JENKON INTERNATIONAL INC
DEFS14A, 2000-05-08
COMPUTER PROGRAMMING SERVICES
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                            SCHEDULE 14A INFORMATION

                  Proxy Statement Pursuant to Section 14(a) of
            the Securities Exchange Act of 1934 (Amendment No.    )

<TABLE>
      <S>        <C>
      Filed by the Registrant /X/
      Filed by a Party other than the Registrant / /

      Check the appropriate box:
      / /        Preliminary Proxy Statement
      / /        Confidential, for Use of the Commission Only (as permitted
                 by Rule 14a-6(e)(2))
      /X/        Definitive Proxy Statement
      / /        Definitive Additional Materials
      / /        Soliciting Material Pursuant to Section240.14a-12

                     JENKON INTERNATIONAL, INC.
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                 (Name of Registrant as Specified In Its Charter)

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           (Name of Person(s) Filing Proxy Statement, if other than the
                                    Registrant)
</TABLE>

Payment of Filing Fee (Check the appropriate box):

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<S>        <C>  <C>
/X/        No fee required.
/ /        Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
           and 0-11.
           (1)  Title of each class of securities to which transaction
                applies:
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           (2)  Aggregate number of securities to which transaction
                applies:
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           (3)  Per unit price or other underlying value of transaction
                computed pursuant to Exchange Act Rule 0-11 (set forth the
                amount on which the filing fee is calculated and state how
                it was determined):
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           (4)  Proposed maximum aggregate value of transaction:
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           (5)  Total fee paid:
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/ /        Fee paid previously with preliminary materials.
/ /        Check box if any part of the fee is offset as provided by
           Exchange Act Rule 0-11(a)(2) and identify the filing for which
           the offsetting fee was paid previously. Identify the previous
           filing by registration statement number, or the Form or
           Schedule and the date of its filing.
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                           JENKON INTERNATIONAL, INC.
                        7600 N.E. 41ST STREET, SUITE 350
                          VANCOUVER, WASHINGTON 98662
                                 (360) 256-4400

                            ------------------------

                   NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON MAY 31, 2000

                            ------------------------


To the Stockholders of JENKON INTERNATIONAL, INC.:



    You are cordially invited to attend a special meeting of stockholders of
Jenkon International, Inc., a Delaware corporation ("Jenkon" or the "Company"),
which will be held at the Embassy Suites Hotel, Eric Hauser Room, 319 S.W. Pine
Street, Portland, Oregon 97204, at 10:00 a.m., Pacific Daylight Time, on
Wednesday, May 31, 2000, to consider and act upon the following matters, all as
more fully described in the accompanying Proxy Statement which is incorporated
herein by this reference:


    1.  To consider and vote upon a single, unified proposal described in the
       accompanying Proxy Statement, which provides for:


       (a) Approval of the conversion of 1,208,000 outstanding shares of the
           Company's Series B Preferred Stock into an aggregate of 12,080,000
           shares of common stock of the Company ("Common Stock") in accordance
           with the terms of the Certificate of Designation, Preferences and
           Rights of Series B Preferred Stock of the Company (the "Series B
           Certificate," a copy of which is attached as Appendix A to the
           accompanying Proxy Statement);



       (b) Approval of the conversion of 1,208,000 outstanding shares of the
           Company's Series C Preferred Stock into an aggregate of 12,080,000
           shares of Common Stock in accordance with the terms of the
           Certificate of Designation, Preferences and Rights of Series C
           Preferred Stock of the Company (the "Series C Certificate," a copy of
           which is attached as Appendix B to the accompanying Proxy Statement);
           and



       (c) Approval of (i) the conversion of Convertible Promissory Notes in an
           aggregate principal amount of $4.5 million (the "Convertible Notes,"
           the form of which is included as Appendix C to the accompanying Proxy
           Statement) into an aggregate of 4,500,000 shares of Common Stock, and
           (ii) the conversion of all or substantially all accrued but unpaid
           interest on the Convertible Notes into shares of Common Stock at a
           conversion rate equal to the last reported sale price of the
           Company's Common Stock on the Nasdaq SmallCap Market on May 30, 2000;


    2.  To consider and vote upon a proposal to approve an amendment to the
       Company's Certificate of Incorporation (the form of which is included as
       Appendix D to the accompanying Proxy Statement), pursuant to which
       (i) the authorized number of shares of Common Stock of the Company will
       be increased from 20,000,000 to 50,000,000 shares, and (ii) the name of
       the Company will be changed from Jenkon International, Inc. to Multimedia
       K.I.D., Inc.;


    3.  To consider and vote upon a proposal, described in the accompanying
       Proxy Statement, which provides for approval of the sale of all of the
       outstanding capital stock of Summit V, Inc. ("Summit V"), the Company's
       direct sales software subsidiary, to JIA, Inc., a corporation affiliated
       with Daniel Jensen, a founder, significant stockholder, and former
       director of the Company, and Robert Cavitt, a former director of the
       Company and current officer of

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       Summit V, pursuant to the terms of a Stock Purchase Agreement, dated as
       of April 6, 2000 (a copy of which is included as Appendix E to the
       accompanying Proxy Statement); and


    4.  To transact such other business as may properly come before the meeting
       or any adjournment thereof.

    Stockholders of record of the Company's Common Stock at the close of
business on May 5, 2000, the record date fixed by the Board of Directors, are
entitled to notice of, and to vote at, the meeting.

    THOSE WHO CANNOT ATTEND ARE URGED TO SIGN, DATE, AND OTHERWISE COMPLETE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. ANY STOCKHOLDER
GIVING A PROXY HAS THE RIGHT TO REVOKE IT ANY TIME BEFORE IT IS VOTED.

                                          BY ORDER OF THE BOARD OF DIRECTORS

                                          Cliff DeGroot, SECRETARY


Vancouver, Washington
May 8, 2000

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                           JENKON INTERNATIONAL, INC.
                        7600 N.E. 41ST STREET, SUITE 350
                          VANCOUVER, WASHINGTON 98662
                                 (360) 256-4400

                            ------------------------

                                PROXY STATEMENT

                             ---------------------


                   APPROXIMATE DATE PROXY MATERIAL FIRST SENT
                         TO STOCKHOLDERS: MAY 10, 2000


                            ------------------------

                                  INTRODUCTION


    This Proxy Statement (the "Proxy Statement") is being furnished to
stockholders of Jenkon International, Inc., a Delaware corporation ("Jenkon" or
the "Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company (the "Board") from holders of record of the Company's
outstanding shares of Company common stock as of the close of business on
May 5, 2000 (the "Record Date") for use at the Special Meeting of Stockholders
of the Company (the "Meeting") to be held at the Embassy Suites Hotel, Eric
Hauser Room, 319 S.W. Pine Street, Portland, Oregon 97204, at 10:00 a.m.,
Pacific Daylight Time, on Wednesday, May 31, 2000, and at any adjournment or
postponement thereof. This Proxy Statement is first being mailed to the
Company's stockholders on approximately May 10, 2000.


MATTERS FOR CONSIDERATION AT THE MEETING

    At the Meeting, holders of shares of Company common stock will be asked to
consider and vote upon the following matters:

        1.  A single, unified proposal (the "Conversion Proposal") described in
    this Proxy Statement, providing for:


           (a) Approval of the conversion of 1,208,000 outstanding shares of the
       Company's Series B Preferred Stock into an aggregate of 12,080,000 shares
       of common stock of the Company ("Common Stock") in accordance with the
       terms of the Certificate of Designation, Preferences and Rights of
       Series B Preferred Stock of the Company (the "Series B Certificate," a
       copy of which is included as Appendix A hereto);



           (b) Approval of the conversion of 1,208,000 outstanding shares of the
       Company's Series C Preferred Stock into an aggregate of 12,080,000 shares
       of Common Stock in accordance with the terms of the Certificate of
       Designation, Preferences and Rights of Series C Preferred Stock of the
       Company (the "Series C Certificate," a copy of which is included as
       Appendix B hereto); and



           (c) Approval of (i) the conversion of Convertible Promissory Notes in
       an aggregate principal amount of $4.5 million (the "Convertible Notes,"
       the form of which is included as Appendix C hereto) into an aggregate of
       4,500,000 shares of Common Stock, and (ii) the conversion of all or
       substantially all accrued but unpaid interest on the Convertible Notes
       into shares of Common Stock at a conversion price equal to the last
       reported sale price of the Company's Common Stock on the Nasdaq SmallCap
       Market on May 30, 2000;


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        2.  To consider and vote upon a proposal (the "Charter Amendment
    Proposal") to approve an amendment to the Company's Certificate of
    Incorporation (the form of which is included as Appendix D hereto), pursuant
    to which (i) the authorized number of shares of Common Stock of the Company
    will be increased from 20,000,000 to 50,000,000 shares, and (ii) the name of
    the Company will be changed from Jenkon International, Inc. to Multimedia
    K.I.D., Inc.;


        3.  To consider and vote upon a proposal (the "Sale Proposal"),
    described in this Proxy Statement, which provides for approval of the sale
    of all of the outstanding capital stock of Summit V, Inc. ("Summit V"), the
    Company's direct sales software subsidiary, to JIA, Inc., a corporation
    affiliated with Daniel Jensen, a founder, significant stockholder, and
    former director of the Company, and Robert Cavitt, a former director of the
    Company and current officer of Summit V, pursuant to the terms of a Stock
    Purchase Agreement (the "Purchase Agreement"), dated as of April 6, 2000 (a
    copy of which is included as Appendix E hereto); and


        4.  To transact such other business as may properly come before the
    meeting or any adjournment thereof.

    THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR EACH OF THE CONVERSION PROPOSAL, THE CHARTER AMENDMENT
PROPOSAL AND THE SALE PROPOSAL.

VOTING RIGHTS AND PROXY INFORMATION

    Only holders of record of shares of Common Stock as of the close of business
on the Record Date will be entitled to notice of and to vote at the Meeting or
any adjournment or postponement thereof. Holders of shares of Common Stock are
entitled to one vote per share on any matter which may properly come before the
Meeting.

    The presence, either in person or by properly executed proxy, of the holders
of a majority of the then outstanding shares of Common Stock is necessary to
constitute a quorum at the Meeting and to permit action to be taken by the
stockholders at such Meeting.

    The Conversion Proposal requires the affirmative vote of a majority of the
shares of Common Stock present in person or represented by proxy at the Meeting.
Thus, stockholders who are not present, in person or by proxy, at the Meeting
will not affect the outcome of the vote on the Conversion Proposal but will
affect whether a quorum is present at the Meeting. Abstentions as to the
Conversion Proposal will have the same effect as votes against such proposal.

    Each of the Charter Amendment Proposal and the Sale Proposal requires the
affirmative vote of the holders of at least a majority of the outstanding shares
of Common Stock. Thus, abstentions as to the Charter Amendment Proposal and the
Sale Proposal will have the same effect as votes against such proposal.

    Shares represented by proxies that reflect abstentions or "broker non-votes"
(i.e., shares held by a broker or nominee which are represented at the Meeting,
but with respect to which such broker or nominee is not empowered to vote on a
particular proposal) will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum. Broker non-votes,
however, will be treated as not voted for purposes of determining approval of
the Conversion Proposal and will not be counted as votes for or against such
proposal.


    Proxies duly executed and returned by stockholders and received by the
Company before the Meeting will be voted "FOR" the Conversion Proposal, "FOR"
the Charter Amendment Proposal and "FOR" the Sale Proposal, unless a contrary
choice is specified in the proxy. Where a specification is indicated as provided
in the proxy, the shares represented by the proxy will be voted and cast in
accordance with the specification made. As to other matters, if any, to be voted
upon, the persons


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designated as proxies will take such actions as they, in their discretion, may
deem advisable. The persons named as proxies were selected by the Board and each
of them is an officer and/or director of the Company.


    In the event that a quorum is not present at the time the Meeting is
convened, or if for any other reason the Company believes that additional time
should be allowed for the solicitation of proxies, the Company may adjourn the
Meeting with or without a vote of the stockholders. If the Company proposes to
adjourn the Meeting by a vote of the stockholders, the persons named in the
enclosed form of proxy will vote all shares of Common Stock for which they have
voting authority in favor of such adjournment.

    Your execution of the enclosed proxy will not affect your right as a
stockholder to attend the Meeting and to vote in person. Any stockholder giving
a proxy has the right to revoke it at any time by either (a) filing with the
Secretary of the Company at or before the Meeting a written notice of revocation
bearing a later date than the proxy, (b) duly executing a subsequent proxy
relating to the same shares of the Common Stock and delivering it to the
Secretary of the Company at or before the Meeting, or (c) attending the Meeting
and voting in person (although attendance at the Meeting will not in and of
itself constitute a revocation of a proxy).

    A form of proxy is being furnished herewith by the Company to each
stockholder, and, in each case, is solicited on behalf of the Board for use at
the Meeting. The Company will bear the cost of the solicitation. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodian nominees and fiduciaries to supply proxy material to the beneficial
owners of the Common Stock of whom they have knowledge, and will reimburse them
for their expenses in so doing; and certain directors, officers and other
employees of the Company, not specifically employed for the purpose, may solicit
proxies, without additional remuneration therefor, by personal interview, mail,
telephone, facsimile, or telegraph. In addition, the Company has retained
Corporate Investor Communications, Inc., 111 Commerce Road, Carlstadt, New
Jersey 07092 to assist in the solicitation for a fee of not more than $10,000.

NO APPRAISAL RIGHTS

    Stockholders of the Company will not be entitled to appraisal or dissenter's
rights under Delaware law in connection with the Conversion Proposal, the
Charter Amendment Proposal or the Sale Proposal.

ATTENDANCE OF ACCOUNTANTS

    A representative of BDO Seidman LLP, the Company's principal accountants
(the "Auditor"), is expected to be present at the Meeting. The Auditor will have
the opportunity to make a statement with respect to the proposals contained in
this Proxy Statement if the Auditor desires to do so. The Auditor is expected to
be available to respond to appropriate stockholder questions, if any.

                            THE CONVERSION PROPOSAL

SUMMARY OF THE CONVERSION PROPOSAL

    The Conversion Proposal is a single, unified proposal consisting of
(i) approval of the conversion of the outstanding shares of Series B Preferred
Stock and Series C Preferred Stock (collectively, the "Preferred Stock") into
shares of Common Stock, and (ii) approval of the conversion of the outstanding
principal and interest on the Convertible Notes into shares of Common Stock,
each as

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described in more detail below. In order to effect the foregoing, the following
resolution will be offered by the Board of Directors at the Meeting:


       "RESOLVED, That the holders of the Company's outstanding Common Stock
       hereby authorize the conversion into Common Stock of (i) the issued and
       outstanding shares of Series B Preferred Stock and Series C Preferred
       Stock in accordance with the terms of the Certificate of Designation,
       Preferences and Rights of Series B Preferred Stock and Series C Preferred
       Stock, respectively, and (ii) principal and accrued but unpaid interest
       on Convertible Promissory Notes in the original principal amount of
       $4.5 million pursuant to the terms of such Notes, as amended."


BACKGROUND; DESCRIPTION OF PREFERRED STOCK AND CONVERTIBLE NOTES

    On December 16, 1999, the Company entered into a Stock Exchange Agreement
and Plan of Reorganization (the "Exchange Agreement") with Multimedia
K.I.D.--Intelligence in Education Ltd., ("MMKid"), an Israeli-based interactive
educational company, and the stockholders of MMKid pursuant to which the Company
acquired all of the outstanding capital stock of MMKid in exchange for the
following consideration: (i) 840,000 shares of Common Stock, (ii) 1,208,000
shares of Company Series B Preferred Stock, and (iii) 1,208,000 shares of
Company Series C Preferred Stock.

    DESCRIPTION OF PREFERRED STOCK.  The Company currently has 1,208,000
authorized shares of Series B Preferred Stock, all of which have been issued and
are currently outstanding, and 1,208,000 authorized shares of Series C Preferred
Stock, all of which have been issued and are currently outstanding. Except as
otherwise required by applicable law, the Preferred Stock currently has no
voting rights but shall be convertible into Common Stock as described in "The
Conversion Proposal--Conversion of Preferred Stock" below.


    Holders of the Preferred Stock are not entitled to any dividends. So long as
any shares of Preferred Stock are outstanding, the Corporation shall not,
without the written consent of a majority of the outstanding shares of Series B
Preferred Stock and Series C Preferred Stock, (i) declare or pay any dividend
on, (ii) make any distributions to the holders of, or (iii) repurchase, redeem
or make provision for the purchase or redemption (whether directly or through a
subsidiary) of, any class or series of stock of the Corporation ranking junior
or equal to the Preferred Stock.



    Holders of the Preferred Stock are entitled to a liquidation preference
equal to $10.00 per share, subject to customary adjustments. In the event that
the assets available for distribution upon a liquidation shall be insufficient
to pay the holders of the Preferred Stock the full amounts to which they are
entitled, the holders of the Preferred Stock shall share ratably in any
distribution. After payment of the liquidation preference, the holders of the
Common Stock shall be entitled to receive ratably any remaining assets or funds
of the Company remaining for distribution.



    DESCRIPTION OF CONVERTIBLE NOTES.  As a condition to closing the acquisition
of MMKid, the Company completed a private placement of $4.5 million of
Convertible Notes, the proceeds of which were allocated among Summit V and
MMKid. The Convertible Notes are not secured by any assets of the Company, bear
interest at an annual rate of 12% from and after January 1, 2000 and, unless
converted into Common Stock, were initially due and payable in full on or before
April 1, 2000, which date was later extended by all or substantially all of the
holders of the Convertible Notes to June 1, 2000. Accrued interest on the
Convertible Notes was payable in cash on February 1, 2000 and March 1, 2000,
with any remaining accrued but unpaid interest payable in additional shares of
Common Stock at maturity. See "The Conversion Proposal--Conversion of
Convertible Notes" below.



    REGISTRATION RIGHTS.  Pursuant to the terms of the Exchange Agreement and
the terms by which the Convertible Notes were sold, the Company has agreed to
file (at least 15 days prior to the date of the Meeting), at its own expense, a
registration statement covering (i) all of the shares issuable upon


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conversion of the Convertible Notes, and (ii) at least 8,750,000 of the shares
of Common Stock issuable upon conversion of the Preferred Stock.



    In addition, the Company has granted the holders of the Preferred Stock
piggy back and demand registration rights with respect to any shares of Common
Stock not registered as described above. The demand registration rights shall be
exercisable for a period of two years commencing June 13, 2000 (180 days
following the acquisition of MMKid). Shares registered pursuant to the exercise
of demand or piggy back registration rights (other than the 8,750,000 shares
described above) shall be subject to a one year lock-up restriction which may be
waived, in whole or in part, by a majority of disinterested directors and which
shall terminate (i) at any time after the closing sales price of the Company's
Common Stock exceeds $6.00 per share for 20 consecutive trading days, or
(ii) at any time after the Company completes a public offering of Common Stock
for cash (other than upon exercise of outstanding options or warrants). The
registration rights of the Preferred Stockholders shall terminate with respect
to any shares that may be legally sold by the holder in the public market
without the volume limitations imposed by Rule 144 of the Securities Act of
1933, as amended.



    NASDAQ LISTING REQUIREMENTS.  The Company currently has sufficient
authorized but unissued shares of Common Stock to effect the conversion of the
Convertible Notes and a portion of the Preferred Stock without obtaining
approval of the stockholders. However, the listing requirements of the Nasdaq
Stock Market, Inc. with respect to Nasdaq SmallCap Market companies such as the
Company require a listed company to obtain stockholder approval prior to any
issuance of its common stock which equals or exceeds 20% of its outstanding
common stock (or 20% or more of the Company's outstanding voting power). Since
the Company issued approximately 19% of its Common Stock in connection with the
acquisition of MMKid, the conversion of the Convertible Notes and/or the
Preferred Stock into Common Stock would cause the Company to exceed the 20%
threshold imposed by Nasdaq. Failure to comply with the Nasdaq listing
requirements could result in the delisting of the Company's Common Stock from
trading on the Nasdaq SmallCap Market. See "The Conversion Proposal--Additional
Considerations."



CONVERSION OF PREFERRED STOCK


    Pursuant to the terms of the Series B Certificate and the Series C
Certificate, respectively, upon approval of conversion by holders of a majority
of the Common Stock represented and entitled to vote at a meeting of
stockholders, (i) the Series B Preferred Stock will automatically convert into
12,080,000 shares of Common Stock, and (ii) the Series C Preferred Stock will
have voting rights on an as-converted basis and will be convertible into an
aggregate of 12,080,000 shares of Common Stock at such time as the revenues of
MMKid (as a stand alone entity) shall exceed $1,700,000 for any 12 month period
(including months prior to December 16, 1999). The $1.7 million 12 month revenue
target has been satisfied by MMKid.

    Accordingly, in the event stockholder approval of the Conversion Proposal is
obtained, all outstanding shares of the Preferred Stock will automatically be
converted into an aggregate of 24,160,000 shares of Common Stock. The shares
issued upon conversion of the Preferred Stock would represent approximately 71%
of the issued and outstanding shares of Common Stock (assuming the simultaneous
conversion of the Convertible Notes into Common Stock). See "Conversion of
Convertible Notes."

    Pursuant to the terms of the Series B Certificate and the Series C
Certificate, in the event that stockholder approval of the grant of conversion
rights to the Series B and Series C Preferred Stock is not obtained on or prior
to March 31, 2000 or such later date as the holders of a majority of the
respective series shall agree (the "Stockholder Approval Date"), the shares of
Series B and Series C Preferred Stock, respectively, will be redeemable at the
option of the holders thereof at a redemption price equal to $10 per share (the
"Redemption Price"). In March 2000, the Company obtained the

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written consent of a majority of the holders of the Series B Preferred Stock and
Series C Preferred Stock to an extension of the Stockholder Approval Date to
May 31, 2000.


    The Redemption Price increases at a rate of 15% per annum from and after
April 1, 2000. As of the date of the Meeting, the Redemption Price per share
will be $10.25 per share for an aggregate Redemption Price for all shares of
Preferred Stock of $24,764,000. In the event that the Conversion Proposal is not
approved and some or all of the holders of Preferred Stock exercise their
redemption rights, it is highly unlikely that the Company will have or be able
to raise sufficient funds to meet its redemption obligations.



CONVERSION OF CONVERTIBLE NOTES



    Pursuant to the terms of the Convertible Notes, the Board of Directors of
the Corporation agreed to call a meeting in which the stockholders would be
asked to approve the issuance of shares of Common Stock upon conversion of the
Convertible Notes. Section 2 of the Convertible Notes provides that, upon
stockholder approval of the issuance of shares upon conversion, the Convertible
Notes would be automatically converted into shares of Common Stock at a
conversion price of $1.00 per share. In addition, holders of all or
substantially all of the Convertible Notes have agreed that any accrued but
unpaid interest on the Notes will convert into shares of Common Stock at a
conversion rate equal to the last reported sale price of the Company's common
stock on the Nasdaq SmallCap Market on May 30, 2000. On the date of the Meeting,
there will be approximately $138,000 of accrued but unpaid interest on the
Convertible Notes that will be converted into shares of Common Stock.



    Accordingly, in the event stockholder approval of the Conversion Proposal is
obtained, all or substantially all of the Convertible Notes will be converted
into outstanding shares of the Preferred Stock which will automatically be
converted into an aggregate of 4,500,000 shares of Common Stock plus such
additional number of shares equal to the amount of accrued and outstanding
interest (approximately $138,000) divided by the last reported sale price of the
Company's Common Stock on May 30, 2000. Upon conversion, former holders of
Convertible Notes would own approximately 13% of the issued and outstanding
shares of Common Stock (assuming the simultaneous conversion of the Preferred
Stock into Common Stock).


    In the event that approval of the Conversion Proposal is not obtained on or
prior to May 31, 2000, the Convertible Notes will be due and payable in full
upon written notice of default by the respective holders thereof. In the event
that the Company receives notice of default from holders of a significant
portion of the Convertible Notes, it is unlikely that the Company will have or
be able to raise sufficient funds to meet its payment obligations under the
Convertible Notes.


ADDITIONAL CONSIDERATIONS



    THE COMPANY MAY NOT BE ABLE TO MAINTAIN ITS NASDAQ SMALLCAP LISTING.  The
Nasdaq Stock Market, Inc. has indicated that the change of control of the
Company that will result from the approval of the Conversion Proposal will cause
Nasdaq to review the Company's listing on the Nasdaq SmallCap Market as if it
were an new applicant. The standards for new listing include requirements that
(i) the Company have net tangible assets of at least $4 million or a market
capitalization of at least $50 million, and (ii) the minimum bid price of the
Company's Common Stock be at least $4. The Company must also meet other,
quantitative and non-quantitative listing requirements in order to meet the
Nasdaq listing standards. There can be no assurances that the Company will have
sufficient net tangible assets or market capitalization, that its stock price
will be high enough on date of the Meeting, or that it will be able to otherwise
satisfy the requirements for listing on the Nasdaq SmallCap Market. If the
Company fails to maintain its Nasdaq SmallCap Market listing or is deemed not to
qualify for continued listing upon Nasdaq review, the market value of the
Company's Common Stock likely would


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decline and stockholders likely would find it more difficult to dispose of, or
to obtain accurate quotations as to the market value of, the Common Stock.



    FUTURE SALES OF RESTRICTED SHARES COULD ADVERSELY AFFECT PRICE OF COMMON
STOCK AND LIMIT THE COMPANY'S ABILITY TO COMPLETE ADDITIONAL FINANCING.  Sales
of a substantial number of shares of Common Stock into the public market in the
future could materially adversely affect the prevailing market price for the
Company's Common Stock. Upon approval of the Conversion Proposal and the Charter
Amendment Proposal, the Company will issue approximately 29,000,000 shares of
Common Stock, a portion of which will be registered for resale and a portion of
which will become eligible for resale pursuant to Rule 144 in December 2000 (one
year following the date of issuance). Such a large "over-hang" of stock eligible
for sale in the public market may have the effect of (i) depressing the price of
the Company's Common Stock, and (ii) making it difficult or impossible for the
Company to obtain additional debt or equity financing.


    STOCKHOLDERS WILL EXPERIENCE SIGNIFICANT DILUTION UPON CONVERSION OF
PREFERRED STOCK AND CONVERTIBLE PROMISSORY NOTES.  Upon approval of the
Conversion Proposal and the Charter Amendment Proposal, the Company will issue
approximately 29,000,000 additional shares of its Common Stock. The holders of
Common Stock will experience significant dilution both in terms of ownership
percentage and in terms of net tangible book value per share as a result of such
conversion.


INTERESTS OF CERTAIN PERSONS IN CONVERSION PROPOSAL; CHANGE OF CONTROL


    In connection with the acquisition of MMKid by the Company pursuant to the
terms of the Exchange Agreement, the former stockholders of MMKid acquired an
aggregate of 840,000 shares of Common Stock as well as the outstanding shares of
Preferred Stock. The Preferred Stock does not currently have any voting rights.
However, approval of the Conversion Proposal (and the Charter Amendment
Proposal) will result in the former MMKid stockholders acquiring a substantial
majority (approximately 73%) of the outstanding Common Stock of the Company. As
a result, upon approval of the Conversion Proposal (and the Charter Amendment
Proposal), the former MMKid stockholders will have sufficient voting power to
control the Board of Directors of the Company as well as any matters for which a
vote of stockholders is required under applicable law.

    Pessie Goldenberg, a director of the Company and an executive officer of
MMKid, currently owns approximately 234,418 shares of Common Stock and 267,349
shares of Series B Preferred Stock and 267,349 shares of Series C Preferred
Stock. As a result, in the event the stockholders approve the Conversion
Proposal and the Charter Amendment Proposal, Mr. Goldenberg will own 5,581,398
shares of Common Stock, representing approximately 16% of the Company's issued
and outstanding Common Stock.

EFFECT OF THE CONVERSION PROPOSAL ON STOCK OPTIONS


    Upon approval of the Conversion Proposal, pursuant to the terms of those
stock options granted under the Company's Stock Option Plan, each outstanding
option will become fully vested. As of April 30, 2000, there were 443,382
outstanding options having exercise prices ranging from $0.01 to $3.83 and a
weighted average exercise price of $1.91 per share. See "The Sale
Proposal--Effect of the Sale Proposal on Stock Options."


VOTE REQUIRED

    The affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the Meeting is required to approve the
Conversion Proposal. However, because the Company does not currently have a
sufficient number of authorized shares of Common Stock in order to effect all of
the conversions contemplated by the Conversion Proposal, approval of the Charter

                                       7
<PAGE>
Amendment Proposal (described elsewhere in this Proxy Statement) will be
required in order to fully implement the Conversion Proposal.

    In the event that approval of the Conversion Proposal is obtained but
approval of the Charter Amendment Proposal is not, the Board may elect to
convert such portion of the Preferred Stock and Convertible Notes as the Company
has sufficient authorized shares to convert. In such event, assuming that the
holders of the Preferred Stock do not exercise their redemption rights, the
Company may attempt to obtain approval of the Charter Amendment Proposal in a
separate meeting of stockholders after giving effect to the partial conversion.

BOARD RECOMMENDATION


    The Board of Directors unanimously believes that approval of the Conversion
Proposal is in the best interests of the Company for a variety of reasons. Such
belief is based in part upon the adverse consequences to the Company that will
result from a failure to approve such conversion. In the event that stockholder
approval of the Conversion Proposal is not obtained, (i) it is unlikely that the
Company will have sufficient capital resources in order to repay its obligations
under the Convertible Notes, and (ii) it is highly unlikely that the Company
would have sufficient capital resources to redeem shares of Preferred Stock upon
any exercise of redemption rights by the holders thereof. Accordingly, if the
Conversion Proposal is not approved, the Company will be required to immediately
locate an alternate source of financing to meet its obligations under the
Convertible Notes and any redemption obligations it may have with respect to the
Preferred Stock and/or to fund its operations if available operating funds are
used to meet the Company's obligations to the holders of the Convertible Notes
or Preferred Stock. There can be no assurance that the Company will be able to
obtain such financing at all or on terms that are favorable to the Company. The
Company's failure to obtain sufficient financing within the requisite time frame
will likely result in the delisting of the Company's securities from trading on
the Nasdaq SmallCap Market and could make it impossible for the Company to
continue operations and/or force the Company to seek protection under federal
bankruptcy law.


    In addition, the Board believes that the cancellation of the Convertible
Notes and conversion of the Convertible Notes and Preferred Stock into Common
Stock that will result from approval of the Conversion Proposal (and the Charter
Amendment Proposal) is in the best interests of the Company since the
elimination of indebtedness and the potential Preferred Stock redemption
obligations increases the likelihood that the Company will be able to attract
additional equity or debt financing should additional capital be required in the
future. However, even if the Conversion Proposal (and the Charter Amendment
Proposal) is approved, there can be no assurance that additional sources of
capital will be available to the Company on favorable terms, or at all, if and
when needed.

    FOR THE REASONS DESCRIBED ABOVE AND ELSEWHERE IN THIS PROXY STATEMENT, THE
BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE CONVERSION PROPOSAL.
SHARES REPRESENTED BY THE PROXIES WILL BE VOTED FOR THE PROPOSAL UNLESS A VOTE
AGAINST THE PROPOSAL OR AN ABSTENTION IS SPECIFICALLY INDICATED ON THE PROXY
CARD.

                                       8
<PAGE>
                         THE CHARTER AMENDMENT PROPOSAL

SUMMARY


    The Board of Directors of the Company has unanimously adopted, and believes
that it would be in the best interest of the Company and its stockholders if the
stockholders approve, the Charter Amendment Proposal, which would (i) amend the
Certificate of Incorporation of the Company to increase the number of authorized
shares of Common Stock of the Company from 20,000,000 shares to 50,000,000
shares, and (ii) change the Company's name to Multimedia K.I.D., Inc. The full
text of the proposed amendments to the Company's Certificate of Incorporation is
set forth in Appendix D attached to this Proxy Statement.


BACKGROUND

    Pursuant to the terms of the Exchange Agreement, the Company has agreed to
amend its Certificate of Incorporation to increase the number of authorized
shares of Common Stock in order to facilitate the conversion of the Convertible
Notes and Preferred Stock into Common Stock as described above under "The
Conversion Proposal."

    As noted in "The Conversion Proposal" above, the Company does not currently
have a sufficient number of authorized shares to permit the conversion of all
outstanding Series B and Series C Preferred Stock and the Convertible Notes into
Common Stock in accordance with their respective terms. The Amended Certificate
will allow for the issuance of Common Stock in connection with the conversion of
outstanding Series B and Series C Preferred Stock and Convertible Notes to
Common Stock.

    Additionally, because the Company (i) has elected to sell its direct sales
software operations that have operated under or been associated with the name
Jenkon International, Inc. (see "The Sale Proposal" below), and (ii) the Company
intends to focus its future resources and energies into developing and expanding
the operations of MMKid, the Board of Directors has proposed to amend the
Company's Certificate of Incorporation to change the name of the Company from
"Jenkon International, Inc." to "Multimedia K.I.D., Inc."

    If the Charter Amendment Proposal is approved, the increased number of
authorized shares of Common Stock resulting from the adoption of the amendment
to the Certificate of Incorporation of the Company will be available for
issuance of shares upon conversion of the Preferred Stock and Convertible Notes,
exercise of outstanding options and warrants, and for issuances from time to
time for such purposes and consideration as the Board may approve, and no
further vote of the stockholders of the Company will be required for such
issuances, except as provided under Delaware law, the rules of any national
securities exchange on which the Common Stock is listed at such time or the
rules of the Nasdaq Stock Market, Inc., if applicable.

INTERESTS OF CERTAIN PERSONS IN THE CHARTER AMENDMENT PROPOSAL


    See "The Conversion Proposal--Interests of Certain Persons in the Conversion
Proposal" above for a discussion of the interest of the former stockholders of
MMKid, including Pessie Goldenberg, a director of the Company and executive
officer of MMKid, in the Conversion Proposal. The identified interests of such
persons in the Conversion Proposal are identical to their respective interests
in the Charter Amendment Proposal.


VOTE REQUIRED

    The Charter Amendment Proposal requires the affirmative vote of the holders
of at least a majority of the outstanding shares of Common Stock. Stockholder
approval of the Charter Amendment Proposal is also a necessary condition to
implementation of the Conversion Proposal. Because the

                                       9
<PAGE>
Company does not currently have a sufficient number of authorized shares of
Common Stock in order to effect the conversions contemplated by the Conversion
Proposal, approval of the Charter Amendment Proposal will be required in order
to fully implement the Conversion Proposal. However, in the event that approval
of the Conversion Proposal is obtained but approval of the Charter Amendment
Proposal is not, the Board may elect to convert such portion of the Preferred
Stock and Convertible Notes as the Company has sufficient authorized shares to
convert. In such event, assuming that the holders of the Preferred Stock do not
exercise their redemption rights, the Company may attempt to obtain approval of
the Charter Amendment Proposal in a separate meeting of stockholders after
giving effect to the partial conversion.

BOARD RECOMMENDATION

    The Board of Directors unanimously believes that approval of the Charter
Amendment Proposal is in the best interests of the Company. Because of the need
for approval of the Charter Amendment Proposal in order to completely effect the
conversions contemplated by the Conversion Proposal, the reasons for the Board's
recommendation with respect to the Charter Amendment Proposal are substantially
the same as those set forth above under "The Conversion Proposal--Board
Recommendation." In addition, the Board believes that the availability of
additional shares of Common Stock for issuance without the delay and expense of
obtaining the approval of stockholders at a special meeting will afford the
Company greater flexibility in acting upon proposed transactions or financings
involving the issuance or sale of Common Stock or securities convertible into
Common Stock in the future. Finally, the Company believes that the proposed name
change contemplated by the Charter Amendment Proposal is in the best interests
of the Company since it is more descriptive of the Company's business and
strategy to focus on the development of MMKid's business and its decision to
discontinue (whether through the sale of Summit V or otherwise) its direct sales
software business.

    FOR THE REASONS DESCRIBED ABOVE AND ELSEWHERE IN THIS PROXY STATEMENT, THE
BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE CHARTER AMENDMENT
PROPOSAL. SHARES REPRESENTED BY THE PROXIES WILL BE VOTED FOR THE PROPOSAL
UNLESS A VOTE AGAINST THE PROPOSAL OR AN ABSTENTION IS SPECIFICALLY INDICATED ON
THE PROXY CARD.

                                       10
<PAGE>
                               THE SALE PROPOSAL

SUMMARY


    The Board has unanimously adopted, and believes that it would be in the best
interest of the Company and its stockholders if the stockholders approve, the
Sale Proposal, which would authorize the Company to sell its direct sales
software operations through the sale of its subsidiary Summit V to JIA, Inc., a
corporation affiliated with Daniel Jensen, a founder, a significant stockholder,
and former director of the Company, and Robert Cavitt, a former director of the
Company and current officer of Summit V, pursuant to the terms of the Purchase
Agreement.


    In order to effect the Sale Proposal, the following resolution will be
offered by the Board at the Meeting:

       "RESOLVED, that the holders of the Company's outstanding Common Stock
       hereby ratify and approve the sale of the Company's Summit V, Inc.
       subsidiary to JIA, Inc., an affiliate of Dan Jensen and Robert Cavitt, in
       accordance with the terms of the Stock Purchase Agreement, dated as of
       April 6, 2000, by and among JIA, Inc., the Company, Summit V, Inc., and
       Jenkon International, Inc., a Washington corporation and wholly-owned
       subsidiary of the Company."


    The complete terms of the proposed sale of Summit V are contained in the
Stock Purchase Agreement (the "Purchase Agreement") attached to this Proxy
Statement as Exhibit E. This summary of the Sale Proposal is qualified in its
entirety by the terms of the Purchase Agreement.


BACKGROUND


    On December 16, 1999, the Company acquired all of the outstanding capital
stock of MMKid. See "The Conversion Proposal--Background." MMKid is an Israeli
corporation engaged in the design, manufacture and sale of numerous innovative
software and activity systems that together create virtual interactive learning
centers for children and adults. MMKid has over 100 software titles covering
content as diverse as science, nature, math, music, language, art, technology,
transportation, as well as everyday environments such as the home and workplace.
The educational systems are designed to promote creativity, imagination,
listening, reading, writing, cognitive and motor skills through a full range of
media which touches on different senses and emotions. In 1998, MMKid was awarded
the Computer Software Award from the Office of the Prime Minister of Israel for
the category of "Special Innovation and Invention in Education."



    Prior to the acquisition of MMKid, the Company was engaged in the
development, marketing and sale of software solutions for the direct sales
industry. The Company's direct sales operations were handled through Summit V, a
wholly-owned operating subsidiary of the Company. In February 2000, in light of
Summit V's continuing losses and ongoing development costs, the Company's
limited capital resources, and the Board's belief that the Company and its
stockholders would be better served by focusing on the development of the
business of MMKid, the Company decided to discontinue its direct sales software
operations. The Board determined that the original intention to have two
separate operating companies, Summit V and MMKid, was not ultimately in the best
interests of the Company's stockholders due to the confusing picture presented
by the two companies' respective business models and the difficulty of
integrating management of the two separate businesses. At such time, the Board
also decided that the discontinuation or sale of Summit V's business would free
the remaining business from the significant product development expenses of the
Summit V operations, thereby enabling the management of MMKid to focus its
limited capital resources on the development and marketing of its educational
products through MMKid.



    In response to the Board's decision to discontinue Summit V's direct sales
software operations, a management group led by Dan Jensen, a founder of the
Company, and Robert Cavitt entered into


                                       11
<PAGE>

discussions with the Board regarding the possible purchase of Summit V. At the
time, Mr. Cavitt was the President and a director of the Company and Mr. Jensen
was a director and significant stockholder.



    On March 15, 2000, the Company entered into a preliminary Stock Purchase
Agreement to sell Summit V to JIA, Inc., a Washington corporation ("JIA"), a
corporation affiliated with and controlled by Robert Cavitt and Daniel Jensen.
At such time, the parties also entered into a Management Agreement whereby the
Company and Summit V appointed JIA to supervise and direct the day-to-day
operations of Summit V in the period between execution of the purchase agreement
and the closing of the transactions contemplated thereby. See "Terms of
Agreements--Management Agreement." At such time, Robert Cavitt and Daniel Jensen
resigned from their respective positions as officers and/or directors of the
Company, with Cavitt remaining as President of Summit V during the transition
period between execution of the Purchase Agreement and the Closing, as such
terms are defined below.



    Immediately following the execution of the March 15, 2000 draft of the Stock
Purchase Agreement, it became clear that certain material terms of the proposed
transaction had not been adequately addressed. Accordingly, the March 15, 2000
Stock Purchase Agreement was canceled and the parties entered into additional
discussions regarding the terms of the proposed sale. On April 6, 2000, the
parties entered into a new definitive Stock Purchase Agreement, described in
greater detail below, a copy of which is attached to this Proxy Statement as
Appendix E.


    The sale of Summit V is subject to many contingencies, including stockholder
approval and other events that are outside the Company's control. There can be
no assurance that the sale of Summit V will be consummated. In the event that
the Sale Proposal is not approved and the sale of Summit V is not completed, the
Company's financial condition would be materially and adversely affected.

TERMS OF AGREEMENTS

    The following summarizes the material terms of the proposed sale of Summit
V. The following discussion is qualified in its entirety by the copies of the
Purchase Agreement and Management Agreement filed as appendices to this Proxy
Statement.

    STOCK PURCHASE AGREEMENT.  The Company has entered into a Stock Purchase
Agreement dated April 6, 2000 (the "Purchase Agreement"), by and among JIA,
Summit V, the Company and Jenkon International, Inc., a Washington corporation
and wholly-owned subsidiary of the Company.


    Pursuant to the terms of the Purchase Agreement, JIA agreed to purchase 100%
of the outstanding shares of Summit V (the "Shares"), for an aggregate purchase
price of $1,175,000 (the "Purchase Price"). The Purchase Price is payable as
follows: (i) $500,000 in cash upon the closing of the sale of Summit V stock
(the "Closing"), and (ii) $675,000 by delivery of a Promissory Note of JIA
bearing interest at the rate of 10% per annum payable quarterly in arrears (the
"Note"), with all principal and interest due and payable one year from the date
of Closing (the "Closing Date"), which Note shall be secured by a pledge of
75,000 shares of Company Common Stock held by stockholders or affiliates of JIA.


    The Closing shall occur two days following stockholder approval of the sale,
or such other time following Company stockholder approval as the parties shall
agree. The Purchase Agreement contains limited but customary representations,
warranties and covenants of each of the parties, as well as customary conditions
precedent to Closing. As such, any party's failure to comply with a condition
precedent to Closing may jeopardize or prevent the Closing's occurrence, even if
stockholder approval of the Sale Proposal has been obtained.


    For example, the Closing may not be consummated if any of the
representations and warranties made by any party in the Purchase Agreement are
inaccurate as of the date of the Purchase Agreement and as of the Closing Date
or if a party fails to perform all of its obligations as set forth in the
Purchase Agreement. The Purchase Agreement requires deliveries of numerous
customary documents,


                                       12
<PAGE>

including legal opinions, required third party consents, approvals and
certificates. Additional conditions to Closing include: (i) the execution of a
two-year noncompetition agreement by David Edwards stating that he will not
compete with Summit V or JIA; (ii) the execution of releases by certain current
and former officers and/or directors releasing JIA, Summit V, the Company and
their respective affiliates from and against any liability for loans,
compensation and other claims relating to or arising prior to the Closing Date,
other than claims arising out of the Purchase Agreement; (iii) consummation of
the transactions contemplated by the Purchase Agreement not violating any law or
regulation to which any party is subject; (iv) no material adverse change in the
business, operations or prospects of Summit V occurring between the date of the
Purchase Agreement and the Closing Date; and (v) there being no legal
proceedings, pending or threatened, that would prevent the Closing. The failure
of any of these required deliveries or conditions could jeopardize the ability
of the Company to complete the sale of Summit V.


    Pursuant to Article 9 of the Purchase Agreement, the Purchase Agreement may
be terminated by mutual written consent of the parties, or by any party upon
breach of another party's representations, warranties or agreements. The
Purchase Agreement also permits a party to terminate the Purchase Agreement if
any law or regulation will make consummation of the transactions illegal or
otherwise prohibited. In addition, JIA may terminate the Purchase Agreement if
the Company's Board withdraws or modifies its approval or recommendation of the
Sale Proposal or the Purchase Agreement. Furthermore, either the Company or JIA
may terminate the Purchase Agreement for either a failure to obtain stockholder
approval, a failure to close by June 30, 2000, or a determination by the Board
that a failure to withdraw from or modify the Purchase Agreement would create a
substantial risk of liability for breach of its fiduciary duties to the
Company's stockholders under Delaware law.

    If the Purchase Agreement is terminated the Company may, in certain
circumstances, be required to pay a termination fee of $200,000 plus all
expenses of JIA incurred in connection with the Purchase Agreement. Such fee
will be payable if the Purchase Agreement is terminated: (i) by any party for
failure to obtain stockholder approval at the Company's stockholders meeting and
at or prior to such meeting a "Takeover Proposal" (as defined below) shall have
been publicly announced; (ii) by JIA upon a determination by the Company's Board
that a failure to withdraw from or modify the Purchase Agreement would create a
substantial risk of liability for breach of its fiduciary duties to the
Company's stockholders under Delaware law; (iii) by JIA upon the Company's
Board's (A) withdrawal or modification of its approval or recommendation of the
Sale Proposal or the Purchase Agreement, (B) failure to reconfirm its
recommendation after a written request to do so or its approval or
recommendation of any Takeover Proposal, or (C) resolution to take any of the
foregoing actions; or (iv) by JIA in the event of a willful and material breach
of a covenant or agreement by the Company.

    A "Takeover Proposal" means any proposal or offer from any person relating
to any direct or indirect acquisition or purchase of a substantial amount of
assets of the Company or at least 20% interest in the total voting securities of
the Company or any tender offer or exchange offer that if consummated would
result in any person beneficially owning 20% or more of any class of equity
securities of the Company or any merger, consolidation, business combination,
sale of substantially all assets, recapitalization, liquidation, dissolution or
similar transaction involving the Company, other than the transactions
contemplated by the Purchase Agreement.

    In addition, if the Purchase Agreement is terminated and, within 12 months
following such termination, the Company enters into a "Company Acquisition," the
Company will be required to pay the $200,000 termination fee and costs described
above.

    A "Company Acquisition" includes any transaction or series of related
transactions involving (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company pursuant to which the stockholders of the Company immediately preceding
such transaction or series of related transactions hold less than 60% of the
equity interests in

                                       13
<PAGE>
the surviving or resulting entity of such transaction or transactions (other
than the transactions contemplated by this Agreement); (ii) a sale by the
Company of assets (excluding inventory and used equipment sold in the ordinary
course of business) representing in excess of 40% of the fair market value of
the Company's business immediately prior to such sale; or (iii) the acquisition
by any person or group (including without limitation by way of a tender offer or
an exchange offer or issuance by the Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of 40% or more
of the then outstanding shares of capital stock of the Company.


    Furthermore, in addition to any termination fee payable as described above,
the Company will be required to pay JIA an additional termination fee equal to
$100,000 if the Purchase Agreement is terminated by JIA based upon either
(i) failure by the Company to obtain Company stockholder approval of the Sale
Proposal, (ii) a determination by the Company's Board that a failure to withdraw
from or modify the Purchase Agreement would create a substantial risk of
liability for breach of its fiduciary duties to the Company's stockholders under
Delaware law, or (iii) the Company's Board's withdrawal or modification of its
approval or recommendation of the Sale Proposal or the Purchase Agreement.


    The Company may not have sufficient capital resources to pay any termination
fees or costs in the event that such payments are due.


    MANAGEMENT AGREEMENT.  In connection with the Purchase Agreement, in
March 2000 the Company entered into a Management Agreement (the "Management
Agreement"), by and among the Company, Jenkon International, Inc., a Washington
corporation, Summit V and JIA, which provides for the management and operation
of Summit V's business by JIA during the period from March 15, 2000 until either
the Closing of the sale of Summit V or the termination of the Purchase Agreement
(the "Interim Period"). The Management Agreement is attached to this Proxy
Statement as Appendix F.



    Pursuant to the terms of the Management Agreement, JIA has been appointed to
supervise, direct and control the day-to-day operation and management of Summit
V's business during the Interim Period. The Management Agreement establishes
standards of operation as well as a list of JIA's powers and authorities. In
addition, the Management Agreement sets forth numerous specific covenants and
limitations regarding JIA's operation of Summit V during the Interim Period.
Such covenants include restrictions on the sale of assets, expenditures outside
of the ordinary course of business, the incurrence of debt, and the hiring and
firing of employees.



    Upon execution of the Management Agreement, Jenkon and JIA established a
joint bank account and agreed to cause all receipts from Summit V accounts
receivable to be deposited in such account and to cause all payments with
respect to liabilities of Summit V to be paid from such account. During the
Interim Period, JIA agreed to advance to Summit V, through deposits in the
above-referenced account, such amounts as are necessary to fund the continuing
operations of Summit V's business (including, without limitation, the prompt
payment of employee salaries, employment and other taxes, lease payments and
other operating expenses of Summit V). In the event that the sale of Summit V is
not completed for any reason, JIA agreed to return all of the business and
assets to Summit V in good order and repair. During the Interim Period, JIA
shall have full authority to collect all cash receipts of Summit V and make all
required disbursements of cash out of the joint account. JIA is not entitled to
compensation for its services in managing the operations of Summit V's business
under the Management Agreement.


    Either JIA or the Company may terminate such Management Agreement in the
event of a termination of the Purchase Agreement or upon a material breach of
the Management Agreement by the other party. Further, either the Company or
Summit V may terminate the Management Agreement if JIA commences any cause,
proceeding or other action relating to bankruptcy, insolvency, reorganization or
relief of debtors. Moreover, following notice to JIA and an opportunity to cure,
the

                                       14
<PAGE>
Company may terminate the Management Agreement upon a determination by its Board
that JIA has mismanaged the operations of Summit V's business.

    If the Management Agreement is terminated prior to the Closing for any
reason other than JIA's breach of the Management Agreement or the Purchase
Agreement, JIA will have the right to receive all of the funding payments made
by JIA with respect to the funding of the operations of Summit V during the
Interim Period. Further, in the event that a Closing does not occur for any
reason other than JIA's breach of the Management Agreement or the Purchase
Agreement, the Company will be obligated to reimburse JIA for its costs incurred
in connection with the operation of Summit V's business. The Company may not
have sufficient capital resources to reimburse JIA for any such costs incurred
in connection with the operation of Summit V's business in the event that such
payments are due.


    OTHER AGREEMENTS.  In connection with the Purchase Agreement, the Company,
JIA and David Edwards entered into a Voting Agreement (the "Voting Agreement"),
pursuant to which Mr. Edwards agreed to vote the number of shares of Company
Common Stock owned by him as of the close of business on the Record Date in
favor of the Sale Proposal. In connection with the Voting Agreement,
Mr. Edwards also agreed to deliver to JIA an irrevocable proxy to vote his
shares in favor of the Sale Proposal and against any competing proposal.


FEDERAL TAX CONSEQUENCES OF THE SALE PROPOSAL

    The Company does not believe that the sale of Summit V will have any
material federal income tax consequences to the Company or its stockholders.

INTERESTS OF CERTAIN PERSONS IN THE SALE PROPOSAL

    In order to facilitate the Closing of the sale of Summit V, David Edwards,
the Company's Chief Executive Officer and a director, executed a promissory note
in the principal sum of $100,000 payable to JIA 11 months after the Closing.
Mr. Edwards received no consideration from the Company or any other party in
exchange for this agreement.

    Dan Jensen and Robert Cavitt, each an officer and director of JIA, are
former officers and directors of the Company. Mr. Jensen remains a significant
stockholder of the Company and Mr. Cavitt remains an officer of Summit V pending
completion of the sale to JIA. In addition, Mr. Cavitt holds currently
exercisable options to purchase 234,680 shares of Company Common Stock. See
"Voting Securities and Principal Stockholders."

EFFECT OF THE SALE PROPOSAL ON STOCK OPTIONS

    Upon the sale of Summit V, it is anticipated that all employees employed by
the Company in the operations of Summit V will no longer be employed by the
Company. As a result, their options will terminate unless exercised within
90 days of the Closing. See "The Conversion Proposal--Effect of the Conversion
Proposal on Stock Options."

VOTE REQUIRED

    Although the Company does not believe that stockholder approval of the sale
contemplated by the Purchase Agreement is required under applicable law, the
Board is requesting stockholder approval of the Sale Proposal because such
approval is a condition to closing under the terms of the Purchase Agreement.
The Sale Proposal requires the affirmative vote of the holders of at least a
majority of the outstanding shares of Common Stock.


    In the event that the stockholders do not approve the Sale Proposal at the
Meeting, the Company may elect to proceed with the transactions contemplated by
the Purchase Agreement in the event that


                                       15
<PAGE>

JIA is willing to waive such approval as a condition to closing. The Board has
retained discretion, even if stockholder approval of the Sale Proposal is
obtained, to abandon, defer or modify the terms of the Sale Proposal, provided
that following stockholder approval, the Board will not make any changes in the
terms of the Sale Proposal unless the Board determines that such changes would
not be materially adverse to the Company's stockholders. If stockholder approval
of the Sale Proposal is obtained and the transactions contemplated by the
Purchase Agreement are completed, in the event of a legal challenge to the Sale
Proposal, the Board of Directors of the Company intends to assert stockholder
approval of the Sale Proposal as an affirmative defense against such challenge.
Even if stockholder approval of the Sale Proposal is obtained, there can be no
assurance that the sale contemplated by the Sale Proposal will occur.


BOARD RECOMMENDATION


    The Board of Directors unanimously believes that approval of the Sale
Proposal is in the best interests of the Company for a variety of reasons. As
noted elsewhere in this Proxy Statement, in February 2000, in light of Summit
V's continuing losses and ongoing development costs, the Company's limited
capital resources, and the Board's belief that the Company and its stockholders
would be better served by focusing on the development of the business of MMKid,
the Company decided to discontinue its direct sales software operations. The
Board also determined that the original intention to have two separate operating
companies, Summit V and MMKid, was not ultimately in the best interests of the
Company's shareholders due to the confusing picture presented by the two
companies' respective business models and the difficulty of integrating
management of the two separate businesses. At such time, the Board also decided
that the discontinuation or sale of Summit V's business would free the remaining
business from the significant product development expenses of the Summit V
operations, thereby enabling the management of MMKid to focus its limited
capital resources on the development and marketing of its educational products
through MMKid.


    In light of the Board's determination to discontinue the Company's direct
sales operations, the Board believes that a sale of Summit V to JIA is the only
viable alternative by which the Company will be able to receive any value for
the discontinued business. In order to sell the discontinued operations to a
party other than JIA, the Company believes it would be required to continue to
fund the operations of Summit V until a suitable buyer could be identified and a
transaction closed. Given the Company's limited financial resources and the
relatively low value of the Summit V operations, absent a sale to JIA, the Board
does not believe that it would be in the Company's best interest, nor would the
Company have sufficient capital resources, to continue the operations of Summit
V. Moreover, because of JIA's familiarity with the operations of Summit V, the
Board believes that it is the only potential buyer in a position to act quickly
enough to meet the Company's needs. Accordingly, the Board believes that the
Sale Proposal is the only viable alternative available to the Company with
respect to the disposition of Summit V's operations.

    The Board's recommendation is also based in part upon the adverse
consequences to the Company that will result from a failure to approve the Sale
Proposal. In particular, failure to approve the Sale Proposal will result in the
Company having to reimburse JIA for the amounts advanced for Summit V's
operations under the Management Agreement plus the $100,000 termination fee
required under the terms of the Purchase Agreement. In addition, if the Sale
Proposal is not approved and the Company subsequently sells Summit V to a third
party or enters into another transaction that results in the sale of significant
assets or a change in control of the Company, the Company might be required to
pay an additional termination fee of $200,000. See "Terms of Agreements" above.


    In the event that the Sale Proposal is not approved and the Company and JIA
do not elect to proceed with the closing, the Company may not have sufficient
capital resources to pay the termination fee(s) described above and the amounts
owed to JIA for funds advanced under the Management Agreement. Accordingly, if
the Sale Proposal is not approved, it is likely that the Company will be


                                       16
<PAGE>

required to immediately locate an alternate source of financing to meet its
obligations. There can be no assurance that the Company will be able to obtain
such financing at all or on terms that are favorable to the Company. The
Company's failure to obtain sufficient financing within the requisite time frame
will likely result in the delisting of the Company's securities from trading on
the Nasdaq SmallCap Market and could make it impossible for the Company to
continue operations and/or force the Company to seek protection under federal
bankruptcy law.


    FOR THE REASONS DESCRIBED ABOVE AND ELSEWHERE IN THIS PROXY STATEMENT, THE
BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE SALE PROPOSAL. SHARES
REPRESENTED BY THE PROXIES WILL BE VOTED FOR THE PROPOSAL UNLESS A VOTE AGAINST
THE PROPOSAL OR AN ABSTENTION IS SPECIFICALLY INDICATED ON THE PROXY CARD.

FAIRNESS OPINION


    In connection with the Sale Proposal, Jenkon engaged Capitalink, L.C.
("Capitalink") to render an opinion as to the fairness, from a financial point
of view, to the Jenkon stockholders, of the consideration to be received. On
March 22, 2000, Capitalink delivered its written opinion to the Board that,
based upon and subject to the assumptions made, matters considered, and
limitations on its review as set forth in the opinion, from a financial point of
view, the consideration to be received in the Sale Proposal is fair to the
Jenkon stockholders.


    THE FULL TEXT OF THE WRITTEN OPINION OF CAPITALINK DATED AS OF MARCH 22,
2000 IS ATTACHED AS APPENDIX G AND IS INCORPORATED HEREIN BY THIS REFERENCE (THE
"CAPITALINK OPINION"). JENKON STOCKHOLDERS ARE URGED TO READ THE CAPITALINK
OPINION CAREFULLY AND IN ITS ENTIRETY FOR A DESCRIPTION OF THE ASSUMPTIONS MADE,
MATTERS CONSIDERED, PROCEDURES FOLLOWED AND LIMITATIONS ON THE REVIEW UNDERTAKEN
BY CAPITALINK IN RENDERING ITS OPINION. THE SUMMARY OF THE CAPITALINK OPINION
SET FORTH IN THIS PROXY STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE FULL TEXT OF SUCH OPINION.


    The Capitalink Opinion was rendered based upon the original terms of the
Purchase Agreement and was rendered prior to the execution of the definitive
Purchase Agreement, which definitive agreement includes a higher purchase price
for the purchase of Summit V. As the definitive Purchase Agreement reflects a
higher purchase price and does not contain any material changes that are adverse
to the Company, the Company does not believe that the changes would materially
alter Capitalink's analysis and conclusions reached in its opinion or adversely
impact the fairness of the Sale Proposal to the Jenkon stockholders.
Accordingly, the Company has not asked Capitalink to prepare a revised opinion
to reflect the terms of the definitive Purchase Agreement.



    No limitations were imposed by Jenkon on the scope of Capitalink's
investigation or the procedures to be followed by Capitalink in rendering its
opinion. Capitalink was not requested to and did not make any recommendation to
the Board as to the form or amount of consideration received in the Sale
Proposal which, Capitalink assumed, was determined through arms length
negotiations between parties. The Capitalink Opinion is for the use and benefit
of the Board in connection with its consideration of the Sale Proposal and is
not intended to be and does not constitute a recommendation to any stockholder
of Jenkon as to how such stockholder should vote with respect to the Sale
Proposal. Capitalink was not requested to opine as to, and its opinion does not
address, Jenkon's underlying business decision to proceed with or effect the
Sale Proposal.


    Capitalink took into account its assessment of general economic, market and
financial conditions as well as its experience in connection with similar
transactions and securities valuations generally.

                                       17
<PAGE>
Capitalink was not asked to consider, and its opinion does not address, the
relative merits of the Sale Proposal as compared to any alternative business
strategy that might exist for Jenkon.

    In arriving at its opinion, Capitalink, among other things: (i) reviewed the
Purchase Agreement; (ii) reviewed publicly available financial information and
other data with respect to Jenkon, including the Annual Report for the fiscal
year ended June 30, 1999, the Quarterly Reports on Form 10-QSB for the periods
ended September 30, 1999, and December 31, 1999, and, the Current Reports on
Form 8-K, dated December 30, 1999 and (on Form 8-K/A) dated February 28, 2000;
(iii) reviewed the Jenkon Private Placement Memorandum dated September 10, 1999;
(iv) reviewed certain other relevant financial and operating data relating to
Jenkon and Summit V made available from published sources and from the internal
records of Jenkon; (v) considered the historical financial results and present
financial condition of Summit V with those of other companies that we deemed
relevant; (vi) reviewed and analyzed the financial terms of certain transactions
that we deemed comparable to the Sale Proposal; (vii) reviewed certain publicly
available information concerning the trading of, and the trading market for, the
common stock of Jenkon; (viii) reviewed and analyzed certain publicly available
information concerning the trading of, and the trading market for, companies
that we believed to be comparable to Summit V; (ix) reviewed and discussed with
representatives of the management of Jenkon and Summit V certain financial and
operating information furnished to us and presented in the public filings;
(x) inquired about and discussed the Sale Proposal with Jenkon and Summit V
management; and (xi) performed such other analyses and examinations as
Capitalink deemed appropriate.

    In arriving at its opinion, Capitalink relied upon and assumed the accuracy
and completeness of all of the financial and other information that was used
without assuming any responsibility for any independent verification of any such
information and further relied upon the assurances of Jenkon's and Summit V's
management that they were not aware of any facts or circumstances that would
make any such information inaccurate or misleading. In arriving at its opinion,
Capitalink did not make a physical inspection of the properties and facilities
of either Jenkon or Summit V, and has not made or obtained any evaluations or
appraisals of the assets and liabilities (contingent or otherwise) of either
Jenkon or Summit V. Capitalink assumed that the Sale Proposal will be
consummated in a manner that complies in all respects with the applicable
provisions of the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and all other applicable federal and state statutes,
rules and regulations. In addition, upon the advice of the management of Jenkon
and its legal advisors, Capitalink assumed that the Sale Proposal would not
cause any adverse tax affect to Jenkon based on the use of existing net
operating loss carryforwards available. Capitalink's opinion was necessarily
based upon market, economic and other conditions as they existed on, and could
be evaluated as of, March 22, 2000. Accordingly, although subsequent
developments may affect its opinion, Capitalink did not assume any obligation to
update, review or reaffirm its opinion.


    Each of the analyses conducted by Capitalink was carried out in order to
provide a different perspective on the Sale Proposal, and to enhance the total
mix of information available. Capitalink did not form a conclusion as to whether
any individual analysis, considered in isolation, supported or failed to support
an opinion as to the fairness, from a financial point of view, of the Sale
Proposal to the Jenkon stockholders. Capitalink did not place any particular
reliance or weight on any individual analysis, but instead concluded that its
analyses, taken as a whole, supported its determination. Accordingly, Capitalink
believes that its analyses must be considered as a whole and that selecting
portions of its analyses or the factors it considered, without considering all
analyses and factors collectively, could create an incomplete view of the
process underlying the analyses performed by Capitalink in connection with the
preparation of its opinion.


                                       18
<PAGE>
    Capitalink analyzed the fairness of the Sale Proposal using the following
methodologies:

    DISCOUNTED CASH FLOW.  Capitalink performed a discounted cash flow ("DCF")
analysis, aggregating (x) the present value of Summit V's projected unlevered
free cash flows over the three year forecast period with (y) the present value
of a range of terminal values. Free cash flow represents the amount of cash
generated and available for principal, interest and dividend payments after
providing for ongoing business operations; these free cash flow figures were
based upon operating and financial forecasts provided to Capitalink by the
management of Jenkon. The range of terminal values represents the residual value
of Summit V at the end of the forecast period; this range of terminal values was
calculated by applying a range of implied multiples to Summit V's earnings
before interest, taxes, depreciation and amortization ("EBITDA") in the final
year of the forecast period. Capitalink analyzed two cases. In the first case
(the "Management Case") Capitalink utilized the projections as provided by
Jenkon management. In the second case (the "Revised Case"), Capitalink modified
the Management Case by assuming certain reductions in revenue and operating
performance.


    As part of the DCF analysis, Capitalink utilized (i) discount rates of 20%
to 45%, which were chosen based upon several assumptions including interest
rates, the inherent business risk of Summit V and Summit V's estimated cost of
capital; and (ii) a range of terminal multiples. The resulting range of
enterprise values were then adjusted to account for net debt, yielding a range
of equity values for Summit V.


    Utilizing the Management Case projections and based upon a range of terminal
multiples of EBITDA for fiscal year 2002 of 1.5x to 6.5x, the implied enterprise
value of Summit V ranged from approximately $3.6 million to approximately
$34.8 million; after subtracting net debt, the implied equity value of Summit V
ranged from approximately $3.6 million to approximately $34.8 million. Utilizing
the Revised Case and based upon a range of terminal multiples of EBITDA for
fiscal year 2002 of 1.5x to 6.5x, the implied enterprise value of Summit V
ranged from approximately $(2.5) million to approximately $(1.1) million; after
subtracting net debt, the implied equity value of Summit V ranged from
approximately $(2.4) million to approximately $(1.0) million.

    ASSET ACCUMULATION ANALYSIS.  The Asset Accumulation Method is a balance
sheet oriented valuation method whereby a company's balance sheet is restated to
fair market value. This involves the revaluation of the assets and liabilities
recorded on the balance sheet, and the identification and valuation of otherwise
unrecorded tangible and intangible assets and liabilities.

    For the purpose of using the Asset Accumulation Method, Capitalink utilized
the Summit V balance sheet as of December 31, 1999, the latest available
financial data prior to the date of its opinion. The balance sheet items have
been analyzed to determine whether any adjustments are necessary to the carrying
values in order for the fair market values to be accurately reflected.

    In order to determine the extent of the adjustments, if any, to the balance
sheet items, there are four alternative premises of value: (i) value in
continued use, as part of a going concern; (ii) value in place, as part of a
mass assemblage of assets; (iii) value in exchange, in an orderly disposition;
and, (iv) value in exchange, in a forced liquidation.

    Based on discussions with Jenkon management, the value in exchange, in an
orderly liquidation has been utilized in determining adjustments to the balance
sheet items. This methodology assumes that the assets are sold piecemeal, not as
part of a mass assemblage. It is further assumed that the assets have been given
adequate exposure in their normal secondary market. After applying this
methodology, Capitalink estimated the value of Summit V to be $160,000.

    SELECTED COMPARABLE COMPANY ANALYSIS.  The selected comparable publicly
traded company analysis involves the separate review of companies deemed
comparable to Summit V. Capitalink reviewed certain financial information
relating to Summit V in the context of the corresponding

                                       19
<PAGE>
financial information, ratios and public market multiples for the publicly
traded companies that it deemed comparable. No company used in Capitalink's
analysis was deemed to be identical to Summit V; accordingly, Capitalink
considered the multiples for such comparable companies to be more relevant than
the multiples of any single company.

    The companies used for purposes of the analysis were Information Management
Associates, ASD Systems, Inc., Spanlink Communications, Inc., Timberline
Software Corp., Timeline, Inc., and Smith-Gardner Associates (the
"Publicly-Traded Comparables").


    Based on publicly available information, Capitalink reviewed various
financial information of the Publicly-Traded Comparables, including, among other
things, market value, revenue, earnings per share, assets, and earnings before
interest and taxes ("EBIT"). Subsequent to such review and based on the
respective market values and enterprise values (defined as market value plus net
debt, which is equal to the aggregate book value of all debt, preferred stock
and minority interest, minus the aggregate cash and cash equivalents),
Capitalink calculated ranges of various multiples for the Publicly-Traded
Comparables.



    This analysis indicated that the approximate enterprise value multiple of
the last twelve months' ("LTM") revenue ranged from 1.1x to 7.0x, with a mean of
3.5x, and a median of 3.4x and the approximate LTM EBIT ranged from 2.8x to
19.0x, with a mean of 10.7x, and a median of 10.3x. The analysis also indicated
that the approximate LTM earnings per share ranged from 5.3x to 35.8x, with a
mean of 18.4, and a median of 14.0x, the approximate equity value multiple of
common equity ranged from 2.0x to 25.0x, with a mean of 10.4x, and a median of
6.4x; and the approximate equity value multiple of total assets ranged from 1.7x
to 7.9x, with a mean of 3.9x, and a median of 3.6x.


    None of the Publicly-Traded Comparables utilized as a comparison is
identical to Summit V. Accordingly, an analysis of publicly-traded comparable
companies is not mathematical, rather it involves complex consideration and
judgments concerning differences in financial and operating characteristics of
the comparable companies and other factors that could affect the public trading
of the comparable companies or company to which they are being compared.

    SELECTED COMPARABLE TRANSACTION ANALYSIS:  The selected comparable
transaction analysis involves a review of merger, acquisition and asset purchase
transactions involving companies deemed comparable to Summit V. Information is
typically not disclosed for transactions involving a private seller, even when
the buyer is a public company, unless the acquisition is deemed to be "material"
for the acquiror. As a result, the selected comparable transaction analysis is
limited to transactions involving the acquisition of a public company, or
substantially all of its assets, or the acquisition of a large private company,
or substantially all of its assets, by a public company.


    Capitalink began its analysis by searching for transactions entered into
recently which were deemed comparable to the Sale Proposal. Capitalink located
seven transactions where financial data of the acquired company and the terms of
the transaction were disclosed. The resulting transactions are as follows:
(i) the acquisition of FDP Corp. (develops and markets software for use by life
insurance agents) by SunGard Data Systems Inc.; (ii) the acquisition of
Ultradata Corporation (an information management software and solutions
provider) by CFI ProServices Inc.; (iii) the acquisition of MECA Software, LLC
(a developer of personal financial management software) by CFI
ProServices Inc.; (iv) the acquisition of Metrowerks Inc. (develops, markets and
supports ColdWarrior software development tools) by Motorola Inc.; (v) the
acquisition of Prism Solutions Inc. (develops and markets data warehouse
software) by Ardent Software Inc.; (vi) the acquisition of Modern Computer
Systems Inc. (provides data processing and related services to financial
institutions) by CFI ProServices Inc.; and (vii) the acquisition of Red Brick
Systems Inc. (provides relational database products and services for data
warehouse applications) by Informix Corp. (collectively, the "Comparable
Transactions").


                                       20
<PAGE>
    Based on the information disclosed in the Comparable Transactions,
Capitalink calculated a range of transaction value multiples based on
(i) trailing twelve months ("TTM") revenue, and (ii) total assets for such
transactions by dividing the respective transaction values (including cash paid,
shares issued, assumption of debt and/or other consideration to the seller) by
items (i) and (ii) above for each of the Comparable Transactions.

    This analysis indicated that the approximate transaction value multiple of
TTM revenue ranged from 0.3x to 3.7x, with a mean of 1.7x, and a median of 1.7x;
and the approximate transaction value multiple of total assets ranged from 1.2x
to 5.5x, with a mean of 3.0x, and a median of 2.3x.

    None of the Comparable Transactions, or other business combinations utilized
as a comparison, is identical to the Sale Proposal. Accordingly, an analysis of
comparable business combinations is not mathematical, rather it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the Comparable Transactions and other factors that could
affect the acquisition value of the comparable companies or company to which
they are being compared.


    HISTORICAL STOCK PRICE ANALYSIS.  Capitalink reviewed the daily closing
market price and trading volume of Jenkon Common Stock over the 12 month period
March 8, 1999 through March 8, 2000. Capitalink calculated total trading volumes
at various closing trade ranges. In addition, Capitalink calculated (i) closing
price ranges as a percentage of total trading days in the 12 month period,
(ii) trading volume per price range as a percentage of total volume in the 12
month period, and (iii) trading volume ranges as a percentage of total volume.



    Capitalink also prepared and compared the following indices for the 12 month
period March 8, 1999 through March 8, 2000; (i) Jenkon Common Stock price;
(ii) the respective market capitalization-weighted stock prices of the
Publicly-Traded Comparables; and (iii) the Russell 3000 Index.


    HISTORICAL FINANCIAL DATA ANALYSIS:  Capitalink reviewed and analyzed
certain financial information for Summit V, including Jenkon Annual Reports on
Form 10-KSB, Quarterly Reports on Form 10-QSB and financial statements and
schedules provided by Jenkon management.

    In connection with its services in connection with the Sale Proposal,
Capitalink received $45,000. In addition, Jenkon has agreed to indemnify
Capitalink for certain liabilities that may arise out of rendering this opinion.

    Capitalink is an investment banking firm which, as part of its investment
banking business, regularly is engaged in the evaluation of businesses and their
securities in connection with mergers, acquisitions, and private placements.

                            BUSINESS OF THE COMPANY

    The following presents certain information regarding the current business of
the Company. As the Company has determined to discontinue the operations of
Summit V regardless of whether the Sale Proposal is approved, the following
information is presented only with respect to the operations of MMKid and
excludes a discussion of the operations of Summit V. See "Sale Proposal."

GENERAL


    Founded and incorporated in January 1996, MMKid develops educational systems
for kindergartens, schools, special education, management training and
enrichment centers. The Company's systems combine interactive software, playful
didactic aides and unique electronic interfaces. Such products have been
marketed and installed in over 30 countries around the world. MMKid's products
provide educational, three-dimensional computerized environments that combine
physical components such as wooden blocks, task cards, worksheets and books with
the latest computer-based technologies.


                                       21
<PAGE>
    Pursuant to an agreement dated January 21, 1996, the Company was granted a
right of first refusal to purchase all the rights to an interactive learning
system named "Multimedia K.I.D." and a cognitive application named "Action
K.I.D." from P.M.D. Technological and Educational Systems Ltd. ("PMD"). At the
time the agreement was consummated, PMD was owned and operated by an executive
officer and founder of MMKid. Some of PMD's employees were transferred to the
Company during 1996. The majority of PMD's employees were transferred in
January 1998.

    In 1997, MMKid was granted a Computer Software Award from the office of the
Prime Minister of Israel in the category of "Special Innovation and Invention in
Education."

BUSINESS STRATEGY

    Although there can be no assurance that the Company will be able to achieve
its goals, the Company's business objective is to expand market penetration and
to become a leader in the development of educational systems and related
products. In order to achieve this objective, the Company's strategy includes
the following elements:

    EXPAND GEOGRAPHIC MARKET PENETRATION.  The Company believes that
international markets provide significant opportunity for the Company to
increase sales of its products. Given the increasing acknowledgment of the need
for change in educational systems in many countries throughout the world and
especially in the United States, Germany, France, the United Kingdom,
Scandinavia, Italy and Spain, the Company intends to expand its geographic
presence by expanding the focus of its sales and marketing efforts to these
international markets as well as the Israeli market.


    INCREASE MARKET PENETRATION OF CORE PRODUCTS.  The Company believes that its
current base of clients represents only a small portion of the total number of
educational institutions and learning centers that are potential users of the
Company's core products. The Company will attempt to increase the market
penetration through more aggressive marketing and promotional effort and by
continuing to forge partnerships with corporate market leaders and industry
spokespeople.


    LEVERAGE CURRENT AND FUTURE CUSTOMER BASE.  The Company believes that as its
customer base expands, the use of the Company's educational systems will
encourage other educators to utilize the system and thus open new opportunities
to provide training and additional services. Additionally, the pedagogical
methodology inherent in their products promotes substantial change in the
educational structure of the institution thereby providing further opportunities
to sell additional products.

    The success of the Company's business strategy will depend in part upon the
Company's access to capital resources to fund any expansion as well as other
factors such as market demand for its products, many of which are outside of the
Company's control. See "Additional Considerations and Risk Factors" below.

CORE PRODUCTS.

    All the products developed by the Company are designed to provide a
comprehensive educational environment that promotes the learning development
process. Although all the products have been developed in English, the various
systems have been localized into more than twenty different languages.

    ACTION K.I.D.  Action K.I.D. is an interactive multi-dimensional,
multi-activity education center. The computerized center integrates an auditory
communications system, a video photography station, and vibrant visual
instructional material into a programmed wooden playground-like structure,
complete with a labyrinth, balance beam, bridge, ramps and ladders to create an
interactive learning wonderland for children. Built into the structure is a
touch system comprised of step-on keypads, a variety of hand

                                       22
<PAGE>
buttons, touch screens, and other elements that receive, convey and record
real-time information relevant to the task at hand.

    MY K.I.D.  The My K.I.D. software system interfaces with an interactive
activity unit, playful didactic items and colorful activity mats. The system
incorporates multimedia software and is designed for individual or group work,
depending on pedagogical needs. My K.I.D. focuses on developing language arts,
and does so by integrating vocabulary from various fields and emphasizing the
different aspects of language including grammar, expressive writing, reading
comprehension and listening skills.

    K.I.DUCATION.  The K.I.Ducation system is a comprehensive computer-assisted
learning system. The system, with its built-in electronic panel, features
soft-touch keys and icons, and the ability to function as a keyboard and mouse.
The subjects addressed by the K.I.Ducation system are derived from a broad range
of fields including nature, hygiene, electricity, arithmetic, biology and other
fields commonly covered in educational settings. The system comes with a
learning kit that includes hundreds of colorful manipulatives including template
mats, task cards, picture cards, wood blocks, soft sponge numbers, dice and the
all-inclusive Creative Workshop.


    EDULINE.  The EDULine family of systems combine an activity table,
interactive software, three-dimensional objects, didactic tools and electronic
interfaces. The systems are designed to provide flexibility to enable adaptation
to all learning populations. In the EDULine family, such items as a Tactile
Table and Illuminated Keyboard address the special needs framework.


    The Company has also developed a new series of Home Products, in addition to
the Company's current series. These products, called Spunky's Fun Keys, contain
unique three-dimensional aides that are to be used in conjunction with the
software.

TECHNOLOGY

    Similar to many other software packages, MMKid's products utilize various
technologies including operating systems provided by various suppliers. All the
Company's products currently operate on the DOS operating system and Microsoft
Windows 95-98 and NT.


    The programs developed by the Company which work on the DOS operating system
use PASCAL. The programs that work on Windows operating systems use Lingo
(Director) and Visual C++. The programs developed by the Company require a PC
with a 486 MHz or faster processor and a sound card.


CUSTOMERS

    The Company's products (including products sold or licensed by PMD), have
been installed in over 30 countries around the world. The Company's strategy is
to locate companies in various countries which will serve to market the
Company's products. Typical customers include schools, learning centers,
government offices and management training centers. The Company's sales have
been primarily generated from Israel, the United States and Eastern Europe.

    The Company's sales have historically been dependent upon a few major
customers with over 95% of the Company's sales being derived from the Company's
top three customers in fiscal 1999.

SALES AND MARKETING

    The Company sells its products to customers through its direct sales force
inside Israel. The Company has agreements with several companies to market and
sell certain products in countries outside Israel. In addition, Company
employees attend several technological education shows and participate in
seminars organized by academic bodies.

                                       23
<PAGE>
    Substantially all of the Company's sales to date have been generated from
sales of its Action K.I.D. Systems.

    The Company is currently upgrading its Web site. The site, among other
things, will be used to increase the Company's exposure to the education
industry. It will also be used to transfer didactic materials to the teachers
utilizing the Company's products.

    The Company markets its products to four broad-based categories in the
education industry:

        EDUCATIONAL INSTITUTIONS.  These institutions are often directed by
    government initiatives. They provide a forum for children and adults alike
    to learn through new and innovative technology incorporating cooperative
    group activities often not available in the home and other areas. These
    products are often customized according to the concepts being taught.

        HOME PRODUCTS.  This category is geared to learning in the home where
    competition is high. Products are not customized, but are differentiated
    from other off-the-shelf home learning systems by the tangible accessory
    items that are incorporated into the products.

        LEARNING AND ENRICHMENT CENTERS.  These centers are generally intended
    to cater to different sectors of the population that provide more
    specialized instruction.

        COMMERCIAL PRODUCTS.  The Company develops compact disc games for
    promotional use that are commissioned by external companies.

COMPETITION

    The market for educational products is highly competitive and is
characterized by rapidly changing customer preferences and little or no barriers
of entry. There are numerous businesses, many of which are better capitalized
than the Company, currently offering software and other products directed at the
same customer base. The Company believes that the primary competitive factors
for the provision of its systems are performance specifications, sales price,
customer service, brand name and service record. The Company's success will
depend heavily upon its ability to provide high quality systems that meet
customer specifications and are competitively priced. Other factors that will
affect the Company's success in this market include the Company's ability to
attract additional experienced marketing, sales, and management talent and the
expansion of worldwide training capabilities.

    The Company's current and prospective competitors vary greatly from small
private multimedia publishers with 10-20 employees to large international
corporations with revenues in excess of $300 million in annual sales. The
Company believes that their products are differentiated from nearly all their
competitors by the uniqueness of the combination of technology, software and
didactic aides that are incorporated into the products. Some or all of the
Company's actual and potential competitors have greater market presence,
engineering, marketing, sales and distribution capabilities, and financial,
technological and personnel resources than those available to the Company. As a
result, they may be able to adapt more swiftly to new or emerging technologies
and changes in customer specifications, take advantage of acquisition and other
opportunities more readily, and devote greater resources to the marketing and
sale of their products than can the Company.

    Because price is a major competitive factor in the market for the Company's
products, if any of the Company's present or future competitors elect to
initiate and support prolonged price competition to gain market share, the
Company likely would be forced to lower its prices, possibly for a protracted
period, which would have a material adverse effect on its financial condition
and results of operations and could threaten its economic viability.


    The Company believes that several factors will enable it to effectively
compete, including a longer product shelf life for the Company's products than
the shelf lives of regular multimedia educational


                                       24
<PAGE>

products, ease of product adaptation, and a relatively short development cycle
due to significant development experience. Other means by which the Company
believes it is able to differentiate itself from its competitors lie in the
nature of the products themselves which are developed and tailored for school
use, thereby making it easier for teachers to integrate the Company's products
into the classroom.


EMPLOYEES


    As of March 31, 2000, the Company had approximately 95 employees, all of
which were full-time employees. Of these, 67 employees were engaged in the
operation of Summit V and are not expected to be employees of the Company
following any sale of Summit V to JIA. None of the employees are represented by
a labor union, and the Company considers its relations with employees to be
good.


RESEARCH AND DEVELOPMENT


    MMKid is currently developing a new line of products based on the technology
contained in the Action K.I.D. system. One new application currently under
development targets adults in management-level positions and is intended to
impart management strategies and to enhance sales. The Company is also planning
the development of a virtual helmet that will allow users of the systems to
receive instructions and other applications.


    Since the beginning of the calendar year ended December 31, 1999, the
Company's research and development activities have primarily been directed
towards the development of the My K.I.D and Action K.I.D. systems. Research and
development expenses were $319,467 for the six months ended June 30, 1999 and
$697,611 and $223,486 for the years ended December 31, 1998 and 1997,
respectively.

INTELLECTUAL PROPERTY

    The Company relies on a combination of trade secret laws and contractual
restrictions to establish and protect its technology. The Company is in the
process of registering certain trademarks. There can be no assurance that the
steps taken by the Company will be adequate to prevent misappropriation of its
technology or that the Company's competitors will not independently develop
technologies and products that are substantially equivalent or superior to the
Company's technology and products. In addition, there can be no assurance that
licenses for any intellectual property that may be required for the Company to
provide services or develop products would be available on reasonable terms, if
at all.

    The Company has not historically required trade secrecy and confidentiality
agreements to be executed by its employees or independent software developers in
order to protect its rights in its proprietary technology. The Company is in the
process of requiring employees, contractors and distributors to execute such
agreements. No assurance can be given that such measures will be effective in
protecting the Company's rights in its present or future technology.


    The Company has filed applications with the Israeli Registry of Trademarks
for My K.I.D. and five of the animated figures incorporated into the product.
Additionally, the Company intends to file for U.S. trademarks for the same.
There can be no assurance that tradename protection can be obtained for these
names. Although the Company does not believe that its products or tradenames
infringe upon the proprietary rights of any third parties and no third parties
have asserted trademark, patent, or copyright infringement or other similar
claims against the Company, there can be no assurance that third parties will
not assert such claims against the Company in the future or that such claims
will not be successful. The Company could incur substantial costs and diversion
of management resources with respect to the defense of any claims relating to
proprietary rights which could have a material adverse effect on the Company's
business, financial condition and results of operations. Furthermore, parties
making such claims could secure a judgment awarding substantial damages, as well
as injunctive or


                                       25
<PAGE>

other equitable relief which could effectively block the Company's ability to
sell product in the United States or abroad. Such a judgment could have a
material adverse effect on the Company's business, financial condition or
results of operations.


    The laws of certain foreign countries where the Company distributes or
intends to distribute its products do not effectively protect technology,
trademarks or tradenames that the Company uses in its business and considers
proprietary. The Company has not undertaken to investigate such laws or to
assure that available protection is obtained.

PROPERTY

    The Company leases approximately 300 square meters of office and 180 square
meters of factory space in Petach-Tikva, Israel. The Company also leases
approximately 160 square meters of factory and warehouse space in Rosh Haain,
Israel. The Company believes its facilities are adequate for its present needs
and that suitable space would be available to accommodate its future needs.

LEGAL PROCEEDINGS


    Summit V acquired from Redwood Technology a license to utilize certain
Ardent Software, Inc. products incorporated into Summit V's software in
connection with sales in certain portions of Asia, including China. The grant of
the license by Unidata, Inc., a predecessor of Ardent Software, Inc., to Redwood
Technology and the sublicense by Redwood Technology to Avon Products or its
affiliates, have been challenged in a lawsuit (the "U.S. Claim") filed in the
United States District Court for the Western District of Washington at Tacoma
(Case No. C96-5459FDB) by Pacific Unidata, Ltd., the Asia licensee of
Unidata, Inc., as violating the terms of such licensee's agreement with Unidata.
In addition, Pacific Unidata, Ltd. brought an action (the "China Claim") against
Guangzhou Avon Co., Ltd., a Chinese subsidiary of Avon Products ("Avon China"),
in the Guangdong Province Supreme People's Court (the "Chinese Court") seeking
damages against Avon China for infringement of Pacific Unidata, Ltd.'s copyright
and exclusive rights to certain Unidata software in China. In June 1998, the
Chinese Court awarded damages in favor of Pacific Unidata, Ltd. in an amount of
approximately US$12 million plus costs. Avon China has informed the Company that
it intends to appeal the ruling and has indicated an intention to seek
indemnification against Redwood Technology and the Company in the event it is
unsuccessful in its appeal. Although the Company is not a party to the China
Claim or the U.S. Claim, if Unidata, Inc. does not indemnify Redwood Technology
and the Company from damages resulting from the China Claim and the U.S. Claim
and the Company is required to (i) devote significant resources to protect its
interests and the interests of its sublicensees in Asia or (ii) if any
sublicensee successfully seeks indemnification against Redwood Technology or the
Company for damages suffered as a result of claims made by Pacific
Unidata, Ltd. and the Company is required to pay such indemnification directly
or as a successor to Redwood Technology, the Company's financial condition and
results of operations could be materially adversely affected.


    In July 1995, Summit V purchased and/or licensed substantially all of the
assets and assumed certain liabilities of Redwood Technology, the developer of
certain of the Company's software technology. Because Redwood Technology may be
deemed to have been rendered insolvent by the sale and license of certain of its
assets to Summit V and because of the commonality of ownership and management of
Redwood Technology and Summit V, the Company is or may be subject to claims by
unsatisfied creditors of Redwood Technology challenging the Company's rights to
the acquired assets or alleging successor liability or other similar claims.
Whether or not litigation ensues, such claims could result in a disruption of
the Company's business which would have a material adverse effect on the Company
and its financial performance. The Company may elect or be required to settle
obligations of Redwood Technology. In the event that the Company was required to
pay all or a significant portion of the claims of creditors of Redwood
Technology, the Company's business and financial conditions and its ability to
achieve its business plan could be materially and adversely affected.

                                       26
<PAGE>
    In November 1999, AmeriPlan Corporation ("AmeriPlan"), a Texas corporation,
filed a demand for arbitration seeking a refund of approximately $100,000 in
payments owing for software and services provided by Jenkon. AmeriPlan also is
seeking an undetermined amount of consequential damages. Jenkon has denied that
it owes AmeriPlan any of these amounts and has also filed a counterclaim for
approximately $250,000 that is still owing under the parties' agreements. The
arbitration hearing is scheduled for July 2000. Jenkon intends to vigorously
pursue this litigation.

    In the ordinary course of business, the Company is subject to various legal
proceedings and claims. In the opinion of management, the amount of ultimate
liability with respect to these proceedings will not materially affect the
financial position, results of operations or cash flow of the Company.


ADDITIONAL CONSIDERATIONS AND RISK FACTORS



    MMKID HAS A HISTORY OF LOSSES AND HAS LIMITED REVENUES AND CAPITAL
RESOURCES.  MMKid has not operated profitably and has experienced net losses of
approximately $111,000 for the six months ended June 30, 1999 and approximately
$50,000 and $428,000 for the fiscal years ended December 31, 1997 and 1998,
respectively. Moreover, the Company's revenues from sales of products, services
and marketing rights were approximately $748,000, $714,000 and $1,499,000 over
the same periods. There can be no assurance that the Company will ever be able
to generate significant revenues or profits from operations.



    NEED FOR ADDITIONAL CAPITAL.  The Company's business involves the continued
investment of funds towards the development of new products and modifications of
existing products as well as sales and marketing efforts related thereto. To the
extent that the Company is unsuccessful in generating significant cash flow from
operations in order to fund such investments in product development, sales and
marketing, the Company will need to rely on outside financing sources for
working capital. The Company currently has no significant bank line of credit
and there can be no assurance that the Company will be able to obtain sources of
outside financing on favorable terms, if at all, in the event that such
financing is required in the future. To the extent that the Company's operations
do not generate positive working capital or enable it to secure adequate outside
financing, the Company's business would be materially and adversely affected.


    THE COMPANY MAY NOT BE ABLE TO MAINTAIN ITS NASDAQ LISTING; RISK OF
LOW-PRICED SECURITIES.  The Company's Common Stock is currently listed for
trading on the Nasdaq SmallCap Market. To maintain inclusion on the Nasdaq
SmallCap Market, the Company's Common Stock must continue to be registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Company must continue to have net tangible assets of at least
$2,000,000, a public float of at least 500,000 shares with a market value of at
least $1,000,000, at least 300 stockholders, a minimum bid price of $1.00 per
share and at least two market makers. As previously reported, the Company has
received a letter from the Nasdaq Listing Qualifications Division stating that
the Company's net tangible assets as of June 30, 1999 did not meet the minimum
amount of $2,000,000 and the Company's eligibility for continued listing on The
Nasdaq Stock Market is under review. The Company believes that, upon stockholder
approval of the Conversion Proposal and the Charter Amendment Proposal, the
Company's net tangible assets will be in excess of the minimum requirement.
However, there can be no assurance that the Company will be able to maintain the
standards for Nasdaq SmallCap Market inclusion with respect to its Common Stock.


    In addition, as a result of the acquisition of MMKid and the discontinuation
of Jenkon's historical direct sales software operations, Nasdaq has indicated
that it will review the Company's listing as if it were a new applicant. As the
standards for new listing are more stringent than the standards for continued
listing on Nasdaq, the Company might not qualify for continued listing on the
Nasdaq SmallCap Market as a result of such review. See "The Conversion
Proposal--Additional Considerations." If the Company fails to maintain its
Nasdaq SmallCap Market listing or is deemed not


                                       27
<PAGE>
to qualify for continued listing upon Nasdaq review, the market value of the
Common Stock likely would decline and stockholders likely would find it more
difficult to dispose of, or to obtain accurate quotations as to the market value
of, the Common Stock. If the Common Stock ceases to be included on the Nasdaq
SmallCap Market, the Common Stock could become subject to Rule 15a-9 under the
Exchange Act, which imposes additional sales practice requirements on
broker-dealers which sell such securities. If the Common Stock becomes subject
to the penny stock rules, the ability of broker-dealers to make a market in or
sell the Company's securities may be adversely affected and the market liquidity
for the Company's securities could be severely adversely affected.

    NEW PRODUCTS AND RAPID TECHNOLOGICAL CHANGE.  The markets for the Company's
products are characterized by technological change, evolving industry standards
and frequent new product introductions and enhancements. The introduction of
products embodying new technologies and the emergence of new industry standards
could render the Company's existing products and products currently under
development obsolete and unmarketable. The Company's future success will depend
upon its ability to enhance its current products and develop and successfully
introduce and sell new products that keep pace with market developments and
respond to evolving end-user specifications. Any failure by the Company to
anticipate or respond adequately to technological developments or end-user
specifications, or any significant delays in product development or
introduction, could damage the Company's competitive position in the marketplace
and reduce revenues. The Company may need to increase the size of its product
development staff in the near term to meet these challenges. There can be no
assurance that the Company will be successful in hiring and training adequate
product development personnel to meet its needs. There can be no assurance that
the Company will be successful in developing and marketing new products or
product enhancements on a timely basis or that the Company will not experience
significant delays in the future. Any failure to successfully develop and market
new products and product enhancements would have a material adverse effect on
the Company's results of operations.

    RISKS OF PRODUCT DEVELOPMENT IN GENERAL.  The success of the Company is
dependent upon its ability to deliver reliable, easy-to-use and technologically
up-to-date educational products. Any failure of the Company's existing or new
products to meet client specifications or expectations will have a material
adverse effect on the Company's reputation and the demand for the Company's
products. There can be no assurance that the Company's products will meet such
specifications or expectations. In addition, continued demand for the Company's
products will depend on its ability to successfully anticipate customer demand
and to integrate new and emerging technologies, features and standards into its
products on a timely basis. Any failure by the Company to anticipate customer
demand and to successfully integrate new features and standards into its
products on a timely basis could adversely affect the Company's reputation,
demand for its products and, as a result, its financial condition and results of
operations.

    COMPETITION.  The market for educational products is highly competitive and
is characterized by technological change, rapidly changing customer preferences
and little or no barriers to entry. There are many businesses, many of which are
better capitalized than the Company, currently offering products similar in type
or scope to the Company's products. The Company's success will depend heavily
upon its ability to provide high quality products that meet the demand of
educators and consumers. Other factors that will affect the Company's success in
this market include the Company's ability to attract additional experienced
marketing, sales, and management talent, and the expansion of worldwide support,
training, and service capabilities. The Company's current and prospective
competitors vary greatly from small private multimedia publishers with 10-20
employees to large international corporations with revenues in excess of
$300 million in annual sales. Some or all of the Company's actual and potential
competitors may have greater market presence, engineering, customer support and
marketing capabilities, and financial, technological and personnel resources
than those available to the Company. As a result, they may be able to adapt more
swiftly to new or emerging

                                       28
<PAGE>
technologies and changes in customer requirements, take advantage of acquisition
and other opportunities more readily, and devote greater resources to the
marketing and sale of their products than can the Company.

    Because price is a major competitive factor in the market for the Company's
products, if any of the Company's present or future competitors elect to
initiate and support prolonged price competition to gain market share, the
Company likely would be forced to lower its prices, possibly for a protracted
period, which would have a material adverse effect on its financial condition
and results of operations and could threaten its economic viability.


    SIGNIFICANT FLUCTUATIONS IN QUARTERLY RESULTS.  The Company has experienced
and expects to continue to experience significant fluctuations in its quarterly
results. Such fluctuations may be caused by many factors, including, but not
limited to: the size and timing of individual orders; seasonality of revenues;
lengthy sales cycle; delays in introduction of products or product enhancements
by the Company or other providers of components for the Company's systems;
competition and pricing in the educational products industry; market acceptance
of new products; reduction in demand for existing products and shortening of
product life cycles as a result of new product introductions by competitors;
foreign currency exchange rates; mix of products sold; conditions or events in
the education industry; and general economic conditions. The Company does not
typically maintain a significant backlog and therefore the revenue results for
each quarter depend substantially on orders received and delivered in that
quarter. As a result of the relatively high revenue amount for certain products
and relatively low unit volume of those systems, any lost or delayed sales will
have a disproportionately greater effect on the Company's revenues and quarterly
results relative to companies that have higher unit sales volumes and less
revenue associated with a particular product. The Company's sales cycle varies
greatly with the different products. For the higher priced systems, the typical
sales cycle is three to six months from the time initial sales contact is made
with a qualified prospect, making the timing of the Company's revenues difficult
to predict and the Company's quarterly results difficult to forecast. The
Company's sales cycle relating to the lower costing products is anywhere from
two weeks to two months. The Company's expense levels are based in part on its
forecasts of future revenues. Accordingly, since a large portion of the
Company's expenses are fixed in nature, the Company would not be able to quickly
curtail expenses in response to a decline in revenues, and operating results for
a given quarter would be adversely affected. As a result, revenues for any
quarter are subject to significant variation and the Company believes that
period-to-period comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as indications of future performance.
To the extent that the Company's Common Stock is publicly traded, fluctuations
in operating results may also result in volatility in the market price of the
Company's Common Stock.


    MANAGEMENT OF GROWTH.  To manage its growth effectively, the Company will be
required to continue to implement and improve its operating and financial
systems and to expand, train and manage its employee base. There can be no
assurance that the management skills and systems currently in place will be
adequate if the Company continues to grow. In addition, although no acquisitions
of companies or products, other than the reverse acquisition of Jenkon, are
currently being negotiated, the Company may make acquisitions in the future. The
Company's management has only limited experience with acquisitions, which
involve numerous risks, including difficulties in the assimilation of acquired
operations and products, the diversion of management's attention from other
business concerns and the potential loss of key employees of the acquired
companies.

    NEW BUSINESS; ABILITY TO INTEGRATE AND MANAGE.  The acquisition of MMKid has
resulted in the Company operating a new business with respect to which it has
little or no experience in a country (Israel) in which a majority of the
Company's current Board of Directors has little experience. The business of
MMKid, although software-related, is separate, distinct and not complementary to
the Company's historical business. The Company's lack of experience and track
record in the educational

                                       29
<PAGE>
software and systems business, and the Company's inexperience with Israeli laws
and business practices may result in the inability of the Company to effectively
compete which may lead to operating losses and loss of standing in the
industries in which the Company operates, any of which would have an adverse
effect on the Company, its operations and financial condition.


    DEPENDENCE ON SALES OF EXISTING PRODUCTS.  Substantially all of MMKid's
revenues have been derived from sales of its enrichment centers, comprised of
the Action KID and other systems. Accordingly, any event that adversely affects
fees derived from the sale of such systems such as competition from other
products, significant flaws in the Company's products or incompatibility of
software products with third party hardware or software products, negative
publicity or evaluation, or obsolescence of the hardware platforms or software
environments in which the systems run, would have a material adverse effect on
the Company's results of operations. The Company's future financial performance
will depend, in substantial part, on its ability to expand sales of its existing
products while developing and successfully marketing new and enhanced products.



    DEPENDENCE ON THIRD PARTY SOFTWARE AND HARDWARE.  The Company's products
incorporate and use software products and computer hardware and equipment
developed by other entities. The operating systems on which the Company's
products can function (DOS, Windows 95-98 and NT) have been developed or are
owned by Microsoft Corporation. The computer hardware and equipment sold as part
of the Company's turnkey system are manufactured by the Pentium Company (an
Israeli company), and others. There can be no assurance that all of these
entities will remain in business, that their product lines will remain viable or
that these products will otherwise continue to be available to the Company. If
any of these entities ceases to do business, or abandons or fails to enhance a
particular product line, the Company may need to seek other suppliers. This
could have a material adverse effect on the Company's results of operations. In
addition, there also can be no assurance that the Company's current suppliers
will not significantly alter their pricing in a manner adverse to the Company.



    OPERATIONS IN ISRAEL.  MMKid's operations are based in Israel and, as a
result, the Company's financial results and prospects are directly affected by
economic, political and military conditions in Israel. Moreover, some of the
Company's employees may be obligated to perform annual reserve duty in the
Israeli Defense Forces and are subject to being called for active duty at any
time upon the outbreak of hostilities. Any adverse economic, political or
military developments in Israel could have a material adverse effect on the
Company and its ability to operate.


                                       30
<PAGE>
                          PRICE RANGE OF COMMON STOCK


    The Common Stock of the Company has traded on the Nasdaq SmallCap Market
under the symbol JNKN. On or about May 3, 2000 the Company changed its ticker
symbol to MKID to more accurately reflect the focus of its business on the
development of MMKid.


    The following table sets forth for the indicated periods, the range of high
and low per share closing prices for our Common Stock as reported on the Nasdaq
SmallCap Market for each quarter since the quarter commencing July 1, 1998:


<TABLE>
<CAPTION>
                                                                   PRICE RANGE OF
                                                                    COMMON STOCK
                                                              -------------------------
                                                                HIGH           LOW
                                                              ---------   -------------
<S>                                                           <C>         <C>
Fiscal Year Ended June 30, 1999:
First Quarter (from August 14, 1998)........................  $6 1/4       $4 1/4
Second Quarter..............................................  $5           $3 3/8
Third Quarter...............................................  $4           $1.188
Fourth Quarter..............................................  $3 1/4       $1.188

Fiscal Year Ending June 30, 2000:
First Quarter...............................................  $2 1/4       $1 3/8
Second Quarter..............................................  $4 3/4       $1 1/4
Third Quarter...............................................  $6 3/8       $3.938
</TABLE>



    As of the Record Date there were approximately 45 holders of record of our
Common Stock.


                  VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS


    The Company has outstanding voting securities consisting of only Common
Stock, of which 5,513,732 shares were outstanding as of the close of business on
the Record Date. Only stockholders of record on the books of the Company at the
close of business on the Record Date will be entitled to vote at the Meeting.
Each share of Common Stock is entitled to one vote. Representation at the
Meeting by the holders of a majority of the outstanding shares of Common Stock,
either by personal attendance or by proxy, will constitute a quorum.


    The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of the Record Date as to (a) each director of
the Company, (b) each executive officer of the Company, (c) all executive
officers and current directors of the Company as a group, and (d) each person
known to the Company to beneficially own five percent or more of the outstanding
shares of Common Stock. The Company believes that the persons named in the table
have sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, subject to community property laws, where
applicable.

                                       31
<PAGE>


<TABLE>
<CAPTION>
                                   SHARES BENEFICIALLY OWNED(1)
                               ------------------------------------
                               NUMBER OF SHARES OF   PERCENT OWNED    NUMBER OF SHARES
                               VOTING STOCK BEFORE      PRIOR TO       OF VOTING STOCK       PERCENT OWNED
NAME AND ADDRESS(2)              CONVERSIONS(1)      CONVERSIONS(3)   AFTER CONVERSIONS   AFTER CONVERSIONS(3)
- -------------------            -------------------   --------------   -----------------   --------------------
<S>                            <C>                   <C>              <C>                 <C>
David Edwards................         796,296              14.4%            796,296                2.3%

Pessie Goldenberg............         234,418               4.2%          5,581,398(4)            16.3%

Joseph Albanese..............               0                 0%                  0                  0%

Phillip Luizzo...............          25,000            *                   25,000            *

Robert Cavitt(5).............         234,680(6)            4.1%            234,680(6)         *

All directors and executive
  officers as a group (6
  persons)...................       1,293,394(7)           22.5%          6,690,374(7)            19.4%

Dan Jensen...................         759,294              13.8%            759,294                2.2%

Zehava Rubner................         286,381               5.2%          6,818,701(8)            20.0%
  Adv. Bachar
  17 Marmorek
  Tel-Aviv, Israel

Naomi Bodner.................         143,199               2.6%          3,409,249(9)            10.0%
  16 Grosser Lane
  Monsey, NY 10952

Laura Huberfeld..............         143,199               2.6%          3,409,249(10)           10.0%
  250 Longwood Crossing
  Lawrence, NY 11559
</TABLE>


- ------------------------


 (1) Shares of Common Stock which the person has the right to acquire within
     60 days of May 5, 2000 are deemed outstanding in calculating the percentage
     of ownership of the persons, but not deemed outstanding as to any other
     person. Ownership of less than 1% is indicated by an asterisk.


 (2) The business address of each of the persons listed unless stated otherwise
     is c/o the Company at 7600 N.E. 41st Street, Suite 350, Vancouver,
     Washington 98662.


 (3) Percentages based on 5,513,732 shares of Common Stock outstanding as of the
     Record Date and 34,173,732 shares assumed to be outstanding following
     approval of the Conversion Proposal and Charter Amendment Proposal. Note
     that the figure 34,173,732 excludes that additional number of shares
     issuable upon conversion of the Convertible Notes, which number is equal to
     the amount of accrued and outstanding interest (approximately $138,000 on
     the date of the meeting) divided by the last reported sale price of the
     Company's Common Stock on May 30, 2000.



 (4) Includes 5,346,980 shares of Common Stock issuable upon conversion of
     267,349 shares of Series B Preferred Stock and 267,349 shares of Series C
     Preferred Stock (subject to stockholder approval hereby).



 (5) Mr. Cavitt is currently an officer of Summit V but will resign as an
     officer upon closing of the sale of Summit V. See "The Sale Proposal."



 (6) Consists of shares issuable upon currently exercisable options to purchase
     an aggregate of 234,680 shares of Common Stock. Such options will terminate
     90 days following completion of the sale of Summit V in accordance with the
     Sale Proposal.



 (7) Includes currently exercisable options to acquire an aggregate of 237,680
     shares of Common Stock which are exercisable within 60 days following the
     Record Date.


                                       32
<PAGE>
 (8) Includes 6,532,320 shares of Common Stock issuable upon conversion of
     326,616 shares of Series B Preferred Stock and 326,616 shares of Series C
     Preferred Stock (subject to stockholder approval hereby).

 (9) Includes 3,266,050 shares of Common Stock issuable upon conversion of
     163,303 shares of Series B Preferred Stock and 163,302 shares of Series C
     Preferred Stock (subject to stockholder approval hereby).

 (10) Includes 3,266,050 shares of Common Stock issuable upon conversion of
      163,302 shares of Series B Preferred Stock and 163,303 shares of Series C
      Preferred Stock (subject to stockholder approval hereby).

    Assuming approval of the Conversion Proposal and the Charter Amendment
Proposal, the former stockholders of MMKid as a group would hold approximately
73% of fully-diluted Common Stock.

                             STOCKHOLDER PROPOSALS

    Stockholders who wish to present proposals for action at the Meeting are
required to submit their proposals in writing to the Secretary of the Company at
the address of the Company set forth on the first page of this Proxy Statement
on or prior to April 26, 2000. Matters relating to such proposals, including the
number and length thereof, eligibility of persons entitled to have such
proposals included and other aspects are regulated by the Securities Exchange
Act of 1934, as amended, Rules and Regulations of the Securities and Exchange
Commission and other laws and regulations to which interested persons should
refer.

                                 OTHER MATTERS

    The management of the Company does not know of any other matters which are
to be presented for action at the Meeting. Should any other matters come before
the Meeting or any adjournment thereof, the persons named in the enclosed proxy
will have the discretionary authority to vote all proxies received with respect
to such matters in accordance with their collective judgment.

                      ANNUAL REPORT AND QUARTERLY REPORTS

    A copy of the Company's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1999 and a copy of any Quarterly Reports on Form 10-QSB for any
quarterly periods for which such forms have been filed subsequent to the end of
fiscal 1999, each as filed with the Securities and Exchange Commission
(exclusive of Exhibits), will be furnished without charge to any person from
whom the accompanying proxy is solicited upon written request to Jenkon
International, Inc., 7600 N.E. 41st Street, Suite 350, Vancouver, Washington
98662, Attention: Secretary. If Appendix copies are requested, a copying charge
of $.20 per page will be made.

                                          BY ORDER OF THE BOARD OF DIRECTORS

                                          Cliff DeGroot,
                                          SECRETARY


Vancouver, Washington
May 8, 2000


STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES AND TO DATE, SIGN, AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR
COOPERATION WILL BE APPRECIATED.

                                       33
<PAGE>
                                   APPENDIX A

                  CERTIFICATE OF DESIGNATION, PREFERENCES AND
                       RIGHTS OF SERIES B PREFERRED STOCK

                                      A-1
<PAGE>
                    CERTIFICATE OF DESIGNATION, PREFERENCES
                                 AND RIGHTS OF
                            SERIES B PREFERRED STOCK
                         OF JENKON INTERNATIONAL, INC.,
                             A DELAWARE CORPORATION

    (Pursuant to Section 151 of the General Corporation Law of the State of
Delaware)

    Jenkon International, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that, pursuant to the authority contained in Article 4, Section 2 of
its Certificate of Incorporation, and in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware, its Board
of Directors has adopted the following resolution creating a series of its
Preferred Stock designated as Series B Preferred Stock:

    RESOLVED, that a series of the class of authorized Preferred Stock of the
Corporation be, and hereby is, created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof, are as follows:

        BE IT RESOLVED, that pursuant to the authority vested in the Board of
    Directors of the Corporation by the Certificate of Incorporation, the Board
    of Directors does hereby provide for the issue of a series of Preferred
    Stock, $.001 par value per share, of the Corporation, to be designated
    "Series B Preferred Stock", consisting of 1,208,000 shares, and to the
    extent that the voting powers, designations, preferences, limitations,
    restrictions and relative rights of the Series B Preferred Stock are not
    stated and expressed in the Certificate of Incorporation, does hereby fix
    and herein state and express such voting powers, designations, preferences,
    limitations, restrictions and relative rights as follows (all terms used
    herein which are defined in the Certificate of Incorporation shall be deemed
    to have the meanings provided therein):

        1.  DESIGNATION AND AMOUNT.  The shares of such series shall be
    designated as "Series B Preferred Stock" and the number of shares
    constituting such series shall be 1,208,000. Such number of shares may be
    decreased by resolution of the Board of Directors; provided, that no
    decrease shall reduce the number of shares of Series B Preferred Stock to a
    number less than the number of shares of Series B Preferred Stock then
    outstanding or reserved for issuance.

        2.  RANKING.  The Series B Preferred Stock shall rank (i) senior to the
    Common Stock, (ii) junior to the Series A Preferred Stock, and (ii) equal to
    the Series C Preferred Stock of the Corporation with respect to the payment
    of dividends, the distribution of assets and upon liquidation or winding up
    of the Corporation.

        3.  DIVIDENDS.  So long as any shares of Series B Preferred Stock are
    outstanding, the Corporation shall not, without the written consent of the
    holders of a majority of the outstanding shares of Series B Preferred Stock,
    (i) declare or pay a dividend on, (ii) make any distribution to the holders
    of, or (iii) repurchase, redeem or make provisions for the purchase or
    redemption (whether directly or through a subsidiary) of any class or series
    of stock of the Corporation ranking junior or equal to the Series B
    Preferred Stock (other than the payment of dividends payable in securities
    of the Corporation which shall be governed by the provisions of
    Section 4(e)(i) of this Certificate of Designation).

        4.  CONVERSION RIGHTS AND LIMITATIONS.  The holders of the Series B
    Preferred Stock shall have the following conversion rights and limitations:

           (a)  SUBJECT TO STOCKHOLDER APPROVAL.  No shares of Series B
       Preferred Stock shall be convertible into Common Stock of the Corporation
       until the holders of a majority of the

                                      A-2
<PAGE>
       Common Stock represented and entitled to vote at a meeting of
       stockholders at which a quorum is present shall approve the right of the
       Series B Preferred Stock to so convert ("Stockholder Approval").

           (b)  AUTOMATIC CONVERSION.  Upon Stockholder Approval, the shares of
       Series B Preferred Stock shall automatically convert into fully-paid and
       nonassessable shares of Common Stock, with identical designations,
       preferences and rights thereof.

           (c)  CONVERSION RATE.  Each share of Series B Preferred Stock shall
       be converted into ten (10) shares of Common Stock.

           (d)  MECHANICS OF CONVERSION.  Upon Stockholder Approval, each holder
       of Series B Preferred Stock shall surrender the certificate or
       certificates therefor, duly endorsed, at the office of the Corporation or
       of any transfer agent for the Common Stock. Thereupon the Corporation
       shall promptly issue and deliver at such office to such holder a
       certificate or certificates for the number of shares of Common Stock to
       which such holder is entitled. Such conversion shall be deemed to have
       been made immediately prior to the close of business on the date of such
       surrender of the certificate representing the shares to be converted, and
       the person entitled to receive the shares of Common Stock issuable upon
       such conversion shall be treated for all purposes as the record holder of
       such shares of Common Stock on such date (the "Conversion Date").

           (e)  ADJUSTMENTS IN CERTAIN CUSTOMARY EVENTS.

               (i)  STOCK DIVIDENDS.  In the event the Corporation shall make or
           issue, or fix a record date for the determination of holders of
           Common Stock entitled to receive, a dividend or other distribution
           payable in securities of the Corporation, then and in each such event
           provision shall be made so that the holders of the Series B Preferred
           Stock shall receive upon conversion thereof in addition to the number
           of shares of Common Stock receivable thereupon, the number of
           securities of the Corporation which they would have received had
           their Series B Preferred Stock been converted into Common Stock on
           the date of such event and had they thereafter, during the period
           from the date of such event to and including the Conversion Date,
           retained such securities receivable by them as aforesaid during such
           period, giving application to all adjustments called for during such
           period under this Section 4 with respect to the rights of the holders
           of the Series B Preferred Stock.

               (ii)  RECAPITALIZATION OR RECLASSIFICATION.  If the Common Stock
           of the Corporation shall be changed into the same or different number
           of shares of any class or classes of stock of the Corporation,
           whether by recapitalization, reclassification or otherwise (other
           than a subdivision or combination of shares or stock dividend
           provided for elsewhere in the Certificate of Incorporation or these
           resolutions, or a reorganization, merger, consolidation or sale of
           assets provided for elsewhere in the Certificate of Incorporation or
           these resolutions), then and in each such event the holder of shares
           of Series B Preferred Stock shall have the right thereafter to
           convert such shares into the kind and amount of shares of stock and
           other securities and property receivable upon such reorganization,
           reclassification or other change by holders of the number of shares
           of Common Stock into which such shares of Series B Preferred Stock
           would have been converted (taking into account all accrued and unpaid
           dividends and interest with respect to such Series B Preferred Stock)
           immediately prior to such reorganization, reclassification or change,
           all subject to further adjustment as provided herein.

               (iii)  MERGER OR SALE OF ASSETS.  If at any time or from time to
           time there shall be a merger or consolidation of the Corporation with
           or into another corporation (other than

                                      A-3
<PAGE>
           a merger which does not result in any reclassification, conversion,
           exchange or cancellation of outstanding shares or Common Stock of the
           Corporation), or the sale of all or substantially all of the
           Corporation's properties and assets to any other person followed by a
           liquidation of the Corporation, then, as a part of such transaction,
           provision shall be made so that each holder of a share of Series B
           Preferred Stock then outstanding shall have the right thereafter to
           convert such share only into the kind and amount of securities, cash
           and other property of the Corporation, or of the successor
           corporation resulting from such merger or consolidation, receivable
           upon such consolidation, merger, sale or transfer by a holder of the
           number of shares of Common Stock of the Corporation into which such
           share of Series B Preferred Stock might have been converted
           immediately prior to such consolidation, merger, sale or transfer,
           assuming such holder of Common Stock of the Corporation is not an
           entity with which the Corporation consolidated or into which the
           Corporation merged or which merged into the Corporation or to which
           such sale or transfer was made, as the case may be (a "constituent
           entity"), or an affiliate of a constituent entity. If necessary in
           any such case, appropriate adjustment shall be made in the
           application of the provisions of this Section 4 with respect to the
           rights of the holders of the Series B Preferred Stock after such
           transaction to the end that the provisions of this Section 4
           (including adjustment of the Conversion Price then in effect and the
           number of shares issuable upon conversion of the Series B Preferred
           Stock) shall be applicable after that event in a manner corresponding
           as nearly as may be practicable in relation to any shares of stock or
           other securities or property thereafter deliverable on the conversion
           of the shares. The above provisions shall similarly apply to
           successive consolidations, mergers, sales or transfers.

               (iv)  SUBDIVISION AND COMBINATION.  In the event that the
           outstanding Common Stock shall be subdivided (by stock split or
           otherwise), or combined or consolidated, by reclassification or
           otherwise, into a different number of shares of Common Stock, the
           number of shares of Common Stock into which a share of Series B
           Preferred Stock may be converted shall be adjusted so that the
           holders of the Series B Preferred Stock shall have the right to
           convert each share of Series B Preferred Stock into the number of
           shares of Common Stock which such holders would have received upon
           such subdivision or combination if such holders had converted such
           shares into Common Stock immediately prior to such subdivision or
           combination. Any such adjustments shall become effective at the close
           of business on the effective date of the subdivision or combination.

               (v)  CERTIFICATE AS TO ADJUSTMENTS.  In each case of an
           adjustment or readjustment of the number of shares of Common Stock
           into which a share of Series B Preferred Stock may be converted, the
           Corporation will furnish each holder of Series B Preferred Stock with
           a certificate, executed by the President and Chief Financial Officer
           of the Corporation showing such adjustment or readjustment, and
           stating in detail the facts upon which such adjustment or
           readjustment is based. The Corporation in any such instance may, and
           in every instance upon the request of the holders of a majority of
           the Series B Preferred Stock the Corporation will, cause its
           independent public accountants to confirm the accuracy of such
           adjustment or readjustment. Any adjustment so confirmed shall be for
           all purposes hereof conclusively be deemed to be an appropriate
           adjustment.

           (f)  TRANSFER TAXES.  The Corporation will pay any and all
       documentary stamp or similar issue or transfer taxes payable in respect
       of the issue or delivery of shares of Common Stock on conversions of
       shares of Series B Preferred Stock pursuant hereto; provided, however,
       that the Corporation shall not be required to pay any tax which may be
       payable in respect of any transfer involved in the issue or delivery of
       shares of Common Stock in a name other than

                                      A-4
<PAGE>
       that of the holder of the shares of Series B Preferred Stock to be
       converted and no such issue or delivery shall be made unless and until
       the person requesting such issue or delivery has paid to the Corporation
       the amount of any such tax or has established, to the satisfaction of the
       Corporation, that such tax has been paid.

           (g)  SHARES TO BE VALIDLY ISSUED, ETC..  The Corporation covenants
       that all shares of Common Stock which may be issued upon conversions of
       shares of Series B Preferred Stock will upon issue be duly and validly
       issued, fully paid and non-assessable, free of all liens and charges and
       not subject to any preemptive rights.

           (h)  RESERVATION OF COMMON STOCK.  The Corporation shall at all times
       reserve and keep available out of its authorized but unissued shares of
       Common Stock, solely for the purpose of effecting the conversion of the
       shares of the Series B Preferred Stock, such number of its shares of
       Common Stock as shall from time to time be sufficient to effect the
       conversion of all outstanding shares of the Series B Preferred Stock, and
       if at any time the number of authorized but unissued shares of Common
       Stock shall not be sufficient to effect the conversion of all then
       outstanding shares of the Series B Preferred Stock, the Corporation shall
       take such corporate action as may be necessary to increase its authorized
       but unissued shares of Common Stock to such number of shares as shall be
       sufficient for such purpose.

        5.  REDEMPTION.

           (a)  REDEMPTION RIGHTS.  Upon the occurrence of a "Redemption Event"
       (as defined below), the shares of Series B Preferred Stock shall be
       redeemable at the option of the holders thereof. The redemption price of
       each share of Series B Preferred Stock shall be ten dollars ($10) per
       share (the "Redemption Price"). The Redemption Price shall increase at a
       rate of fifteen percent (15%) per year from and after April 1, 2000. A
       holder of Series B Preferred Stock desiring to redeem its shares shall
       provide written notice to the Corporation at its principal office of
       setting forth the number of shares it wishes to redeem. The Corporation
       shall pay the Redemption Price to a holder of Series B Preferred Stock
       within five (5) business days after it receives such written demand.

           (b)  REDEMPTION EVENT.  For purposes hereof, a "Redemption Event"
       shall be deemed to have occurred if:

               (i) Stockholder Approval has not been granted on or prior to
           March 31, 2000, or such later date as the holders of a majority of
           the Series B Preferred Stock shall agree;

               (ii) A receiver, liquidator or trustee of the Corporation or of a
           substantial part of its properties shall be appointed by court order
           and such order shall remain in effect for more than fifteen
           (15) days, the Corporation shall be adjudicated bankrupt or
           insolvent, a substantial party of the property of the Corporation
           shall be sequestered by court order and such order shall remain in
           effect for more than fifteen (15) days, or a petition to reorganize
           the Corporation under any bankruptcy, reorganization or insolvency
           law shall be filed against the Corporation and shall not be dismissed
           within forty-five (45) days after such filing;

              (iii) The Corporation shall file a petition in voluntary
           bankruptcy or request reorganization under any provision of any
           bankruptcy, reorganization or insolvency law, or shall consent to the
           filing of any petition against it under any such law; or

               (iv) The Corporation shall make an assignment for the benefit of
           its creditors, or admit in writing its inability to pay its debts
           generally as they become due, or consent to the appointment of a
           receiver, trustee or liquidator of the Corporation, or of all or any
           substantial part of its properties.

                                      A-5
<PAGE>
        6.  LIQUIDATION, DISSOLUTION OR WINDING UP.

           (a)  LIQUIDATION PREFERENCE.  In the event of any liquidation,
       dissolution or winding up of the Corporation, whether voluntary or
       involuntary ("Liquidation"), occurring before the date of Stockholder
       Approval, the holders of each share of Series B Preferred Stock shall be
       entitled to receive out of the "Available Funds" (as defined below),
       before any sums shall be paid or any assets distributed among the holders
       of shares of Common Stock and any other class of stock of the Corporation
       ranking junior to the Series B Preferred Stock, an amount or value (such
       amount or value as described immediately below is hereinafter called the
       "Series B Preference Price") equal to $10.00 per share of Series B
       Preferred Stock (subject to adjustment if the Series B Preferred Stock of
       the Corporation shall be changed into a different number of shares,
       whether by recapitalization, reclassification or otherwise, and then and
       in each such event the holder of shares of Series B Preferred Stock shall
       have the right thereafter to receive upon redemption such same amount
       aggregately receivable immediately prior to reorganization,
       reclassification or other change of the number of shares of Series B
       Preferred Stock apportioned among the number of shares into which such
       shares of Series B Preferred Stock are changed) plus in each case, any
       and all declared but unpaid dividends on such shares. As used herein,
       "Available Funds" shall mean the assets of the Corporation legally
       available for distribution to holders of the Corporation's capital stock,
       whether such assets are capital, surplus, or earnings. If the Available
       Funds shall be insufficient to permit the payment in full to all holders
       of the Series B Preferred Stock the full amounts (including all dividends
       accrued and unpaid) to which they shall be entitled by reason of such
       Liquidation of the Corporation, then there shall be paid to the holders
       of the Series B Preferred Stock in connection with such Liquidation of
       the Corporation, an amount equal to product derived by multiplying the
       amount of Available Funds times a fraction, the numerator of which shall
       be the full amount to which the holders of the Series B Preferred Stock
       shall be entitled by reason of such Liquidation of the Corporation and
       the denominator of which shall be the total amount which would have been
       distributed by reason of such Liquidation of the Corporation with respect
       to the Series B Preferred Stock then outstanding had the Corporation
       possessed sufficient assets to pay the maximum amount which the holders
       of all such stock would be entitled to receive in connection with such
       Liquidation of the Corporation.

        The voluntary sale, conveyance, lease, exchange or transfer of all or
    substantially all the property or assets of the Corporation, or the merger
    or consolidation of the Corporation into or with any other corporation, or
    the merger of any other corporation into the Corporation, or any purchase of
    all or substantially all of the shares of any class or series of stock of
    the Corporation, shall not be deemed to be a Liquidation of the Corporation
    for the purposes of this Section 6, [so long as such transaction does not
    result in the issuance or creation of any shares of Preferred Stock of the
    Corporation, or of any successor, except any shares of Preferred Stock that
    rank junior (as defined elsewhere in these resolutions) to the shares of
    Series B Preferred Stock as to dividends and as to the distribution of
    assets upon dissolution, liquidation or winding up; provided, however, if
    more than 50% (by value as determined in good faith by the Board of
    Directors) of the consideration received in a transaction by holders of the
    Corporation's Common Stock in such transaction consists of cash, notes
    payable in cash or Marketable Stock (as defined below), the transaction will
    be deemed to be a Liquidation for purposes of this Section. The phrase "all
    or substantially all" as used in this definition in reference to a class of
    the Corporation's capital stock means 66% or more of the aggregate
    outstanding amount. The phrase "all or substantially all" as used in this
    definition in reference to the property, business or assets of the
    Corporation shall mean assets of a corporation as are quantitatively vital
    to the operations of the Corporation and substantially affects the existence
    and purpose of the Corporation. As used herein, the term "Marketable Stock"
    means the Corporation's Common Stock or common stock of any corporation

                                      A-6
<PAGE>
    that is the successor to all or substantially all of the business or assets
    of the Corporation or of the ultimate parent of such successor, which is (or
    will, upon distribution thereof, be) listed or quoted on the New York Stock
    Exchange, the American Stock Exchange, or the Nasdaq National Market or the
    Nasdaq Small Cap Market.]

        The holder of any shares of Series B Preferred Stock shall not be
    entitled to receive any payment of the full balance owed for such shares
    under this Section 6 until such holder shall cause to be delivered to the
    Corporation (i) the certificate(s) representing such shares of Series B
    Preferred Stock (or an affidavit of lost certificate and such other
    documentation or assurances as are required by applicable law, in a form
    reasonably acceptable to the Corporation) and (ii) transfer instrument(s)
    satisfactory to the Corporation and sufficient to transfer such shares of
    Series B Preferred Stock to the Corporation free of any adverse interest. No
    interest shall accrue on any payment upon Liquidation after the due date
    thereof.

        After the Series B Preference Price shall have been paid in full to the
    holders of the Series B Preferred Stock, or funds necessary for such payment
    shall have been set aside by the Corporation in trust for the account of
    holders of the Series B Preferred Stock and available for such payment, the
    remaining assets of the Corporation available for distribution to
    stockholders shall be distributed among the holders of Common Stock and any
    other class of stock of the Corporation ranking junior to the Series B
    Preferred Stock, and the holders of shares of the Series B Preferred Stock
    will not be entitled to any further participation in any distribution of
    assets by the Corporation.

           (b)  PROPERTY.  Whenever the distribution provided for herein shall
       be paid in property other than cash, the value of such distribution shall
       be the fair market value of such property as determined in good faith by
       the Board of Directors of the Corporation.

        7.  VOTING RIGHTS.  Except as otherwise required by applicable law, the
    Series B Preferred Stock shall have no voting rights.

        8.  NOTICES OF RECORD DATES.  In the event of any taking by the
    Corporation of a record of the holders of any class of securities for the
    purpose of determining the holders thereof who are entitled to receive any
    dividend or other distribution, or to receive any other right, or any
    capital reorganization of the Corporation, any reclassifi cation or
    recapitalization of the capital stock of the Corporation, any merger or
    consolidation of the Corporation, or any transfer of all or substantially
    all of the assets of the Corporation to any other corporation, or any other
    entity or person, or any voluntary or involuntary dissolution, liquidation
    or winding up of the Corporation, then and in each such event the
    Corporation shall mail or cause to be mailed to each holder of Series B
    Preferred Stock a notice specifying (i) the date on which any such record is
    to be taken for the purpose of such dividend, distribution or right and a
    description of such dividend, distribution or right, (ii) the date on which
    any such reorganization, reclassification, recapitalization, transfer,
    consolidation, merger, dissolution, liquidation or winding up is expected to
    become effective, (iii) the time, if any, that is to be fixed, as to when
    the holders of record of Common Stock (or other securities) shall be
    entitled to exchange their shares of Common Stock (or other securities) for
    securities or other property deliverable upon such reorganization,
    reclassification, recapitalization, transfer, consolidation, merger,
    dissolution, liquidation or winding up. Such notice shall be mailed at least
    30 days prior to the date specified in such notice on which such action is
    to be taken.

        9.  NO REISSUANCE OF THE SERIES B PREFERRED STOCK.  No share or shares
    of the Series B Preferred Stock acquired by the Corporation by reason of
    redemption, purchase, conversion or otherwise shall be reissued. The
    Corporation may from time to time take such appropriate corporate action as
    may be necessary to reduce the authorized number of shares of the Series B
    Preferred Stock accordingly.

                                      A-7
<PAGE>
        10.  NO SENIOR OR EQUAL SHARES.  With the exception of the Series C
    Preferred Stock, the Board of Directors of the Corporation shall not,
    without the consent of the holders of a majority of the outstanding
    Series B Preferred Stock, create any class or series of equity security
    which is either senior or equal to the Series B Preferred Stock with respect
    to rights upon Liquidation.

        11.  AMENDMENT.  If any shares of Series C Preferred Stock have been
    issued and are outstanding, the rights, preferences and privileges of the
    Series C Preferred Stock may not be changed, altered or amended without the
    prior consent of the holders of (i) a majority of the outstanding Series C
    Preferred Stock, and (ii) at least eight-five percent (85%) of the
    outstanding Common Stock.


        12.  COMMON STOCK.  All rights accruing to the outstanding shares of the
    Corporation not expressly provided for to the contrary herein shalt be
    vested in the Common Stock.


                                      A-8
<PAGE>
                                   APPENDIX B

                  CERTIFICATE OF DESIGNATION, PREFERENCES AND
                       RIGHTS OF SERIES C PREFERRED STOCK

                                      B-1
<PAGE>
                    CERTIFICATE OF DESIGNATION, PREFERENCES
                                 AND RIGHTS OF
                            SERIES C PREFERRED STOCK
                                       OF
                          JENKON INTERNATIONAL, INC.,
                             A DELAWARE CORPORATION

    (Pursuant to Section 151 of the General Corporation Law of the State of
Delaware)

    Jenkon International, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that, pursuant to the authority contained in Article 4, Section 2 of
its Certificate of Incorporation, and in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware, its Board
of Directors has adopted the following resolution creating a series of its
Preferred Stock designated as Series C Preferred Stock:

    "RESOLVED, that a series of the class of authorized Preferred Stock of the
Corporation be, and hereby is, created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof, are as follows:

        BE IT RESOLVED, that pursuant to the authority vested in the Board of
    Directors of the Corporation by the Certificate of Incorporation, the Board
    of Directors does hereby provide for the issue of a series of Preferred
    Stock, $.001 par value per share, of the Corporation, to be designated
    "Series C Preferred Stock", consisting of 1,208,000 shares, and to the
    extent that the voting powers, designations, preferences, limitations,
    restrictions and relative rights of the Series C Preferred Stock are not
    stated and expressed in the Certificate of Incorporation, does hereby fix
    and herein state and express such voting powers, designations, preferences,
    limitations, restrictions and relative rights as follows (all terms used
    herein which are defined in the Certificate of Incorporation shall be deemed
    to have the meanings provided therein):

        1.  DESIGNATION AND AMOUNT.  The shares of such series shall be
    designated as "Series C Preferred Stock" and the number of shares
    constituting such series shall be 1,208,000. Such number of shares may be
    decreased by resolution of the Board of Directors; provided, that no
    decrease shall reduce the number of shares of Series C Preferred Stock to a
    number less than the number of shares of Series C Preferred Stock then
    outstanding or reserved for issuance.

        2.  RANKING.  The Series C Preferred Stock shall rank (i) senior to the
    Common Stock, and (ii) equal to the Series B Preferred Stock of the
    Corporation with respect to the payment of dividends, the distribution of
    assets and upon liquidation or winding up of the Corporation.

        3.  DIVIDENDS.  So long as any shares of Series C Preferred Stock are
    outstanding, the Corporation shall not, without the written consent of the
    holders of a majority of the outstanding shares of Series C Preferred Stock,
    (i) declare or pay a dividend on, (ii) make any distribution to the holders
    of, or (iii) repurchase, redeem or make provisions for the purchase or
    redemption (whether directly or through a subsidiary) of any class or series
    of stock of the Corporation ranking junior or equal to the Series C
    Preferred Stock (other than the payment of dividends payable in securities
    of the Corporation which shall be governed by the provisions of
    Section 4(f)(i) of this Certificate of Designation).

        4.  CONVERSION RIGHTS AND LIMITATIONS.  The holders of the Series C
    Preferred Stock shall have the following conversion rights and limitations:

           (a)  SUBJECT TO STOCKHOLDER APPROVAL.  No shares of Series C
       Preferred Stock shall be convertible into Common Stock of the Corporation
       unless and until the holders of a majority

                                      B-2
<PAGE>
       of the Common Stock represented and entitled to vote at a meeting of
       stockholders at which a quorum is present shall approve the right of the
       Series C Preferred Stock to so convert ("Stockholder Approval").

           (b)  SUBJECT TO POST-MERGER REVENUES OF THE
       CORPORATION.  Additionally, no shares of Series C Preferred Stock shall
       be convertible into Common Stock of the Corporation unless and until the
       first calendar year (or part thereof) in which revenues of Multimedia
       K.I.D.--Intelligence in Education, Ltd., an Israeli corporation that will
       become a wholly-owned subsidiary of the Corporation simultaneously with
       the initial issuance of the shares of Series C Preferred Stock, as a
       stand-alone entity, shall exceed US$1,700,000.00, exclusive of revenues
       generated by the portion of the Corporation that constituted the
       Corporation prior to the contemplated merger (the "Annual Revenue
       Target").

           (c)  AUTOMATIC CONVERSION.  Upon both Stockholder Approval and the
       achievement of the Annual Revenue Target, the shares of Series C
       Preferred Stock shall automatically convert into fully-paid and
       nonassessable shares of Common Stock, with identical designations,
       preferences and rights thereof.

           (d)  CONVERSION RATE.  Each share of Series C Preferred Stock shall
       be converted into ten (10) shares of Common Stock, subject to adjustment
       in accordance with Section 4(f) below.

           (e)  MECHANICS OF CONVERSION.  Upon Stockholder Approval and the
       achievement of the Annual Revenue Target, each holder of Series C
       Preferred Stock shall surrender the certificate or certificates therefor,
       duly endorsed, at the office of the Corporation or of any transfer agent
       for the Common Stock. Thereupon the Corporation shall promptly issue and
       deliver at such office to such holder a certificate or certificates for
       the number of shares of Common Stock to which such holder is entitled.
       Such conversion shall be deemed to have been made immediately prior to
       the close of business on the date of such surrender of the certificate
       representing the shares to be converted, and the person entitled to
       receive the shares of Common Stock issuable upon such conversion shall be
       treated for all purposes as the record holder of such shares of Common
       Stock on such date (the "Conversion Date").

           (f)  ADJUSTMENTS IN CERTAIN CUSTOMARY EVENTS.

               (i)  STOCK DIVIDENDS.  In the event the Corporation shall make or
           issue, or fix a record date for the determination of holders of
           Common Stock entitled to receive, a dividend or other distribution
           payable in securities of the Corporation, then and in each such event
           provision shall be made so that the holders of the Series C Preferred
           Stock shall receive upon conversion thereof in addition to the number
           of shares of Common Stock receivable thereupon, the number of
           securities of the Corporation which they would have received had
           their Series C Preferred Stock been converted into Common Stock on
           the date of such event and had they thereafter, during the period
           from the date of such event to and including the Conversion Date,
           retained such securities receivable by them as aforesaid during such
           period, giving application to all adjustments called for during such
           period under this Section 4 with respect to the rights of the holders
           of the Series C Preferred Stock.

               (ii)  RECAPITALIZATION OR RECLASSIFICATION.  If the Common Stock
           of the Corporation shall be changed into the same or different number
           of shares of any class or classes of stock of the Corporation,
           whether by recapitalization, reclassification or otherwise (other
           than a subdivision or combination of shares or stock dividend
           provided for elsewhere in the Certificate of Incorporation or these
           resolutions, or a reorganization, merger, consolidation or sale of
           assets provided for elsewhere in the Certificate of Incorporation

                                      B-3
<PAGE>
           or these resolutions), then and in each such event the holder of
           shares of Series C Preferred Stock shall have the right thereafter to
           convert such shares into the kind and amount of shares of stock and
           other securities and property receivable upon such reorganization,
           reclassification or other change by holders of the number of shares
           of Common Stock into which such shares of Series C Preferred Stock
           would have been converted (taking into account all accrued and unpaid
           dividends and interest with respect to such Series C Preferred Stock)
           immediately prior to such reorganization, reclassification or change,
           all subject to further adjustment as provided herein.

               (iii)  MERGER OR SALE OF ASSETS.  If at any time or from time to
           time there shall be a merger or consolidation of the Corporation with
           or into another corporation (other than a merger which does not
           result in any reclassification, conversion, exchange or cancellation
           of outstanding shares or Common Stock of the Corporation), or the
           sale of all or substantially all of the Corporation's properties and
           assets to any other person followed by a liquidation of the
           Corporation, then, as a part of such transaction, provision shall be
           made so that each holder of a share of Series C Preferred Stock then
           outstanding shall have the right thereafter to convert such share
           only into the kind and amount of securities, cash and other property
           of the Corporation, or of the successor corporation resulting from
           such merger or consolidation, receivable upon such consolidation,
           merger, sale or transfer by a holder of the number of shares of
           Common Stock of the Corporation into which such share of Series C
           Preferred Stock might have been converted immediately prior to such
           consolidation, merger, sale or transfer, assuming such holder of
           Common Stock of the Corporation is not an entity with which the
           Corporation consolidated or into which the Corporation merged or
           which merged into the Corporation or to which such sale or transfer
           was made, as the case may be (a "constituent entity"), or an
           affiliate of a constituent entity. If necessary in any such case,
           appropriate adjustment shall be made in the application of the
           provisions of this Section 4 with respect to the rights of the
           holders of the Series C Preferred Stock after such transaction to the
           end that the provisions of this Section 4 (including adjustment of
           the Conversion Price then in effect and the number of shares issuable
           upon conversion of the Series C Preferred Stock) shall be applicable
           after that event in a manner corresponding as nearly as may be
           practicable in relation to any shares of stock or other securities or
           property thereafter deliverable on the conversion of the shares. The
           above provisions shall similarly apply to successive consolidations,
           mergers, sales or transfers.

               (iv)  SUBDIVISION AND COMBINATION.  In the event that the
           outstanding Common Stock shall be subdivided (by stock split or
           otherwise), or combined or consolidated, by reclassification or
           otherwise, into a different number of shares of Common Stock, the
           number of shares of Common Stock into which a share of Series C
           Preferred Stock may be converted shall be adjusted so that the
           holders of the Series C Preferred Stock shall have the right to
           convert each share of Series C Preferred Stock into the number of
           shares of Common Stock which such holders would have received upon
           such subdivision or combination if such holders had converted such
           shares into Common Stock immediately prior to such subdivision or
           combination. Any such adjustments shall become effective at the close
           of business on the effective date of the subdivision or combination.

               (v)  CERTIFICATE AS TO ADJUSTMENTS.  In each case of an
           adjustment or readjustment of the number of shares of Common Stock
           into which a share of Series C Preferred Stock may be converted, the
           Corporation will furnish each holder of Series C Preferred Stock with
           a certificate, executed by the President and Chief Financial Officer
           of the Corporation showing such adjustment or readjustment, and
           stating in detail the facts upon which such adjustment or
           readjustment is based. The Corporation in any such

                                      B-4
<PAGE>
           instance may, and in every instance upon the request of the holders
           of a majority of the Series C Preferred Stock the Corporation will,
           cause its independent public accountants to confirm the accuracy of
           such adjustment or readjustment. Any adjustment so confirmed shall be
           for all purposes hereof conclusively be deemed to be an appropriate
           adjustment.

           (g)  TRANSFER TAXES.  The Corporation will pay any and all
       documentary stamp or similar issue or transfer taxes payable in respect
       of the issue or delivery of shares of Common Stock on conversions of
       shares of Series C Preferred Stock pursuant hereto; provided, however,
       that the Corporation shall not be required to pay any tax which may be
       payable in respect of any transfer involved in the issue or delivery of
       shares of Common Stock in a name other than that of the holder of the
       shares of Series C Preferred Stock to be converted and no such issue or
       delivery shall be made unless and until the person requesting such issue
       or delivery has paid to the Corporation the amount of any such tax or has
       established, to the satisfaction of the Corporation, that such tax has
       been paid.

           (h)  SHARES TO BE VALIDLY ISSUED, ETC..  The Corporation covenants
       that all shares of Common Stock which may be issued upon conversions of
       shares of Series C Preferred Stock will, upon issue, be duly and validly
       issued, fully paid and non-assessable, free of all liens and charges and
       not subject to any preemptive rights.

           (i)  RESERVATION OF COMMON STOCK.  The Corporation shall at all times
       from and after the date of Stockholder Approval reserve and keep
       available out of its authorized but unissued shares of Common Stock,
       solely for the purpose of effecting the conversion of the shares of the
       Series C Preferred Stock, such number of its shares of Common Stock as
       shall from time to time be sufficient to effect the conversion of all
       outstanding shares of the Series C Preferred Stock, and if at any time
       the number of authorized but unissued shares of Common Stock shall not be
       sufficient to effect the conversion of all then outstanding shares of the
       Series C Preferred Stock, the Corporation shall take such corporate
       action as may be necessary to increase its authorized but unissued shares
       of Common Stock to such number of shares as shall be sufficient for such
       purpose.

        5.  CANCELLATION.  In the event that the Annual Revenue Target is not
    achieved by December 31, 2001, the shares of Series C Preferred Stock shall
    automatically be canceled without any further action on the part of the
    holders thereof or of the Corporation, and the holders of Series C Preferred
    Stock shall not be entitled to any rights of any sort, including, but not
    limited to, any rights of conversion, redemption or distribution.

        6.  REDEMPTION.

           (a)  REDEMPTION RIGHTS.  Upon the occurrence of a "Redemption Event"
       (as defined below), the shares of Series C Preferred Stock shall be
       redeemable at the option of the holders thereof. The redemption price of
       each share of Series C Preferred Stock shall be ten dollars ($10) per
       share (the "Redemption Price"). The Redemption Price shall increase at a
       rate of fifteen percent (15%) per year from and after April 1, 2000. A
       holder of Series C Preferred Stock desiring to redeem its shares shall
       provide written notice to the Corporation at its principal office of
       setting forth the number of shares it wishes to redeem. The Corporation
       shall pay the Redemption Price to a holder of Series C Preferred Stock
       within five (5) business days after it receives such written demand.

           (b)  REDEMPTION EVENT.  For purposes hereof, a "Redemption Event"
       shall be deemed to have occurred if:

               (i) Stockholder Approval has not been obtained on or prior to
           March 31, 2000, or such later date as the holders of a majority of
           the Series C Preferred Stock shall agree;

                                      B-5
<PAGE>
           provided, however, that if Stockholder Approval occurs after
           March 31, 2000, a Redemption Event shall be deemed to occur only with
           respect to shares of Series C Preferred Stock with respect to which
           written demand for redemption shall have been made and received by
           the Corporation prior to the date of Stockholder Approval;

               (ii) A receiver, liquidator or trustee of the Corporation or of a
           substantial part of its properties shall be appointed by court order
           and such order shall remain in effect for more than fifteen
           (15) days, the Corporation shall be adjudicated bankrupt or
           insolvent, a substantial party of the property of the Corporation
           shall be sequestered by court order and such order shall remain in
           effect for more than fifteen (15) days, or a petition to reorganize
           the Corporation under any bankruptcy, reorganization or insolvency
           law shall be filed against the Corporation and shall not be dismissed
           within forty-five (45) days after such filing;

              (iii) The Corporation shall file a petition in voluntary
           bankruptcy or request reorganization under any provision of any
           bankruptcy, reorganization or insolvency law, or shall consent to the
           filing of any petition against it under any such law; or

               (iv) The Corporation shall make an assignment for the benefit of
           its creditors or consent to the appointment of a receiver, trustee or
           liquidator of the Corporation, or of all or any substantial part of
           its properties.

        7.  LIQUIDATION, DISSOLUTION OR WINDING UP.

           (a)  LIQUIDATION PREFERENCE.  In the event of any liquidation,
       dissolution or winding up of the Corporation, whether voluntary or
       involuntary ("Liquidation"), occurring before the date of Stockholder
       Approval, the holders of each share of Series C Preferred Stock shall be
       entitled to receive out of the "Available Funds" (as defined below),
       before any sums shall be paid or any assets distributed among the holders
       of shares of Common Stock and any other class of stock of the Corporation
       ranking junior to the Series C Preferred Stock, an amount or value (such
       amount or value as described immediately below is hereinafter called the
       "Series C Preference Price") equal to $10.00 per share of Series C
       Preferred Stock (subject to adjustment if the Series C Preferred Stock of
       the Corporation shall be changed into a different number of shares,
       whether by recapitalization, reclassification or otherwise, and then and
       in each such event the holder of shares of Series C Preferred Stock shall
       have the right thereafter to receive upon redemption such same amount
       aggregately receivable immediately prior to reorganization,
       reclassification or other change of the number of shares of Series C
       Preferred Stock apportioned among the number of shares into which such
       shares of Series C Preferred Stock are changed) plus in each case, any
       and all declared but unpaid dividends on such shares. In the event that a
       Liquidation occurs subsequent to the date of Stockholder Approval but
       prior to the date on which the Annual Revenue Target has been achieved,
       holders of Series C Preferred Stock will be entitled to a Series C
       Preference Price of $.01 per share of Series C Preferred Stock and, after
       payment thereof, shall participate ratably with the Common Stock in any
       distribution of Available Funds on an "as converted" bases. As used
       herein, "Available Funds" shall mean the assets of the Corporation
       legally available for distribution to holders of the Corporation's
       capital stock, whether such assets are capital, surplus, or earnings. If
       the Available Funds shall be insufficient to permit the payment in full
       to all holders of the Series C Preferred Stock the full amounts
       (including all dividends accrued and unpaid) to which they shall be
       entitled by reason of such Liquidation of the Corporation, then there
       shall be paid to the holders of the Series C Preferred Stock in
       connection with such Liquidation of the Corporation, an amount equal to
       product derived by multiplying the amount of Available Funds times a
       fraction, the numerator of which shall be the full amount to which the
       holders of the Series C Preferred Stock shall be entitled by reason of
       such

                                      B-6
<PAGE>
       Liquidation of the Corporation and the denominator of which shall be the
       total amount which would have been distributed by reason of such
       Liquidation of the Corporation with respect to the Series C Preferred
       Stock then outstanding had the Corporation possessed sufficient assets to
       pay the maximum amount which the holders of all such stock would be
       entitled to receive in connection with such Liquidation of the
       Corporation.

           The voluntary sale, conveyance, lease, exchange or transfer of all or
       substantially all the property or assets of the Corporation, or the
       merger or consolidation of the Corporation into or with any other
       corporation, or the merger of any other corporation into the Corporation,
       or any purchase of all or substantially all of the shares of any class or
       series of stock of the Corporation, shall not be deemed to be a
       Liquidation of the Corporation for the purposes of this Section 7;
       provided, however, if more than 50% (by value as determined in good faith
       by the Board of Directors) of the consideration received in a transaction
       by holders of the Corporation's Common Stock in such transaction consists
       of cash, notes payable in cash or Marketable Stock (as defined below),
       the transaction will be deemed to be a Liquidation for purposes of this
       Section. The phrase "all or substantially all" as used in this definition
       in reference to a class of the Corporation's capital stock means 66% or
       more of the aggregate outstanding amount. The phrase "all or
       substantially all" as used in this definition in reference to the
       property, business or assets of the Corporation shall mean assets of a
       corporation as are quantitatively vital to the operations of the
       Corporation and substantially affects the existence and purpose of the
       Corporation. As used herein, the term "Marketable Stock" means the
       Corporation's Common Stock or common stock of any corporation that is the
       successor to all or substantially all of the business or assets of the
       Corporation or of the ultimate parent of such successor, which is (or
       will, upon distribution thereof, be) listed or quoted on the New York
       Stock Exchange, the American Stock Exchange, or the Nasdaq National
       Market or the Nasdaq Small Cap Market.

           The holder of any shares of Series C Preferred Stock shall not be
       entitled to receive any payment of the full balance owed for such shares
       under this Section 7 until such holder shall cause to be delivered to the
       Corporation (i) the certificate(s) representing such shares of Series C
       Preferred Stock (or an affidavit of lost certificate and such other
       documentation or assurances as are required by applicable law, in a form
       reasonably acceptable to the Corporation) and (ii) transfer instrument(s)
       satisfactory to the Corporation and sufficient to transfer such shares of
       Series C Preferred Stock to the Corporation free of any adverse interest.
       No interest shall accrue on any payment upon Liquidation after the due
       date thereof.

           After the Series C Preference Price shall have been paid in full to
       the holders of the Series C Preferred Stock, or funds necessary for such
       payment shall have been set aside by the Corporation in trust for the
       account of holders of the Series C Preferred Stock and available for such
       payment, the remaining assets of the Corporation available for
       distribution to stockholders shall be distributed among the holders of
       Common Stock and any other class of stock of the Corporation ranking
       junior to the Series C Preferred Stock, and the holders of shares of the
       Series C Preferred Stock will not be entitled to any further
       participation in any distribution of assets by the Corporation.

           (b)  PROPERTY.  Whenever the distribution provided for herein shall
       be paid in property other than cash, the value of such distribution shall
       be the fair market value of such property as determined in good faith by
       the Board of Directors of the Corporation.

        8.  VOTING RIGHTS.  Except as otherwise required by applicable law, the
    Series C Preferred Stock shall have no voting rights prior to Stockholder
    Approval. If there has been Stockholder Approval but the Annual Revenue
    Target has not been satisfied, each share of the Series C Preferred Stock
    shall, except to the extent that requirements of law supersede the
    limitations on

                                      B-7
<PAGE>
    voting rights in the Certificate of Incorporation or these resolutions and
    as otherwise set forth herein, be entitled to vote, together with holders of
    the Common Stock of the Corporation as a single class, with respect to any
    questions upon which holders of Common Stock have the right to vote. Each
    holder of Series C Preferred Stock shall be entitled to that number of votes
    equal to the number of shares of Common Stock into which such holder's
    shares of Series C Preferred Stock could be converted pursuant to the
    provisions of Section 4 hereof, at the record date for the determination of
    stockholders entitled to vote on such matter or, if no such record date is
    established, at the date such vote is taken or any written consent of
    stockholders is solicited. Each holder of Series C Preferred Stock shall be
    entitled, notwithstanding any provision hereof, to notice of any
    stockholders' meeting in accordance with the bylaws of this Corporation.

        9.  NOTICES OF RECORD DATES.  In the event of any taking by the
    Corporation of a record of the holders of any class of securities for the
    purpose of determining the holders thereof who are entitled to receive any
    dividend or other distribution, or to receive any other right, or any
    capital reorganization of the Corporation, any reclassifi cation or
    recapitalization of the capital stock of the Corporation, any merger or
    consolidation of the Corporation, or any transfer of all or substantially
    all of the assets of the Corporation to any other corporation, or any other
    entity or person, or any voluntary or involuntary dissolution, liquidation
    or winding up of the Corporation, then and in each such event the
    Corporation shall mail or cause to be mailed to each holder of Series C
    Preferred Stock a notice specifying (i) the date on which any such record is
    to be taken for the purpose of such dividend, distribution or right and a
    description of such dividend, distribution or right, (ii) the date on which
    any such reorganization, reclassification, recapitalization, transfer,
    consolidation, merger, dissolution, liquidation or winding up is expected to
    become effective, (iii) the time, if any, that is to be fixed, as to when
    the holders of record of Common Stock (or other securities) shall be
    entitled to exchange their shares of Common Stock (or other securities) for
    securities or other property deliverable upon such reorganization,
    reclassification, recapitalization, transfer, consolidation, merger,
    dissolution, liquidation or winding up. Such notice shall be mailed at least
    30 days prior to the date specified in such notice on which such action is
    to be taken.

        10.  NO REISSUANCE OF THE SERIES C PREFERRED STOCK.  No share or shares
    of the Series C Preferred Stock acquired by the Corporation by reason of
    redemption, purchase, conversion or otherwise shall be reissued. The
    Corporation may from time to time take such appropriate corporate action as
    may be necessary to reduce the authorized number of shares of the Series C
    Preferred Stock accordingly.

        11.  NO SENIOR OR EQUAL SHARES.  With the exception of the Series B
    Preferred Stock, the Board of Directors of the Corporation shall not,
    without the consent of the holders of a majority of the outstanding
    Series C Preferred Stock, create any class or series of equity security
    which is either senior or equal to the Series C Preferred Stock with respect
    to rights upon Liquidation.

        12.  AMENDMENT.  If any shares of Series C Preferred Stock have been
    issued and are outstanding, the rights, preferences and privileges of the
    Series C Preferred Stock may not be changed, altered or amended without the
    prior consent of the holders of (i) a majority of the outstanding Series C
    Preferred Stock, and (ii) at least eight-five percent (85%) of the
    outstanding Common Stock.


        13.  COMMON STOCK.  All rights accruing to the outstanding shares of the
    Corporation not expressly provided for to the contrary herein shalt be
    vested in the Common Stock."


                                      B-8
<PAGE>
                                   APPENDIX C

                      FORM OF CONVERTIBLE PROMISSORY NOTE

                                      C-1
<PAGE>
THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED, DISPOSED OF OR OFFERED FOR SALE, IN
WHOLE OR IN PART, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THAT ACT COVERING THIS NOTE AND/OR THE COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO JENKON
INTERNATIONAL, INC. THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

                          CONVERTIBLE PROMISSORY NOTE
                                  (THE "NOTE")

                           JENKON INTERNATIONAL, INC.

Principal Sum: $

Holder:

    JENKON INTERNATIONAL, INC., a Delaware corporation (hereinafter called the
"Corporation"), hereby promises to pay the Principal Sum set forth above (the
"Principal Sum") to the order of the above-referenced holder (the "Holder") on
or before April 1, 2000. This Note shall accrue interest at the rate of twelve
percent (12%) per annum from and after January 1, 2000. Accrued interest shall
be payable on February 1, 2000 and at maturity or on conversion (each, an
"interest payment date"). Interest shall be computed on the basis of a 360-day
year.

    1.  ISSUANCE.  This Note is being issued pursuant to the terms of a Note
Purchase Agreement between the Corporation and the Holder (the "Subscription
Agreement") which contains, among other things, certain representations by the
Holder as to Holder's sophistication as an investor. In addition, the
Subscription Agreement contains certain covenants of the Corporation relating to
the registration of the Common Stock into which this Note may be converted under
the Securities Act of 1933, as amended (the "Act").

    2.  CONVERSION.

        (a) On the Shareholder Approval Date (as hereinafter defined), the
    outstanding principal balance of this Note shall automatically be converted
    into shares of common stock, $0.001 par value, of the Corporation ("Common
    Stock") at a conversion price of $1.00 per share.

        (b) Simultaneously with the issuance of this Note, the Corporation shall
    reserve for issuance on conversion of this Note the total number shares of
    Common Stock issuable upon conversion of this Note (as such number may be
    adjusted from time to time in accordance with (c) below, the "Conversion
    Shares"). The Corporation shall use its best reasonable efforts promptly to
    list on the Nasdaq SmallCap Market, all of the Conversion Shares.

        (c) If any capital reorganization or reclassification of the Common
    Stock, stock split, reverse stock split, stock combination, or consolidation
    or merger of the Corporation with or into another corporation, or
    distribution of the proceeds of any sale or conveyance of all or
    substantially all of its assets to another corporation (a "Capital Event")
    shall be effected, then, as a condition precedent of such Capital Event, the
    following provision shall be made: The Holder of the Note shall, from and
    after the date of such Capital Event sale have the right to receive upon
    conversion (in lieu of the shares of Common Stock of the Corporation
    immediately theretofore issuable upon the exercise of conversion rights),
    such shares of stock, securities or assets as would have been issued or
    payable with respect to or in exchange for the number of shares of Common
    Stock immediately theretofore issuable upon conversion of the Note
    (regardless of whether the Note was

                                      C-2
<PAGE>
    actually convertible at such time). In any such case, appropriate provision
    shall be made with respect to the rights and interests of the Holders to the
    end that such conversion rights (including, without limitation, provisions
    for appropriate adjustments) shall thereafter be applicable, as nearly as
    may be practicable in relation to any shares of stock, securities or assets
    thereafter deliverable upon the conversion of the Note.

        (d) The Corporation covenants to call a meeting of stockholders to be
    held on or before March 31, 2000 to, among other things, approve the
    issuance of the Conversion Shares and such other shares of Common Stock as
    may be issuable upon conversion of certain other notes of the same tenor
    (collectively, the "JNKN Notes"). The Board of Directors of the Corporation
    will recommend that the stockholders of the Corporation vote in favor of
    such approval. The date on which such approval is obtained is referred to
    herein as the "Stockholder Approval Date."

    3.  ISSUANCE OF CONVERSION SHARES.  The Corporation covenants and agrees
that all Conversion Shares will, upon conversion of the JNKN Notes and issuance
in accordance with the terms hereof, be duly and validly issued, fully paid and
non-assessable.

    4.  EVENTS OF DEFAULT AND ACCELERATION OF THE NOTE.

        (a) An "event of default" with respect to this Note shall exist if any
    of the following shall occur:

           (i) The Corporation shall breach or fail to comply with any provision
       of this Note and such breach or failure shall continue for fifteen
       (15) days after written notice thereof to the Corporation by any Holder
       of JNKN Notes.

           (ii) A receiver, liquidator or trustee of the Corporation or of a
       substantial part of its properties shall be appointed by court order and
       such order shall remain in effect for more than fifteen (15) days; or the
       Corporation shall be adjudicated bankrupt or insolvent; or a substantial
       part of the property of the Corporation shall be sequestered by court
       order and such order shall remain in effect for more than fifteen
       (15) days; or a petition to reorganize the Corporation under any
       bankruptcy, reorganization or insolvency law shall be filed against the
       Corporation and shall not be dismissed within forty-five (45) days after
       such filing.

          (iii) The Corporation shall file a petition in voluntary bankruptcy or
       request reorganization under any provision of any bankruptcy,
       reorganization or insolvency law, or shall consent to the filing of any
       petition against it under any such law.

           (iv) The Corporation shall make an assignment for the benefit of its
       creditors, or consent to the appointment of a receiver, trustee or
       liquidator of the Corporation, or of all or any substantial part of its
       properties.

        (b) If an event of default referred to in clause (i) shall occur, the
    Holder may, in addition to such Holder's other remedies, by written notice
    to the Corporation, declare the principal amount of this Note, together with
    all interest accrued thereon, to be due and payable immediately. Upon any
    such declaration, such amount shall become immediately due and payable and
    the Holder shall have all such rights and remedies provided for under the
    terms of this Note and the Subscription Agreement. If an event of default
    referred to in clauses (ii), (iii) or (iv) shall occur, the principal amount
    of this Note, together with all interest accrued thereon, shall become
    immediately due and payable and the Holder shall have all such rights and
    remedies, if any, provided for under the terms of this Note and the
    Subscription Agreement.

    5.  INTEREST RATE LIMITATION.  It is the intent of Holder and the
Corporation in this execution of this Note, that the loan evidenced hereby be
exempt from the restrictions of applicable state usury laws. In the event that
for any reason, it should be determined that any such usury law is applicable to
this Note, Holder and the Corporation stipulate and agree that none of the terms
and provisions

                                      C-3
<PAGE>
contained herein shall ever be construed to create a contract for the use,
forbearance or detention of money requiring payment of interest at a rate in
excess of the maximum interest rate permitted to be charged by the laws of such
state. In such event, if the Corporation shall collect monies which are deemed
to constitute interest which would otherwise increase the effective interest
rate on this Note to a rate in excess of the maximum rate permitted to be
charged by applicable state law, all such sums shall, at the option of Holder,
be credited to the payment of the sums due hereunder or returned to the
Corporation.

    6.  MISCELLANEOUS.

        (a) All notices and other communications required or permitted to be
    given hereunder shall be in writing and shall be given (and shall be deemed
    to have been duly given upon receipt) by delivery in person, by telegram, by
    facsimile, recognized overnight mail carrier, telex or other standard form
    of telecommunications, or by registered or certified mail, postage prepaid,
    return receipt requested, addressed as follows: (a) if to the Holder, to
    such address as such Holder shall furnish to the Corporation in accordance
    with this Section, or (b) if to the Corporation, to it at its headquarters
    office, or to such other address as the Corporation shall furnish to the
    Holder in accordance with this Section.

        (b) This Note shall be governed and construed in accordance with the
    laws of the State of New York applicable to agreements made and to be
    performed entirely within such state.

        (c) The Corporation waives protest, notice of protest, presentment,
    dishonor, notice of dishonor and demand.

        (d) If any provision of this Note shall for any reason be held to be
    invalid or unenforceable, such invalidity or unenforceability shall not
    affect any other provision hereof, but this Note shall be construed as if
    such invalid or unenforceable provision had never been contained herein.

        (e) The waiver of any event of default or the failure of the Holder to
    exercise any right or remedy to which it may be entitled shall not be deemed
    a waiver of any subsequent event of default or of the Holder's right to
    exercise that or any other right or remedy to which the Holder is entitled.

        (f) Upon the occurrence of an uncured event of default, the Holder of
    this Note shall be entitled to recover its legal and other costs of
    collecting on this Note, and such costs shall be deemed added to the
    principal amount of this Note.


        (g) In addition to all other remedies to which the Holder may be
    entitled hereunder, Holder shall also be entitled to decrees of specific
    performance without posting bond or other security.


                                      C-4
<PAGE>
                                   APPENDIX D

                      FORM OF AMENDMENT TO CERTIFICATE OF
                  INCORPORATION OF JENKON INTERNATIONAL, INC.

                                      D-1
<PAGE>
                  AMENDED ARTICLE I AND ARTICLE IV, SECTION 1
                                       OF
                          CERTIFICATE OF INCORPORATION
                         OF JENKON INTERNATIONAL, INC.

                                   ARTICLE I

    The name of this corporation (herein called the "Corporation") is as
follows:

                            Multimedia K.I.D., Inc.

                                   ARTICLE IV

    Section 1.  AUTHORIZED SHARES.  The total number of all classes of capital
stock which the corporation is authorized to issue is 55,000,000 shares which
shall be divided into two classes as follows: 50,000,000 Common shares, with a
par value of $.001 per share; and 5,000,000 Preferred shares, with a par value
of $.001 per share.

    The full voting power of the Corporation shall be exercised by the Common
Stock and all other future series of Common shares with full voting rights and
any series of Preferred shares with equivalent voting rights, all voting
together as one class, and none of such series of Common shares or Preferred
shares shall have any other or special voting rights except as otherwise
required by the laws as then applicable, the Corporation's Certificate of
Incorporation as then amended, or any resolution of the Board of Directors
originally designating such series.

    Preferred shares of the Corporation's capital stock may be issued in one or
more series at such time or times, and for such consideration or considerations
as the Board of Directors may determine from time to time. The Board of
Directors is expressly authorized as to any wholly unissued series of Preferred
shares, to determine the number of shares thereof and the dividend rights,
dividend rates, conversion rights (if any), redemption prices, liquidation
preferences, voting rights (if any), the rights and terms of redemption
(including sinking fund provisions) and all other rights, preferences and
privileges thereof. The Board of Directors may increase or decrease the number
of shares of any series subsequent to the issue of shares of that series, but
not below the number of shares of that series then outstanding. In case the
number of shares of any series shall be so decreased, the shares constituting
that decrease shall resume the status which they had prior to the adoption of
the resolution originally fixing the number of shares of that series.

                                      D-2
<PAGE>
                                   APPENDIX E

                           STOCK PURCHASE AGREEMENT.

                                      E-1
<PAGE>
                            STOCK PURCHASE AGREEMENT

                                     AMONG

                                   JIA, INC.

                                 SUMMIT V, INC

                                      AND

               JENKON INTERNATIONAL, INC., A DELAWARE CORPORATION

                                      AND

              JENKON INTERNATIONAL, INC., A WASHINGTON CORPORATION

                           DATED AS OF APRIL 6, 2000

                                      E-2
<PAGE>
                               TABLE OF CONTENTS

<TABLE>
<S>       <C>        <C>        <C>                                                           <C>
ARTICLE I--DEFINITIONS......................................................................     E-6

ARTICLE II--PURCHASE AND SALE OF SHARES.....................................................     E-7
          2.1        Purchase and Sale of Shares............................................     E-7
          2.2        Consideration for Shares...............................................     E-7
                     2.2.1      Closing Payment.............................................     E-7
                     2.2.2      Note........................................................     E-7
                     2.2.3      Escrow......................................................     E-7
          2.3        Closing................................................................     E-7

ARTICLE III--REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS.............
                                                                                                 E-8
          3.1        Shareholder Matters....................................................     E-8
                     3.1.1      Good Title..................................................     E-8
                     3.1.2      Authority...................................................     E-8
                     3.1.3      Enforceability..............................................     E-8
                     3.1.4      No Approvals or Notices Required; No Conflicts..............     E-8
                     Company Organization; Good Standing; Corporate Authority;
          3.2        Enforceability.........................................................     E-9
          3.3        Capitalization.........................................................     E-9
          3.4        Subsidiaries and Affiliates............................................     E-9
          3.5        No Approvals or Notices Required; No Conflicts.........................    E-10
          3.6        Financial Statements; Obligations......................................    E-10
          3.7        Action by David Edwards................................................    E-10
          3.8        Accuracy of SEC Filings................................................    E-10
          3.9        Corporate Books and Records............................................    E-11
          3.10       Brokers or Finders.....................................................    E-11
          3.11       Bank Accounts..........................................................    E-11
          3.12       Accuracy of Representations and Warranties.............................    E-11
          3.13       Tax Consequences.......................................................    E-11

ARTICLE IV--REPRESENTATIONS AND WARRANTIES OF BUYER.........................................    E-11
          4.1        Organization...........................................................    E-11
          4.2        Enforceability.........................................................    E-11
          4.3        No Approvals or Notices Required; No Conflicts With Instruments........    E-12
          4.4        Claims and Legal Proceedings...........................................    E-12
          4.5        Tax Consequences.......................................................    E-12
          4.6        Accuracy of SEC Filings................................................    E-12
          4.7        Accuracy of Representations and Warranties.............................    E-12

ARTICLE V--COVENANTS........................................................................    E-12
          5.1        Conduct of Business by the Company Pending the Closing.................    E-12
          5.2        Access to Information; Confidentiality.................................    E-14
</TABLE>

                                      E-3
<PAGE>
<TABLE>
<S>       <C>        <C>        <C>                                                           <C>
          5.3        No Solicitation........................................................      14
          5.4        Notification of Certain Matters........................................    E-16
          5.5        Further Action.........................................................    E-16
          5.6        Publicity..............................................................    E-17

ARTICLE VI--ADDITIONAL AGREEMENTS...........................................................    E-17
          6.1        Preparation of the Proxy Statement; Stockholders Meeting...............    E-17
          6.2        Certain Expenses.......................................................    E-17
          6.3        Assignment of Intellectual Property....................................    E-17

ARTICLE VII--CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER...................................    E-17
          7.1        Accuracy of Representations and Warranties.............................    E-17
          7.2        Performance of Agreements..............................................    E-18
          7.3        Opinion of Counsel for the Company and the Shareholders................    E-18
          7.4        Consents to Sale of Shares.............................................    E-18
          7.5        Officers' Certificate..................................................    E-18
          7.6        Shareholder's Certificate..............................................    E-18
          7.7        Material Adverse Change................................................    E-18
          7.8        Approvals and Consents.................................................    E-18
          7.9        Proceedings and Documents; Secretary's Certificate.....................    E-18
          7.10       Compliance With Laws...................................................    E-19
          7.11       Legal Proceedings......................................................    E-19
          7.12       Delivery of Certificates...............................................    E-19
          7.14       Noncompetition Agreements..............................................    E-19
          7.15       Waiver by Insiders.....................................................    E-19

ARTICLE VIII--CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE SHAREHOLDERS.......
                                                                                                E-19
          8.1        Accuracy of Representations and Warranties.............................    E-19
          8.2        Performance of Agreements..............................................    E-19
          8.3        Opinion of Counsel for Buyer...........................................    E-20
          8.4        Officers' Certificate..................................................    E-20
          8.5        Material Adverse Change................................................    E-20
          8.6        Approvals and Consents.................................................    E-20
          8.7        Proceedings and Documents; Secretary's Certificate.....................    E-20
          8.8        Compliance With Laws...................................................    E-20
          8.9        Legal Proceedings......................................................    E-20
          8.10       Fairness Opinion.......................................................    E-20
          8.11       Waiver by Insiders.....................................................    E-20

ARTICLE IX--TERMINATION, AMENDMENT AND WAIVER...............................................    E-21
          9.1        Termination............................................................    E-21
          9.2        Effect of Termination..................................................    E-21
          9.3        Amendment..............................................................    E-22
          9.4        Waiver.................................................................    E-22
</TABLE>

                                      E-4
<PAGE>
<TABLE>
<S>       <C>        <C>        <C>                                                           <C>
ARTICLE X--SURVIVAL AND INDEMNIFICATION.....................................................    E-22
          10.1       Survival...............................................................    E-22
          10.2       Indemnification........................................................    E-22
                     10.2.1     Indemnification by the Shareholders.........................    E-22
                     10.2.2     Indemnification by Buyer....................................    E-23
          10.3       Limitations............................................................    E-23
          10.4       Procedure for Indemnification..........................................    E-23
                     10.4.1     Claim Notice................................................    E-23
                     10.4.2     Dispute Notice..............................................    E-23
                     10.4.3     Third-Party Claims..........................................    E-23
          10.5       Investigations; Waivers................................................    E-24

ARTICLE XI--GENERAL.........................................................................    E-24
          11.1       Expenses...............................................................    E-24
          11.2       Specific Enforcement...................................................    E-25
          11.3       Consequential Damages..................................................    E-25
          11.4       Assignment.............................................................    E-25
          11.5       Notices................................................................    E-25
          11.6       Governing Law; Jurisdiction; Venue.....................................    E-26
          11.7       Successors and Assigns.................................................    E-26
          11.8       Severability...........................................................    E-26
          11.9       Entire Agreement; Counterparts.........................................    E-26
</TABLE>

                                      E-5
<PAGE>
                            STOCK PURCHASE AGREEMENT

    This Stock Purchase Agreement (this "AGREEMENT") is entered into as of
April 6, 2000 among JIA, Inc., a WASHINGTON, corporation ("BUYER"), Jenkon
International, Inc., a WASHINGTON corporation ("the SHAREHOLDER"), Jenkon
International, Inc., a DELAWARE corporation (the "PARENT"), and Summit V, Inc.,
a Washington corporation (the "COMPANY"). The Shareholder and Parent are
collectively referred to as the "SHAREHOLDERS." Shareholder is a wholly owned
subsidiary of Parent.

                                    RECITALS

        A. The Shareholder owns the Shares and desires and intends to sell the
    Shares to Buyer at the price and on the terms and subject to the conditions
    set forth below.

        B.  Buyer desires and intends to purchase the Shares from the
    Shareholder at the price and on the terms and subject to the conditions set
    forth below.

                                   AGREEMENT

    In consideration of the terms hereof and for good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:

                             ARTICLE I--DEFINITIONS

    1.1.  "BALANCE SHEET":  The balance sheet of the Company as of December 31,
1999.

    1.2.  "BUYER INDEMNIFIED PARTIES":  As defined in Section 10.2.1.

    1.3.  "CLAIM":  As defined in Section 10.2.1.

    1.4.  "CLAIM NOTICE":  As defined in Section 10.4.2.

    1.5.  "CLOSING":  As defined in Section 2.3.

    1.6.  "CLOSING AMOUNT":  As defined in Section 2.2.1.

    1.7.  "CLOSING DATE":  The date, time and place of Closing as specified in
Section 2.3.

    1.8.  "COMMON STOCK":  As defined in Section 3.3(a).

    1.9.  "DISCLOSURE SCHEDULES":  The Disclosure Schedules attached and made a
part hereof and which constitute in their entirety a representation and warranty
under Article III.

    1.10.  "ESCROW AGENT":  As defined in Section 2.2.3.

    1.11.  "ESCROW AGREEMENT":  As defined in Section 2.2.3.

    1.12.  "ESCROW AMOUNT":  As defined in Section 2.2.3.

    1.13.  "FINANCIAL STATEMENTS":  As defined in Section 3.6.

    1.14.  "GAAP":  Generally accepted accounting principles in the United
States.

    1.15.  "INDEMNIFIED PARTIES":  As defined in Section 10.2.2.

    1.16.  "KNOWLEDGE":  Representations and warranties to a party's knowledge
mean that in acquiring such knowledge, the party representing and warranting
such knowledge need not make any inquiry or investigation.

    1.17.  "LOSSES":  As defined in Section 10.2.1.

    1.18.  "MATERIAL":  Material individually or in the aggregate.

    1.19.  "NOTE":  As defined in Section 2.2.2.

    1.20.  "PARENT":  As defined in the first paragraph.

                                      E-6
<PAGE>
    1.21.  "PERSON":  Any person, corporation, partnership, joint venture,
association, organization, other entity or governmental or regulatory authority.

    1.22.  "PURCHASE PRICE":  The aggregate purchase price for the Shares, as
defined in Section 2.2.

    1.23.  "SHAREHOLDER":  As defined in the first paragraph.

    1.24.  "SHAREHOLDERS":  As defined in the first paragraph.

    1.25.  "SHAREHOLDER INDEMNIFIED PARTIES":  As defined in Section 10.2.2.

    1.26.  "SHARES":  The 5,000 shares of common stock of the Company to be
purchased by Buyer, representing 100% of the outstanding shares of the Company.

    1.27.  "SUBSIDIARY":  When used in reference to any Person, shall mean any
corporation of which outstanding securities having ordinary voting power to
elect a majority of the Board of Directors of such corporation are owned
directly or indirectly by such Person.

    1.28.  "TRANSACTION DOCUMENTS":  This Agreement and each of the agreements,
certificates, instruments and documents executed or delivered pursuant to the
terms of this Agreement.

                    ARTICLE II--PURCHASE AND SALE OF SHARES

2.1  PURCHASE AND SALE OF SHARES

    On the terms and subject to the conditions of this Agreement, Buyer agrees
to purchase the Shares from the Shareholder, and the Shareholder agrees to sell
the Shares to Buyer.

2.2  CONSIDERATION FOR SHARES

    The aggregate purchase price for the Shares is $1,175,000 (the "PURCHASE
PRICE"), payable as set forth in this Section 2.2.

    2.2.1  CLOSING PAYMENT

    The sum of $500,000 (the "CLOSING AMOUNT") shall be paid by Buyer to the
Shareholder (a) through the release to the Shareholder of the $200,000 Escrow
Amount, as defined in section 2.2.3 below, and (b) by bank wire transfer of
$300,000, in each case at the Closing.

    2.2.2  NOTE

    At the Closing, the Buyer will deliver to the Shareholder a Note in the
principal amount of $675,000. The Note will be in form mutually acceptable to
Buyer and Shareholder, will bear interest at the rate of 10% per annum payable
quarterly in arrears, and all principal and interest will be due and payable one
year from the Closing Date. The Note will be secured by a pledge in form
reasonably satisfactory to Shareholders of 75,000 shares of the common stock of
Parent.

    2.2.3  ESCROW

    Within three business days of the date of this Agreement, Buyer will deposit
the sum of $200,000 (the "ESCROW AMOUNT") with a mutually satisfactory escrow
agent (the "ESCROW AGENT") to be held in escrow as evidence of financial
capacity and in accordance with a mutually satisfactory Escrow Agreement (the
"ESCROW AGREEMENT") to be entered into by Buyer, the Shareholder and the Escrow
Agent.

2.3  CLOSING

    The closing of the transactions contemplated herein (the "CLOSING") shall be
TWO days following stockholder approval by the stockholders of Parent and shall
be held at the office of Perkins Coie, 1211 SW Fifth Avenue, Portland, Oregon
97204, at 9:00 A.M. local time, or such other time and date as Buyer and the
Shareholder shall agree (the "CLOSING DATE"). At the Closing, each of Buyer, and
the Shareholder shall take all such action and deliver all such funds,
documents, instruments, certificates

                                      E-7
<PAGE>
and other items as may be required, under this Agreement or otherwise, in order
to perform or fulfill all covenants, conditions and agreements on its part to be
performed or fulfilled at or before the Closing Date and to cause all conditions
precedent to the other parties' obligations under this Agreement to be satisfied
in full.

ARTICLE III--REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS

    To induce Buyer to enter into and perform this Agreement, and except as is
otherwise set forth in the Disclosure Schedules, which exceptions shall
specifically identify the paragraph or paragraphs of this Article III to which
such exceptions relate, and which shall constitute in its entirety a
representation and warranty under this Article III, the Company, the Shareholder
and the Parent jointly and severally represent and warrant to Buyer as of the
date of this Agreement and as of the Closing as follows in this Article III
(which representations and warranties shall survive the Closing as provided in
Article X).

3.1  SHAREHOLDER MATTERS

    3.1.1  GOOD TITLE

    The Shareholder is the beneficial and record owner of the Shares which
represent all of the issued and outstanding capital stock of the Company. Such
Shares are owned free and clear of any lien, encumbrance, restriction on sale,
transfer or voting (other than restrictions imposed by applicable securities
laws), preemptive right, option or other right to purchase and upon the
consummation of the sale of such Shares as contemplated hereby, Buyer will
acquire good title to such Shares, free and clear of any lien, encumbrance,
restriction on sale, transfer or voting (other than restrictions imposed by
applicable securities laws or those created by Buyer), preemptive right, option
or other right.

    3.1.2  AUTHORITY

    Each of the Shareholders and the Parent has all requisite corporate power,
right and authority to enter into this Agreement and the other Transaction
Documents to which it is a party, to consummate the transactions contemplated
hereby and thereby, and the Shareholder has the power sell and transfer such
Shares without the consent or approval of any other Person.

    3.1.3  ENFORCEABILITY

    This Agreement has been, and the other Transaction Documents to which any of
the Shareholders is a party on the Closing will be, duly executed and delivered
by the Shareholders, and this Agreement is, and each of the other Transaction
Documents to which it is a party on the Closing will be, the legal, valid and
binding obligation of the Shareholders, enforceable against the Shareholders in
accordance with its terms.

    3.1.4  NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS

    The execution, delivery and performance of this Agreement and the other
Transaction Documents by the Shareholders, and the consummation of the
transactions contemplated hereby and thereby, will not (a) constitute a
violation (with or without the giving of notice or lapse of time, or both) of
any provision of any law or any judgment, decree, order, regulation or rule of
any court, agency or other governmental authority applicable to the
Shareholders, (b) require any consent, approval or authorization of, or
declaration, filing or registration with, any Person other than (i) consent of
the stockholders of Parent (including, to the extent required, the filing and
approval of a proxy statement with the Securities and Exchange Commission), and
(ii) notification of the Nasdaq Stock Market, Inc. to the extent required under
its rules, (c) result in a default (with or without the giving of notice or
lapse of time, or both) under, acceleration or termination of, or the creation
in any party of the right to accelerate, terminate, modify or cancel, any
agreement, lease, note or other restriction, encumbrance, obligation or
liability to which the Company is a party or by which it is bound or to

                                      E-8
<PAGE>
which any assets of the Company are subject, or (d) result in the creation of
any lien or encumbrance upon the assets of the Shareholders, or upon any Shares
or other securities of the Company.

3.2  COMPANY ORGANIZATION; GOOD STANDING; CORPORATE AUTHORITY; ENFORCEABILITY

    The Company is a corporation duly organized, validly existing and in good
standing under the laws of the state of Washington. The Company is duly
qualified to do business, and is in good standing in the states required due to
(a) the ownership or lease of real or personal property for use in the operation
of the Company's business or (b) the nature of the business conducted by the
Company except where the failure to be so qualified or in good standing would
not have a material adverse effect on the Company. The Company has all requisite
power, right and authority to own, operate and lease its properties and assets,
to carry on its business as now conducted and as proposed to Buyer by the
Company to be conducted, to execute, deliver and perform its obligations under
this Agreement and the other Transaction Documents to which it is a party, and
to carry out the transactions contemplated hereby and thereby.

    All actions on the part of the Company and its officers and directors
necessary for the authorization, execution, delivery and performance of this
Agreement and the other Transaction Documents, the consummation of the
transactions contemplated hereby and thereby, and the performance of all of the
Company's obligations under this Agreement and the other Transaction Documents
have been taken or will be taken prior to the Closing. This Agreement has been,
and the other Transaction Documents to which the Company is a party on the
Closing will be, duly executed and delivered by the Company, and this Agreement
is, and each of the other Transaction Documents to which it is a party on the
Closing will be, a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.

3.3  CAPITALIZATION

    (a) The authorized capital stock of the Company consists of 50,000 shares of
common stock, one dollar par value (the "COMMON STOCK").

    (b) The issued and outstanding capital stock of the Company consists and as
of the Closing will consist solely of the Shares, which are and as of the
Closing will be held of record by the Shareholder. All shares of Common Stock
that are issued and outstanding are, and as of the Closing Date will be, duly
authorized and validly issued, fully paid and nonassessable, and issued in
compliance with all applicable federal, state and foreign securities laws.
Except for the Shareholder, no Person holds any interest in any of the Shares.

    (c) There are no outstanding rights of first refusal, preemptive rights,
options, warrants, conversion rights or other agreements, either directly or
indirectly, for the purchase or acquisition from the Company of any of the
Shares or other securities of the Company.

    (d) The Company is not a party or subject to any agreement or understanding,
and there is no agreement or understanding between any Persons, that affects or
relates to the voting or giving of written consents with respect to any
securities of the Company or the voting by any director of the Company.

3.4  SUBSIDIARIES AND AFFILIATES

    The Company does not have, and has never had, any Subsidiaries. The Company
does not own, directly or indirectly, any ownership, equity, profits or voting
interest in, or otherwise control, any corporation, partnership, joint venture
or other entity, and has no agreement or commitment to purchase any such
interest.

                                      E-9
<PAGE>
3.5  NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS

    The execution, delivery and performance of this Agreement and the other
Transaction Documents by the Company, and the consummation of the transactions
contemplated hereby and thereby, will not (a) constitute a violation (with or
without the giving of notice or lapse of time, or both) of any provision of any
law or any judgment, decree, order, regulation or rule of any court, agency or
other governmental authority applicable to the Company, (b) require any consent,
approval or authorization of, or declaration, filing or registration with, any
Person other than (i) consent of the stockholders of Parent (including, to the
extent required, the filing and approval of a proxy statement with the
Securities and Exchange Commission), (ii) notification of the Nasdaq Stock
Market, Inc. to the extent required under its rules, and (iii) consent of the
landlord of the premises occupied by Summit V, (c) result in a default (with or
without the giving of notice or lapse of time, or both) under, acceleration or
termination of, or the creation in any party of the right to accelerate,
terminate, modify or cancel, any agreement, lease, note or other restriction,
encumbrance, obligation or liability to which the Company is a party or by which
it is bound or to which any assets of the Company are subject, (d) result in the
creation of any lien or encumbrance upon the assets of the Company, or upon any
Shares or other securities of the Company, (e) conflict with or result in a
breach of or constitute a default under any provision of the Articles or Bylaws
of the Company, or (f) invalidate or adversely affect any material permit,
license, authorization or status used in the conduct of the business of the
Company.

3.6  FINANCIAL STATEMENTS; OBLIGATIONS

    The Company has delivered to Buyer (a) balance sheets and statements of
operations, shareholders' equity and cash flows of the Parent at and for the
fiscal years ended June 30, 1998, 1999, and accompanying notes, audited by BDO
Seidman, independent auditors and certified public accountants, and
(b) unaudited balance sheets and unaudited statements of operations and cash
flows of the Parent at and for the six month period ended December 31, 1999. All
the foregoing financial statements (including the notes thereto) are referred to
as the "FINANCIAL STATEMENTS". The Financial Statements have been prepared in
conformity with GAAP consistently applied throughout the periods covered, except
as may be indicated in the notes thereto, and present fairly the financial
position, results of operations and changes in financial position of the Parent
at the dates and for the periods indicated, subject, in the case of the
unaudited financial statements, to normal recurring period-end adjustments.

    To the knowledge of David Edwards, the Company has no liabilities or
obligations of any nature (absolute, accrued or contingent) that are not fully
reflected or reserved against in the Balance Sheet, as prescribed by GAAP and
the Financial Accounting Standards Board, except liabilities or obligations
incurred since the date of the Balance Sheet in the ordinary course of business
and consistent with past practice. The Company maintains and will continue to
maintain standard systems of accounting established and administered in
accordance with GAAP. The Company is not a guarantor, indemnitor, surety or
other obligor of any indebtedness of any other Person.

3.7  ACTION BY DAVID EDWARDS

    Since June 30, 1999 David Edwards has not entered into any contracts on
behalf of the Company or Jenkon International (UK) nor entered into any
employment agreement or arrangement on behalf of those entities except a bonus
arrangement with Cliff De Groot.

3.8  ACCURACY OF SEC FILINGS

    To the knowledge of David Edwards, the filings made with the Securities and
Exchange Commission by the Parent (the "SEC Documents") do not contain a
misstatement of material fact concerning the Company, its operations and
financial condition or omit to state a fact necessary to make such statements
contained therein not misleading.

                                      E-10
<PAGE>
3.9  CORPORATE BOOKS AND RECORDS

    The Company has furnished to Buyer true and complete copies of (a) the
Articles of Incorporation and Bylaws of the Company as currently in effect,
including all amendments thereto, (b) the minute books of the Company, and
(c) the stock transfer books of the Company. Such minutes reflect all meetings
of the Company's shareholders, Board of Directors and any committees thereof
since the Company's inception, and such minutes accurately reflect the events of
and actions taken at such meetings. Such stock transfer books accurately reflect
all issuances and transfers of shares of capital stock of the Company since its
inception.

3.10  BROKERS OR FINDERS

    The Company has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by or on behalf of the Company, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby other than
such arranged or committed to by Buyer.

3.11  BANK ACCOUNTS

    Disclosure Schedule 3.11 sets forth the names and locations of all banks,
trust companies, savings and loan associations and other financial institutions
at which the Company maintains safe deposit boxes or accounts of any nature and
the names of all Persons authorized to draw thereon, make withdrawals therefrom
or have access thereto.

3.12  ACCURACY OF REPRESENTATIONS AND WARRANTIES

    To the knowledge of David Edwards, none of the representations and
warranties of Buyer contained in this agreement is inaccurate, contains a
misstatement of material fact, or omits to state a fact necessary to make such
statements contained therein not misleading.

3.13  TAX CONSEQUENCES

    Neither Parent nor Shareholder makes any representation or warranty with
respect to, and each expressly disclaims any responsibility for, any Tax
consequences to the Buyer arising out of the structure or terms of this
Agreement, or the negotiation or consummation hereof. The Buyer shall be solely
responsible for any such Tax consequences.

              ARTICLE IV--REPRESENTATIONS AND WARRANTIES OF BUYER

    To induce the Company and the Shareholders to enter into and perform this
Agreement, Buyer represents and warrants to the Company and the Shareholders as
of the date of this Agreement and as of the Closing as follows in this
Article IV:

4.1  ORGANIZATION

    Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the state of Washington. Buyer has all requisite corporate
power and authority to own, operate and lease its properties and assets, to
carry on its business as now conducted and as proposed to be conducted, to
execute, deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party, and to carry out the transactions
contemplated hereby and thereby.

4.2  ENFORCEABILITY

    All corporate action on the part of Buyer and its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of this Agreement and the other Transaction Documents to which it is
a party, the consummation of the transactions contemplated hereby and thereby,
and the performance of all of Buyer's obligations under this Agreement and the
other Transaction Documents to which it is a party has been taken or will be
taken prior to the Closing. This

                                      E-11
<PAGE>
Agreement has been, and the other Transaction Documents to which Buyer is a
party on the Closing will be duly executed and delivered by Buyer, and this
Agreement is, and each of the other Transaction Documents to which Buyer is a
party on the Closing will be, a legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.

4.3  NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS

    The execution, delivery and performance by Buyer of this Agreement and the
other Transaction Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, will not (a) constitute a
violation (with or without the giving of notice or lapse of time, or both) of
any provision of any law or any judgment, decree, order, regulation or rule of
any court, agency or other governmental authority applicable to Buyer,
(b) require Buyer to obtain any consent, approval or authorization of, or
declaration, filing or registration with, any Person, or (c) constitute a
violation of any provisions of Buyer's Articles of Incorporation or Bylaws.

4.4  CLAIMS AND LEGAL PROCEEDINGS

    There is no claim, action, suit, arbitration, criminal or civil
investigation or proceeding pending or involving or, to Buyer's knowledge,
threatened against Buyer before or by any court or governmental or
nongovernmental department, commission, board, bureau, agency or
instrumentality, or any other Person, that questions the validity of this
Agreement or any action taken or to be taken by Buyer pursuant to this Agreement
or in connection with the transactions contemplated hereby.

4.5  TAX CONSEQUENCES

    Buyer does not make any representation or warranty with respect to, and
expressly disclaims any responsibility for, any Tax consequences to the
Shareholder arising out of the structure or terms of this Agreement, or the
negotiation or consummation hereof. The Shareholder shall be solely responsible
for any such Tax consequences.

4.6  ACCURACY OF SEC FILINGS

    To the knowledge of Daniel Jensen and Robert Cavitt, the filings made with
the Securities and Exchange Commission by the Shareholder (the "SEC Documents")
do not contain a misstatement of material fact concerning the Company, its
operations and financial condition or omit to state a fact necessary to make
such statements contained therein not misleading.

4.7  ACCURACY OF REPRESENTATIONS AND WARRANTIES

    To the knowledge of Daniel Jensen and Robert Cavitt, none of the
representations and warranties of Shareholders and the Company contained in this
Agreement are inaccurate, contain a misstatement of material fact, or omit to
state a fact necessary to make such statements contained therein not misleading.

                              ARTICLE V--COVENANTS

    Between the date of this Agreement and the time of Closing, the parties
covenant and agree as set forth in this Article V.

5.1  CONDUCT OF BUSINESS BY THE COMPANY PENDING THE CLOSING

    Unless Buyer shall otherwise agree in writing, the business of the Company
shall be conducted only in, and the Company shall not take any action except in,
and the directors and officers of the Company and the Shareholders shall cause
the Company to be conducted in, the ordinary course of business and in a manner
consistent with past practice and in accordance with applicable law; and the
Company shall use its reasonable best efforts to preserve substantially intact
the business organization of the Company, to keep available the services of the
current directors, officers, employees and

                                      E-12
<PAGE>
consultants of the Company and to preserve the current relationships of the
Company with customers, suppliers and other persons with which the Company has
significant business relations. By way of amplification and not limitation,
except as otherwise contemplated by this Agreement, the Company shall not,
between the date of this Agreement and the time of Closing, directly or
indirectly do, or propose to do, any of the following without giving Buyer prior
written notice of and receiving Buyer's prior written consent:

    (a) amend or otherwise change its Charter or Bylaws;

    (b) except as disclosed on Disclosure Schedule 5.1(b), issue, sell, pledge,
dispose of, grant, encumber or authorize the issuance, sale, pledge,
disposition, grant or encumbrance of (i) any shares of capital stock of any
class of the Company, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any other
ownership interest (including, without limitation, any phantom interest), of the
Company or (ii) any assets of the Company;

    (c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock property or otherwise, with respect to any of its capital
stock;

    (d) reclassify, combine, split, subdivide, redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock;

    (e) (i) acquire (including, without limitation, by merger, consolidation, or
acquisition of stock or assets) or form any corporation, partnership, other
business organization or division thereof, or acquire directly or indirectly any
material amount of assets; (ii) except as contemplated by this Agreement incur
any indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any Person, or make any loans or advances, except in the
ordinary course of business and consistent with past practice which loans shall
be on terms and conditions satisfactory to Buyer; (iii) enter into any contract
or agreement other than in the ordinary course of business, consistent with past
practice; (iv) authorize any single capital expenditure that is in excess of
$5,000 or capital expenditures that are, in the aggregate, in excess of $25,000;
or (v) enter into or amend any contract, agreement, commitment or arrangement
with respect to any matter set forth in this subsection (e);

    (f) enter into any employment, consulting or agency agreement, or increase
the compensation payable or to become payable to its officers, employees or
consultants, except for increases in accordance with existing agreements or past
practices for employees of the Company who are not officers of the Company, or
grant any severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or employee of the Company, or
establish, adopt, enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee;

    (g) take any action, other than reasonable and usual actions in the ordinary
course of business and consistent with past practice, with respect to accounting
policies or procedures (including, without limitation, procedures with respect
to the payment of accounts payable and collection of accounts receivable);

    (h) make any tax election inconsistent with past practices or settle or
compromise any material federal, state, local or foreign income tax liability;

    (i) pay, discharge or satisfy any claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary course of business and
consistent with past practice, of liabilities reflected or reserved against in
the

                                      E-13
<PAGE>
Balance Sheet or subsequently incurred in the ordinary course of business and
consistent with past practice;

    (j) enter into any equipment lease; or

    (k) take or agree to take any action specified in Section 3.7, or enter into
any other material transaction other than those specified above; or

    (l) agree to do any of the foregoing.

    Notwithstanding anything to the contrary contained in this Agreement,
neither the Company nor the Shareholder shall have been deemed to have breached
or violated the provisions of this Section 5.1 with respect to any action taken
by the Company that is authorized, approved, effected or implemented by the
Buyer, Daniel Jensen or Robert Cavitt following the date of this Agreement,
whether pursuant to the terms of any Management Agreement between the Company,
Shareholders and Buyer (the "Management Agreement"), or otherwise.
Notwithstanding anything to the contrary contained in this Agreement, the
Management Agreement or any other agreements contemplated hereby or thereby,
Buyer agrees that it shall not cause or permit any action described in
Section 5.1 to be taken without the express written consent of Shareholder,
which consent may only be signed by David Edwards, or an independent member of
the Board of Directors of Shareholder; provided the Company is expressly
authorized to borrow operating funds from Buyer or any other person to the
Company introduced by Buyer.

    Notwithstanding anything to the contrary contained elsewhere in this
Agreement, the parties hereto acknowledge and agree that prior to Closing,
Shareholder shall cause all of the issued and outstanding shares of Jenkon
International Limited, a United Kingdom corporation (Jenkon U.K.) to be
contributed to the Company, so that at Closing, Jenkon U.K. shall be a
wholly-owned subsidiary of the Company. In this regard, Parent represents and
warrants that other than liabilities reflected on the financial statements of
Parent filed with the Securities and Exchange Commission, there are no
liabilities or other outstanding obligations of Jenkon U.K.

5.2  ACCESS TO INFORMATION; CONFIDENTIALITY

    From the date hereof to the time of Closing, the Company and the
Shareholders shall, and shall cause their representatives to, afford Buyer and
its representatives complete access at all reasonable times to the officers,
employees, agents, properties, offices and other facilities, books and records
of the Company and shall furnish Buyer with all financial, operating and other
data and information as Buyer may reasonably request and as such access is
necessary to the consummation of the transactions contemplated hereby.

5.3  NO SOLICITATION

    (a) The Company and Shareholders shall not, nor shall they authorize or
permit any of their officers, directors or employees or any investment banker,
attorney or other advisor or representative retained by it to, directly or
indirectly, (i) solicit, initiate or encourage the submission of any Takeover
Proposal (as hereinafter defined) or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Takeover Proposal; provided, however, that if, at any time prior to the Closing
Date either of the Boards of Directors of the Shareholders determines in good
faith that (i) after consultation with outside counsel that failure to do so
would create a substantial risk of liability for breach of its fiduciary duties
to its stockholders under applicable law and (ii) that such Takeover Proposal
constitutes a Superior Proposal (as hereinafter defined), the Company and
Shareholders may, in response to a written Takeover Proposal that was
unsolicited or that did not otherwise result from a breach of this
Section 5.3(a), and subject to compliance with Section 5.3(c), (x) furnish
information with respect to

                                      E-14
<PAGE>
the Company to any person pursuant to a customary and reasonable confidentiality
agreement no less favorable to the Company, and no less onerous to such person,
than the confidentiality obligation contained herein and (y) participate in
negotiations regarding such Takeover Proposal. Without limiting the foregoing,
it is understood that any violation of the restrictions set forth in the
preceding sentence by any officer, director or employee of the Company or
Shareholders, or any investment banker, attorney or other advisor or
representative of the Company or Shareholders, acting on behalf of the Company
or Shareholders, shall be deemed to be a breach of this Section 5.3(a) by the
Company and Shareholders. The Company and Shareholders will immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any parties conducted prior to the date of this Agreement with respect to
any Takeover Proposal and request the return of all information provided to
third parties pursuant to one or more confidentiality agreements. For purposes
of this Agreement, "Takeover Proposal" means any proposal or offer from any
person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company (other than products of the Company)
or at least 20% interest in the total voting securities of the Company or any
tender offer or exchange offer that if consummated would result in any person
beneficially owning 20% or more of any class of equity securities of the Company
or any merger, consolidation, business combination, sale of substantially all
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company, other than the transactions contemplated by this
Agreement.

    (b) Except as expressly permitted by this Section 5.3, neither the Boards of
Directors of the Shareholders nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Buyer, the
approval or recommendation by such Boards of Directors or any such committee of
this Agreement, (ii) approve or recommend, or propose to approve or recommend,
any Takeover Proposal or (iii) cause the Company or Shareholders to enter into
any letter of intent, agreement in principle, acquisition agreement or other
similar agreement (an "Acquisition Agreement") with respect to any Takeover
Proposal. Notwithstanding the foregoing, prior to the Closing Date, either of
the Boards of Directors of Shareholders, to the extent either determines in good
faith after consultation with outside legal counsel that failure to do so would
create a substantial risk of liability for breach of its fiduciary duties to the
Parent's stockholders under applicable law, may withdraw or modify its approval
or recommendation of this Agreement or the Merger or recommend any Superior
Proposal (as hereinafter defined), in each case at any time after the third
business day following Buyer's receipt of written notice (a "Notice of Superior
Proposal") advising Buyer that the Board of Directors of one of the Shareholders
has received a Superior Proposal, specifying the identity of the person making
the Takeover Proposal and the material terms and conditions of the Superior
Proposal (it being understood that any amendment to the price or material terms
of a Superior Proposal shall require an additional Notice of Superior Proposal
and an additional three business day period thereafter to the extent permitted
under applicable law). In addition, prior to the Closing Date, either of the
Boards of Directors of Shareholders, to the extent it determines in good faith,
after consultation with outside legal counsel, that failure to do so would
result in a substantial risk of liability for breach of its fiduciary duties to
its stockholders under applicable law, may cause the Shareholders to terminate
this Agreement (and concurrently with or after such termination, if it so
chooses, cause the Company to enter into an Acquisition Agreement with respect
to a Superior Proposal). For purposes of this Agreement, a "Superior Proposal"
means any bona fide written proposal made by a third party to acquire, directly
or indirectly, for consideration consisting of cash and/or equities, more than
50% of the voting power of the Company Common Stock or all or substantially all
the assets of the Company and otherwise on terms which the Boards of Directors
of the Shareholders determine in good faith judgment (after consultation with a
financial advisor of nationally recognized reputation) to be more favorable to
the Company's stockholders than the transactions contemplated by this Agreement.

    (c) In addition to the obligations of the Shareholders set forth in
paragraphs (a) and (b) of this Section 5.3, the Company promptly shall within
24 hours after receipt advise Buyer orally and in

                                      E-15
<PAGE>
writing of any request for nonpublic information which either of the
Shareholders reasonably believes could lead to a Takeover Proposal or of any
Takeover Proposal, or any inquiry with respect to or which either of the
Shareholders reasonably believes could lead to any Takeover Proposal, the
identity of the person making such Takeover Proposal and the material terms and
conditions of such request, Takeover Proposal or inquiry. The Shareholders will
keep Buyer promptly informed in all material respects of the status and details
(including amendments or proposed amendments) of any such Takeover Proposal or
inquiry.

    (d) Nothing contained in this Section 5.3 or elsewhere in this Agreement
shall prohibit the Parent from (i) taking and disclosing to its stockholders a
position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act or (ii) making any disclosure to the stockholders of Parent required by
applicable laws; provided that the Shareholders shall not, except in accordance
with the provisions of Section 5.3(b), withdraw or modify, or propose to
withdraw or modify, its recommendation of the Merger or approve or recommend, or
propose to approve or recommend, a Takeover Proposal.

5.4  NOTIFICATION OF CERTAIN MATTERS

    The Company and/or the Shareholders shall give prompt written notice to
Buyer, and Buyer shall give prompt written notice to the Company and/or the
Shareholders, of (a) the occurrence or nonoccurrence of any event which would be
likely to (i) cause any representation or warranty of the Company and/or the
Shareholders or Buyer, respectively, contained in this Agreement to be
materially untrue or inaccurate or (ii) result in the material failure to
satisfy a closing condition in Article VII or VIII; (b) any material failure of
the Company and/or the Shareholders or Buyer, respectively, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it or them; and (c) any written communication from any Person alleging that the
consent of such Person may be required in connection with the transactions
contemplated by this Agreement; provided, however, that the delivery of any
notice pursuant to this Section 5.4 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.

5.5  FURTHER ACTION

    Upon the terms and subject to the conditions hereof, each of the parties
shall (a) make promptly its respective filings, and thereafter make any other
required submissions, under applicable laws with respect to the transactions
contemplated hereby and shall cooperate with the other parties with respect to
such filings and submissions and (b) use its reasonable best efforts to take, or
cause to be taken, all appropriate action, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated
hereby, including, without limitation, using its reasonable best efforts to
obtain all shareholder consents as well as waivers, licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and parties to contracts as are necessary for the consummation of the
transactions contemplated hereby and to fulfill the conditions to the closing of
the sale of the Shares to Buyer. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, each party to this Agreement shall use its reasonable best efforts to
take all such action. None of Buyer, the Company or the Shareholders will
undertake any course of action inconsistent with this Agreement or that would
make any representations, warranties or agreements made by such party in this
Agreement untrue or any conditions precedent to this Agreement unable to be
satisfied at or prior to the Closing.

                                      E-16
<PAGE>
5.6  PUBLICITY

    None of the parties shall disclose, make or issue, or cause to be disclosed,
made or issued, any statement or announcement concerning this Agreement or the
transactions contemplated hereby to any third parties (other than its officers,
directors, employees, authorized representatives, legal advisors and financial
advisors who need to know such information in connection with carrying out or
facilitating the transactions contemplated hereby) without the prior written
consent of the other parties, except as required by law or any listing or other
agreement with any public securities trading exchange or market to which Buyer
is a party and after providing written notice to the other parties of such
required disclosure.

                       ARTICLE VI--ADDITIONAL AGREEMENTS

6.1  PREPARATION OF THE PROXY STATEMENT; STOCKHOLDERS MEETING

    As soon as practicable following the date of this Agreement, the Parent
shall prepare and file with the SEC a Proxy Statement relating to the
Transaction and seeking approval of the Transaction by stockholders of Parent.
The Parent will use its reasonable efforts to cause the Proxy Statement to be
mailed to its stockholders as promptly as practicable. Buyer shall furnish all
information concerning itself to Parent as may be reasonably requested in
connection with any such action and the preparation, filing and distribution of
the Proxy Statement.

6.2  CERTAIN EXPENSES

    Shareholder will promptly, upon receipt of billing therefor from Buyer,
reimburse Buyer for expenses, including transportation, lodging and meals
incurred by Clifford DeGroot in providing assistance to Shareholder and its
shareholders in Israel in connection with Shareholder's proxy statement.

6.3  ASSIGNMENT OF DOMAIN NAMES AND MARKS

    For good and valuable consideration, receipt of which is hereby
acknowledged, Shareholders hereby assign to Company all rights, title and
interest in and to the domain names and marks, registered or unregistered,
identified in Exhibit A attached hereto, together with the good will associated
thereto, including, the right to recover for damages and profits for past
infringements thereof. Shareholders agree to execute and deliver at the request
of Company, all papers, instruments, and assignments, and to perform any and all
other reasonable acts Company may require, including recordation of the
assignment, in order to vest all Shareholders' rights, title, and interest in
and to the said domain names and marks in Company and/or to provide evidence to
support any of the foregoing in the event such evidence is deemed necessary by
Company, to the extent such evidence is in the possession or control of
Shareholders.

           ARTICLE VII--CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

    The obligations of Buyer to perform and observe the covenants, agreements
and conditions to be performed and observed by it at or before the Closing shall
be subject to the satisfaction of the following conditions, which may be
expressly waived only in writing signed by Buyer:

7.1  ACCURACY OF REPRESENTATIONS AND WARRANTIES

    Each of the representations and warranties of the Company and the
Shareholders contained in this Agreement and the other Transaction Documents to
which each is a party (including applicable Exhibits or Disclosure Schedules)
shall be true and correct as of the date hereof and at and as of the Closing
Date as though made on that date; except to the extent such representations and
warranties are made as of a specified date, in which case such representations
and warranties shall be true and correct as of the specified date.

                                      E-17
<PAGE>
7.2  PERFORMANCE OF AGREEMENTS

    The Company and the Shareholders shall have performed all obligations and
agreements and complied with all covenants and conditions contained in this
Agreement or any other Transaction Document to be performed and complied with by
them at or prior to the Closing.

7.3  OPINION OF COUNSEL FOR THE COMPANY AND THE SHAREHOLDERS

    Buyer shall have received the opinion of Jeffer, Mangels Butler & Marmaro
LLP, counsel for the Company and the Shareholders, dated the Closing Date, in
form and substance reasonably acceptable to Buyer.

7.4  CONSENTS TO SALE OF SHARES

    The Company shall have received and shall have delivered to Buyer written
consents to the sale of the Shares from each of the parties (other than the
Company) to those agreements, leases, notes or other documents set forth as
requiring such consent on the Disclosure Schedules, which consents shall be
satisfactory in all respects to Buyer in its sole and absolute discretion.

7.5  OFFICERS' CERTIFICATE

    Buyer shall have received a certificate of the Chief Executive and the chief
financial officer of the Company, dated the Closing Date, certifying that the
conditions set forth in Sections 7.1, 7.2, 7.4, 7.7 and 7.9 have been fulfilled.

7.6  SHAREHOLDER'S CERTIFICATE

    Buyer shall have received a certificate of each the Shareholders, executed
on behalf of such Shareholder by its Chief Executive Officer and chief financial
officer, dated the Closing Date, certifying that the conditions set forth in
Sections 7.1, 7.2, 7.4, 7.7 and 7.9 have been fulfilled.

7.7  MATERIAL ADVERSE CHANGE

    Since the date hereof and through the Closing, there shall not have occurred
(or be threatened) any material adverse change (a) in the business, operations,
assets, liabilities, earnings, condition (financial or other), or prospects of
the Company or (b) with respect to the Shareholders and the Shares, and no
material adverse change shall have occurred (or be threatened) in any domestic
or foreign laws or regulations affecting the Company or in any third party
contractual or other business relationships of the Company.

7.8  APPROVALS AND CONSENTS

    All transfers of permits or licenses and all approvals, applications or
notices to public agencies, federal, state, local or foreign, the granting or
delivery of which is necessary for the consummation of the transactions
contemplated hereby or for the continued operation of the Company as set forth
in the Disclosure Schedules, shall have been obtained, and all waiting periods
specified by law shall have passed. All other consents, approvals and notices
material to the consummation of the transactions contemplated by this Agreement
and referred to in the Disclosure Schedules shall have been obtained or
delivered. All such transfers, approvals, and consents shall be satisfactory in
all respects to Buyer in its sole and absolute discretion.

7.9  PROCEEDINGS AND DOCUMENTS; SECRETARY'S CERTIFICATE

    All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions shall have been approved by counsel to Buyer, and Buyer shall have
received a certificate of the Secretary of the Company and each of the
Shareholders, as to the authenticity and effectiveness of the actions of the
Board of Directors of the Company and each of the Shareholders authorizing the
sale of the Shares and the other transactions

                                      E-18
<PAGE>
contemplated by this Agreement and the other Transaction Documents to which the
Company or any of the Shareholders is a party, and such other documents as are
reasonably specified by counsel to Buyer.

7.10  COMPLIANCE WITH LAWS

    The consummation of the transactions contemplated by this Agreement shall be
legally permitted by all laws and regulations to which Buyer is subject.

7.11  LEGAL PROCEEDINGS

    No order of any court or administrative agency shall be in effect that
enjoins, restrains, conditions or prohibits consummation of this Agreement, and
no litigation, investigation or administrative proceeding shall be pending or
threatened that would enjoin, restrain, condition or prevent consummation of
this Agreement or the transactions contemplated hereby.

7.12  DELIVERY OF CERTIFICATES

    The Shareholder shall deliver to Buyer at Closing certificates representing
the Shares, duly endorsed for transfer on the Company's books.

7.14  NONCOMPETITION AGREEMENTS

    David Edwards shall have entered into a two-year noncompetition agreement
reasonably acceptable to Buyer to the effect he will not compete with the
Company or Buyer as their businesses are now conducted.

7.15  WAIVER BY INSIDERS

    Each of Robert Cavitt, Daniel Jensen and David Edwards shall execute a
release, in a form and substance reasonably satisfactory to Buyer and the
Company, pursuant to which each of them releases Buyer, the Company and their
respective affiliates from and against any liability for loans, compensation and
other claims relating to or arising prior to the Closing Date (other than claims
arising under this Agreement or the Transaction Documents).

    ARTICLE VIII--CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE
                                  SHAREHOLDERS

    The obligations of the Company and the Shareholders to perform and observe
the covenants, agreements and conditions to be performed and observed by each of
them at or before the Closing shall be subject to the satisfaction of the
following conditions, which may be expressly waived only in writing signed by
the Company and the Shareholders.

8.1  ACCURACY OF REPRESENTATIONS AND WARRANTIES

    Each of the representations and warranties of Buyer contained in this
Agreement and the other Transaction Documents to which it is a party shall be
true and correct as of the date hereof and at and as of the Closing Date as
though made on that date, except to the extent such representations and
warranties are made as of a specified date, in which case such representations
and warranties shall be true and correct as of the specified date.

8.2  PERFORMANCE OF AGREEMENTS

    Buyer shall have performed all obligations and agreements and complied with
all covenants and conditions contained in this Agreement or any other
Transaction Document to be performed and complied with by it at or prior to the
Closing.

                                      E-19
<PAGE>
8.3  OPINION OF COUNSEL FOR BUYER

    The Company and the Shareholders shall have received the opinion of Perkins
Coie LLP, counsel for Buyer, dated the Closing Date, in form and substance
reasonably acceptable to Company and the Shareholder.

8.4  OFFICERS' CERTIFICATE

    The Shareholders shall have received a certificate of a Vice President and
another officer of Buyer, dated the Closing Date, certifying that the conditions
in Sections 8.1, 8.2, 8.5 and 8.6 have been fulfilled.

8.5  MATERIAL ADVERSE CHANGE

    Since the date hereof and through the Closing, there shall not have occurred
any material adverse change in the business, operations, assets, liabilities,
earnings, condition (financial or other) of Buyer that would render Buyer unable
to perform its obligations under the Transaction Documents.

8.6  APPROVALS AND CONSENTS

    All transfers of permits or licenses and all approvals, applications or
notices to public agencies, federal, state, local or foreign, required to be
obtained by Buyer for the consummation of the transactions contemplated hereby
shall have been obtained, and all waiting periods specified by law shall have
passed.

8.7  PROCEEDINGS AND DOCUMENTS; SECRETARY'S CERTIFICATE

    All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions shall have been approved by counsel to the Company and the
Shareholders and the Company and the Shareholders shall have received a
certificate of the Secretary of Buyer, as to the authenticity and effectiveness
of the actions of the Board of Directors of Buyer authorizing the purchase of
the Shares and the other transactions contemplated by this Agreement and the
other Transaction Documents to which Buyer is a party, and such other documents
as are reasonably specified by counsel to the Company and the Shareholders.

8.8  COMPLIANCE WITH LAWS

    The consummation of the transactions contemplated by this Agreement shall be
legally permitted by all laws and regulations to which the Company and the
Shareholders are subject.

8.9  LEGAL PROCEEDINGS

    No order of any court or administrative agency shall be in effect that
enjoins, restrains, conditions or prohibits consummation of this Agreement, and
no litigation, investigation or administrative proceeding shall be pending or
threatened that would enjoin, restrain, condition or prevent consummation of
this Agreement or the transactions contemplated hereby.

8.10  FAIRNESS OPINION

    The Parent shall have received an opinion of a financial advisor acceptable
to it, substantially to the effect that the consideration to be received by the
Shareholder for the sale of the Shares pursuant to this Agreement is fair, from
a financial point of view, to the Shareholder.

8.11  WAIVER BY INSIDERS

    Each of Robert Cavitt, Daniel Jensen and David Edwards shall execute a
release, in a form and substance reasonably satisfactory to Shareholders,
pursuant to which each of them releases Shareholders, the Company and their
affiliates from and against any liability for loans, compensation

                                      E-20
<PAGE>
and other claims relating to or arising prior to the Closing Date (other than
claims arising under this Agreement or the Transaction Documents).

                 ARTICLE IX--TERMINATION, AMENDMENT AND WAIVER

9.1  TERMINATION

    This Agreement may be terminated at any time prior to the Closing:

    (a) by mutual written consent of the Shareholders, Company and Buyer;

    (b) by the Company or either of the Shareholders, if Buyer shall have
breached any of its representations, warranties or agreements;

    (c) by Buyer, if the Company and/or either of the Shareholders shall have
breached any of its or their representations, warranties or agreements;

    (d) by either the Shareholder or Buyer:

           (i) if the Closing has not occurred by June 30, 2000; provided,
       however, that the right to terminate this Agreement under this subsection
       (d) shall not be available to any party whose failure to fulfill any
       obligation under this Agreement has been the cause of, or resulted in,
       the failure of the Closing to occur on or before such date;

           (ii) if stockholder approval shall not have been obtained at the
       stockholders meeting of Parent duly convened therefor or at any
       adjournment or postponement thereof;

          (iii) if prior to the Closing Date, the Board of Directors of either
       of the Shareholders has made the determination referred to in the
       penultimate sentence of Section 5.3(b); provided, however, that neither
       the Company nor the Shareholders may terminate this Agreement pursuant to
       this Section 9.1(d)(iii) unless and until three business days have
       elapsed following delivery to Buyer of a Notice of Superior Proposal with
       respect to a Superior Proposal by the Board of Directors of Parent.

    (e) by either the Company or Buyer if there shall be any law or regulation
that makes consummation of the sale of the Shares by the Shareholder to Buyer
illegal or otherwise prohibited or if any judgment, injunction, order or decree
enjoining Buyer or the Company from consummating the sale of the Shares by the
Shareholder to Buyer is entered and such judgment, injunction, order or decree
shall become final and nonappealable.

    (f) by Buyer if (i) the Board of Directors of Parent or any committee
thereof shall have withdrawn or modified in a manner adverse to Buyer its
approval or recommendation of the sale or this Agreement or failed to reconfirm
its recommendation within 15 business days after a written request to do so, or
approved or recommended any Takeover Proposal or approved or recommended any
Takeover Proposal or (ii) the Board of Directors of Parent shall have resolved
to take any of the foregoing actions.

9.2  EFFECT OF TERMINATION

    In the event of the termination of this Agreement, the confidentiality
obligations under Section 5.2, and Sections 9.2, 11.1, 11.2, 11.3 and 11.6 shall
survive any such termination and nothing shall relieve any party from liability
for any breach. In addition, the following shall apply:

    (a) In the event of the termination of this Agreement pursuant to
Section 9.1(a), or by the Company or one of the Shareholders pursuant to
Section 9.1(d), there shall be no further obligation on the part of any party.

                                      E-21
<PAGE>
    (b) In the event of the termination of this Agreement pursuant to
Section 9.1(e) or by the Buyer pursuant to Section 9.1(c), (d) or (f), Company
and the Shareholders shall promptly repay any amounts advanced by Buyer to the
Company.

9.3  AMENDMENT

    Buyer, the Company and the Shareholders may amend, modify or supplement this
Agreement at any time, but only in writing duly executed on behalf of each of
the parties to be bound thereby.

9.4  WAIVER

    At any time prior to the Closing, any party may (a) extend the time for the
performance of any obligation or other act of any other party, (b) waive any
inaccuracy in the representations and warranties contained in any Transaction
Document, or (c) waive compliance with any agreement or condition in any
Transaction Document. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party or parties to be bound.
The failure of any party at any time or times to require performance of any
provisions shall in no manner affect its right at a later time to enforce the
same. No waiver by any party of any condition or of any breach of any terms,
covenants, representations, warranties or agreements contained in this Agreement
shall be deemed to be a further or continuing waiver of any such condition or
breach in other instances or a waiver of any other condition or any breach of
any other terms, covenants, representations, warranties or agreements.

                    ARTICLE X--SURVIVAL AND INDEMNIFICATION

10.1  SURVIVAL

    All representations and warranties contained in this Agreement or the other
Transaction Documents shall survive for a period of two years following the
Closing, except that the representations and warranties of the Company shall
terminate immediately after Closing. The covenants and agreements contained in
this Agreement that contemplate performance after the Closing shall survive the
Closing and shall continue until all obligations with respect thereto shall have
been performed or satisfied or shall have been terminated in accordance with
their terms.

10.2  INDEMNIFICATION

    10.2.1  INDEMNIFICATION BY THE SHAREHOLDERS

    The Shareholders shall jointly and severally indemnify and hold Buyer and
its affiliates (the "BUYER INDEMNIFIED PARTIES") harmless from and against, and
shall reimburse Buyer Indemnified Parties for, any and all losses, damages,
debts, liabilities, obligations, judgments, orders, awards, writs, injunctions,
decrees, fines, penalties, taxes, costs or expenses (including but not limited
to any legal and accounting fees and expenses) ("LOSSES") arising out of or in
connection with:

    (a) any material inaccuracy in or other breach of any representation or
warranty made by the Company or either of the Shareholders in this Agreement or
in any other Transaction Document;

    (b) any material failure by the Company or the Shareholders to perform or
comply, in whole or in part, with any covenant or agreement in this Agreement or
any other Transaction Document to which it is a party; or

    (c) any claim, demand, cause of action, suit, proceeding, hearing or
investigation ("CLAIM") by any person or entity for brokerage or finder's fees
or commissions or similar payments based upon any agreement or understanding
alleged to have been made by such person or entity directly or indirectly with
the Company, any of its officers, directors or employees, (other than Robert
Cavitt or Daniel Jensen) or the Shareholders, in connection with any of the
transactions contemplated by this

                                      E-22
<PAGE>
Agreement or any other Transaction Document, and all taxes relating to periods
on or prior to the Closing Date.

    10.2.2  INDEMNIFICATION BY BUYER

    Buyer shall indemnify and hold the Shareholders (the "SHAREHOLDER
INDEMNIFIED PARTIES"; together with Buyer Indemnified Parties, the "INDEMNIFIED
PARTIES") harmless from and against, and shall reimburse the Shareholder
Indemnified Parties for, any and all Losses arising out of or in connection
with:

    (a) any material inaccuracy in or other breach of any representation or
warranty made by Buyer in this Agreement or in any other Transaction Document;

    (b) any material failure by Buyer to perform or comply, in whole or in part,
with any covenant or agreement in this Agreement or any other Transaction
Document to which it is a party;

    (c) any Claim by any person or entity for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such person or entity directly or indirectly with
Buyer or any of its officers, directors or employees in connection with any of
the transactions contemplated by this Agreement or any other Transaction
Document, or

    (d) any Claim by any person or entity relating to operation of the Company's
business from and after the Closing Date.

10.3  LIMITATIONS

    Any claim for indemnification must be asserted as provided in Section 10.4
within two years from the Closing Date; otherwise, this Article X shall be null,
void and without effect.

10.4  PROCEDURE FOR INDEMNIFICATION

    10.4.1  CLAIM NOTICE

    In the event that any Indemnified Party sustains or incurs any Losses in
respect of which indemnification may be sought pursuant to this Article X, such
Indemnified Party may assert a claim for indemnification by giving written
notice (the "CLAIM NOTICE") to the indemnifying party, which will describe in
reasonable detail the facts and circumstances on which the asserted claim for
indemnification is based. The Claim Notice will also specify how the Indemnified
Party intends to recover such funds pursuant to this Agreement. Unless the claim
described in the Claim Notice is contested by the indemnifying party by written
notice to the Indemnified Party of the amount of the claim that is contested,
given within 30 days of the receipt of the Claim Notice, the Indemnified Party
may recover such undisputed amount of the claim described in the Claim Notice.

    10.4.2  DISPUTE NOTICE

    If, within thirty (30) days of the receipt by the indemnifying party of the
Claim Notice, the indemnifying party contests in writing to the Indemnified
Party and the Escrow Agent (if such claim is against the Shareholder) that such
Loss constitutes an indemnifiable claim (the "DISPUTE NOTICE"), then the
Indemnified Party and the indemnifying party, acting in good faith, shall
attempt to reach agreement with respect to such claim.

    10.4.3  THIRD-PARTY CLAIMS

    With respect to claims for indemnification resulting from or in connection
with any legal proceeding commenced by a third party, the Indemnified Party will
give the Claim Notice to the indemnifying party no later than 20 days prior to
the time any initial answer or response to the asserted claim is legally
required under any applicable court or procedural rule. The indemnifying party
will,

                                      E-23
<PAGE>
subject to the limitations set forth in Section 10.3, promptly indemnify the
Indemnified Party in accordance with the provisions of this Article X and the
Escrow Agreement.

10.5  INVESTIGATIONS; WAIVERS

    An Indemnified Party's right to indemnification provided for in this
Article X will remain in effect notwithstanding any investigation at any time by
or on behalf of any party or any waiver by any party of any condition to such
party's obligations to consummate the transactions contemplated hereby.

                              ARTICLE XI--GENERAL

11.1  EXPENSES

    11.1.1  Whether or not the transactions contemplated by this Agreement are
consummated, each party shall each pay its own fees and expenses for the
negotiation, preparation and carrying out of this Agreement and the other
Transaction Documents (including legal and accounting fees and expenses);
provided, however, that, should any action be brought hereunder, the attorneys'
fees and expenses of the prevailing party shall be paid by the other party to
such action. The Shareholder shall pay any transfer or similar taxes that may be
payable in connection with the transactions contemplated by this Agreement.

    11.1.2  In the event that this Agreement is terminated (i) by any party
hereto (A) pursuant to Section 9.1(d)(ii) and at or prior to the time of the
Stockholders Meeting a Takeover Proposal shall have been publicly announced or
(B) pursuant to Section 9.1(d)(iii), (ii) by Buyer pursuant to Section 9.1(f) or
(iii) by Buyer pursuant to Section 9.1(c) in respect of a willful and material
breach of a covenant or agreement by the Company or Shareholders, then in such
case Shareholders shall, promptly, but in no event later than two days after the
date of such termination, pay Buyer a fee equal to $200,000 plus all expenses of
Buyer incurred in connection with this Agreement in immediately available funds
by wire transfer (the "Termination Fee"). If this Agreement is terminated by any
party hereto pursuant to Section 9.1(d) (to the extent the Parent has
theretofore failed to hold the Stockholders Meeting in breach of its obligations
under Section 6.1, and prior to the date 12 months following the date of the
termination of this Agreement, the Company shall either (x) consummate a Company
Acquisition (as hereinafter defined) or (y) enter into a written Acquisition
Agreement providing for a Company Acquisition, then the Shareholders shall pay
the Termination Fee in the case of clause (x) concurrently with the consummation
of such Company Acquisition or in the case of clause (y) concurrently with the
consummation of the transaction subject to such Acquisition Agreement (whether
or not such transaction is consummated prior to the date 12 months following the
date of the termination of this Agreement, but only in the event that such
transaction subject to such Acquisition Agreement is in fact consummated).
Shareholders acknowledge that the agreements contained in this Section 11.1.2
are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, Buyer would not enter into this Agreement;
accordingly, if Shareholders fail promptly to pay the amounts due pursuant to
this Section 11.1.2, and, in order to obtain such payment, Buyer commences a
suit which results in a judgment against the Shareholders for the amounts set
forth in this Section 11.1.2, Shareholders shall pay to Buyer its reasonable
costs and expenses (including attorneys' fees and expenses) in connection with
such suit, together with interest on the amounts set forth in this
Section 11.1.2 at the prime rate of Bank of America N.T. & S.A. in effect on the
date such payment was required to be made. "Company Acquisition" shall mean any
transaction or series of related transactions involving (i) a merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company or Shareholders pursuant to which
the stockholders of the Company immediately preceding such transaction or series
of related transactions hold less than 60% of the equity interests in the
surviving or resulting entity of such transaction or transactions (other than
the transactions contemplated by this Agreement); (ii) a sale by the Company of
assets (excluding inventory

                                      E-24
<PAGE>
and used equipment sold in the ordinary course of business) representing in
excess of 40% of the fair market value of the Company's business immediately
prior to such sale; or (iii) the acquisition by any person or group (including
without limitation by way of a tender offer or an exchange offer or issuance by
the Company), directly or indirectly, of beneficial ownership or a right to
acquire beneficial ownership of 40% or more of the then outstanding shares of
capital stock of the Company.

    11.1.3  If the Agreement is terminated by Buyer pursuant to
Section 9.1(d)(ii) or (iii) or Section 9.1 (f) then, in addition to any fee
payable pursuant to Section 11.1.3, the Shareholders shall, promptly, but in no
event later than two business days after the date of such termination, pay Buyer
a fee equal to $100,000.

11.2  SPECIFIC ENFORCEMENT

    The parties expressly agree that they will be irreparably damaged if this
Agreement is not specifically enforced. Upon a breach or threatened breach of
the terms, covenants and/or conditions of this Agreement by any party, Buyer,
the Company and the Shareholders shall, in addition to all other remedies, be
entitled to a temporary or permanent injunction, without showing any actual
damage, and/or a decree for specific performance, in accordance with the
provisions of this Agreement.

11.3  CONSEQUENTIAL DAMAGES

    No party shall be liable to the other parties for any special, indirect,
incidental or consequential damages resulting from any breach of this Agreement.

11.4  ASSIGNMENT

    This Agreement shall not be assigned by operation of law or otherwise,
except that Buyer may assign all or any of its rights and obligations to any of
its affiliates. In the event of any such permitted assignment, Buyer shall
guarantee the performance of such obligations by such assignee.

11.5  NOTICES

    Unless otherwise provided, any notice under this Agreement shall be given in
writing and shall be deemed effectively given (a) upon personal delivery to the
party to be notified, (b) upon confirmation of receipt by fax by the party to be
notified, (c) one business day after deposit with a reputable overnight courier,
prepaid for overnight delivery and addressed as set forth in (d), or (d) three
days after deposit with the U.S. Post Office, postage prepaid, registered or
certified with return receipt requested and addressed to the party to be
notified at the address indicated for such party below, or at such other address
as such party may designate by 10 days' advance written notice to the other
parties given in the foregoing manner.

       TO BUYER:
       JIA, INC.
       7600 NE 41st St., Suite 300
       Vancouver, WA 98662
       Facsimile: 360-256-9623
       Attention: Robert Cavitt

       with a copy to:

       PERKINS COIE LLP
       1211 SW Fifth, Suite 1500
       Portland, OR 97204
       Facsimile: (503) 727-2000
       Attention: Patrick J. Simpson

                                      E-25
<PAGE>
       TO THE COMPANY:

       SUMMIT V, INC.
       7600 NE 41st St., Suite 300
       Vancouver, WA 98662
       Facsimile: 360-256-9623
       Attention: David Edwards

       with a copy to:

       JEFFER MANGELS BUTLER & MARMARO
       2121 Avenue of the Stars
       Los Angeles, CA 90067
       Facsimile: 310-203-90067
       Attention: Robert Steinberg

       TO THE SHAREHOLDERS:

       JENKON INTERNATIONAL,
       7600 NE 41st St., Suite 300
       Vancouver, WA 98662
       Facsimile: 360-256-9623
       Attention: David Edwards

       with a copy to:

       JEFFER MANGELS BUTLER & MARMARO
       2121 Avenue of the Stars
       Los Angeles, CA 90067
       Facsimile: 310-203-90067
       Attention: Robert Steinberg

11.6  GOVERNING LAW; JURISDICTION; VENUE

    This Agreement shall be governed by and construed under the laws of the
state of Washington without regard to principles of conflict of laws. Any
dispute among the parties relating to or arising out of this Agreement shall be
settled by binding arbitration pursuant to the rules of the American Arbitration
Association. Such arbitration shall take place in Vancouver, Washington and the
parties irrevocably consent to the jurisdiction and venue of the state and
federal courts located in Clark County, Washington in connection with any action
relating to the enforcement of any arbitral award.

11.7  SUCCESSORS AND ASSIGNS

    The terms and conditions of this Agreement shall inure to the benefit of and
be binding on the respective successors and assigns of the parties.

11.8  SEVERABILITY

    If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement, and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

11.9  ENTIRE AGREEMENT; COUNTERPARTS

    This Agreement constitutes the entire agreement among the parties with
respect to this subject matter and supersedes all prior agreements and
undertakings, both written and oral, among the parties with respect to this
subject matter including the Stock Purchase Agreement dated March 15, 2000 among
the same parties. This Agreement may be executed in two or more counterparts,
which together shall constitute one instrument.

                                      E-26
<PAGE>

    IN WITNESS WHEREOF, the parties hereto have entered into and signed this
Agreement as of the date and year first above written.



                                          JIA, INC.
                                          SUMMIT V, INC.
                                          JENKON INTERNATIONAL, INC. (DELAWARE)
                                          JENKON INTERNATIONAL, INC.
                                          (WASHINGTON)


                                      E-27
<PAGE>
                                   EXHIBIT A

       TRADEMARKS:

       Direct Selling Today

       Jenkon

       Now!

       Summit V

       PENDING TRADEMARKS:

       JOL (stands for Jenkon On-Line)

       DOMAIN NAMES:

       jenkon.com

       jencon.com

       nownetwork.com

       jenkon-dev.com

                                      E-28
<PAGE>
                                   APPENDIX F

                              MANAGEMENT AGREEMENT

                                      F-1
<PAGE>
                              MANAGEMENT AGREEMENT


    THIS MANAGEMENT AGREEMENT is made and entered into as of March 15, 2000,
among Jenkon International, Inc., a Delaware corporation ("Jenkon"), Jenkon
International, Inc., a Washington corporation ("Jenkon Washington"), Summit
V, Inc., a Washington corporation ("Summit V"), and JIA, Inc., a Washington
corporation ("JIA"), with respect to the following facts:


        A. JIA, Summit V, Jenkon Washington, and Jenkon have entered into a
    Stock Purchase Agreement, of even date herewith (the "Stock Purchase
    Agreement"), pursuant to which JIA has agreed to acquire, among other
    things, all of the outstanding stock of Summit V.

        B.  Summit V's business consists of the design, development, marketing
    and sale of software solutions for the direct sales industry and related
    operations (the "Business").

        C.  This Agreement is entered into by Summit V, JIA, Jenkon Washington,
    and Jenkon pursuant to the terms of the Stock Purchase Agreement and
    provides for management of the operations of the Business by JIA during the
    term of this Agreement on the terms and conditions hereinafter set forth.

    NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein, and intending to be legally bound hereby, the parties agree
as follows:

    1.  DEFINITIONS:  The following terms have the meanings given to them below:

        (a)  "COMMENCEMENT DATE"  means the date of this Agreement.

        (b)  "INTERIM PERIOD"  means the period commencing on the Commencement
    Date and ending on the Termination Date.

        (c)  "CASH RECEIPTS"  means all money received by JIA (directly or
    through its role as manager of the Summit V) relating to the operation of
    the Business during the Interim Period, including money received from
    collection of accounts receivable arising prior to or during the Interim
    Period.

        (d)  "CASH DISBURSEMENTS"  means all expenses incurred and money spent
    by Summit V (whether financed through Cash Receipts or other capital
    resources of Summit V or through advances from JIA) relating to the
    liabilities or obligations of Summit V or the operation of the Business
    during the Interim Period.

    2.  TERM OF AGREEMENT; TERMINATION.

        (a) The term of this Agreement shall commence on the date of this
    Agreement and shall continue until terminated (the "Termination Date") as
    set forth below. This Agreement shall terminate on the earliest to occur of
    the following:

           (i) the closing of the sale of Summit V stock contemplated by the
       Stock Purchase Agreement (the "Closing") or the termination of the Stock
       Purchase Agreement prior to Closing, or

           (ii) the mutual written consent of the parties hereto to termination
       of this Agreement, or

          (iii) by Jenkon or JIA, as the case may be, in the event that the
       other party materially breaches the terms of this Agreement, or

           (iv) by Jenkon in the event that the disinterested members of the
       Board of Directors of Jenkon makes a good faith determination that JIA
       has mismanaged the operation of Summit V's business in a manner that has
       or is reasonably likely to have a material adverse effect on Jenkon and
       (1) Jenkon has given notice of the nature of such mismanagement to JIA
       and (2) such mismanagement, to the extent curable, has been cured by JIA
       within five (5) business

                                      F-2
<PAGE>
       days of receipt of notice; provided, however, Jenkon may not terminate
       this Agreement pursuant to this clause (iv) in the event that Jenkon,
       within five (5) business days of the notice of mismanagement, receives
       reasonable assurances from JIA that JIA is prepared and able to close.
       Such assurances from JIA are to take the form of a written
       representations from JIA and its officers as to JIA's willingness and
       ability to close within such time frame and which assurances shall be
       supported by such objective proof of JIA's ability to close as Jenkon may
       reasonably require.

           (v) by Jenkon or Summit V if JIA shall commence any cause, proceeding
       or other action (A) under any existing or future law of any jurisdiction,
       domestic or foreign, relating to bankruptcy, insolvency, reorganization
       or relief of debtors, seeking to have an order for relief entered with
       respect to them, or seeking to adjudicate them a bankrupt or insolvent,
       or seeking reorganization, arrangement, adjustment, winding-up,
       liquidation, dissolution, composition or other relief with respect to
       their debts, or (B) seeking appointment of a receiver, trustee, custodian
       or other similar official for JIA or for all or any substantial part of
       the assets of JIA; if JIA shall make a general assignment for the benefit
       of creditors; if there shall be commenced against JIA any case,
       proceeding or other action of a nature referred to in clause (i) above
       with (A) results in the entry of an order for relief or any such
       adjudication or appointment or (B) remains undismissed, undischarged or
       unbonded for a period of sixty (60) days; or if there shall be commenced
       against JIA any case, proceeding or other action seeking issuance of a
       warrant of attachment, execution, distraint or similar process against
       all or any substantial part of its assets, which results in the entry of
       an order for any such relief which shall not have been vacated,
       discharged, or stayed or bonded pending appeal within thirty (30) days
       from the entry thereof.

    3.  MANAGEMENT OF BUSINESS.

        (a)  APPOINTMENT OF JIA AS MANAGER.  Summit V and Jenkon hereby appoint
    and retain JIA to supervise, direct and control the day-to-day operation and
    management of the Business during the Interim Period upon the terms and
    conditions set forth herein. The services to be provided by JIA pursuant to
    this Agreement shall include, but shall not be limited to, the management,
    administrative and support services set forth on EXHIBIT A of this
    Agreement.

        (b)  STANDARD OF OPERATION.  JIA shall manage and operate the Business
    in a commercially reasonable manner and shall be subject to and agrees to
    operate under the same standard of care, duties and legal obligations as are
    applicable to officers and directors of corporations under Delaware law. JIA
    agrees to comply with all applicable laws, rules and regulations in
    connection with the operation of the business (except where non-compliance
    could not have a material adverse effect on the Business or the financial
    condition of Summit V or Jenkon. Subject to the foregoing standard and the
    limitations on the powers of JIA described in this Agreement, JIA's powers
    and authority shall include, but shall not be limited to:

           (i) the collection of accounts receivable (including any reasonable
       discounting of the same consistent with past practices);

           (ii) the compromise or settlement of accounts payable (consistent
       with past practices);

          (iii) the hiring, supervising, directing the work of, promoting,
       discharging and determining the compensation and other benefits of all
       personnel working in the Business; and

           (iv) the ability to enter into such service, supply, development and
       other contracts or agreements as are in JIA's reasonable judgment
       necessary for the operation of the Business; provided, however, that the
       terms of such contracts and agreements (including the terms of any
       warranty or service obligations by Summit V) shall be consistent with the
       terms of Summit V's historical contracts and agreements of similar size
       and type and, in all cases other

                                      F-3
<PAGE>
       than customer support and service agreements, shall be terminable by
       Summit V, without liability, on not more than 30 days notice.

        (c)  COVENANTS OF JIA REGARDING OPERATIONS.  JIA covenants and agrees
    that during the Interim Period,

           (i) it shall maintain the assets of the Business in good condition
       and repair consistent with past practices, including, without limitation,
       all necessary repairs and replacements of hardware and other equipment
       used in connection with the Business;

           (ii) its shall cause Summit V to keep in existence all policies of
       insurance insuring the Business and the assets and the operation thereof
       against liability and property damage, fire and other casualty during the
       Interim Period, consistent with the policies currently maintained by
       Summit V and/or Jenkon;

          (iii) to the extent that JIA elects to terminate any employees of
       Summit V, such termination(s) shall be made in accordance with applicable
       law after consultation with the acting head of human resources of Summit
       V (currently Pat O'Hara) and only after David Edwards or any other
       representative of Jenkon designated by David Edwards shall have approved
       such termination. Such termination shall be made by JIA in accordance
       with applicable federal or state employment law; and

           (iv) JIA agrees that Jenkon or its designated representatives shall
       be provided full and complete access, during normal business hours upon
       reasonable notice (which shall, in no case, be required to be more than
       24 hours in advance), to all information, documentation and physical
       premises maintained by JIA in connection with the Business or the
       management thereof;

           (v) it shall assemble and maintain all financial accounting records,
       controls and systems of Summit V in the manner currently assembled and
       maintained and agrees to fully cooperate (without charge to Jenkon or
       Summit V) with the preparation of any audit, review or other financial
       information or statements reasonably required by Jenkon, it being
       understood that any failure to do so would cause Jenkon irreparable harm.
       In this regard, JIA agrees to maintain Summit V's financial records
       during the Interim Period in a manner consistent with the requirements of
       a publicly-traded company that is required to file periodic reports with
       the Securities and Exchange Commission under the Securities Exchange Act
       of 1934, as amended (the "Exchange Act").

           (vi) JIA understands that Jenkon is a reporting company under the
       Exchange Act and, as such, has certain obligations under the Exchange Act
       and under the rules and regulations of the Nasdaq Stock Market that are
       applicable to the operation of the Business during the Interim Period.
       JIA agrees to take all steps reasonably necessary in order to enable
       Jenkon to comply with such obligations.

        (d)  ADDITIONAL COVENANTS OF JIA REGARDING BUSINESS.  During the Interim
    Period, unless Jenkon shall otherwise agree in writing (as evidenced by the
    written consent of David Edwards or any independent member of the Board of
    Directors of Jenkon), which shall not be unreasonably withheld, JIA shall:

           (i) conduct the Business in the ordinary and usual course of business
       and consistent with past practice;

           (ii) not purport to issue, sell, pledge or dispose of, or agree to
       issue, sell, pledge or dispose of, any shares of, or any options,
       warrants or rights of any kind to acquire any shares of the capital stock
       of Summit V or any class or any debt or equity securities convertible
       into

                                      F-4
<PAGE>
       or exchangeable for such capital stock, it being expressly agreed that
       JIA shall have no power to authorize the issuance of any securities on
       behalf of Summit V;

          (iii) not cause Summit V to (1) incur or become contingently liable
       with respect to any indebtedness for borrowed money other than trade
       payables incurred in the ordinary course of business, (2) redeem,
       purchase, acquire or offer to purchase or acquire any shares of capital
       stock of Summit V, Jenkon or any other company, or any options, warrants
       or rights to acquire any such shares, (3) make any acquisition of any
       assets or businesses other than expenditures for current assets in the
       ordinary course of business and expenditures for fixed or capital assets
       in the ordinary course of business, (4) sell, pledge, dispose of or
       encumber any material assets or businesses other than sales of businesses
       or assets in the ordinary course of business, or (5) renew, extend,
       modify or enter into any real property (or office) lease on behalf of
       Summit V (it being understood that JIA intends to negotiate and enter
       into its own lease with the current landlord for the corporate
       headquarters of Summit V);

           (iv) confer with David Edwards or any person designated by David
       Edwards to report operational matters of materiality and the general
       status of ongoing operations;

           (v) not (1) cause Summit V to acquire (including, without limitation,
       by merger, consolidation, or acquisition of stock or assets) or form any
       corporation, partnership, other business organization or division
       thereof, or acquire directly or indirectly any material amount of assets;
       (2) except as specifically contemplated by this Agreement, cause Summit V
       to incur any indebtedness for borrowed money or issue any debt securities
       or assume, guarantee or endorse, or otherwise as an accommodation become
       responsible for, the obligations of any person or entity, or make any
       loans or advances, except in the ordinary course of business and
       consistent with past practice which loans shall be on terms and
       conditions satisfactory to Jenkon; (3) cause Summit V to enter into any
       contract or agreement other than in the ordinary course of business,
       consistent with past practice; (4) except for the capital expenditures
       and purchase orders specifically described (by type and maximum
       expenditure) on Schedule 1 to this Agreement, authorize any single
       capital expenditure by or on behalf of Summit V that is in excess of
       $10,000 or capital expenditures that are, in the aggregate, in excess of
       $50,000; or (5) enter into or amend or cause Summit V to enter into or
       amend any contract, agreement, commitment or arrangement with respect to
       any matter set forth in this subsection;

           (vi) not (1) cause Summit V to enter into any employment, consulting
       or agency agreement (whether written or oral), or increase the
       compensation payable or to become payable to its officers, employees or
       consultants, except for increases in accordance with existing agreements
       or past practices for employees of Summit V who are not officers,
       directors or shareholders of Summit V or JIA, (2) cause Summit V to grant
       any severance or termination pay to, or enter into any employment or
       severance agreement with, any director, officer employee of Summit V or
       JIA, (3) cause Summit V to establish, adopt, enter into or amend any
       collective bargaining, bonus, profit sharing, thrift, compensation, stock
       option, restricted stock, pension, retirement, deferred compensation,
       employment, termination, severance or other plan, agreement, trust, fund,
       policy or arrangement for the benefit of any director, officer or
       employee of Summit V or JIA, or (4) cause Summit V to make any
       distribution of cash or other assets to JIA or any shareholder, director,
       officer or affiliate thereto other than pursuant to the terms of
       employment or consulting arrangements in effect on the date of this
       Agreement (which shall in all cases, be consistent with past practice);

          (vii) not make, change or revoke any material tax election on behalf
       of Summit V or make any material agreement or settlement regarding taxes
       owed by Summit V with any taxing authority;

                                      F-5
<PAGE>
         (viii) not take any action, other than reasonable and usual actions in
       the ordinary course of Business and consistent with Summit V's past
       practice, with respect to accounting policies or procedures (including,
       without limitation, procedures with respect to the payment of accounts
       payable and collection of accounts receivable), other than as required by
       GAAP or as reasonably required by Jenkon;

           (ix) not make or issue any press release on behalf of Summit V or JIA
       relating to the Business or the terms of this Agreement;

           (x) cause Summit V to pay and make any required deposits of payroll
       and employment taxes on a timely basis and in accordance with applicable
       law; and

           (xi) cause Summit V's obligations and accounts payable to be paid
       when due, consistent with past practices.

    4.  CASH RECEIPTS AND CASH DISBURSEMENTS.

        (a)  BANK ACCOUNT.  Promptly following the execution of this Agreement,
    JIA and Summit V shall jointly establish and maintain one or more bank
    accounts (collectively, the "Interim Account") and shall cause all receipts
    from accounts receivable of Summit V to be deposited into the Interim
    Account, and shall cause all payments with respect to liabilities of Summit
    V to be paid from the Interim Account. JIA shall make deposits to the
    Interim Account ("Funding Deposits") as required to fund Summit V's
    operation as provided in Section 4(b) below. The Interim Account shall be
    registered in the name of Summit V and shall provide for signatories
    designated by JIA (who shall, in all cases, be officers of JIA); provided,
    however, that Jenkon shall have the power (and the Interim Account shall
    specifically provide Jenkon the power) to change or modify the signatories
    upon any breach of this Agreement by JIA, the termination of this Agreement,
    or to the extent the Board of Directors makes a reasonable good faith
    determination that such changes are necessary in accordance with the
    fiduciary duties of the Board of Directors to the stockholders of Jenkon.
    Neither Jenkon nor Summit V shall make withdrawals from the Interim Account
    other than in the ordinary course of Summit V's Business. JIA shall not make
    withdrawals from the Interim Account except (i) to pay Summit V liabilities
    and fund Summit V operating expenses during the Interim Period, or
    (ii) upon termination of this Agreement or Closing, to receive any unused
    Funding Deposits. Jenkon shall be entitled to receive and review all account
    statements and, upon request, JIA shall provide Jenkon with account balance
    information relating to the Interim Account. If this Agreement is terminated
    prior to Closing (other than as a result of a breach of or failure to
    perform its obligations under this Agreement or the Stock Purchase Agreement
    by JIA), JIA shall have the right to withdraw from the Interim Account the
    aggregate amount of all Funding Deposits.

        (b)  ADVANCES AND RETURN OF PROPERTY BY JIA.  During the Interim Period,
    JIA agrees to advance to Summit V (through Funding Deposits as described in
    (a) above), such amounts as are necessary to fund the continuing operations
    of Summit V's business (including, without limitation, the prompt payment of
    employee salaries, employment and other taxes, lease payments and other
    operating expenses of Summit V). In the event that a Closing does not occur
    (other than by reason of a breach of this Agreement or the Stock Purchase
    Agreement by JIA, Jenkon shall reimburse JIA for all Funding Deposits used
    in connection with the operation of the Business. In the event that the
    Closing does not occur (for any reason), JIA shall return all of the
    business and assets to Summit V in good order and repair, normal wear
    excepted.

        (c)  CASH RECEIPTS.  JIA shall have full authority to collect all Cash
    Receipts and deposit them in the Interim Account.

                                      F-6
<PAGE>
        (d)  CASH DISBURSEMENTS.  Subject to any limitations set forth elsewhere
    in this Agreement, JIA shall have full authority to make Cash Disbursements
    out of Cash Receipts and Funding Deposits in connection with the operation
    of the Business.

        (e)  NO COMPENSATION TO JIA.  JIA shall not be entitled to compensation
    for its services in managing the operations of the Business hereunder.

    5.  [RESERVED]

    6.  INDEMNIFICATION.

        (a)  INDEMNIFICATION OF JIA.  Jenkon and Summit V hereby jointly and
    severally agree to indemnify, defend and hold JIA and each of its officers,
    directors and agents harmless from and against any and all liabilities,
    claims, demands, rights and causes of action of whatever kind or nature
    arising out of or resulting from (i) the a breach of this Agreement by
    Jenkon, and (ii) if the Closing does not occur for reasons other than a
    breach or failure to perform by JIA, the operation of the Business prior to
    the date of this Agreement.

        (b)  INDEMNIFICATION OF JENKON AND SUMMIT V. JIA  (and, if a Closing
    occurs, Summit V) hereby jointly and severally agree to indemnify, defend
    and hold Jenkon (and, if a Closing does not occur, Summit V) and each of
    their respective officers, directors and agents harmless from and against
    any and all liabilities, claims, demands, rights and causes of action of
    whatever kind or nature arising out of or resulting from (i) the a breach of
    this Agreement by JIA, (ii) if the Closing occurs, the operation of the
    Business or any other business by Summit V or JIA subsequent to the date of
    this Agreement, and (iii) any offering or sale of securities by JIA.

    7.  FORCE MAJEURE.  Neither JIA, Summit V nor Jenkon shall be liable for any
delay in the performance of their respective obligations hereunder due to any
cause beyond its reasonable control, including, but not limited to, fires,
floods, strikes, or other labor disputes, accidents to machinery, delay in
performing the Services because of the installation or removal of data
processing equipment, production shutdowns, shortages of fuel, acts of sabotage,
riots, precedence or priorities granted at the request or for the benefit,
directly or indirectly, of the federal or any state government or any
subdivision or agency thereof, delay in transportation or lack of transportation
facilities, or restrictions imposed by federal, state or other governmental
legislation or rules or regulations thereof.

    8.  NATURE OF RELATIONSHIP.  JIA, Summit V and Jenkon acknowledge and agree
that JIA is acting as an independent contractor, and, except as otherwise
provided in this Agreement or the Stock Purchase Agreement, this Agreement is
not intended to create any other relationship between the parties, including,
without limitation, a partnership or joint venture. Jenkon, Summit V and Jenkon
Washington hereby acknowlegde and agree that during the Interim Period, Robert
Cavitt shall remain as an officer of Summit V but, subject to the duties,
standards of conduct and restrictions imposed by the terms of this Agreement
with respect to JIA's management of the Business, each of Jenkon, Summit V and
Jenkon Washington hereby waive any conflict of interest arising out of Robert
Cavitt's role as an officer of Summit V and an officer and director of JIA.

    9.  AUTHORITY; AUTHORIZATIONS.  Jenkon and Summit V represent and warrant to
JIA that they have the power and authority to enter into this Agreement and to
perform their obligations hereunder, and that they have taken all necessary
corporate action required to be taken to authorize the execution, delivery and
performance of this Agreement. JIA represents and warrants that it has the power
and authority to enter into this Agreement and to perform its obligations
hereunder and that it has taken all necessary corporate action required to be
taken in order to authorize the execution, delivery and performance of this
Agreement.

    10.  ASSIGNMENT.  No party shall assign its rights under this Agreement or
its interest herein without the other parties' prior written consent.

                                      F-7
<PAGE>
    11.  NON-WAIVER.  Failure of any party hereto to enforce any of the terms
and provisions herein or to exercise any right accruing through the default of
the other parties shall not constitute a waiver of other or future defaults of
the defaulting party.

    12.  GOVERNING LAW.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington, without regard to
principles of conflicts of law thereof.

    13.  ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement
between the parties relative to the subject matter of this Agreement. This
Agreement expressly supersedes all prior negotiations, representations, offers,
letters, contracts, writings or other agreements or understandings with respect
hereto. No change, amendment or modification hereof shall be valid unless it is
made in writing and signed by all parties.

    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.


<TABLE>
<S>                                              <C>
                                                 JIA, Inc., a Washington corporation

                                                 Summit V, Inc., a Washington corporation

                                                 Jenkon International, Inc., a Delaware corporation

                                                 Jenkon International, Inc., a Washington corporation
</TABLE>


                                      F-8
<PAGE>
                         MANAGEMENT SERVICES AGREEMENT
                                   EXHIBIT A

     I.ACCOUNTING SERVICES
       Cash Management
       Financial Statement Preparation
       Tax Return Preparation Supervision
       Credit & Collections Supervision
       Accounts Payable, Cash Disbursements Supervision
       Bank Account Reconciliations Supervision
       Cost Accounting Assistance

    II.MANAGEMENT INFORMATION SERVICES
       Data Processing Services Supervision for
       Order Entry and Billing
       Sales and Accounts Receivable
       Accounts Payable and Cash Disbursement
       Payroll
       General Software Support
       Productivity Planning

    III.EMPLOYEE BENEFITS
       Administration of Employee Benefit Plans

    IV. PERSONNEL MANAGEMENT

     V. COMPANY MANAGEMENT AND PLANNING

    VI. SALES ACTIVITY SUPERVISION

   VII. PURCHASING SUPERVISION

                                      F-9
<PAGE>
                                   APPENDIX G
                      FAIRNESS OPINION OF CAPITALINK, L.C.

                                      G-1
<PAGE>
                                                            As of March 22, 2000

Board of Directors
Jenkon International, Inc.
7600 NE 41st Street
Suite 350
Vancouver, WA 98662

Members of the Board:

    We understand that there is a Stock Purchase Agreement, dated as of
March 15, 1999 (the "Stock Purchase Agreement"), among JIA, Inc. ("JIA"),
Jenkon, Jenkon International, Inc, a wholly-owned subsidiary of Jenkon, and
Summit, whereby JIA shall purchase 100% of the outstanding shares of Summit in
exchange for the following (hereafter, the "Purchase Consideration"):

       Consideration of $850,000, of which $500,000 shall be paid at the closing
       of the transaction, and $350,000 of which shall be in the form of a
       promissory note with an interest rate of 12% per annum, due one year from
       the closing of the transaction.

    The transaction described in the preceding two paragraphs is referred to as
the "Proposed Transaction."

    You have requested our opinion as to the fairness, from a financial point of
view, to the shareholders of Jenkon of the Purchase Consideration. We have not
been requested to opine as to, and our opinion does not in any manner address,
the underlying business decision of Jenkon to proceed with or effect the
Proposed Transaction. In addition, we have not been requested to explore any
alternatives to the Proposed Transaction.

    In arriving at our opinion, we, among other things: (i) reviewed the Stock
Purchase Agreement; (ii) reviewed publicly available financial information and
other data with respect to Jenkon, including the Annual Report for the fiscal
year ended June 30, 1999, the Quarterly Reports on Form 10-QSB for the periods
ended September 30, 1999, and December 31, 1999, and, the Current Reports on
Form 8-K, dated December 30, 1999 and (on Form 8-K/A) dated February 28, 2000;
(iii) reviewed the Jenkon Private Placement Memorandum dated September 10, 1999;
(iv) reviewed certain other relevant financial and operating data relating to
Jenkon and Summit made available from published sources and from the internal
records of Jenkon; (v) considered the historical financial results and present
financial condition of Summit with those of other companies that we deemed
relevant; (vi) reviewed and analyzed the financial terms of certain transactions
that we deemed comparable to the Proposed Transaction; (vii) reviewed certain
publicly available information concerning the trading of, and the trading market
for, the common stock of Jenkon; (viii) reviewed and analyzed certain publicly
available information concerning the trading of, and the trading market for,
companies that we believed to be comparable to Summit; (ix) reviewed and
discussed with representatives of the management of Jenkon and Summit certain
financial and operating information furnished to us and presented in the public
filings; (x) inquired about and discussed the Proposed Transaction with Jenkon
and Summit management; and (xi) performed such other analyses and examinations
as we deemed appropriate.

    In arriving at our opinion, we relied upon and assumed the accuracy and
completeness of all of the financial and other information that was used without
assuming any responsibility for any independent verification of any such
information and further relied upon the assurances of Jenkon's management that
they were not aware of any facts or circumstances that would make any such
information inaccurate or misleading. In arriving at our opinion, we did not
make a physical inspection of the properties and facilities of Jenkon (or
Summit), and has not made or obtained any evaluations or appraisals of the
assets and liabilities (contingent or otherwise) of Summit. We assumed that the
Proposed Transaction will be consummated in a manner that complies in all
respects with the applicable provisions of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as

                                      G-2
<PAGE>
amended, and all other applicable federal and state statutes, rules and
regulations. In addition, upon the advice of the management of Jenkon and its
legal advisors, we assumed that the Proposed Transaction would not cause any
adverse tax affect to Jenkon based on use of existing net operating loss
carryforwards available. Our opinion was necessarily based upon market, economic
and other conditions as they existed on, and could be evaluated as of,
March 22, 2000. Accordingly, although subsequent developments may affect our
opinion, we did not assume any obligation to update, review or reaffirm our
opinion.

    We have also assumed, with your consent, that the Proposed Transaction will
be consummated in accordance with the terms described in the Stock Purchase
Agreement, without any further amendments thereto, and without waiver by Jenkon
of any of the conditions to any obligations thereunder.

    In connection with our services, we have previously received a retainer and
will receive the balance of our fee for rendering this opinion. In addition,
Jenkon has agreed to indemnify us for certain liabilities that may arise out of
the rendering this opinion. This opinion is not intended to be and does not
constitute a recommendation to any shareholder of Jenkon as to how such
shareholder should vote, if required to, with respect to the Proposed
Transaction.

    Our opinion is for the use and benefit of the Board of Directors of Jenkon
and is rendered to the Board of Directors in connection with its consideration
of the Proposed Transaction and may not be used by Jenkon for any other purpose
or reproduced, disseminated, quoted or referred to by Jenkon at any time, in any
manner or for any purpose, without the prior written consent of Capitalink,
except that this opinion, may be reproduced in full in, and references to the
opinion and to Capitalink and its relationship with Jenkon may be included in
any proxy statement relating to the Proposed Transaction that Jenkon files with
the U.S. Securities and Exchange Commission and distributes to holders of
Jenkon's common stock in connection with the Proposed Transaction.

    Based upon and subject to the foregoing, it is our opinion that, as of the
date of this letter, the Purchase Consideration is fair, from a financial point
of view, to the shareholders of Jenkon.

Very truly yours,
CAPITALINK, L.C.

                                      G-3
<PAGE>
PROXY

                             JENKON INTERNATIONAL, INC.
                        7600 N.E. 41ST STREET, SUITE 350
                          VANCOUVER, WASHINGTON 98662
                                 (360) 256-4400

          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

    The undersigned hereby appoints David Edwards and Cliff DeGroot as Proxies,
each with the power to appoint his substitute, and hereby authorizes them or
either of them to represent and to vote as designated below, all the shares of
common stock of Jenkon International, Inc. held of record by the undersigned on
May 5, 2000, at the Special Meeting of Shareholders to be held on May 31, 2000,
or any adjournment thereof.

1.  APPROVAL OF THE CONVERSION PROPOSAL (as described in the Proxy Statement)

            / /  FOR            / /  AGAINST            / /  ABSTAIN

2.  APPROVAL OF THE CHARTER AMENDMENT PROPOSAL (as described in the Proxy
Statement)

            / /  FOR            / /  AGAINST            / /  ABSTAIN

3.  APPROVAL OF THE SALE PROPOSAL (as described in the Proxy Statement)

            / /  FOR            / /  AGAINST            / /  ABSTAIN

4.  In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

                          (CONTINUED ON REVERSE SIDE)
<PAGE>
    THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3.

                                              Dated ______________________, 2000

                                              __________________________________
                                                          Signature

                                              __________________________________
                                                  Signature if held jointly

                                              Please sign exactly as name
                                              appears below. When shares are
                                              held by joint tenants, both should
                                              sign. When signing as attorney, as
                                              executor, administrator, trustee,
                                              or guardian, please give full
                                              title as such. If a corporation,
                                              please sign in full corporate name
                                              by President or other authorized
                                              officer. If a partnership, please
                                              sign in partnership name by
                                              authorized person.

 PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
                                   ENVELOPE.



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