X0202 3 2007-06-28 0 0001376556 Vaughan Foods, Inc. FOODU 0001132413 MILLENCO, L.L.C. 666 FIFTH AVENUE, 8TH FLOOR NEW YORK NY 10103-0899 0 0 1 0 0001273087 MILLENNIUM MANAGEMENT, L.L.C. 666 FIFTH AVENUE, 8TH FLOOR NEW YORK NY 10103-0899 0 0 0 1 May be deemed as group member. 0001017456 ENGLANDER ISRAEL A C/O MILLENNIUM MANAGEMENT, L.L.C. 666 FIFTH AVENUE, 8TH FLOOR NEW YORK NY 10103-0899 0 0 0 1 May be deemed as group member. common stock, no par value ("Common Stock") 177000 D Class A warrant ("Class A Warrant") 9.75 2007-07-27 2012-06-27 Common Stock 177000 D Class B warrant ("Class B Warrant") 13.00 2007-07-27 2012-06-27 Common Stock 177000 D As of the date hereof, Millenco, L.L.C., a Delaware limited liability company ("Millenco") (formerly known as Millenco, L.P.) beneficially owns 177,000 of the Issuer's units ("Units"). Each Unit consists of (a) one share of common stock, no par value ("Common Stock") (b) one Class A warrant ("Class A Warrant") and (c) one Class B warrant ("Class B Warrant"). Millennium Management, L.L.C., a Delaware limited liability company ("Millennium Management"), is the manager of Millenco, and consequently may be deemed to have shared voting control and investment discretion over securities owned by Millenco. Israel A. Englander ("Mr. Englander") is the managing member of Millennium Management. As a result, Mr. Englander may be deemed to have shared voting control and investment discretion over securities deemed to be beneficially owned by Millennium Management. The foregoing should not be construed in and of itself as an admission by Millennium Management or Mr. Englander as to beneficial ownership of the shares owned by Millenco. Each Class A Warrant entitles the holder to purchase one share of the Company's Common Stock at a price of $9.75. Each Class A Warrant will become exercisable on July 27, 2007 and expire on June 27, 2012. Commencing six months from the date of the Issuer's final prospectus (June 27, 2007), the Issuer may redeem some or all of the Class A Warrants at a price of $0.25 per Class A Warrant, after the Class A Warrants become separately tradeable and after the closing price of the Issuer's Common Stock, as reported on the principal market on which the Issuer's Common Stock trades, has been at or above 200% of the Unit offering price of $6.50 for five consecutive trading days, by giving the holders not less than 30 days' notice. Each Class B Warrant entitles the holder to purchase one share of the Company's Common Stock at a price of $13.00. Each Class B Warrant will become exercisable on July 27, 2007 and expire on June 27, 2012. Commencing six months from the date of the Issuer's final prospectus (June 27, 2007), the Issuer may redeem some or all of the Class B Warrants, at a price of $0.25 per warrant after the Class B Warrants become separately tradeable by giving the holders not less than 30 days' notice, which the Issuer may do after the its gross revenues, as confirmed by an independent audit, for any period of twelve months preceding the date of the notice, are equal to or greater than $100 million. * MILLENCO, L.L.C. *Mark Meskin, Chief Executive Officer 2007-07-06