Contact:    Brian Bender                  John Hough
            Chief Financial Officer       The Rockey Company
            Egghead, Inc.                 509-891-4858 (August 14 only)
            509-891-4858                  206-728-1100 or jhough@rockey-
                                          seattle.com

                                                           FOR IMMEDIATE RELEASE

                         EGGHEAD SHAREHOLDERS APPROVE MERGER
         COMPANY AIMS FOR LEADERSHIP IN "OFF-PRICE" COMPUTER PRODUCTS MARKET


SPOKANE (Wash.), August 14, 1997 -- Shareholders of Egghead, Inc. (Nasdaq: EGGS)
today approved a merger with closely held Surplus Software, Inc. (dba Surplus
Direct) in a move that will significantly expand the company's business
opportunities.  The merger became effective today following approval by the
shareholders of both companies.

George Orban, Egghead chairman and CEO, said, "This merger is a pivotal step in
the company's restructuring.  We believe that the combination creates synergies
in management and strategic business options and that it will open new
opportunities for Internet commerce, marketing, retail distribution and product
procurement.

"We believe that the combined strength of the two companies gives Egghead an
opportunity to become a leader again. The fastest growing channels of
distribution for PC hardware and software are the superstore channel, the mail
order channel and the Internet.  This merger with Surplus Direct, a young
company which markets close-out and surplus merchandise via the Internet and
catalogs, gives us better opportunities to participate in each of the three
channels, and become a key player in the fast-growing `off price' segment."

Jonathan Brodeur, president of Surplus Direct said, "Together we will combine
our strengths and resources to create a stronger business model.  We're
confident this merger will enhance our online and catalog services, bringing a
wider variety of shopping options to our combined customer base which includes 5
million Egghead Cue-TM- cardholders."

Egghead, with revenues of $360.7 million for fiscal year 1997, has a nationwide
consumer franchise as a reseller of personal computer hardware and software
through 86 retail stores, 1-800 Egghead and an Internet site (www.egghead.com). 
In November 1996, the company became one of the first major computer products
retailers to deliver software programs over the Internet directly to customers'
computers.

Surplus Direct is a direct marketer of previous-version computer hardware and
software. It operates an Internet commerce site (www.surplusdirect.com), a
catalog business and an Internet auction site (www.surplusauction.com).

Since its inception in 1992, Surplus Direct's sales have grown from $974,000 to
$59 million.  Surplus Direct believes, based on data from P.C. Meter, a New York
research firm that tracks Internet usage, that its web site is the most
frequented Internet shopping site for computer related items in the contiguous
United States.

Prior to the merger, the companies were joint venture partners in Egghead
Computer Surplus, a warehouse retail store in Portland, Oregon.





The merger was approved by 93 percent of the Egghead shares voted and 100
percent of Surplus Direct's shares voted.  The transaction, which involved the
issuance of 5.6 million Egghead common shares, is valued at $36.3 million based
on the average daily closing price of Egghead shares over the past 30 days.  The
price includes repayment by Egghead of approximately $6.0 million of Surplus
Direct's debt.  Surplus Direct CEO Greg Boudreau and President Jon Brodeur join
the Egghead board of directors today.  Surplus Direct shareholders will own
approximately 24 percent of the outstanding shares of Egghead, Inc. if all
Surplus Direct stock options to be assumed by Egghead are exercised.

Note:  This news release contains forward-looking statements that involve risks
and uncertainties, including risks related to the highly competitive nature of
the computer products retailing industry, the seasonality and quarterly
fluctuation of financial results, the early stage of the company's new store
format, the dependence of the company's sales on the purchase and use of
personal computers and software, and the risks detailed in the company's SEC
reports, including the report on Form 10-K for the year ended March 29, 1997. 
Actual results may differ materially.


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