SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549


                                    FORM 8-K

                                 CURRENT REPORT

                    Pursuant to Section 13 or 15(d) of
                    the Securities Exchange Act of 1934


             Date of Report (Date of earliest event reported):

                                September 2, 1999


                            MICRON ELECTRONICS, INC.
                -----------------------------------------------

              (Exact name of registrant as Specified in Its Charter)

                                    Minnesota
                     ---------------------------------------

                  (State or other jurisdiction of incorporation)

            0-17932                            41-1404301
        ---------------------------------------------------------------
        (Commission File No)       (IRS Employer Identification Number)



                               900 E. Karcher Road
                               Nampa, Idaho 83687
                  --------------------------------------------

                      (Address of principal executive offices)


                                 (208) 898-3434

               (Registrant's telephone number, including area code)


<PAGE>


Item 5.  OTHER EVENTS

     Amended and Restated Component Recovery Agreement

     Effective September 2, 1999, Micron  Electronics,  Inc. (the "Company") and
its parent corporation, Micron Technology, Inc. ("MTI"), entered into an Amended
and Restated Component Recovery Agreement (as amended,  the "Component  Recovery
Agreement"). The Component Recovery Agreement, which was previously scheduled to
expire on September 2, 1999, has a term of two years and requires MTI to deliver
to the Company  components used in connection with the Company's  SpecTek memory
products division.  The cost to the Company of components obtained from MTI will
be negotiated on a quarterly  basis,  but in no event will the cost be less than
50% of pre-tax net income  generated from the sale of SpecTek  products  derived
from such  components.  The  maximum  cost  payable  by the  Company  to MTI for
components during fiscal 2000 will be as follows:  first quarter, 50% of pre-tax
net income;  second quarter,  62.5% of pre-tax net income; third quarter, 75% of
pre-tax  net income;  and fourth  quarter  87.5% of pre-tax  net income.  At the
commencement  of the second  quarter of fiscal 2000 the Company has an option to
require MTI to purchase all of the assets of SpecTek for a purchase  price equal
to net book value.  At the  commencement  of fiscal  2001,  MTI has an option to
require  the  Company to sell all of the assets of SpecTek  under the same terms
and conditions. Additionally, the Company would have an option to require MTI to
purchase,  and MTI would  have the option to require  the  Company to sell,  the
assets of SpecTek at book value if MTI's  ownership  in the Company  falls below
50% or if an unrelated third party acquires more than 30% of the Company.

     A copy of the Component  Recovery  Agreement is attached  hereto as Exhibit
10.42 and is incorporated herein by reference.

     Exclusive Sales Representative Agreement
     ----------------------------------------

     Effective September 2, 1999, the Company and Micron Semiconductor Products,
Inc.   ("MSP"),   a  subsidiary  of  MTI,   entered  into  an  Exclusive   Sales
Representative Agreement (the "Sales Representative  Agreement") under which MSP
will serve as exclusive sales representative for SpecTek memory products.

     A copy of the Sales Representative  Agreement is attached hereto as Exhibit
10.65 and is incorporated herein by reference.


<PAGE>


Item 7.  FINANCIAL STATEMENTS AND EXHIBITS

     (c) Exhibits.

     The following exhibits are filed herewith:

         10.42.   Amended and Restated Component Recovery
              Agreement effective September 2, 1999 by and
              between Micron Technology, Inc. and Micron
              Electronics, Inc.

         10.65    Exclusive Sales Representative
              Agreement effective September 2, 1999
              between Micron Electronics, Inc. and Micron
              Semiconductor Products, Inc.



<PAGE>



                                   SIGNATURES
                                   ----------


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                           MICRON ELECTRONICS, INC.




Date: September 10, 1999                   By   /s/ James R. Stewart
                                             --------------------------------
                                               James R. Stewart
                                               Senior Vice President &
                                               Chief Financial Officer


<PAGE>


EXHIBIT 10.42
                              AMENDED AND RESTATED
                          COMPONENT RECOVERY AGREEMENT


     This Amended and Restated Component Recovery Agreement (the "Agreement") is
entered into  effective as of  September 2, 1999 (the  "Effective  Date") by and
between Micron Technology,  Inc., a Delaware corporation located at 8000 Federal
Way,  Boise,  Idaho 83716  ("MTI"),  and Micron  Electronics,  Inc., a Minnesota
corporation located at 900 E. Karcher Road, Nampa, Idaho 83687 ("MEI").

     WHEREAS,  MTI is engaged in the business of  developing  and  manufacturing
semiconductor  memory  devices and MEI is engaged in the business of  recovering
semiconductor memory devices for sale to third parties;

     WHEREAS,   MTI  wishes  to  sell  and  MEI  wishes  to   purchase   certain
semiconductor  memory  devices  which do not meet MTI's  design  and  electrical
specifications and utilize them in less critical applications;

     WHEREAS, MTI and MEI entered into a Component Recovery Agreement, effective
as of August 14, 1996 (the "Original CRA");

     WHEREAS,  the Original  CRA was amended by Amendment  Number 1 to Component
Recovery Agreement, effective as of August 30, 1996 (the "First Amendment");

     WHEREAS, the Original CRA and the First Amendment were amended by Amendment
Number 2 to Component Recovery  Agreement,  dated September 2, 1998 (the "Second
Amendment"); and

     WHEREAS,  MTI and MEI wish to restate the Original CRA, the First Amendment
and the Second Amendment and simultaneously further amend such documents;

     NOW, THEREFORE,  for good and valuable consideration,  the receipt of which
is hereby acknowledged, the parties hereto agree as follows:

     The Original CRA, the First Amendment,  and the Second Amendment are hereby
amended and restated to read in their entirety as follows:

     1.  Definitions.   As  used  in  this  Agreement,  the
following terms have the following meanings:

         (a)  "Affiliated   Company"  means  any  entity,   including,   without
limitation,  a corporation,  a partnership or a limited liability company, which
is at least fifty  percent  (50%) owned or  controlled  by MEI or by MTI and any
entity which is at least fifty  percent  (50%) owned or  controlled  by any such
entity.

<PAGE>


         (b) "Components" means semiconductor memory devices, in die or packaged
form, limited to DRAMs,  SRAMs, VRAMs and/or derivatives which have failed MTI's
design and electrical specifications.  Notwithstanding the foregoing, Components
shall not  include  semiconductor  memory  devices  sold in wafer  form to those
entities  set forth on Exhibit A hereto,  as such  Exhibit may be modified  from
time to time by MTI in its sole  discretion by providing  written notice to MEI,
unless and until such devices are returned to MTI or its Affiliated Company.

         (c) "Extended Term" has the meaning assigned to it in Section 17.1.

         (d)  "JV  Companies"  means,  collectively,   TECH Semiconductor
Singapore  Pte.  Ltd. and KMT  Semiconductor Limited.

         (e)  "JV Components"  means all Components  produced by the JV
Companies  that are  obtained  by MTI or an  Affiliated Company of MTI from the
JV Companies.

         (f)  "Loss of Control"  has the  meaning  assigned to it in
Section 17.3.

         (g) "MEI Volume"  means,  at any given time and for each  separate part
type, the quantity of full specification  semiconductor memory devices purchased
by MEI during the previous fiscal work week.

         (h) "Minimum Throughputs" has the meaning assigned to it in Section 6.

         (i) "MTI's Average Sales Price" means, for each separate part type, the
average  of the prices  associated  with the lowest  priced  full  specification
semiconductor memory devices sold by MTI during the previous fiscal work week in
the amount equal to the MEI Volume. For example, if the MEI Volume for 1-meg x 4
devices were 100 and if, during the same fiscal work week, MTI sold 50 1-meg x 4
devices for $4.00 per device,  100 1-meg x 4 devices for $5.25 per device and 50
1-meg x 4 devices for $6.00 per device,  MTI's  Average Sale Price for 1-meg x 4
devices would be $4.63 [(50 x 4 ) + (50 x 5.25) / 100].

         (j)  "MTI  Components"  means  Components  produced  by  MTI  or an MTI
Affiliated  Company which neither MTI nor an Affiliated  Company of MTI obtained
from the JV Companies.

         (k) "MTI Option Period" has the meaning assigned to it in Section 12.

         (l)  "Sales  Agreement"  means  that  Exclusive  Sales   Representative
Agreement,  dated September 2, 1999, between Micron Semiconductor Products, Inc.
("MSP") and MEI under which MSP will serve as the  exclusive  representative  on
all sales of Components recovered by SpecTek.

<PAGE>


         (m) "Sale Notice" has the meaning assigned to it in Section 12 below.

         (n)  "SpecTek"  means that division of MEI whose  principal  activities
consist of the recovery, testing and sale of Components.

     2. Sales of Components.  MTI hereby grants to MEI the right to purchase all
the MTI Components and all the JV Components and to resell such  Components upon
the  terms  and  conditions  set  forth  herein  and  in  the  Sales  Agreement.
Accordingly,  during the Extended Term, MTI shall not sell or distribute the MTI
Components  or the JV  Components  to any  third  party  whether  in the form of
components,  modules or board level  products  without  first  offering such MTI
Components  and JV  Components  for sale to MEI  pursuant  to the terms  hereof.
Nothing  contained  herein shall  obligate MEI to purchase MTI Components and JV
Components made available for sale by MTI; provided that the restriction on sale
and distribution contained in the immediately preceding sentence shall not apply
to any  Components  that MEI elects  not to take  within  fourteen  (14) days of
notice that such Components are available.

     3.  Component  Recovery.  MTI hereby  grants to MEI the right to enter onto
MTI's  premises at all  reasonable  hours to recover  Components  from MTI. This
right shall include the right by MEI personnel  directly or indirectly,  with or
without MTI's assistance, (i) to retrieve Components from MTI's Probe area; (ii)
to select and assemble Components retrieved from MTI's Probe area for submission
to  MTI's  Assembly  area  for  packaging  (encapsulation)  by MTI  or in  MTI's
discretion  to an assembly  site of MTI's choice (MTI is under no  obligation to
assemble these Components for MEI); and (iii) to retrieve  Components from MTI's
Assembly  area and from  MTI's  Test  area.  For the  purpose  of  allowing  MEI
personnel  to select  and  assemble  Components  for  packaging  by MTI in MTI's
Assembly  area,  MTI agrees to make available to MEI at no cost a reasonable and
adequate amount of Assembly cleanroom floor space, but in no event less than 300
square  feet of  such  floor  space,  for use by MEI  personnel  and  equipment;
provided, however, that MTI may for reasonable business purposes deny MEI access
to MTI's  manufacturing  site, recover Components and provide such Components to
MEI  off-site  at MTI's  cost.  MTI shall bear all costs  associated  with MTI's
fabrication,  probe,  assembly and testing of Components that failed (as defined
in Section 1(b) above) in the Test area. MTI shall also bear all fabrication and
probe costs  relating to Components  MEI recovers from MTI's  Assembly and Probe
areas.  All  manufacturing  costs  associated  with the  assembly of  Components
recovered  by MEI from MTI's  Probe and  Assembly  areas  shall be borne by MEI.
Except as otherwise  provided above, the point of delivery shall be deemed to be
the  point  of  shipment  by MTI or  its  Affiliated  Company  at  MTI's  or its
Affiliated  Company's  manufacturing  site.  Components shall be shipped FOB the
point of delivery.  Title and risk of loss of Components  shall pass from MTI to
MEI at the FOB point. MEI shall (i) exercise its Component  recovery  operations
hereunder in a good and workmanlike  manner  consistent with generally  accepted
industry standards;  (ii) shall use good faith,  commercially reasonable efforts

<PAGE>


to reduce costs and maximize profits with respect to recovered  Components;  and
(iii)  shall  cooperate  with  MTI  and  the JV  Companies  to  recover  as many
Components as is commercially  reasonable.  MEI may  subcontract  manufacturing,
assembly,  testing,  or  module  assembly  services  only  at  costs  reasonably
consistent  with  then-current  market rates and only to the entities  listed on
Exhibit B hereto or such other entities approved in writing by MTI, such consent
not to be  unreasonably  withheld or  delayed.  If MTI fails to respond to MEI's
written request to use a new subcontractor within two (2) business days of MEI's
request therefor, such subcontractor shall be deemed approved by MTI.

     4. Components Produced by JV Companies. During the Extended Term, MTI shall
make commercially reasonable efforts to obtain all Components produced by the JV
Companies  to the  extent  that MTI is  contractually  entitled  to obtain  such
Components or is otherwise able, in its discretion,  to obtain such  Components.
The JV Components  shall be sold to MEI upon the terms and  conditions set forth
herein.

     5. Profit Sharing. In consideration for the recovery and purchase by MEI of
the Components from MTI, MEI hereby agrees to share with MTI a percentage of the
profits  derived from the sale of Components to third parties and MEI Affiliated
Companies and from  intracompany  sales or transfers to MEI's other divisions or
operations.  For the  purpose of  determining  profits on sales from  SpecTek to
MEI's Affiliated  Companies and  intracompany  sales or transfers to MEI's other
divisions  or  operations,  prices for such  Components  shall be based on MTI's
Average  Sales Price and  established  in  accordance  with the  transfer  price
schedule set forth in Schedule A attached hereto.  Except as otherwise  provided
below,  during  the  Extended  Term,  the  parties'  respective  profit  sharing
percentages  with respect to (a) JV Components  and (b) MTI  Components  will be
negotiated on a quarterly basis;  provided that MEI's profit sharing  percentage
will not exceed fifty percent (50%) of pre-tax net income  realized upon sale of
such Components and will not be less than the following:

<TABLE>
<CAPTION>

<S>      <C>                      <C>
         DURING PERIOD            MINIMUM PERCENTAGES

         1. Q1 of Fiscal 2000     50% of pre-tax net income
         2. Q2 of Fiscal 2000     37.5% of pre-tax net income
         3. Q3 of Fiscal 2000     25% of pre-tax net income
         4. Q4 of Fiscal 2000     12.5% of pre-tax  net income
         5. Fiscal 2001           0% of pre-tax net income, unless otherwise
                                  agreed by MTI

</TABLE>


If MTI and MEI cannot agree on MEI's profit sharing  percentage for any quarter,
MTI can  unilaterally  set the profit  sharing  percentage  as long as it is not
lower than the minimum percentage specified above for the quarter in question.

Notwithstanding the foregoing,  if and during such period as the parties and the
JV Companies  agree to utilize a pricing  matrix  based on effective  yields and
worldwide  average sales price in order to establish  prices for JV  Components,
MEI shall be entitled to purchase  from MTI or its  Affiliated  Companies the JV
Components at the price established  pursuant to such pricing matrix.  MEI shall

<PAGE>

be invoiced by MTI or its designated  Affiliated  Company for such JV Components
and  shall  not be  required  to share  profits  with MTI on the sale of such JV
Components.  MTI  shall  be  responsible  to pay  the JV  Companies  for  the JV
Components  and shall be  entitled to receive any  applicable  pricing  discount
available to it under its agreements with the JV Companies.

     6. Minimum  Throughputs/Effect  on Profit  Sharing.  The minimum  quarterly
megabit  throughputs  of  MTI  Components  (the  "Minimum  Throughputs")  to  be
delivered by MTI (or a  designated  affiliate)  to SpecTek  through the Extended
Term shall be as set forth on Exhibit C hereto.  To the extent  that the Minimum
Throughputs are not achieved in any fiscal quarter because of the failure of MTI
to deliver  sufficient  MTI  Components,  MEI's profit sharing amount under this
Agreement  for such  quarter  will be  increased  by the  shortfall  in  Minimum
Throughput  multiplied by SpecTek's  worldwide average selling price during such
quarter  multiplied by MEI's profit sharing  percentage  applicable  during such
quarter.  The immediately  preceding  sentence shall not apply if the failure of
MTI to  deliver  the  Minimum  Throughput  results  from  Acts of God,  strikes,
embargoes, acts of civil or military authorities, shortages in transportation or
other events or factors  beyond the  reasonable  control of MTI,  whether or not
similar to the  foregoing.  Nothing in this  Section 6 shall in any way limit or
reduce  MTI's  obligation  to  deliver  to MEI all MTI  Components  which  it is
otherwise required to deliver under this Agreement.

     7. Payment of Profit Sharing  Amount.  Unless  otherwise  provided  herein,
MTI's  share of pre-tax  net income  realized  from sales to third  parties  and
intracompany  sales or transfers of  Components  shall be paid by MEI to MTI net
forty-five (45) days after the end of each MEI fiscal month.

     8. Inspection of Records.  MEI shall keep full,  clear and accurate records
with  respect to  SpecTek's  costs and its  calculation  of  pre-tax  net income
hereunder.  MTI shall keep full,  clear and accurate records with respect to its
supply of  Components  to MEI  hereunder.  Subject to the prior  execution  of a
nondisclosure  agreement  satisfactory  to the  party  whose  records  are to be
inspected, each party's records relating to its respective performance hereunder
shall be open at all  reasonable  times during the term of this Agreement to the
inspection  of a mutually  agreeable  third  party.  Neither  party hereto shall
unreasonably withhold from the other information necessary to confirm compliance
with the terms of this  Agreement,  including  but not  limited  to  information
pertaining to  intellectual  property  rights and  agreements  pertaining to the
Components. In the event a party requests an inspection as provided herein, such
party shall bear all costs and expenses associated with such inspection,  unless
such inspection  reveals  noncompliance  with the terms of this Agreement by the
other party, in which case the noncomplying  party shall bear all such costs and
expenses.

     9.  Intellectual  Property  Rights.  Each party hereby  grants to the other
party during the Extended Term the right to use and make available as reasonably
<PAGE>


requested the intellectual  property of the other,  including but not limited to
patents, patent applications,  software programs, and copyrighted materials, but
only so far as such  intellectual  property is necessary for the utilizing party
to identify,  recover and sell the Components.  In addition to bearing all costs
of development and manufacture of Components, MTI shall bear sole responsibility
for,  and shall  promptly  pay when due,  all royalty  obligations  arising from
patent license  agreements entered into by MTI, and associated with sales of the
Components  to and by MEI. MTI hereby  agrees to  indemnify  MEI for any damages
incurred  in the event of  nonpayment  by MTI of any such  royalty  obligations,
provided that such  indemnification  shall not extend to damages incurred as the
result of  nonpayment  of  royalties  arising  from a bona fide  dispute  by MTI
regarding the terms or extent of such obligations.  Royalty  obligations paid by
MTI associated  with sales of the  Components  shall be treated as costs for the
purpose of the computation of pre-tax net income referred to in Section 5 above.

     10.  Additional  Equipment for Component  Recovery  Operations.  During the
Extended  Term,  MTI will take  commercially  reasonable  efforts  to provide to
SpecTek  such  additional  equipment  as is  reasonably  appropriate  for MEI to
perform its Component recovery operations,  subject to the unanimous approval of
the  Capital  Committee  (as  defined  hereinafter).  Subject to such  unanimous
approval,  MTI shall use commercially  reasonable efforts to make available such
equipment by  purchasing  it and leasing it to SpecTek at a rental rate equal to
the  depreciation  on the  equipment in question.  The Capital  Committee  shall
consist  of  one  representative   designated  by  MEI  and  one  representative
designated by MTI. Nothing in this Section 10 shall prohibit MEI from purchasing
additional equipment for SpecTek, provided MTI shall not be required to purchase
or assume any obligations with respect to any such equipment.

     11.  Option to  Purchase/Sell  SpecTek  Assets  and  Business.  During  the
Extended  Term,  MTI will  have an  option  to  require  MEI to sell all  assets
primarily used in the SpecTek  business  (excluding  cash) to MTI for a purchase
price  equal to net book  value  less  liabilities  and  obligations  reasonably
incurred in the  operation of SpecTek's  business.  As a part of such sale,  MTI
will assume  SpecTek's  liabilities and obligations  reasonably  incurred in the
operation of SpecTek's business and this Agreement shall terminate.  This option
shall be exercisable  commencing on the earlier to occur of (a) the first day of
the first fiscal quarter of MTI's fiscal year 2001 or (b) upon the occurrence of
a Loss of Control (as defined in Section 17) and shall  continue  throughout the
remainder of the Extended Term. The transaction shall be structured in such form
as the parties shall  reasonably  agree. MEI shall have an option to require MTI
to purchase  all  SpecTek  assets and  business  upon the terms set forth in the
first two (2)  sentences of this  Section 11 which  option shall be  exercisable
commencing on the earlier to occur of (a) the first day of the second quarter of
MTI's  fiscal  year 2000,  or (b) upon the  occurrence  of a Loss of Control and
shall continue throughout the remainder of the Extended Term.

     12. No Transfer of Necessary  SpecTek Assets.  MEI shall not sell,  assign,
transfer,  pledge or in any other manner dispose of any assets primarily used in
<PAGE>


the SpecTek business without first giving written notice to MTI of such proposed
transaction (the "Sale Notice").  Notwithstanding  the foregoing,  MEI may sell,
contribute or otherwise  transfer  such assets to an Affiliated  Company that is
100% owned or controlled by MEI, provided that such Affiliated Company agrees in
writing  to be bound by the terms and  conditions  of this  Agreement.  The Sale
Notice must contain the exact name of the proposed  purchaser  and the terms and
conditions  of the  proposed  sale.  MTI shall have the  option to acquire  such
assets by paying to MEI the purchase price  proposed in the Sale Notice.  If MTI
does not exercise such option within  forty-five  (45) days after its receipt of
the Sale Notice (the "MTI Option Period"), MEI shall have the right to sell such
assets to the stated  purchaser,  only at the price and in  accordance  with the
terms and  conditions  stated in the Sale  Notice  which sale must be  completed
within  forty-five  (45) days of expiration of the MTI Option Period.  Except as
otherwise provided herein, this Agreement and any lease arrangement or agreement
with  respect to equipment  purchased  for SpecTek by MTI pursuant to Section 10
above shall be  nontransferable  and  nonassignable  and shall be deemed to have
terminated  immediately  prior to MEI's  entering  into an  agreement  to sell a
majority of its SpecTek's assets to a third party.

     13.  Confidentiality.  Each party  acknowledges that it will have access to
certain  information and materials  concerning the business,  plans,  customers,
technology,  and products of the other  pertaining to the subject matter of this
Agreement that are  confidential  and of  substantial  value to the other party.
Each  party  agrees  that it will not at any  time  disclose  such  confidential
information to any third party.

     14. No Warranty. MTI MAKES NO WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE
COMPONENTS,   INCLUDING,   BUT  NOT  LIMITED  TO,  ANY  IMPLIED   WARRANTIES  OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR  PURPOSE,  OR QUALITY, OR OTHERWISE.
MTI DOES NOT MAKE TO MEI OR ANY CUSTOMER OF MEI, AND HEREBY EXPRESSLY DISCLAIMS,
ANY OTHER REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE COMPONENTS.
ALL COMPONENTS ARE SOLD "AS IS" AND "WITH ALL FAULTS."

     15.  Limitation of Liability.  Except as otherwise  provided herein, in the
event of termination by either party in accordance with any of the provisions of
this  Agreement,  neither  party  shall be liable to the other  because  of such
termination,  for compensation,  reimbursement or damages on account of the loss
of prospective  profits or anticipated  sales, or on account of any expenditures
or commitments in connection with the business or goodwill of either party.

     16. Patent  Indemnity.  MTI  represents  and warrants that the delivery and
sale of Components  hereunder  will not infringe any patent,  trademark or other
intellectual  property rights of third parties. MTI shall indemnify and hold MEI
harmless  of and  from  any and all  losses,  including  loss of  costs,  claims
liabilities  and  expenses,  including  attorneys'  fees,  incurred  by MEI with
respect to any such infringement of any patent,  trademark or other intellectual
<PAGE>


property rights, provided that such indemnification shall not exceed that amount
equal to  MTI's  share of the net  profits  derived  from the sale by MEI of the
infringing products.  MEI shall have the right to offset against payments due to
MTI  hereunder  the  amount  of any  indemnification  by MTI to MEI  under  this
Section.

     17. Term and Termination.

         17.1 Term. The term of this  Agreement  shall commence on the Effective
Date and shall continue through, and shall expire on, the last day of the end of
MTI's fiscal year 2001 (the "Extended Term"),  subject to earlier termination in
accordance with the provisions of this Agreement.

         17.2 Termination by Mutual Agreement.  This Agreement may be terminated
at any time upon the mutual written agreement of the parties.

         17.3  Termination  by MTI. MTI shall have the option to terminate  this
Agreement  upon MTI's Loss of Control of MEI (as defined  below),  by  providing
written notice to MEI within ninety (90) days of such Loss of Control.

         For purposes of this  Section  17.3,  "Loss of Control"  shall mean the
earlier to occur of (a) the date on which MTI ceases to be the beneficial  owner
of at least fifty percent  (50%) of all MEI Equity  Interests or (b) the date on
which an unrelated  third party  acquires more than thirty  percent (30%) of all
MEI  Equity  Interests.  "Equity  Interests"  shall  mean  any and  all  shares,
interests,  rights  to  purchase  warrants,  options,  participations  or  other
equivalents  of, or interests in (however  designated)  corporate stock or other
equity  participations,  including  partnership  interests,  whether  general or
limited, including any preferred equity interests.

         17.4 Termination for Cause. In addition to any other remedies  provided
by this Agreement or available at law or in equity, subject to the terms of this
Section 17.4,  either party may terminate  this  Agreement in the event that the
other party has defaulted in any of its material obligations hereunder. Any such
termination will be effective only after: (a) the non-defaulting  party provides
written  notice to the defaulting  party  specifying in detail the nature of the
default,  (b) the default  continues  unremedied for a period of sixty (60) days
following the written notice, and (c) an arbitrator determines that a default of
a material  obligation has occurred and remains  unremedied  after expiration of
the sixty (60) day period. Any arbitration  pursuant to the foregoing clause (c)
shall  be  conducted  according  to  the  rules  of  the  American   Arbitration
Association  (the "AAA") and shall be held in Boise,  Idaho. A party  requesting
arbitration  shall give written demand to the other party and within thirty (30)
days after such demand the parties will attempt to agree on the  appointment  of
an arbitrator. If the parties are unable to agree on an arbitrator, the AAA upon
application  of either  party will  appoint an  arbitrator  with  experience  in
transactions  similar to those  contemplated in this  Agreement.  The arbitrator
will begin the arbitration hearing within thirty (30) days after appointment and
shall render his or her decision  within  thirty (30) days of the  conclusion of
the hearings.  If the arbitrator determines that a material default has occurred

<PAGE>

and has  remained  unremedied,  the  non-defaulting  party  may  terminate  this
Agreement  effective  upon ten (10) days prior written  notice to the defaulting
party.  In  the  event  of  termination  pursuant  to  this  Section  17.4,  the
non-defaulting  party may exercise the option  described in Section 11 by giving
written notice to the  defaulting  party of its election to exercise such option
within  thirty (30) days after the  effective  date of the  termination  of this
Agreement.

         17.5 Survival of Certain Terms.  The provisions of Sections 13, 14, 15,
16, 17 and 19 of this Agreement  shall remain in full force and effect after any
termination of the Agreement. With respect to Components delivered by MTI to MEI
for which  profits  have not yet been  realized  by MEI or paid to MTI,  all the
provisions  of this  Agreement  shall  remain in full force and effect after any
termination of this Agreement.

     18. Application to Subsidiaries.  The obligations of either party hereunder
shall be applicable to subsidiaries of each such party.  "Subsidiary" shall mean
any entity owned fifty percent (50%) or more by a party.

     19. General Provisions.

         19.1 Governing  Law. This Agreement  shall be governed by and construed
under the laws of the State of Idaho.  Except as provided in Section 17.4 above,
the federal and state  courts  within the State of Idaho shall have the sole and
exclusive jurisdiction to adjudicate any dispute arising out of this Agreement.

         19.2  Entire  Agreement.   This  Agreement   together  with  the  Sales
Agreement,  Exhibits A, B and C, which exhibits are  incorporated  herein,  sets
forth the entire  agreement  and  understanding  of the parties  relating to the
subject matter herein and merges all prior discussions  between them. Except for
changes to Exhibit A hereto,  no modification of or amendment to this Agreement,
nor any waiver of any rights under this Agreement,  shall be effective unless in
writing signed by authorized representatives of both parties.

         19.3 Notices.  Any notice required or permitted by this Agreement shall
be in writing and shall be sent by prepaid  registered or certified mail, return
receipt  requested,  addressed  to the other party at the  address  shown at the
beginning of this  Agreement or at such other  address for which such party give
notice hereunder.  Such notice shall be deemed to have been given three (3) days
after deposit in the mail.

         19.4 Force Majeure.  Nonperformance of either party shall be excused to
the extent  that  performance  is rendered  impossible  by strike,  fire,  flood
governmental  acts or orders or restrictions,  or any other reason where failure
to  perform  is beyond  the  control  and not  caused by the  negligence  of the
nonperforming party.

         19.5  Assignability  and Binding Effect.  The rights and obligations of
each party  hereunder may not be assigned or transferred  directly or indirectly
without the prior written consent of the other party, which consent shall not be

<PAGE>

unreasonably  withheld.  Provided,  however,  that  either  party may  assign or
transfer  all or any portion of its rights and  obligations  arising out of this
Agreement to one or more of its wholly-owned  Affiliated Companies provided such
Affiliated  Company  shall  agree in  advance  and in  writing  to the terms and
conditions of this Agreement. Change of ownership or control of MEI or MTI shall
not  constitute an assignment or transfer  under this Section 19.5. If MEI sells
or transfers all of its component recovery assets and business to a wholly-owned
Affiliated  Company,  MEI  shall  assign  or  transfer  all  of its  rights  and
obligations arising out of this Agreement to such Affiliated Company. Subject to
the foregoing,  this Agreement shall be binding upon and inure to the benefit of
the parties hereto,  their successors and permitted assigns.  19.6 Counterparts.
This Agreement may be executed in two or more counterparts,  each of which shall
be deemed an original and all of which together shall constitute one instrument.


MICRON TECHNOLOGY, INC.         MICRON ELECTRONICS, INC.


By: /s/  Steven R. Appleton     By:  /s/  Joel J. Kocher
   ----------------------------    ----------------------------

Title:  Chief Executive Officer Title: Chief Executive Officer

<TABLE>
<CAPTION>



                  Schedule A

<S>               <C>                <C>
MTI's Average     Transfer Price     Transfer Price
Sales Price       for Full           for Systems Grade
                  Specification      Parts
                  Parts
-------------------------------------------------------
0X                .975(X)            .8288(X)


Transfer Price    Transfer Parts
for Printer       for Audio Grade
Buffer Grade      Devices
Parts
------------------------------------
 .70(X)            .25(X)

</TABLE>

<PAGE>


                                    Exhibit A

                                 Wafer Customers



                            Kingpak Technology, Inc.









<PAGE>


                                    Exhibit B

                            Permitted Subcontractors




                  Austin Manufacturing Services
                  Bright Technology, Inc
                  Component Technologies, Inc.
                  ECSC
                  Eldorado Technical Service, Inc.
                  Levin International, Inc
                  MCMS
                  Memory Works, Inc.
                  Micron Systems Integration
                  Modules Technology
                  SMS Memory Module Assembly, Inc.
                  Tanisys, Inc
                  Technicom, Inc
                  Wescom Marketing, Inc.
                  Wintec Industries







<PAGE>



                                    Exhibit C

                        MTI Component Minimum Throughputs





                              385,000,000 Megabits

EXHIBIT 10.65
                                 EXCLUSIVE SALES
                            REPRESENTATIVE AGREEMENT

     This  Exclusive  Sales  Representative   Agreement  (this  "Agreement")  is
effective  as of  September  2,  1999  (the  "Effective  Date")  between  Micron
Electronics, Inc., a Minnesota corporation, by and through its SpecTek division,
with its principal place of business at 900 E. Karcher Road, Nampa,  Idaho 83687
("SpecTek") and Micron  Semiconductor  Products,  Inc., a corporation  organized
under the laws of Idaho, by and through its Crucial  Technology  division,  with
its principal  place of business at 8000 South Federal Way,  Boise,  Idaho 83716
("Crucial").

                                 R E C I T A L S
                                 ---------------

     A. SpecTek recovers  semiconductor  memory devices,  including the products
listed in Exhibit A  attached  hereto,  as it may be  amended  from time to time
("SpecTek Products").

     B. SpecTek and Crucial desire that Crucial act as the exclusive independent
sales  representative  for the  promotion  and sale of SpecTek  Products  in the
territory defined below under the terms and conditions set forth below.

     C. SpecTek and Micron Technology,  Inc. ("MTI"),  Crucial's parent company,
entered into a Component Recovery Agreement effective as of August 30, 1996, and
have  subsequently  entered  into the Amended and  Restated  Component  Recovery
Agreement (the "CRA") concurrently with entering into this Agreement.

     D. Defined  terms used herein  which are not defined  herein shall have the
meanings assigned to them in the CRA.

     NOW,  THEREFORE,  for  good  and  valuable  consideration,   including  the
obligations  entered into by each party in connection  with the CRA, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:

<PAGE>


     1.  Appointment as Exclusive Sales Representative of SpecTek.

         (a)  Appointment.  SpecTek appoints  Crucial,  and Crucial accepts such
appointment,   as  SpecTek's   exclusive   worldwide  (the  "Territory")   sales
representative for the purpose of performing all sales functions relating to the
sale of SpecTek Products,  including without limitation identifying  prospective
purchasers of, promoting the sale of, soliciting orders for,  approving customer
credit for, and accepting or rejecting orders for SpecTek Products.

         (b)   Exclusivity.   All  sales  of  SpecTek  Products  shall  be  made
exclusively by Crucial.

         (c)  Independent   Contractor.   Crucial's  relationship  with  SpecTek
established  under this  Agreement  will be that of an  independent  contractor.
Except as provided in Section 5(a) below,  neither  party has, by virtue of this
Agreement,  and  neither  party will  represent  that it has,  by virtue of this
Agreement,  any  authority  to bind the other  party,  to  assume or create  any
obligation, express or implied, to enter into any agreements regarding the other
party, or to make any warranties or representations on behalf of the other party
or in the other party's name.

     2. Obligations of Crucial.

         (a) Marketing Efforts. Crucial will use commercially reasonable efforts
to vigorously and  aggressively  promote and solicit orders for SpecTek Products
within those regions of the Territory in which Crucial has established marketing
networks.

         (b) Facilities and Personnel;  Costs.  Appropriate arrangements will be
made so that Crucial  will employ  approximately  five (5) of SpecTek's  current
sales  personnel.  Crucial  shall  provide and maintain a  sufficient  number of
technical and sales  personnel  having the  knowledge and training  necessary to
inform  customers  properly  concerning the features and capabilities of SpecTek
Products. Crucial shall be responsible for all costs associated with performance
of its obligations under this Agreement, including, but not limited to, costs of
Crucial facilities,  personnel and marketing. Crucial shall not be entitled to a
commission  for   performance   of  its   obligations   under  this   Agreement.
Notwithstanding  the  foregoing,  Crucial may charge  SpecTek  for  fully-loaded
employee  costs  incurred  by it to employ the sales  personnel  transferred  to
Crucial as provided above, together with reasonable sales and marketing expenses
incurred in connection with sales of SpecTek Products by such employees.

         (c) Customer-Related Responsibilities. Crucial will: (i) assist SpecTek
in locating  prospective  customers of SpecTek  Products  and provide  pertinent
information concerning SpecTek Products to prospective customers;  (ii) promptly
transmit to SpecTek  significant  customer  inquiries and  complaints;  (iii) on
SpecTek's behalf but subject to Section 5(a) below, negotiate prices for SpecTek
Products  reasonably  consistent with  then-current  market  conditions,  assist
customers in placing  orders for SpecTek  Products,  approve or reject  customer
credit requests,  accept or reject customer orders,  and promptly  transmit such
orders to SpecTek; and (iv) assist in expediting  deliveries of SpecTek Products
to customers.

<PAGE>


         (d) No  Competing  Products.  Crucial  will  not  sell,  recover  or
distribute Components, as defined in the CRA, except pursuant to the CRA and
under this Agreement.

         (e) Market  Conditions.  Crucial  will confer with SpecTek from time to
time at the request of SpecTek on matters relating to market  conditions,  sales
forecasting and product planning relating to SpecTek Products.

         (f) Export  Controls.  Crucial  acknowledges  that SpecTek Products are
restricted by the United States  government from export to certain countries and
agrees that it will not knowingly accept orders that would require the export or
re-export  of any SpecTek  Products in  violation  of any United  States  export
control laws; provided that SpecTek shall have in place customary and reasonable
safeguards to ensure that such laws are not violated.

         (g) Sales  Restrictions  of Non-MTI  Suppliers.  Solely with respect to
sales of SpecTek Products  purchased by SpecTek from suppliers other than MTI or
its  affiliates  ("Non-MTI  Suppliers")  Crucial  shall  comply  with (i)  sales
restrictions  imposed by such  Non-MTI  Suppliers  to the extent that Crucial is
notified in advance and in writing of such  restrictions,  and (ii) restrictions
imposed by any import  bonds or  requirements  in  connection  with such SpecTek
Products  to the extent  that  Crucial is  notified in advance and in writing of
such restrictions.

     3. SpecTek Obligations - Marketing and Technical Information.

         SpecTek,  at its own expense,  will provide  Crucial with marketing and
technical information concerning SpecTek Products, as well as samples,  catalogs
and other sales aids for the use of Crucial in amounts sufficient for Crucial to
perform its obligations hereunder. When SpecTek so requests, and upon expiration
or termination of this  Agreement,  Crucial will promptly  return such materials
then in its  possession  to  SpecTek in good and  usable  condition,  subject to
reasonable "wear and tear."

     4. Records and Reports.

         (a)  Forecasts.  Crucial and SpecTek  shall  cooperate in good faith to
prepare  forecasts of future sales in order to facilitate  SpecTek's  production
scheduling.  SpecTek shall diligently adhere to such forecasts in its production
of Products unless otherwise agreed between the parties.

         (b)  Notification.  Crucial will notify SpecTek in writing of any claim
or proceeding  directly involving SpecTek Products within ten (10) business days
after Crucial learns of such claim or proceeding.

     5. Orders, Terms of Sale or License and Billing.

         (a)  Order  Acceptance:  Credit  Indemnity.  Crucial  shall  have  full
authority to negotiate  prices  (provided  that such prices shall be  reasonably
consistent with then-current  market  conditions),  accept and reject orders and
<PAGE>


approve customer credit; provided that Crucial shall indemnify and hold harmless
SpecTek for its profit  sharing  percentage  under the CRA as applied to any bad
debt losses on sales of SpecTek Products in excess of the average bad debt level
(calculated  as a percentage  of total sales) for SpecTek  customers  during the
first three quarters of fiscal 1999, as set forth in Exhibit B.

         (b) Terms of Sale. All sales to customers  solicited by Crucial will be
according to the terms and conditions  established by SpecTek from time to time,
subject to Crucial's consent, which consent shall not be unreasonably withheld.

         (c) Payment.  Unless  otherwise  agreed,  all SpecTek Products shall be
billed by Crucial in the name of SpecTek or its designated affiliate directly to
the customer and Crucial shall act as SpecTek's  agent in connection  therewith.
All invoice payments are to be made directly to a SpecTek account agreed upon by
the  parties.  If any  payment is received  by Crucial in error,  Crucial  shall
immediately  ensure that an amount equal to such  payment is deposited  into the
agreed account.

     6. Proprietary Information.

         Each party shall  comply with the  provisions  of that  certain  Mutual
Confidentiality  Agreement  effective  as of June 24, 1996 among the parties and
their
affiliated companies.

     7. Indemnification.

         (a) Indemnification. Each party will indemnify the other party and hold
it harmless from any claims,  losses or damages,  including court costs and fees
of  attorneys  and  other  professionals,   for  personal  injury,  tangible  or
intangible  property  damage  or any  other  liability,  arising  from  (i)  the
negligence  of such  indemnifying  party,  its employees or agents in connection
with this  Agreement,  and (ii) any breach of any provision of this Agreement by
the indemnifying party.

         (b) Not Employees.  In all matters relating to this Agreement,  neither
Crucial  nor its  employees  or agents are or will act as  employees  of SpecTek
within the meaning or application of any federal or state unemployment insurance
laws, old age benefit laws,  social  security  laws,  workers'  compensation  or
industrial  accident  laws,  or under any other  laws or  regulations  which may
impute any  obligations  or  liability  to  SpecTek  by reason of an  employment
relationship.  Crucial will reimburse  SpecTek for and hold it harmless from any
liabilities or  obligations  imposed upon SpecTek by virtue of any such law with
respect to employees of Crucial in performance of this Agreement.

     8. Proprietary Rights.

         (a) Use During Agreement.  During the term of this Agreement Crucial is
authorized  by SpecTek to use the SpecTek  trademarks,  trade  names,  logos and
designations   currently  used  by  SpecTek  for  SpecTek   Products   ("SpecTek
Trademarks") in connection with Crucial's advertisement and promotion of SpecTek
Products.  Crucial's use of the SpecTek  trademarks  will be in accordance  with
<PAGE>


SpecTek's  written policies in effect from time to time and provided to Crucial,
including  but not  limited  to  trademark  usage  and  cooperative  advertising
policies.  Notwithstanding  any provision of this Agreement,  Crucial may market
and sell SpecTek Products under such other  trademarks,  trade names,  logos and
designations  that it may adopt from time to time and  SpecTek  shall  cooperate
with Crucial in  connection  therewith;  provided  that prior to utilizing  such
other  trademarks,  trade names,  logos and  designations  Crucial  shall obtain
SpecTek's prior written consent, such consent not to be unreasonably withheld or
delayed.  If SpecTek fails to respond to Crucial's  written  request to use such
trademark,  trade name,  logo or  designation  within two (2)  business  days of
Crucial's request therefor, such request shall be deemed approved by SpecTek.

         (b) Crucial Does Not Acquire Rights. During the term of this Agreement,
Crucial will not be required to pay any consideration for the use of the SpecTek
Trademarks, and nothing contained in this Agreement will give Crucial any right,
title or interest in any of them.  Subject to Section  8(e) below and unless MTI
acquires  the assets of SpecTek,  Crucial  acknowledges  that  SpecTek  owns and
retains all SpecTek  Trademarks,  and agrees that it will not at any time during
or after this Agreement  assert or claim any interest in or do anything that may
adversely affect the validity or enforceability of the SpecTek Trademarks.

         (c) No  Continuing  Rights.  Unless MTI acquires the assets of SpecTek,
upon expiration or termination of this Agreement, Crucial will immediately cease
all  display,  advertising  and  use of all  SpecTek  Trademarks  and  will  not
thereafter use, advertise or display any SpecTek Trademarks.

         (d) Obligation to Protect.  Crucial agrees to use reasonable efforts to
protect SpecTek's  proprietary  rights under SpecTek Trademarks and to cooperate
in  SpecTek's  efforts to protect such  proprietary  rights.  Crucial  agrees to
notify SpecTek of any known or suspected breach of SpecTek's  proprietary rights
under SpecTek Trademarks that comes to Crucial's attention. Crucial acknowledges
that  only  SpecTek  has  the  right  to  sue  for  infringements  of  SpecTek's
proprietary rights under SpecTek Trademarks.

         (e) Micron  Trademark.  This Section 8 shall not apply to any trademark
incorporating the word "Micron".

     9.   Purchase by Crucial of Unsold Recovered Components.

         Except as otherwise  provided in (1) and (2) below,  during the term of
this  Agreement,  Crucial or an  affiliate  of Crucial  designated  by it,  will
purchase from SpecTek recovered  Components (only products in module form, audio
RAM products, and sort/settle products unless otherwise agreed by Crucial) which
have been received into finished  goods on or before 5:00 p.m.  (MST) on the day
that is four (4) days prior to the close of each fiscal  quarter,  inclusive  of
the last day of such fiscal quarter (the "Inventory  Close Date") and which were
not sold and shipped during such fiscal quarter ("Unsold Recovered Components").
Crucial's  obligation  to purchase  Unsold  Recovered  Components  as of a given
Inventory Close Date shall be limited as follows:

<PAGE>


         (1) In the event (i) the number of Components  (in memory  density
equivalents)placed into finished goods inventory during the two (2) calendar
week period prior to the Inventory Close Date exceeds (ii) the average number of
Components placed into finished goods inventory  during the five (5) preceding
two (2) week periods,  then  Crucial  shall  not be  obligated  to  purchase the
number  of Components by which (i) exceeds (ii).

         (2) In the event (i) the  number  (in memory  density  equivalents)  of
Unsold Recovered  Components exceeds (ii) the highest number of Unsold Recovered
Components  for any of the  preceding  three (3) fiscal  quarters,  then Crucial
shall not be obligated to purchase the number of Components by which (i) exceeds
(ii).

         In the event Crucial does not purchase Unsold Recovered  Components due
to the  limitations  set forth in (1) or (2) above,  and such Components are not
otherwise  sold and  shipped  during the  following  quarter,  Crucial  shall be
obligated to purchase such  Components at the end of such  following  quarter in
accordance with the terms of this Section 9, including the limitations set forth
in (1) and (2) above.

         The  purchase  will  be  effective  as of the  last  day of the  fiscal
quarter.  The  purchase  price paid by  Crucial to SpecTek  will be equal to the
worldwide  average  sales price for  recovered  Components  of the same type and
quality as the Unsold Recovered  Components as of the last day of the applicable
fiscal  quarter and payment  shall be made by Crucial  within  fifteen (15) days
after   Crucial's   receipt  from   SpecTek  of  inventory   records  and  other
documentation,  in form satisfactory to Crucial,  verifying recovered Components
required to be purchased by Crucial hereunder.

         SpecTek's  profit sharing  percentage under the CRA with respect to any
recovered Components which are delivered into finished goods after the Inventory
Close Date but before the end of a fiscal  quarter,  shall be the profit sharing
percentage in effect under the CRA for the quarter in which the Components  were
delivered to finished  goods  regardless of when such  recovered  Components are
sold or purchased by Crucial.


     10.  [Intentionally Omitted]


     11. Duration and Termination of Agreement.

         (a) Term.  This Agreement is for a term coincident with the term of the
CRA  and  will  automatically  expire  or  terminate   simultaneously  with  the
expiration or termination of the term of the CRA. Notwithstanding the provisions
of this Section,  or any other provisions of this Agreement,  this Agreement may
be terminated at any time as set forth below.

         (b) Termination  for Cause. In addition to any other remedies  provided
by this  Agreement or available at law or in equity:  Either party may terminate
<PAGE>


this  Agreement  at any time in the event that the other party has  defaulted in
any of its  material  obligations  pursuant to this  Agreement  and such default
continues  unremedied for a period of thirty (30) days following  written notice
from the non-defaulting party; provided that if such default is of a nature that
it cannot  reasonably be cured within such thirty (30) day period the defaulting
party shall be allowed a reasonable  time to remedy such default,  not to exceed
ninety (90) days from the written notice.

         (c) Automatic  Termination.  This Agreement  terminates  automatically,
with no further act or action of either party,  if a receiver is appointed for a
party or its  property,  a party  makes an  assignment  for the  benefit  of its
creditors,  any  proceedings  are commenced by, for or against a party under any
bankruptcy,  insolvency  or  debtor's  relief  law,  a party  is  liquidated  or
dissolved or the assets of a party are nationalized.

         (d) Effect of Termination or Expiration. Upon termination or expiration
of this  Agreement:  (i) Unless MTI buys or has agreed to buy SpecTek's  assets,
Crucial will cease to use any SpecTek  Trademarks  and will return all materials
provided  by SpecTek  pursuant  to Section 3 of this  Agreement;  and (ii) for a
period of six (6) months after the date of termination  or  expiration,  upon at
least two (2) weeks prior written notice to Crucial, Crucial will make available
to SpecTek for  inspection  and  copying  all books and records of Crucial  that
pertain to Crucial's  performance of and  compliance  with its  obligations  and
representations under this Agreement.

         (e) No Damages  for  Termination  or  Expiration.  NEITHER  SPECTEK NOR
CRUCIAL NOR ANY OF THEIR  AFFILIATES  WILL BE LIABLE TO THE OTHER FOR DAMAGES OF
ANY KIND,  INCLUDING  INCIDENTAL  OR  CONSEQUENTIAL  DAMAGES,  ON ACCOUNT OF THE
TERMINATION OR EXPIRATION OF THIS AGREEMENT IN ACCORDANCE  WITH THIS SECTION 11.
CRUCIAL WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE ANY  COMPENSATION OR REPARATIONS
ON TERMINATION OR EXPIRATION OF THIS AGREEMENT UNDER THE LAW OF THE TERRITORY OR
OTHERWISE,  OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT.  Neither SpecTek
nor Crucial will be liable to the other on account of  termination or expiration
of this  Agreement  for  reimbursement  or  damages  for the  loss of  goodwill,
prospective  profits or anticipated  income,  or on account of any expenditures,
investments,  leases or commitments made by either SpecTek or Crucial or for any
other  reason  whatsoever  based  upon or  growing  out of such  termination  or
expiration.  Crucial  acknowledges  that (i) Crucial has no expectation  and has
received no  assurances  that any  investment by Crucial in the promotion of and
solicitation  of orders for SpecTek  Products  will be  recovered or recouped or
that  Crucial  will obtain any  anticipated  amount of profits by virtue of this
Agreement, and (ii) Crucial will not have or acquire by virtue of this Agreement
any vested,  proprietary or other right in the promotion of and  solicitation of
SpecTek Products or in any "goodwill" created by its efforts hereunder.

<PAGE>


         (f) Survival.  Each party's rights and obligations under Sections 1(c),
5(a),  6,  7,  8(b),  8(c),  11,  12,  and 13 of  this  Agreement  will  survive
termination or expiration of this Agreement.

     12. Limitation of Liability.

         IN NO EVENT WILL  EITHER  PARTY BE LIABLE  FOR ANY LOST  PROFITS OR ANY
FORM OF SPECIAL, INCIDENTAL,  INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY
KIND,  FROM  ALL  CAUSES  OF  ACTION  OF ANY  KIND,  INCLUDING  TORT  (INCLUDING
NEGLIGENCE),  CONTRACT  AND  BREACH  OF  WARRANTY,  EVEN IF SUCH  PARTY HAS BEEN
INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.

     13. General.

         (a) Assignment.  This Agreement is not assignable by either party,  and
neither  party may  delegate  its duties  hereunder  without  the prior  written
consent of the other party, provided, however, that either party may assign this
Agreement to a subsidiary or entity  controlling,  controlled by or under common
control with such party. Any attempted assignment in violation of this provision
shall be void.  The  provisions  hereof  will be  binding  upon and inure to the
benefit of the parties, their successors and permitted assigns.

         (b) Notices.  All notices and demands  hereunder will be in writing and
will be served by personal  service,  facsimile  transmission or certified mail,
return  receipt  requested,  at the address of the receiving  party set forth in
this Agreement (or at such different  address as may be designated by such party
by written notice to the other party). All notices or demands by mail will be by
certified or  registered  mail,  return  receipt  requested,  and will be deemed
complete ten (10) days after mailing.

         (c) Section Headings and Language Interpretation.  The section headings
contained  herein are for reference only and will not be considered  substantive
parts of this Agreement. The use of the singular or plural form will include the
other form,  and the use of masculine,  feminine or neuter  genders will include
the other genders.

         (d) Governing Law and Choice of Forum. This Agreement shall be governed
by and  construed  under the laws of the State of Idaho.  The  federal and state
courts within the State of Idaho shall have the sole and exclusive  jurisdiction
to adjudicate any dispute arising out of this Agreement.

         (e) Force Majeure.  Neither SpecTek nor Crucial will be responsible for
any  failure to perform  due to  unforeseen  circumstances  or to causes  beyond
SpecTek's or Crucial's reasonable control,  including but not limited to acts of
God, war, riot, embargoes, acts of civil or military authorities,  fire, floods,
accidents,  strikes, or shortages of transportation,  facilities,  fuel, energy,
labor or materials.

<PAGE>


         (f) Equitable  Relief.  Each party  acknowledges that any breach of its
obligations  under this  Agreement  with  respect to the  proprietary  rights or
confidential   information  of  the  other  party  may  cause  the  other  party
irreparable injury for which there are inadequate remedies at law, and therefore
the  other  party  may  be  entitled  to  receive  in  any  court  of  competent
jurisdiction  injunctive,  preliminary or other equitable  relief in addition to
damages, including court costs and fees of attorneys and other professionals, to
remedy any actual or  threatened  violations  of its rights with respect to such
matters.

         (g)  Waiver.  The  waiver by either  party of any  default by the other
party will not waive subsequent  defaults by a defaulting party of the same or a
different kind.

         (h)  Attorneys'  Fees. In the event any litigation is brought by either
party in connection with this Agreement,  the substantially  prevailing party in
such  litigation will be entitled to recover from the other party all the costs,
attorneys' fees and other expenses incurred by such party in the litigation, and
need not bring a suit to final judgment to substantially prevail

         (i) Compliance with Law. Each party will obtain and maintain such legal
permits and licenses as are required by any governmental unit or agency in order
to  fulfill  its  obligations  hereunder  and will  comply  with all  applicable
international,  national,  state,  regional  and  local  laws  and  regulations,
including  United States export laws, in performing its duties  hereunder and in
any of its dealings with respect to SpecTek Products.

         (j) Mutual Covenants. Each party will: (i) avoid deceptive,  misleading
or unethical  practices that are or might be detrimental to the other party, the
other  party's  products  or the  public;  (ii)  make  no  false  or  misleading
representations  with regard to the other party or the other  party's  products;
(iii) not publish or employ,  or cooperate in the  publication or employment of,
any misleading or deceptive  advertising material with regard to the other party
or its products;  and (iv) make no representations,  warranties or guarantees to
customers  or to the trade  with  respect  to the  specifications,  features  or
capabilities  of the  other  party's  products  that are  inconsistent  with the
literature distributed by such party.

         (k) Severability.  In the event any of the provisions of this Agreement
is  held  by  a  court  or  other  tribunal  of  competent  jurisdiction  to  be
unenforceable,  the other provisions of this Agreement will remain in full force
and effect.

         (l) Entire  Agreement.  This Agreement,  together with its Exhibits and
the CRA,  constitutes the entire agreement between the parties pertaining to the
subject matter  hereof,  and supersedes in their entirety any and all written or
oral  agreements  previously  existing  between the parties with respect to such
subject matter. If there is any conflict between any provision of this Agreement
and  a  provision  of  the  CRA,  the  CRA  provision  shall  control.   Crucial
acknowledges  that it is not  entering  into this  Agreement on the basis of any
representations  not  expressly  contained  herein.  Any  modifications  of this
Agreement must be in writing and signed by both parties hereto.
<PAGE>


         (m)  Execution of Agreement.

              (i) Effectiveness. This Agreement will become effective only after
it has been  signed by both  parties  and shall be  deemed  effective  as of the
Effective Date.

              (ii)Counterparts.  This  Agreement  may be executed in two or more
counterparts, each of which when so executed will be deemed an original, and all
of which together will constitute one and the same instrument.


     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the Effective Date.

MICRON ELECTRONICS, INC.       MICRON SEMICONDUCTOR PRODUCTS,
by and through its             INC., by and through its
SPECTEK division               CRUCIAL TECHNOLOGY division

By:    /s/  Joel J. Kocher     By:     /s/  Donald A. Baldwin
      ------------------------       ------------------------
Name:  Joel J. Kocher          Name:  Donald A. Baldwin
      ------------------------       ------------------------
Title: President               Title: President
      ------------------------       ------------------------
Date:  September 3, 1999       Date:  September 2, 1999
      ------------------------       ------------------------


<PAGE>


                                    EXHIBIT A


                                SPECTEK PRODUCTS

     All semiconductor memory products now or hereafter recovered, manufactured,
assembled, tested or sold by SpecTek.















<PAGE>


                                    EXHIBIT B

                      SPECTEK BAD DEBT FOR Q1-Q3 FISCAL 1999
                      --------------------------------------


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