**EXHIBIT 10.2**

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**THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISEOF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, ASAMENDED, OR ANY APPLICABLE STATE SECURITIES LAW.  THIS WARRANT OR SUCH SHARES MAY NOT BE SOLD,DISTRIBUTED, PLEDGED, OFFERED FOR SALE, ASSIGNED, TRANSFERRED, OR OTHERWISEDISPOSED OF UNLESS: (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCHACT AND APPLICABLE STATE SECURITIES LAW COVERING ANY SUCH TRANSACTION INVOLVINGSAID SECURITIES; (B) THE COMPANY (DEFINED BELOW) RECEIVES AN OPINION OF LEGALCOUNSEL FOR THE HOLDER OF THIS WARRANT STATING THAT SUCH TRANSACTION IS EXEMPTFROM REGISTRATION AND SUCH OPINION IS IN FORM AND SUBSTANCE REASONABLYSATISFACTORY TO THE COMPANY; OR (C) PURSUANT TO RULE 144 UNDER SUCH ACT.**

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**WARRANT TO PURCHASESHARES OF COMMON STOCK**

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**VENDINGDATA CORPORATION**

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THIS IS TO CERTIFY THAT, for value received,                      (the “Holder”) is entitled, during a specified period of time as set forth inSection 3 herein (the “Exercise Period”), to purchase from VendingDataCorporation, a Nevada corporation (the “Company”),           (      ) fully paid and nonassessable shares ofthe Company’s common stock, par value $0.001 per share (the “Common Stock”), atan exercise price per share as set forth in Section 1 herein (the “ExercisePrice”) (such number of shares and the Exercise Price being subject toadjustment as provided herein).  The term“Warrant,” as used herein, refers to this Warrant to Purchase Shares of CommonStock, the term “Warrant Shares,” as used herein, refers to the shares ofCommon Stock purchasable hereunder, and the term “Parties,” as used herein,refers collectively to the Holder and the Company.  This Warrant is issuable only in connectionwith that certain 9% Note in the original principal amount of $                   due August 15, 2007, dated as of the same date hereof to Holder and the Company(as “Obligor”) (collectively hereinafter the “Note”).

 

The Note and this Warrant are issued as part of a private placement bythe Company of up to Ten Million Dollars ($10,000,000) in senior notes andwarrants to purchase up to Six Hundred Thousand (600,000) shares of CommonStock (the “Private Placement”).

 

**TERMS AND CONDITIONS**

This Warrant issubject to the following terms, provisions, and conditions:

 

1.                                       ExercisePrice.  The Exercise Price shall be$5.00 per share.

 

2.                                       Mannerof Exercise; Payment for Shares.

 

## 2.1.                              Subject to the provisions hereof, thisWarrant may be exercised by the Holder, in whole or in part (but in not lessthan 1,000 share increments):

 

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2.1.1.                     By thesurrender of this Warrant, together with an exercise agreement in the formattached hereto (the “Exercise Agreement”), duly completed and executed by theHolder, to the Company during normal business hours on any business day at theCompany’s principal executive offices (or such other location as the Companymay designate by notice to the Holder); and

 

2.1.2.                     Upon:  (a) the payment to the Company in cash, bycertified or official bank check or by wire transfer for the account of theCompany in the amount of the Exercise Price multiplied by the number of WarrantShares for which the Warrant is being exercised; or (b) the surrender to the Company of Warrant Shares forcancellation having a Fair Market Price (as defined below) on the date ofexercise equal to the aggregate Exercise Price.

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## 2.2.                              For the purposes of this Warrant, the “FairMarket Price” per Warrant Share shall mean, if the Common Stock is traded on anational securities exchange, listed on the Nasdaq Stock Market or quoted on anover-the-counter quotation system, the average closing or last reported saleprices, respectively, of the Common Stock on such exchange or the Nasdaq StockMarket or the average closing bid and asked prices on an over-the-counterquotation system for the fifteen (15) business days before the effective dateof exercise of the net issuance election. If the Common Stock is not so listed oradmitted to unlisted trading privileges and bid and ask prices are notreported, the Holder cannot elect to exercise this Warrant pursuant to Section2.1.2(b).

 

3.                                       Issuanceof Certificates.  The Warrant Sharesso purchased shall be deemed to be issued to the Holder, as the record owner ofsuch Warrant Shares, as of the close of business on the date on which thisWarrant shall have been surrendered, the completed Exercise Agreement shallhave been delivered, and payment shall have been made for such Warrant Sharesas set in Section 2 above.  Certificatesfor the Warrant Shares so purchased, representing the aggregate number ofshares specified in the Exercise Agreement, shall be delivered to the Holderwithin a reasonable time, not exceeding ten (10) business days, after thisWarrant shall have been so exercised. The certificates so delivered shall be in such denominations as may bereasonably requested by the Holder and shall be registered in the name of theHolder.  If this Warrant shall have beenexercised only in part, then, unless this Warrant has expired, the Companyshall, at its expense, at the time of delivery of such certificates, deliver tothe Holder a new warrant representing the number of Warrant Shares with respectto which this Warrant shall not then have been exercised.

 

4.                                       ExercisePeriod.  This Warrant may beexercised any time before 2:00 p.m., Las Vegas, Nevada time, August 15,2009.

 

5.                                       Covenantsof the Company.  The Company hereby covenants andagrees as follows:

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## 5.1.                              Shares to be Fully Paid. All Warrant Shares shall, upon issuance in accordance with the terms ofthis Warrant, be validly issued, fully paid, and non-assessable.

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## 5.2.                              Reservation of Shares. During the Exercise Period, the Company shall at all times haveauthorized, and reserved for the purpose of issuance upon exercise of thisWarrant, a sufficient number of shares of Common Stock to provide for theexercise of this Warrant.

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## 5.3.                              Successors and Assigns. This Warrant shall be binding upon any entity succeeding to the Companyby merger, consolidation, or acquisition of all or substantially all the Company’sassets.

 

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6.                                       AdjustmentProvisions. During the Exercise Period, the Exercise Price and the numberof Warrant Shares shall be subject to adjustment from time to time as providedin this Section 6.  If the Companyshall, prior to the payment of the Note in full, (1) declare a dividend ormake a distribution of Common Stockpayable in shares of Common Stock, (2) subdivide its outstanding shares ofCommon Stock, into a greater number of shares of Common Stock,(3) combine its outstanding shares of Common Stock into a smaller numberof shares of Common Stock, or (4) issue any shares of capital stock of theCompany by reclassification or capital reorganization of its shares of CommonStock, then the number of Warrant Shares and the Exercise Price in effectimmediately prior to such action shall be adjusted so that the Holder shall beentitled to receive the number and kind of shares of Common Stock or otherCapital Stock which the Holder would have owned or have been entitled toreceive immediately after such action had the Holder exercised the Warrantimmediately prior to the record date in the case of (1), or the effective datein the case of (2), (3) or (4).  In theevent that any adjustment of the Exercise Price as required herein results in afraction of a cent, such Exercise Price shall be rounded up to the nearestcent.

 

7.                                       Paymentof Expenses.  The Company and theHolder shall each be responsible for their own costs and expenses payable inconnection with:  (1) thenegotiation, preparation, execution and delivery of this Warrant and the otheragreements to be executed in connection herewith; and (2) the issuance ofcertificates for Warrant Shares upon the exercise of this Warrant.  The Company shall pay any issuance tax inconnection with the issuance of certificates for Warrant Shares; provided,however, that the Holder shall be responsible for any income or other taxes inconnection with such issuance.

 

8.                                       NoRights or Liabilities as a Stockholder. This Warrant shall not entitle the Holder to any voting rights or otherrights as a stockholder of the Company. No provision of this Warrant, in the absence of affirmative action bythe Holder to purchase Warrant Shares, and no mere enumeration herein of therights or privileges of the Holder, shall give rise to any liability of suchHolder for the Exercise Price or as a stockholder of the Company, whether suchliability is asserted by the Company or by creditors of the Company.

 

9.                                       Transfer,Exchange, and Replacement of Warrant. This Warrant, nor any interest in this Warrant, may be sold,distributed, assigned, offered, pledged or otherwise transferred without theexpress written consent of the Company.

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## 9.1.                              Exchange of Warrants; Replacements ofWarrants.  This Warrant is exchangeable upon thesurrender hereof by the Holder to the Company at its office for a new Warrantof like tenor and date representing in the aggregate the right to purchase thenumber of shares of Common Stock purchasable hereunder, each of such newWarrants to represent the right to purchase such number of shares of CommonStock (not to exceed the aggregate total number purchasable hereunder) as shallbe reasonably designated by the Holder at the time of such surrender.  Upon receipt by the Company of evidencereasonably satisfactory to it of the loss, theft, destruction, or mutilation ofthis Warrant, and, in case of loss, theft or destruction, of indemnity, orsecurity reasonably satisfactory to it, and upon surrender and cancellation ofthis Warrant, if mutilated, the Company will make and deliver a new Warrant oflike tenor, in lieu of this Warrant.

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## 9.2.                              Cancellation: Payment of Expenses. Upon the surrender of this Warrant in connection with any transfer,exchange, or replacement as provided in this Section 9, this Warrant shallbe promptly canceled by the Company.  TheCompany and the Holder shall each be responsible for their own costs andexpenses payable in connection with the preparation, execution, and delivery ofnew Warrants pursuant to this****Section 9.  The Holder shall be responsible for any taxwhich may be payable in connection with any transfer of a certificate forWarrant Shares.

 

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## 9.3.                              Registrar.  The Companyshall maintain, at its principal executive offices (or such other location asthe Company may designate by notice to the Holder), a registrar for thisWarrant, in which the Company shall record the name and address of the personin whose name this Warrant has been issued, as well as the name and address ofeach transferee and each prior owner of this Warrant.

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# 10.                                 Amendments.  No amendmentor modification of this****Warrantshall be deemed effective unless and until such amendment or modification is anexpress writing executed by both the Parties.

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# 11.                                 Governing Law. This Warrant shall be governed by andconstrued and enforced in accordance with the internal laws of the State ofNevada without regard to the body of law controlling conflicts of law.  The parties hereto hereby submit to theexclusive jurisdiction of the courts located in Clark County, Nevada, withrespect to any dispute arising under this Warrant and the transactionscontemplated hereby.

 

12.                                 RegistrationRights.

 

## 12.1.                        Piggyback Registration Rights. Whenever the Company proposes to register any of its equity securitiesunder the Securities Act of 1933 (the “Securities Act”) (other than aregistration on Form S-4 or Form S-8 or any successor or similar forms) and theregistration form to be used may be used for the registration of the WarrantShares, whether or not for sale for its own account, the Company will giveprompt written notice to Holder of its intention to effect such a registrationand will include in such registration all of the Warrant Shares with respect towhich the Company has received written request for inclusion therein withintwenty (20) days after the receipt of the Company’s notice; provided, however,such “piggyback” registration (a “Piggyback Registration”) shall be subject tothe terms and conditions of an underwriting agreement among the Company, Holderand the managing underwriter, if applicable, the customary underwriter cut backprovisions and the execution of a customary standstill of not less than onehundred and eighty (180) days.  Inaddition, the Company and the managing underwriters, if applicable, shall havethe right to terminate or withdraw any registration initiated by the Company orto reduce the number of shares proposed to be registered in view of marketconditions.

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## 12.2.                        Registration Procedure. Upon the request by Holder to initiate either a Piggyback Registration,the Company will use its best efforts to effect the registration of therelevant Warrant Shares in accordance with the intended method of dispositionthereof.

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## 12.3.                        Restrictions. Holder may not assign any of its registration rights granted under thisSection 12 unless the Company has provided its prior written consent to suchassignment and the assignment of this Warrant or the Warrant Shares, asapplicable.

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## 12.4.                        Fees.  The Companyshall pay all Registration Expenses relating to any registration of the WarrantShares hereunder.  “Registration Expenses”shall mean all reasonable fees and expenses incident to the Company’sperformance of or compliance with this Section 12.  Notwithstanding the foregoing, Holder shallpay any and all underwriting discounts, commissions and transfer taxesattributable to the Warrant Shares and the fees of Holder’s own counsel inconnection with the sale of the Warrant Shares.

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## 12.5.                        Cooperation; Indemnification by Holder. In connection with any registration statement in which Holder isparticipating, Holder will furnish to the Company in writing such informationand documents as the Company reasonably requests for use in connection with any

 

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## such registrationstatement or prospectus and, to the extent permitted by law, will indemnify andhold harmless the Company, its affiliates and their respective officers,directors, employees and affiliates against any losses, claims, damages,liabilities, joint or several, to which such parties may become subject underthe Securities Act or otherwise, insofar as such losses, claims, damages orliabilities (or actions or proceedings, whether commenced or threatened, inrespect thereof) arise out of or are based upon:  (1) any untrue or alleged untrue statement ofa material fact contained in the registration statement, prospectus orpreliminary prospectus or any amendment thereof or supplement thereto or in anyapplication; or (2) any omission or alleged omission of a material factrequired to be stated therein or necessary to make the statements therein notmisleading, but only to the extent that such untrue statement or omission ismade in such registration statement, prospectus, preliminary prospectus or anyamendment or supplement thereto, or in any application, in reliance upon and inconformity with written information prepared and furnished to the Company bysuch holder expressly for use therein. The Holder shall reimburse the Company, its affiliates, officers,directors, employees and affiliates for any legal or any other expensesincurred by them in connection with investigating or defending any such loss,claim, liability, action or proceeding; provided,however, that the obligation to indemnify will be limited to Holder andshall not apply to amounts paid in settlement of any such loss, claim, damage,liability, or action if such settlement is effected without the consent ofHolder (which consent shall not be unreasonably withheld).

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## 12.6.                        Indemnification by the Company. In connection with any registration statement in which Holder isparticipating, the Company will indemnify and hold harmless Holder, itsaffiliates and their respective officers, directors, employees and affiliatesagainst any losses, claims, damages, liabilities, joint or several, to whichsuch parties may become subject under the Securities Act or otherwise, insofaras such losses, claims, damages or liabilities (or actions or proceedings,whether commenced or threatened, in respect thereof) arise out of or are basedupon:  (1) any untrue or alleged untruestatement of a material fact contained in the registration statement, prospectusor preliminary prospectus or any amendment thereof or supplement thereto or inany application; or (2) any omission or alleged omission of a material factrequired to be stated therein or necessary to make the statements therein notmisleading, unless such untrue statement or omission is made in suchregistration statement, prospectus, preliminary prospectus or any amendment orsupplement thereto, or in any application, in reliance upon and in conformitywith written information prepared and furnished to the Company by Holderexpressly for use therein.  The Companyshall reimburse Holder, its affiliates, officers, directors, employees andaffiliates for any legal or any other expenses incurred by them in connectionwith investigating or defending any such loss, claim, liability, action or proceeding;provided, however, that theobligation to indemnify will be limited to the Company and shall not apply toamounts paid in settlement of any such loss, claim, damage, liability, oraction if such settlement is effected without the consent of the Company (whichconsent shall not be unreasonably withheld).

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## 12.7.                        Termination. The ability of Holder to initiate a Piggyback Registration shallterminate upon the earlier to occur of: (1) five (5) years after the date of this Warrant; (2) the date Holderno longer holds the Warrant Shares; or (3) the ability of Holder to sell itsWarrant Shares then owned immediately pursuant to Rule 144 of the SecuritiesAct.

 

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13.                                 ExpirationDate.  This Warrant shall expire andbecome null and void and of no further force or effect at 2:00 p.m. Las Vegas,Nevada time no later than August 15, 2009.

 

IN WITNESS WHEREOF,the Company has caused this Warrant to be signed by its duly authorizedofficer.

 
|   | VENDINGDATA CORPORATION  a Nevada corporation |
|--------|-----------------------------------------------|
|   |                                          |   |
|   |                                          |   |
|   | By:                                           |   |   |
|   |                                          | Steven J. Blad |
|   |                                          | President and Chief Executive Officer |
|   | Date:                                         | August    , 2004 |

 

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** **

**EXERCISE AGREEMENT**

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TO:                          VENDINGDATA CORPORATION (THE “COMPANY”)

 

The undersigned, pursuant to the provisions set forth in the attachedWarrant to Purchase Shares of Common Stock (the “Warrant”) hereby irrevocablyelects and agrees to:

 

o                                    Purchase             shares (the “Exercised Shares”) of the Company’s common stock (“Common Stock”)covered by the Warrant and makes payment herewith in full therefore at theprice per share provided by the Warrant in cash or by certified or officialbank check in the amount of $                ;or

 

o                                    Purchase             shares (the “Exercised Shares”) of the Company’s common stock (“Common Stock”)covered by the Warrant and make payment of the exercise price through thesurrender of the right to purchase             shares of Common Stock covered by the Warrant, as permitted under Section 2.1.2(b) of the Warrant.

 

If said number of shares of Common Stock, whether purchased orsurrendered, shall not be all the shares available under the Warrant, a newwarrant is to be issued in the name of said undersigned covering the balance ofthe shares available thereunder less any fraction of a share paid in cash.  Please issue a certificate or certificatesfor the Exercised Shares in the name of and pay any cash for any fractionalshare to:

 
|   | NAME:      |                                                                                      |
|--------|------------|-------------------------------------------------------------------------------------------|
|   |       |                                                                                      |
|   | SIGNATURE: |                                                                                      |
|   |       |                                                                                      |
|   | DATED:     |                                                                                      |
|   |       |                                                                                      |
|   | ADDRESS:   |                                                                                      |
|   |       |                                                                                      |
|   |       |                                                                                      |
|   |       |                                                                                      |
|   | NOTE:      | The above signature should correspond  exactly with the name on the face of the  Warrant. |

 

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