July 26, 2010
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW (COLLECTIVELY, THE “SECURITIES LAWS”), AND HAS
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE
TRANSFERRED UNLESS IT (I) IS REGISTERED OR QUALIFIED UNDER ALL APPLICABLE SECURITIES
LAWS OR (II) IS EXEMPT FROM REGISTRATION OR QUALIFICATION UNDER SUCH LAWS AND THE
ISSUER IS PROVIDED WITH AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
FOR VALUE RECEIVED, Vaughan Foods, Inc., an Oklahoma corporation (“Debtor”), promises to pay to
Herbert B. Grimes (“Lender”), at the offices of the Debtor, on the dates listed in Schedule A (the “Maturity
Dates”) the principal sum of EIGHT HUNDRED EIGHTY THOUSAND, NINE HUNDRED NINE DOLLARS
($880,909.00), together with interest thereon at the rate of ten percent (10%) per annum, compounded daily.
Lender may, at his option, elect to defer some or all of any scheduled payments listed in Schedule A. This
Promissory Note replaces that certain Promissory Note dated June 30, 2009 in the amount $882,750.00, and
is given in satisfaction of the remaining balance on that Promissory Note dated, June 30, 2010. This
Promissory Note is executed on the date noted above and is effective as of June 30, 2010.
Lender understands and agrees that the scheduled payments listed Schedule A include negative amortization
provisions, such that some payments are not sufficient to satisfy all accrued interest through the dates of the
payments, and that such insufficiencies shall be added to the principal balances, as necessary.
If this Note, or any payment hereunder, falls due on a Saturday, Sunday or a day that is a public holiday in the
State of Oklahoma, this Note shall become due or such payment hereunder, shall be made on