EX-10.8


                                 PROMISSORY NOTE


$1,000,000                                                    SEPTEMBER 25, 2006
                                                                PORTLAND, OREGON


                  FOR VALUE  RECEIVED,  Vaughan  Foods,  Inc.  ("Maker"  herein)
promises to pay to the order of Paulson Investment Company, Inc. ("Holder"), the
principal  sum  of  One  Million  and  no/100ths  Dollars  ($1,000,000.00)  (the
"Obligation").  Interest on the Obligation  shall accrue until the Obligation is
paid in full at the rate of ten  percent  (10%) per annum.  The  Obligation  and
interest  shall be payable in lawful  money of the United  States,  at Portland,
Oregon or such other place as the Holder hereof may designate.

                  Interest  shall be computed on monthly basis of a 365-day year
or 366-day year,  as  applicable,  and actual days lapsed.  Maker shall have the
right to prepay at any time in advance of maturity,  without premium or penalty,
all or any part of the  principal  amount of this  Promissory  Note or  interest
thereon.  Payments shall be first applied to outstanding interest and thereafter
to the principal.

         This Promissory Note shall be payable as follows:

         1. When a registration  statement for an initial  public  offering (the
"Offering")  of Maker is filed  with the  SEC,  this  Promissory  Note  shall be
payable on the following schedule:

                  09/28/06------$250,000
                  10/04/06------$250,000
                  10/11/06------$100,000
                  10/18/06------$100,000
                  10/25/06------$100,000
                  11/01/06------$100,000
                  11/08/06------$100,000


  At the option of the Holder,  the Holder may deduct such  payment from the net
proceeds  otherwise  payable  by the  Holder  to the  Maker at the  closing  the
Offering.

         2. In the event the  Offering  has not closed on or before the close of
business on March 31, 2007,  this  Promissory  Note shall  thereafter be payable
thirty (30) days after demand for payment by the Holder.

         Maker waives diligence, presentment, demand, protest, and notice of any
kind whatsoever.  The non-exercise by Holder of any of Holder's rights hereunder
in any instance  shall not constitute a waiver thereof in that or any subsequent
instance.

         Maker shall pay upon demand any and all expenses,  including reasonable
attorney  fees,  incurred or paid by Holder without suit or action in attempting
to  collect  funds  due under  this  Promissory  Note.  In the even an action is
instituted  to enforce or  interpret  any of the terms of this  Promissory  Note
including but not




Promissory Note
September 25, 2006
Page 2


limited to any action or  participation  by Maker in, or in  connection  with, a
case or proceeding under the U.S. Bankruptcy Code or any successor statute,  the
prevailing party shall be entitled to recover all expenses  reasonably  incurred
at, before and after trial,  on appeal,  and on review whether or not taxable as
costs, including, without limitation,  attorneys' fees, witness fees (expert and
otherwise), deposition costs, copying charges and other expenses.

         This  Promissory  Note is to be  construed in all respects and enforced
according to the laws of the State of Oregon.


                                            "MAKER"

                                            VAUGHAN FOODS, INC.

                                            By:  /s/ Mark E. Vaughan
                                                --------------------------------

                                            Its: President
                                                --------------------------------


Accepted:

"HOLDER"

PAULSON INVESTMENT COMPANY, INC.

By:  Lorraine Maxfield
    ------------------------------------------
Its: Senior Vice President, Corporate Finance
    ------------------------------------------