I solved this by using Guvnor instead of eclipse to edit the process which allowed me to do the following:
- add a boundary event on Task 1 catching the TaskPerformed event
- set cancelActivity="true" for the event
https://community.jboss.org/servlet/JiveServlet/downloadImage/2-756046-19303/450-92/Screen+shot+2012-08-27+at+3.54.25+PM.png
Much simpler!