Stock Exchange Agreement and Plan of Reorganization

STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION

THIS STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT") is made and entered into as of by and among

, a corporation ("JENKON"), , an corporation (the "COMPANY"), and the holders of all of the outstanding capital stock of the Company listed in Exhibit A to this Agreement (the "STOCKHOLDERS").

RECITALS

WHEREAS, each Stockholder is the record and beneficial owner of that number of shares of the Common Stock of the Company set forth next to such Stockholder's name on Exhibit A (the "STOCKHOLDER'S SHARES");

WHEREAS, Jenkon desires to acquire all of the outstanding Common Stock of the Company ("COMPANY COMMON STOCK") in exchange for shares of capital stock of Jenkon;

WHEREAS, Jenkon is willing to issue to each Stockholder, and each Stockholder is willing to acquire from Jenkon, shares of capital stock of Jenkon in exchange for such Stockholder's Shares;

WHEREAS, the Board of Directors of Jenkon and the Stockholders deem the above-described exchange to be desirable and in the best interests of each of their corporations, and have authorized and approved such exchange subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the promises and the mutual covenants, representations, warranties and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I. TERMS OF THE EXCHANGE OF STOCK

1.1 THE EXCHANGE OF STOCK. At the Closing (as defined below), Jenkon shall convey, transfer, issue and deliver to each Stockholder the number of shares of Jenkon Common Stock, Series B Preferred and Series C Preferred set forth next to such Stockholder's name on Exhibit A in exchange for all of the Stockholder's Shares set forth next to such Stockholder's name on Exhibit A.

1.2 AMOUNT OF CONSIDERATION.

(a) Aggregate consideration to be issued:

Jenkon Common Stock: shares

Series B Preferred: shares

Series C Preferred: shares

(b) Fully diluted shares expected immediately following the Closing:

1.3 PREFERRED STOCK. Certificate of Designation details.

1.4 POST-CLOSING STRUCTURE OF ENTITIES. Company shall be a wholly-owned subsidiary of Jenkon.

1.5 CLOSING. The closing shall take place at on at or such later date as mutually agreed.

1.6 APPOINTMENT OF STOCKHOLDERS AGENT. The Stockholders Agent is appointed as representative and attorney-in-fact.

ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

2.1 ORGANIZATION AND QUALIFICATION. The Company is duly organized and validly existing under the laws of .

2.2 ARTICLES OF INCORPORATION; BYLAWS. Company has furnished complete copies of organizational documents.

2.3 CAPITALIZATION.

(a) Authorized Company Shares: ordinary shares; outstanding shares: .

(b) Reserved securities or options: Yes

(c) Jenkon to be beneficial and record owner of 5,375 ordinary shares free and clear of liens.

2.4 SUBSIDIARIES. The Company has no subsidiaries.

2.5 AUTHORITY. Stockholders and Company have approved the Stock Exchange.

2.6 COMPANY FINANCIAL STATEMENTS.

Audited balance sheet dates: and .

Interim balance sheet date: .

2.7 NO UNDISCLOSED LIABILITIES. Except as set forth in schedule 2.7.

2.8 NO CHANGES. Except as set forth in schedule 2.8.

2.9 TAX AND OTHER RETURNS AND REPORTS.

All required returns filed: Yes

Any tax audit in progress: Yes

2.10 RESTRICTIONS ON BUSINESS ACTIVITIES. No restrictive agreements.

2.11 TITLE TO PROPERTIES; ABSENCE OF LIENS. Company has good title to assets.

2.12 INTELLECTUAL PROPERTY.

Registered IP schedule attached: Yes

2.13 AGREEMENTS, CONTRACTS AND COMMITMENTS.

2.14 INTERESTED PARTY TRANSACTIONS. Disclose if any.

2.15 COMPLIANCE WITH LAWS. Company complies in all material respects.

2.16 LITIGATION. No pending litigation or threatened proceedings.

2.17 INSURANCE. Insurance policies and fidelity bonds in force.

2.18 BROKERS' AND FINDERS' FEES. No brokerage or finder's fees incurred.

2.19 EMPLOYMENT MATTERS. Employment law compliance confirmed.

2.20 GOVERNMENTAL AUTHORIZATIONS AND LICENSES. All material authorizations held.

2.21 REPRESENTATIONS COMPLETE. No material omissions or misstatements.

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

3.1 TITLE TO THE SHARES. Each Stockholder owns the shares listed in Exhibit A.

3.2 AUTHORITY. Stockholder has authority to enter this Agreement.

3.3 NO LEGAL BAR. No order prevents execution of this Agreement.

3.4 BROKERS' FEES AND FINDERS' FEES. No brokerage or finder fees.

3.5 NO CLAIMS AGAINST THE COMPANY. No claims except as set forth in Company Financials.

3.6 INVESTOR REPRESENTATIONS.

Securities acquired for investment only:

Accredited investor:

Opportunity to review PPM and ask questions:

3.7 LIMITATION ON STOCKHOLDER LIABILITY. Liability capped as provided.

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF JENKON

4.1 ORGANIZATION AND QUALIFICATION. Jenkon is duly organized and in good standing under Delaware law.

4.2 AUTHORITY. Jenkon has authority to enter into this Agreement.

4.3 CAPITALIZATION.

Authorized Jenkon Common Stock: shares

Issued and outstanding: shares

4.4 SEC DOCUMENTS; JENKON FINANCIAL STATEMENTS. SEC filings and financial statements provided.

4.5 NO MATERIAL ADVERSE CHANGE. No material adverse change except as disclosed.

4.6 LITIGATION. No pending litigation affecting the transaction.

4.7 DISCLOSURE. No misleading statements or omissions.

ARTICLE V. CONDUCT PRIOR TO THE CLOSING DATE

5.1 CONDUCT OF BUSINESS OF THE COMPANY.

5.2 NO SOLICITATION. No solicitation of alternative transactions.

5.3 CONDUCT OF BUSINESS OF JENKON. Jenkon shall conduct business in ordinary course.

ARTICLE VI. ADDITIONAL AGREEMENTS

6.1 ADDITIONAL ASSURANCES. Parties shall execute necessary instruments.

6.2 REGISTRATION RIGHTS.

Registration statement to be filed: Yes

Demand registration rights requested: Yes

6.3 LOCK-UP. Stockholders agree to lock-up restrictions.

6.4 CHAIRMAN OF THE BOARD. David Rubner may be appointed chairman.

6.5 CANCELLATION OF INDEBTEDNESS. Best efforts to cancel personal guaranties.

6.6 ACCESS TO INFORMATION. Each party shall afford reasonable access.

6.7 CONFIDENTIALITY. Confidentiality obligations apply.

6.8 FAIRNESS OPINION. Company may obtain fairness opinion.

6.9 EXPENSES. Third-party expenses borne by the respective party.

6.10 PUBLIC DISCLOSURE. No disclosure without approval, except as required by law.

6.11 CONSENTS. Company will use commercially reasonable efforts to obtain consents.

6.12 COMMERCIALLY REASONABLE EFFORTS. Parties will use commercially reasonable efforts.

6.13 NOTIFICATION OF CERTAIN MATTERS. Prompt notice of material developments.

6.14 NASDAQ SMALL CAP LISTING. Jenkon shall authorize listing of shares.

6.15 COMPANY'S AUDITORS. Auditors shall assist with SEC compliance.

6.16 NO ADVICE AS TO TAX EFFECTS ON STOCKHOLDERS. Tax advice disclaimer acknowledged.

6.17 ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES. Additional documents may be required.

6.18 MEETING OF JENKON STOCKHOLDERS. Promptly prepare and file proxy materials and hold meeting.

ARTICLE VII. CONDITIONS TO OBLIGATIONS OF EACH PARTY

7.1 FINANCING.

Gross proceeds raised through financing:

First $500,000 released from escrow:

7.2 GOVERNMENTAL APPROVALS. Approvals received:

7.3 CONSENTS. Required consents received:

7.4 NO LITIGATION. No litigation with material adverse effect:

7.5 NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No injunction or restraint in effect:

7.6 PESSIE GOLDENBERG. Employment agreement entered:

ARTICLE VIII. CONDITIONS TO OBLIGATIONS OF THE STOCKHOLDERS

8.1 REPRESENTATIONS AND WARRANTIES. Jenkon representations true and correct:

8.2 AGREEMENTS AND COVENANTS. Jenkon covenants performed:

8.3 EMPLOYMENT AGREEMENTS. Assumed by Jenkon Washington:

8.4 NASDAQ LISTING. Jenkon common stock listed at Closing:

8.5 BOARD AUTHORIZATION. Board approval delivered:

ARTICLE IX. CONDITIONS TO OBLIGATIONS OF JENKON

9.1 REPRESENTATIONS AND WARRANTIES AT SIGNING. Company and Stockholder reps true at signing:

9.2 REPRESENTATIONS AND WARRANTIES AT CLOSING. Company and Stockholder reps true at closing:

9.3 AGREEMENTS AND COVENANTS. Company and Stockholders performed covenants:

9.4 LEGAL OPINION. Israeli counsel opinion received:

9.5 REVIEW OF FINANCIAL STATEMENTS. Jenkon accountants completed review:

9.6 MATERIAL ADVERSE CHANGE. No material adverse change since agreement date:

9.7 RESIGNATION OF DIRECTORS. Required resignations completed:

ARTICLE X. INDEMNIFICATION

10.1 INDEMNIFICATION BY JENKON. Jenkon indemnifies Company Parties.

10.2 INDEMNIFICATION BY COMPANY PARTIES. Company and Stockholders indemnify Jenkon.

10.3 DEFENSE OF CLAIMS. Claim notice and defense procedures apply.

10.4 LIMITATIONS ON INDEMNIFICATIONS. Survival periods and exclusions apply.

10.5 EXCLUSIVE REMEDIES. Indemnities are exclusive remedies after Closing.

ARTICLE XI. TERMINATION, AMENDMENT AND WAIVER

11.1 TERMINATION.

11.2 EFFECT OF TERMINATION. Agreement becomes void except for surviving provisions.

11.3 AMENDMENT. Amendments require written agreement.

11.4 EXTENSION; WAIVER. Extensions or waivers require written instrument.

ARTICLE XII. MISCELLANEOUS

12.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All survive the Closing.

12.2 NOTICES.

12.3 INTERPRETATION. Includes without limitation.

12.4 COUNTERPARTS. Agreement may be executed in counterparts.

12.5 ENTIRE AGREEMENT; ASSIGNMENT. Entire agreement clause applies.

12.6 SEVERABILITY. Invalid provisions are replaced by enforceable provisions.

12.7 OTHER REMEDIES. Remedies are cumulative.

12.8 GOVERNING LAW. Governed by the laws of the State of New York.

12.9 ARBITRATION. Disputes submitted to AAA arbitration in Vancouver, Washington.

12.10 RULES OF CONSTRUCTION. Counsel representation and construction waiver.

12.11 SPECIFIC PERFORMANCE. Injunctive relief and specific performance available.

IN WITNESS WHEREOF, the parties execute this Agreement.

THE STOCKHOLDERS:

Additional Stockholders / Signatures