business
day after deposit with any return receipt express courier (prepaid); or (iv) one
(1) business day after transmission by facsimile, rapifax or telecopier.

     15.  Successors and Assigns.  The Company may assign any of its rights
          ----------------------
under this Agreement including its rights to purchase Shares under the Right of
First Refusal.  This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the Company.  Subject to the restrictions on
transfer set forth herein, this Agreement shall be binding upon Participant and
Participant's heirs, executors, administrators, legal representatives,
successors and assigns.

     16.  Governing Law.  This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of Delaware as such laws are applied to
agreements between Delaware residents entered into and to be performed entirely
within Delaware.  If any provision of this Agreement is determined by a court of
law to be illegal or unenforceable, then such provision will be enforced to the
maximum extent possible and the other provisions will remain fully effective and
enforceable.
<PAGE>

     17.  Acceptance.  Participant hereby acknowledges receipt of a copy of the
          ----------
Plan and this Agreement.  Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement.  Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
triplicate by its duly authorized representative and Participant has executed
this Agreement in triplicate, effective as of the Date of Grant.


HOSTPRO, INC.                       PARTICIPANT

By: /s/                             /s/
    ---------------------------     ----------------------------
                                    (Signature)

Joel J. Kocher                      Jill Smith
-------------------------------     ----------------------------
(Please print name)                 (Please print name)

Chairman and CEO
-------------------------------
(Please print title)



                  [SIGNATURE PAGE TO STOCK OPTION AGREEMENT]
<PAGE>

                                 Attachment C
                                 ------------

                               RELEASE OF CLAIMS

     This Release of Claims (the "Release") is made and executed by me, Jill D.
Smith, in connection with the termination of my employment with Micron
Electronics, Inc. ("MEI") and HostPro, Inc. ("HostPro"), and in consideration of
my receiving valuable benefits as provided for in that certain Letter Agreement
dated October 20, 2000 (the "Letter Agreement").  These benefits are substantial
consideration to which I am not otherwise entitled.

     I, Jill D. Smith, on behalf of myself and my spouse, heirs, administrators
and assigns, hereby release MEI and HostPro, their parents, subsidiaries and
related corporations, affiliates, or joint venturers and all officers,
directors, employees, agents, and insurers of the aforementioned (collectively
the "Company") from any and all liability, damages or causes of action, whether
known or unknown relating to my employment with the Company or the termination
of that employment, including but not limited to any claims for additional
compensation in any form, or damages.  This specifically includes, but is not
limited to, all claims for relief or remedy under any state or federal laws,
including but not limited to ERISA (29 USC (S) 1001, et seq.), Title VII of the
Civil Rights Act of 1964, the Post-Civil War Civil Rights Acts (42 USC (S)(S)
1981-1988), the Civil Rights Act of 1991, the Equal Pay Act, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act,
the Family and Medical Leave Act, the Older Workers' Benefit Protection Act, the
Worker Adjustment and Retraining Notification Act, the Rehabilitation Act of
1973, the Vietnam Era Veterans' Readjustment Assistance Act, the Fair Labor
Standards Act, Executive Order 11246, all as amended, and the civil rights,
employment and labor laws of Idaho, California, or any other state and the
United States.

     I hereby acknowledge that I have read and understand section 1542 of the
Civil Code of the State of California, which reads as follows:

     A general release does not extend to claims which the creditor does not
     know or suspect to exist in his favor at the time of executing the release,
     which if known by him must have materially affected his settlement with the
     debtor.

I hereby expressly waive and relinquish all rights and benefits under section
1542 of the Civil Code of the State of California and any law or legal principle
of similar effect in any jurisdiction with respect to the releases granted in
this Release.

     This Release shall not apply to the obligations of MEI and HostPro under
the Letter Agreement, nor the obligations of MEI under Section 10 of the
Employment, Severance, and Noncompete Agreement between MEI and me, dated March
22, 1999.  I hereby covenant not to sue, initiate, or continue any legal or
administrative proceeding with regard to any or all claims released herein.

     This Release shall not affect any rights that I may have under any medical
insurance, disability, workers' compensation, unemployment compensation, stock
or retirement plans maintained by the Company including , without limitation,
the HostPro 2000 Equity Incentive Plan II and the Micron Electronic, Inc. 1995
Stock Option Plan.
<PAGE>

     I understand and agree that the Company will take withholding for payroll
taxes out of any payments made to me under the Letter Agreement on the same
basis as if I were on active payroll status during the time payments are made.
I further understand and agree that the Company has made no representations to
me about the tax treatment of any payments made under the Letter Agreement and
that I am solely responsible for the payment of state and federal taxes due on
any amounts paid to me under the Letter Agreement, including any penalties.

     I acknowledge that I have been given at least twenty-one (21) days to
consider my election to accept benefits under the Letter Agreement and to sign
this Release; that I am being provided with a period of seven (7) days following
execution of this Release in which I may revoke, at my sole election, my
acceptance of the Letter Agreement and this Release; and that unless I so
revoke, the Letter Agreement and my Release will be fully effective and
irrevocable seven (7) days after they are signed.  I further understand that the
Company is not obligated to give me any benefits under the Letter Agreement or
the Employment Agreement until the revocation period has passed without my
exercising the right to revoke this Release and the Letter Agreement.

     I acknowledge that I have had time to consider the alternatives and
consequences of my election to receive benefits under the Letter Agreement and
of signing the Release; that I am aware of my right to consult an attorney or
financial advisor at my own expense; and that, in consideration for executing
this Release and my election to receive benefits under the Letter Agreement, I
have received additional benefits and compensation of value to which I would not
otherwise be entitled.

     I HAVE READ THE FOREGOING RELEASE.  I UNDERSTAND THE EFFECT OF THIS RELEASE
AND I VOLUNTARILY ENTER INTO IT AT THIS TIME.

     Every provision of this Release is intended to be severable.  In the event
any term or provision contained in this Release is determined to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
not affect the other terms and provisions of this Release which shall continue
in full force and effect.



Dated:  October 20, 2000


    /s/
--------------------------
Jill D. Smith (Signature)
<PAGE>

                                 Attachment D
                                 ------------

                               RELEASE OF CLAIMS
                               -----------------

     This Release of Claims("the Release") is made and entered into as of this
7th day of November, 2000, by Micron Electronics, Inc., a Minnesota corporation
("MEI"), and its wholly owned subsidiary Host Pro, Inc., a Delaware corporation
("Host Pro"), in favor of Jill D. Smith, an individual residing at 17 Union
Park, Boston, MA  02118 ("Smith").

     WHEREAS, Smith and MEI have entered into a Letter Agreement dated October
20, 2000, pursuant to which MEI has accepted her resignation as an employee and
officer of MEI and HostPro, under an Employment Agreement between MEI and Smith
dated March 22, 1999 (the "Employment Agreement"); and

     WHEREAS, pursuant to the Letter Agreement, MEI and Host Pro have agreed to
deliver this Release to Smith.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of MEI and HostPro, on behalf
of itself and its parents, subsidiaries and the respective shareholders,
officers, directors, employees, agents, servants, representatives, attorneys,
successors and assigns of each of them, hereby releases, remises, and forever
discharges Smith and her heirs, successors and assigns, and each of the forgoing
from any and all claims, demands, controversies, liabilities, damages, debts,
obligations, costs, expenses, attorneys' fees, actions and causes of action, of
any kind and nature, known or unknown, suspected or unsuspected, in law or in
equity, arising out of any acts, omissions, events, or occurrences from the
beginning of time to the date of this Release, including, without limitation,
any and all such claims which relate to or otherwise arise from her relationship
as an officer, employee or director by MEI or HostPro or any of their
affiliates; provided, however, this Release shall not apply to any of Smith's
obligations under the Letter Agreement and the Employment Agreement, including
her obligations under Section 9 of the Employment Agreement, as amended or
modified by the Letter Agreement.  Each of the undersigned covenant not to sue,
initiate or continue any legal or administrative proceedings with regard to any
claim released hereby.

     IN WITNESS WHEREOF, each of the undersigned caused this Release to be
executed on its behalf by a duly authorized officer on this 7th day of November,
2000.


HOSTPRO, INC.                         MICRON ELECTRONICS, INC.


By:  /s/                              By:  /s/
   ------------------------------        ---------------------------------------

Name:  Dennis N. Cavender             Name:  JoAnne S. Pfeifer

Title:  Vice President & Chief        Title:  Vice President of Administration &
        Financial Officer                     Corporate Secretary