**EXHIBIT
      10.3**


FORM
        OF
        WARRANT
 
 **NEITHER
        THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
        WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
        OR
        ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN
        MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
        PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS
        OR
        AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
        OPINION OF COUNSEL FOR THE COMPANY, IS AVAILABLE.**
 
 **Void
        after 5:00 P.M. Pacific Time on the last day of the Exercise
        Period,**
 **as
        defined in the Warrant**
 
 **COMMON
        STOCK PURCHASE WARRANT**
 **OF**
 **VENDINGDATA
        CORPORATION**
 
 This
        is
        to certify that, FOR VALUE RECEIVED, _____________________ (the " **Holder** "),
        is
        entitled to purchase, subject to the provisions of this Warrant, from
        VendingData Corporation, a Nevada corporation (the " **Company** "),
        at an
        exercise price per share of $1.25 per share (the " **Warrant
        Exercise Price** "),
        ______________ K:\53251\99999\DD__A20M8 shares
        of common stock, par value $0.001 per share (the "Common Stock"), less any
        modifications resulting from the application of the provisions of Section
        7 of
        the Credit Agreement. The shares of Common Stock deliverable upon such exercise,
        and as adjusted from time to time, are hereinafter sometimes referred to
        as the
        " **Warrant
        Shares** ."
 
 **1.** **ISSUANCE
        OF WARRANT** .
        This
        Warrant is being issued pursuant to that certain Credit Agreement dated as
        of
        October 5, 2005, between the Company and the Holder (the "Credit Agreement").
        Capitalized terms used but not otherwise defined herein shall have the meanings
        ascribed thereto in the Credit Agreement. In addition, the following terms
        shall
        have the meanings set forth below:
 
 " **Closing
        Price** "
        means,
        as of any date, the last trading price for the Common Stock as reported on
        the
        American Stock Exchange, or other principal exchange or electronic trading
        system on which the shares of Common Stock are quoted or traded.
 
 " **Convertible
        Securities** "
        shall
        mean evidences of indebtedness, shares of stock or other securities, which
        are
        convertible into or exchangeable, with or without payment of additional
        consideration in cash and/or property, for shares of Common Stock, either
        immediately or upon the occurrence of a specified date or a specified
        event.
 
 " **Common
        Stock Purchase Price** ,"
        shall
        mean the Warrant Exercise Price multiplied by the number of Shares of Common
        Stock the Holder wishes to exercise (the maximum number being 1,500,000,
        less
        any modifications resulting from the application of the provisions of Section
        7
        of the Credit Agreement.
  -1-
 
 " **Exercise
        Period** "
        shall
        mean the period commencing on October 6, 2005, at 5:00 p.m., Pacific Time,
        and
        ending at 5:00 p.m., Pacific Time, on October 1, 2011.
 
 " **Loans** "
        means
        loans to the Company under the Credit Agreement of up to
        $5,000,000.
 
 " **Securities
        Act** "
        means
        the Securities Act of 1933, as amended, and all rules and regulations
        promulgated thereunder.
 
 **2.** **EXERCISE
        OF WARRANT** .
        This
        Warrant may be exercised in whole or in part at any time or from time to
        time
        during the Exercise Period by presentation and surrender of this Warrant
        to the
        Company at its principal office, or at the office of its stock transfer agent,
        if any, with the Purchase Form annexed hereto duly executed and accompanied
        by
        payment of the Warrant Exercise Price for the number of shares of Common
        Stock
        specified in such form, less any modifications resulting from the application
        of
        the provisions of Section 7 of the Credit Agreement. If this Warrant should
        be
        exercised in part only, the Company shall, upon surrender of this Warrant
        for
        cancellation, execute and deliver a new Warrant evidencing the rights of
        the
        Holder to purchase the balance of the shares of Common Stock purchasable
        hereunder. Upon receipt by the Company of this Warrant at its office, or
        by the
        stock transfer agent of the Company at its office, in proper form for exercise,
        the Holder shall be deemed to be the holder of record of the shares of Common
        Stock issuable upon such exercise, notwithstanding that the stock transfer
        books
        of the Company shall then be closed or that certificates representing such
        shares of Common Stock shall not then actually be delivered to the Holder.
        As
        soon as practicable after each exercise of this Warrant, in whole or in part,
        and in any event within seven (7) days thereafter, the Company at its expense
        (including the payment by it of any applicable issue taxes) will cause to
        be
        issued in the name of and delivered to the Holder hereof or, as the Holder
        (upon
        payment by the Holder of any applicable transfer taxes) may direct, a
        certificate or certificates for the number of duly authorized, validly issued,
        fully paid and non-assessable shares of Common Stock to which the Holder
        shall
        be entitled upon exercise. All issuances of Common Stock pursuant to the
        exercise of this Warrant shall be rounded (up or down as the case may be)
        to the
        nearest whole share.
 
 **3.** **RESERVATION
        OF SHARES/FRACTIONAL SHARES** .
        The
        Company hereby agrees that at all times there shall be reserved for issuance
        and/or delivery upon exercise of this Warrant such number of shares of Common
        Stock as shall be required for issuance and delivery upon exercise of this
        Warrant. No fractional shares or script representing fractional shares shall
        be
        issued upon the exercise of this Warrant. Instead, the Company will round
        up to
        the nearest whole share.
 
 **4.** **EXCHANGE,
        TRANSFER, ASSIGNMENT OR LOSS OF WARRANT** .
        This
        Warrant is exchangeable, without expense, at the option of the Holder, upon
        presentation and surrender of this Warrant to the Company for other Warrants
        of
        different denominations entitling the Holder thereof to purchase in the
        aggregate the same number of shares of Common Stock purchasable hereunder.
        Upon
        surrender of this Warrant to the Company or at the office of its stock transfer
        agent, if any, with the Assignment Form annexed hereto duly executed and
        funds
        sufficient to pay any applicable transfer tax, the Company shall, without
        charge, execute and deliver a new Warrant in the name of the assignee named
        in
        such instrument of assignment and this Warrant shall promptly be canceled.
        This
        Warrant may be divided or combined with other Warrants which carry the same
        rights upon presentation of this Warrant at the office of the Company or
        at the
        office of its stock transfer agent, if any, together with a written notice
        specifying the names and denominations in which new Warrants are to be issued
        and signed by the Holder hereof. The term "Warrant" as used herein includes
        any
        Warrants into which this Warrant may be divided or for which it may be
        exchanged. Upon receipt by the Company of evidence satisfactory to it of
        the
        loss, theft, destruction or mutilation of this Warrant, (and, in the case
        of
        loss, theft or destruction, of reasonably satisfactory indemnification),
        and
        upon surrender and cancellation of this Warrant, the Company will execute
        and
        deliver a new Warrant of like tenor. Any such new Warrant executed and delivered
        shall constitute an additional contractual obligation on the part of the
        Company, whether or not this Warrant so lost, stolen, destroyed, or mutilated
        shall be at any time enforceable by anyone.
  -2-
 
 **5.** **REGISTRATION
        RIGHTS** .
        Pursuant to the time schedule set forth in this Section 5, the Company shall
        prepare and file a registration statement (the "Registration Statement")
        on Form
        S-3 or any similar short-form registration statement, with respect to the
        registration under the Securities Act of 1933, as amended, and the rules
        and
        regulations promulgated thereunder (collectively, the "Securities Act") of
        all
        Warrant Shares for resale, which Registration Statement shall also cover
        such
        indeterminate number of additional shares of Common Stock as may become issuable
        upon exercise of this Warrant as a result of adjustments from stock splits,
        stock dividends or similar transactions.
  **5.1. Registration
        Process** .
        The
        Company shall file the Registration Statement as soon as practicable but
        in any
        event within 30 days after the date of this Warrant (the earlier of such
        dates
        being herein called the "Filing Date"), and shall use commercially reasonable
        efforts to have such Registration Statement promptly declared effective by
        the
        Securities and Exchange Commission ("SEC") whether or not all Warrant Shares
        requested to be registered can be included; provided, however, that if the
        Company shall furnish to the Holder a certificate signed by the President
        of the
        Company stating that in the good-faith judgment of the Company board of
        directors it would be seriously detrimental to the Company and its stockholders
        for such Registration Statement to be filed by the applicable Filing Date
        and it
        is therefore essential to defer the filing of such Registration Statement,
        the
        Company shall have an additional period of not more than ninety (90) days
        after
        the expiration of the initial Filing Date within which to file such Registration
        Statement; provided, that during such time the Company may not file a
        Registration Statement for securities to be issued and sold for its own
        account.
 
 **5.2.** **Registration
        Default** .
        In the
        event that: (a) the Registration Statement is not filed by the Company by
        the
        Filing Date, or declared effective by the SEC within ninety (90) days after
        the
        Filing Date, or (b) the Common Stock is no longer listed on the American
        Stock
        Exchange or another national securities exchange or quotation medium (including
        the Nasdaq National Market and the Nasdaq SmallCap Market) or has been suspended
        from trading thereon for three (3) consecutive business days the interest
        rate
        on the Notes shall increase by one and one-half percent (1.5%) per annum
        for
        each 30-day period for which the Company remains in default pursuant to this
        Section 5.2, provided that the
        interest rate as so increased shall not exceed 15% per annum; provided, however,
        with respect to a default under subsection (b), the Company shall have one
        hundred twenty (120) days to cure such registration default during which
        time
        the interest rate on the Notes shall not increase, provided that the
        failure of the Company to cure during said 120-day period shall cause the
        retroactive application of the aforesaid increase in such interest rate to
        the
        date of default. Once the Registration Statement has been declared effective
        by
        the SEC, if the Registration Statement is no longer effective, other than
        as
        provided in Section 5.3(f), for a period of thirty (30) days in the aggregate
        (which days need not be consecutive), on the day after such thirtieth (30th)
        day
        the interest rate on the Notes shall increase by one and one-half percent
        (1.5%)
        per annum for each 30-day period for which the Company remains in default
        pursuant to this Section 5.2, provided that the
        interest rate as so increased shall not exceed 13% per annum. When the
        Registration Statement regains its effectiveness or the Common Stock is
        relisted, the interest rate on the Notes shall return to 9% per
        annum.
  -3-
 
 **5.3. Obligations
        of the Company** .
        In
        connection with the registration of the Warrant Shares, the Company shall
        have
        the following obligations:
 
 a. The
        Company shall keep such Registration Statement effective pursuant to Rule
        415 at
        all times until such date as is the earlier of (i) the date on which all
        of the
        Warrant Shares have been sold and (ii) the date on which all of the Warrant
        Shares may be immediately sold to the public without registration or restriction
        pursuant to Rule 144(k) under the Securities Act or any successor provision
        (the
        "Registration Period"), which Registration Statement (including any amendments
        or supplements thereto and prospectuses contained therein and all documents
        incorporated by reference therein) (i) shall comply in all material respects
        with the requirements of the Securities Act and the rules and regulations
        of the
        SEC promulgated thereunder and (ii) shall not contain any untrue statement
        of a
        material fact or omit to state a material fact required to be stated therein,
        or
        necessary to make the statements therein not misleading. The financial
        statements of the Company included in the Registration Statement or incorporated
        by reference therein will comply as to form in all material respects with
        the
        applicable accounting requirements and the published rules and regulations
        of
        the SEC applicable with respect thereto. Such financial statements will be
        prepared in accordance with U.S. generally accepted accounting principles,
        consistently applied, during the periods involved (except (i) as may be
        otherwise indicated in such financial statements or the notes thereto, or
        (ii)
        in the case of unaudited interim statements, to the extent they may not include
        footnotes or may be condensed on summary statements and fairly present in
        all
        material respects the consolidated financial position of the Company and
        its
        consolidated subsidiaries as of the dates thereof and the consolidated results
        of their operations and cash flows for the periods then ended (subject, in
        the
        case of unaudited statements, to immaterial year-end adjustments)).
  b. The
        Company shall prepare and file with the SEC such amendments (including
        post-effective amendments) and supplements to the Registration Statement
        and the
        prospectus used in connection with the Registration Statement as may be
        necessary to keep the Registration Statement effective at all times during
        the
        Registration Period, and, during such period, comply with the provisions
        of the
        Securities Act with respect to the disposition of all Warrant Shares of the
        Company covered by the Registration Statement until the end of the Registration
        Period.
 
 c. The
        Company shall furnish to special counsel for the Holders whose Warrant Shares
        are included in the Registration Statement (i) promptly after the same is
        prepared and publicly distributed, filed with the SEC, or received by the
        Company, one copy of the Registration Statement and any amendment thereto,
        each
        preliminary prospectus and prospectus and each amendment or supplement thereto,
        and each letter written by or on behalf of the Company to the SEC or the
        staff
        of the SEC (including, without limitation, any request to accelerate the
        effectiveness of the Registration Statement or amendment thereto), and each
        item
        of correspondence from the SEC or the staff of the SEC, in each case relating
        to
        the Registration Statement (other than any portion, if any, thereof which
        contains information for which the Company has sought confidential treatment),
        (ii) on the date of effectiveness of the Registration Statement or any amendment
        thereto, a notice stating that the Registration Statement or amendment has
        been
        declared effective, and (iii) such number of copies of a prospectus, including
        a
        preliminary prospectus, if applicable, and all amendments and supplements
        thereto and such other documents as such Holder may reasonably request in
        order
        to facilitate the disposition of the Conversion Shares owned by such
        Holder.
  -4-
 
 d. The
        Company shall use its best efforts to (i) register and qualify the Warrant
        Shares covered by the Registration Statement under such other securities
        or
        "blue sky" laws of such jurisdictions in the United States as each Holder
        who
        holds Warrant Shares being offered reasonably requests, (ii) prepare and
        file in
        those jurisdictions such amendments (including post effective amendments)
        and
        supplements to such registrations and qualifications as may be necessary
        to
        maintain the effectiveness thereof during the Registration Period, (iii)
        take
        such other actions as may be necessary to maintain such registrations and
        qualifications in effect at all times during the Registration Period, and
        (iv)
        take all other actions reasonably necessary or advisable to qualify the
        Conversion Shares for sale in such jurisdictions; provided, however, that
        the
        Company shall not be required in connection therewith or as a condition thereto
        to (A) qualify to do business in any jurisdiction where it would not otherwise
        be required to qualify but for this Section 5.3.d, (B) subject itself to
        general
        taxation in any such jurisdiction, (C) file a general consent to service
        of
        process in any such jurisdiction, (D) provide any undertakings that cause
        the
        Company undue expense or burden, or (E) make any change in its charter or
        bylaws, which in each case the Board of Directors of the Company determines
        to
        be contrary to the best interests of the Company and its
        stockholders.
 
 e. If
        (i)
        there is material non-public information regarding the Company that the
        Company's Board of Directors (the "Board") reasonably determines not to be
        in
        the Company's best interests to disclose and that the Company is not otherwise
        required to disclose, or (ii) there is a significant business opportunity
        (including, but not limited to, the acquisition or disposition of assets
        (other
        than in ordinary course of business) or merger, consolidation, tender offer
        or
        other similar transaction) available to the Company that the Board reasonably
        determines not to be in the Company's best interests to disclose and that
        the
        Company would be required to disclose under the Registration Statement, then
        the
        Company may suspend effectiveness of a Registration Statement filed pursuant
        to
        this Warrant and suspend the sale of Conversion Shares under such Registration
        Statement for a period not to exceed twenty (20) consecutive calendar days,
        provided that the Company may not suspend its obligation pursuant to this
        Section 5.3.e for more than forty (40) calendar days in the aggregate during
        any
        twelve (12) month period (each, a "Blackout Period"); provided, however,
        that no
        such suspension shall be permitted for more than one twenty (20) calendar
        day
        period, arising out of the same set of facts, circumstances or
        transactions.
 
 f. As
        promptly as practicable, but in no event later than five (5) business days,
        after becoming aware of such event, the Company shall notify each Holder
        of the
        occurrence of any event (where filing and delivery of a Form 8-K shall
        constitute compliance) of which the Company has knowledge, as a result of
        which
        the prospectus included in the Registration Statement, as then in effect,
        includes an untrue statement of a material fact or omission to state a material
        fact required to be stated therein or necessary to make the statements therein
        not misleading, and, use its commercially reasonable efforts promptly to
        prepare
        a supplement or amendment to the Registration Statement to correct such untrue
        statement or omission, and deliver such number of copies of such supplement
        or
        amendment to each Holder as such Holder may reasonably request.
  -5-
 
 g. The
        Company shall use its commercially reasonable efforts (i) to prevent the
        issuance of any stop order or other suspension of effectiveness of a
        Registration Statement, and, if such an order is issued, to obtain the
        withdrawal of such order at the earliest practicable moment (including in
        each
        case by amending or supplementing such Registration Statement) and (ii) to
        notify each Holder who holds Warrant Shares being sold (or, in the event
        of an
        underwritten offering, the managing underwriters) of the issuance of such
        order
        and the resolution thereof (and if such Registration Statement is supplemented
        or amended, deliver such number of copies of such supplement or amendment
        to
        each Holder as such Holder may reasonably request).
 
 h. The
        Company shall permit a single firm of counsel designated by the Holders of
        the
        Warrants holding a majority in interest of the Warrant Shares to review the
        Registration Statement and all amendments and supplements thereto a reasonable
        period of time prior to its filing with the SEC, and not file any document
        in a
        form to which such counsel reasonably objects.
 
 i. The
        Company shall make generally available to its security holders as soon as
        practical, but not later than ninety (90) days after the close of the period
        covered thereby, an earnings statement (in form complying with the provisions
        of
        Rule 158 under the Securities Act) covering a twelve-month period beginning
        not
        later than the first day of the Company's fiscal quarter next following the
        effective date of the Registration Statement.
 
 j. At
        the
        request of any Holder in the case of an underwritten public offering, the
        Company shall furnish, on the date of effectiveness of the Registration
        Statement (i) an opinion, dated as of such date, from counsel representing
        the
        Company addressed to the Holders and in form, scope and substance as is
        customarily given in an underwritten public offering and (ii) a letter, dated
        such date, from the Company's independent certified public accountants in
        form
        and substance as is customarily given by independent certified public
        accountants to underwriters in an underwritten public offering, addressed
        to the
        underwriters and the Holders.
 
 k. To
        the
        extent permitted by law, the Company shall make available for inspection
        by (i)
        any Holder, (ii) any underwriter participating in any disposition pursuant
        to
        the Registration Statement filed pursuant to Section 5, (iii) one firm of
        attorneys and one firm of accountants or other agents retained by the Holders,
        and '(iv) one firm of attorneys retained by all such underwriters collectively,
        the "Inspectors"), all reasonably pertinent financial and other records,
        and
        pertinent corporate documents and properties of the Company (collectively,
        the
        "Records"), as shall be reasonably deemed necessary by each Inspector to
        enable
        each Inspector to exercise its due diligence responsibility, and cause the
        Company's officers, directors and employees to supply all information which
        any
        Inspector may reasonably request for purposes of such due diligence; provided,
        however, that each Inspector shall hold in confidence and shall not make
        any
        disclosure (except to an Holder) of any Record or other information which
        the
        Company provides in accordance with this Section 5.3(k), unless (a) the
        disclosure of such Records is necessary to avoid or correct a misstatement
        or
        omission in any Registration Statement, (b) the release of such Records is
        ordered pursuant to a subpoena or other order from a court or government
        body of
        competent jurisdiction, or (c) the information in such Records has been made
        generally available to the public other than by disclosure in violation of
        this
        Note or any other agreement. The Company shall not be required to disclose
        any
        confidential information in such Records to any Inspector until and unless
        such
        Inspector and its respective Holder shall have entered into confidentiality
        agreements (in form and substance satisfactory to the Company) with the Company
        with respect thereto, substantially in the form of this Section 5.3(k). Each
        Holder agrees that it shall, upon learning that disclosure of such Records
        is
        sought in or by a court or governmental body of competent jurisdiction or
        through other means, give prompt notice to the Company and allow the Company,
        at
        its expense, to undertake appropriate action to prevent disclosure of, or
        to
        obtain a protective order for, the Records deemed confidential. Nothing herein
        shall be deemed to limit the Holders' ability to sell Conversion Shares in
        a
        manner which is otherwise consistent with applicable laws and
        regulations.
  -6-
 
 l. The
        Company shall hold in confidence and not make any disclosure of information
        concerning a Holder provided to the Company unless (i) disclosure of such
        information is necessary to comply with federal or state securities laws,
        (ii)
        the disclosure of such information is necessary to avoid or correct a
        misstatement or omission in any Registration Statement, (iii) the release
        of
        such information is ordered pursuant to a subpoena or other order from a
        court
        or governmental body of competent jurisdiction, (iv) such information has
        been
        made generally available to the public other than by disclosure in violation
        of
        this or any other agreement, or (v) such Holder consents to the form and
        content
        of any such disclosure. The Company agrees that it shall, upon learning that
        disclosure of such information concerning an Holder is sought in or by a
        court
        or governmental body of competent jurisdiction or through other means, give
        prompt notice to such Holder prior to making such disclosure, and allow the
        Holder, at its expense, to undertake appropriate action to prevent disclosure
        of, or to obtain a protective order for, such information.
  m. The
        Company shall use its commercially reasonable efforts to promptly either
        (i)
        cause all of the Warrant Shares covered by the Registration Statement to
        be
        listed on the American Stock Exchange or another national securities exchange
        and on each additional national securities exchange on which securities of
        the
        same class or series issued by the Company are then listed, if any, if the
        listing of such Warrant Shares is then permitted under the rules of such
        exchange, or (ii) secure the designation and quotation of all of the Warrant
        Shares covered by the Registration Statement on the Nasdaq National Market
        or
        Nasdaq SmallCap Market.
 
 n. The
        Company shall provide a transfer agent and registrar, which may be a single
        entity, for the Warrant Shares not later than the effective date of the
        Registration Statement.
 
 o. The
        Company shall cooperate with the Holders who hold Warrant Shares being offered
        and the managing underwriter or underwriters, if any, to facilitate the timely
        preparation and delivery of certificates (not bearing any restrictive legends)
        representing Warrant Shares to be offered pursuant to the Registration Statement
        and enable such certificates to be in such denominations or amounts, as the
        case
        may be, as the managing underwriter or underwriters, if any, or the Holders
        may
        reasonably request and registered in such names as the managing underwriter
        or
        underwriters, if any, or the Holders may request, and, within three (3) business
        days after the Registration Statement which includes Warrant Shares is declared
        effective by the SEC, the Company shall cause legal counsel selected by the
        Company to deliver, to the transfer agent for the Warrant Shares (with copies
        to
        the Holders whose Warrant Shares are included in such Registration Statement),
        an opinion of such counsel in the customary form setting forth that the Warrant
        Shares have been registered under the Securities Act.
 
 p. At
        the
        request of any Holder, the Company shall prepare and file with the SEC such
        amendments (including post effective amendments) and supplements to a
        Registration Statement and the prospectus used in connection with such
        Registration Statement as may be reasonably necessary in order to change
        the
        plan of distribution set forth in such Registration Statement.
 
 q. The
        Company shall comply with all applicable laws related to a Registration
        Statement and offering and sale of securities and all applicable rules and
        regulations of governmental authorities in connection therewith (including,
        without limitation, the Securities Act and the Securities Exchange Act of
        1934,
        as amended (the "Exchange Act"), and the rules and regulations promulgated
        by
        the SEC).
 
 r. From
        and
        after the date of this Note, the Company shall not, and shall not agree to,
        allow the holders of any securities of the Company to include any of their
        securities that are not Warrant Shares in the Registration Statement or any
        amendment or supplement thereto without the consent of the holders of a majority
        in interest of the Warrant Shares.
  -7-
 
 **5.4. Fees** .
        The
        Company shall pay all Registration Expenses relating to any registration
        of the
        Warrant Shares hereunder. "Registration Expenses" shall mean all reasonable
        fees
        and expenses incident to Obligor's performance of or compliance with this
        Section 5, including reasonable fees of counsel, not exceeding $25,000, in
        connection with the sale of the Warrant Shares. Notwithstanding the foregoing,
        the Holder shall pay any and all underwriting discounts, commissions and
        transfer taxes attributable to the Warrant Shares.
 
 **5.5. Cooperation** . **** Indemnification by the Holder. In connection with any registration statement
        in
        which the Holder is participating, the Holder will furnish to the Company
        in
        writing such information and documents as the Company reasonably requests
        for
        use in connection with any such registration statement or prospectus and,
        to the
        extent permitted by law, will indemnify and hold 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 under the Securities Act or otherwise, insofar
        as such losses, claims, damages or liabilities (or actions or proceedings,
        whether commenced or threatened, in respect thereof) arise out of or are
        based
        upon: (1) any untrue or alleged untrue statement of a material fact contained
        in
        the registration statement, prospectus or preliminary prospectus or any
        amendment thereof or supplement thereto or in any application; or (2) any
        omission or alleged omission of a material fact required to be stated therein
        or
        necessary to make the statements therein not misleading, but only to the
        extent
        that such untrue statement or omission is made in such registration statement,
        prospectus, preliminary prospectus or any amendment or supplement thereto,
        or in
        any application, in reliance upon and in conformity with written information
        prepared and furnished to the Company by such Holder expressly for use therein.
        The Holder shall reimburse the Company, its affiliates, officers, directors,
        employees and affiliates for any legal or any other expenses incurred 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 the Holder in amount not to exceed the net proceeds to the
        Holder
        from the sale of such Warrant Shares and shall not apply to amounts paid
        in
        settlement of any such loss, claim, damage, liability, or action if such
        settlement is effected without the consent of the Holder (which consent shall
        not be unreasonably withheld).
 
 **5.6. Indemnification
        by
        Obligor** .
        In
        connection with any registration statement in which the Holder is participating,
        the Company will indemnify and hold harmless the Holder, 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 under the Securities Act or otherwise, insofar as such
        losses, claims, damages or liabilities (or actions or proceedings, whether
        commenced or threatened, in respect thereof) arise out of or are based upon:
        (1)
        any untrue or alleged untrue statement of a material fact contained in the
        registration statement, prospectus or preliminary prospectus or any amendment
        thereof or supplement thereto or in any application; or (2) any omission
        or
        alleged omission of a material fact required to be stated therein or necessary
        to make the statements therein not misleading, unless such untrue statement
        or
        omission is made in such registration statement, prospectus, preliminary
        prospectus or any amendment or supplement thereto, or in any application,
        in
        reliance upon and in conformity with written information prepared and furnished
        to the Company by Holder expressly for use therein. The Company shall reimburse
        the Holder, its affiliates, officers, directors, employees and affiliates
        for
        any legal or any other expenses incurred 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 the Company and shall not apply to amounts paid in settlement of any such
        loss, claim, damage, liability, or action if such settlement is effected
        without
        the consent of the Company (which consent shall not be unreasonably
        withheld).
  -8-
 
 **6.** **RIGHTS
        AND OBLIGATIONS OF THE HOLDER** .
        The
        Holder shall not, by virtue of this Warrant, be entitled to any rights of
        a
        stockholder of the Company, either at law or equity, and the rights of the
        Holder are limited to those expressed in this Warrant and are not enforceable
        against the Company except to the extent set forth herein. In addition, no
        provision hereof, in the absence of affirmative action by the Holder to purchase
        shares of Common Stock, and no enumeration herein of the rights or privileges
        of
        the Holder hereof shall give rise to any liability of such Holder for the
        purchase price of any Common Stock or as a stockholder of the Company, whether
        such liability is asserted by the Company or by creditors of the
        Company.
  **7.** **ANTI-DILUTION
        PROVISIONS** .
        The
        Warrant Exercise Price in effect at any time and the number and kind of
        securities purchasable upon exercise of each Warrant, shall be subject to
        adjustment as follows. The Company shall give each Holder notice of any event
        described below which requires an adjustment pursuant to this Section 7 at
        the
        time of such event:
  (a) Stock
        Dividends, Subdivisions and Combinations .
        If at
        any time the Company shall:
  (i) take
        a
        record of the holders of its Common Stock for the purpose of entitling them
        to
        receive a dividend payable in, or other distribution of, shares of Common
        Stock,
 (ii) subdivide
        or reclassify its outstanding shares of Common Stock into a larger number
        of
        shares of Common Stock, or
 
 (iii) combine
        or reclassify its outstanding shares of Common Stock into a smaller number
        of
        shares of Common Stock or otherwise effect a reverse stock split, then:
  (A) the
        number of
        shares of Common Stock for which this Warrant is exercisable immediately
        after
        the occurrence of any such event shall be adjusted to equal the number of
        shares
        of Common Stock which a record holder of the same number of shares of Common
        Stock for which this Warrant is exercisable immediately prior to the occurrence
        of such event, or the record date therefor, whichever is earlier, would own
        or
        be entitled to receive after the happening of such event, and (B) the Warrant
        Exercise Price shall be adjusted to equal: (x) the Warrant Exercise Price
        immediately prior to such event multiplied by the number of shares of Common
        Stock for which this Warrant is exercisable immediately prior to the adjustment
        divided by (y) the number of shares for which this Warrant is exercisable
        immediately after such adjustment.
  (b) Certain
        Other Distributions and Adjustments .
  (i) If
        at any
        time the Company shall take a record of the holders of its Common Stock for
        the
        purpose of entitling them to receive any dividend or other distribution of:
  (A) cash,
  -9-
  (B) any
        evidences
        of its indebtedness, any shares of its capital stock or any other securities
        or
        property of any nature whatsoever (other than Convertible Securities or shares
        of Common Stock), or
  (C) any
        warrants
        or other rights to subscribe for or purchase any evidences of its indebtedness,
        any shares of its stock or any other securities or property of any nature
        whatsoever (other than Convertible Securities or shares of Common
        Stock),
  the
        Holder shall be entitled to receive such dividend or distribution as if the
        Holder had exercised this Warrant.
  (ii) A
        reclassification of the Common Stock (other than a change in par value, or
        from
        par value to no par value or from no par value to par value) into shares
        of
        Common Stock and shares of any other class of stock shall be deemed a
        distribution by the Company to the holders of its Common Stock of such shares
        of
        such other class of stock and in such event the Holder shall be entitled
        to
        receive such distribution as if the Holder had exercised this Warrant and,
        if
        the outstanding shares of Common Stock shall be changed into a larger or
        smaller
        number of shares of Common Stock as a part of such reclassification, such
        change
        shall be deemed a subdivision or combination, as the case may be, of the
        outstanding shares of Common Stock within the meaning of Section
        7(a).
 
 (c) Issuance
        of Warrants or Other Rights .
  (i) If
        at any
        time the Company shall take a record of the holders of its Common Stock for
        the
        purpose of entitling them to receive a distribution of, or shall in any manner
        (whether directly or by assumption in a merger in which the Company is the
        surviving corporation) issue or sell, any warrants or other rights to subscribe
        for or purchase any shares of Common Stock or any Convertible Securities,
        whether or not the rights to exchange or convert thereunder are immediately
        exercisable, and the price per share for which Common Stock is issuable upon
        the
        exercise of such warrants or other rights or upon conversion or exchange
        of such
        Convertible Securities shall be less than the Common Stock Purchase Price,
        then
        the number of shares for which this Warrant is exercisable and the Warrant
        Exercise Price shall be adjusted on the basis that the maximum number of
        shares
        of Common Stock issuable pursuant to all such warrants or other rights or
        necessary to effect the conversion or exchange of all such Convertible
        Securities shall be deemed to have been issued and outstanding and the Company
        shall be deemed to have received all the consideration payable therefor,
        if any,
        as of the date of issuance of such warrants or other rights. No further
        adjustment of the Warrant Exercise Price(s) shall be made upon the actual
        issue
        of such Common Stock or of such Convertible Securities upon exercise of such
        warrants or other rights or upon the actual issuance of such Common Stock
        upon
        such conversion or exchange of such Convertible Securities.
  (ii) If
        at any
        time the Company shall take a record of the holders of its Common Stock for
        the
        purpose of entitling them to receive a distribution of, or shall in any manner
        (whether directly or by assumption in a merger in which the Company is the
        surviving corporation) issue or sell, any warrants or other rights to subscribe
        for or purchase any shares of Common Stock or any Convertible Securities,
        whether or not the rights to exchange or convert thereunder are immediately
        exercisable, and the price per share for which Common Stock is issuable upon
        the
        exercise of such warrants or other rights or upon conversion or exchange
        of such
        Convertible Securities shall be equal to or more than the Common Stock Purchase
        Price, but less than the Warrant Exercise Price, then the Warrant Exercise
        Price
        shall be adjusted downward to match the exercise price of such new warrants
        or
        other rights.
  -10-
  (d) Superseding
        Adjustment .
        If at
        any time after any adjustment of the number of shares of Common Stock for
        which
        this Warrant is exercisable and the Warrant Exercise Price(s) shall have
        been
        made pursuant to Section 7(c) as the result of any issuance of warrants,
        rights
        or Convertible Securities,
 
 (i) such
        warrants or rights, or the right of conversion or exchange in such other
        Convertible Securities, shall expire, and all or a portion of such warrants
        or
        rights, or the right of conversion or exchange with respect to all or a portion
        of such other Convertible Securities, as the case may be, shall not have
        been
        exercised, or
 
 (ii) the
        consideration per share for which shares of Common Stock are issuable pursuant
        to such warrants or rights, or the terms of such other Convertible Securities,
        shall be increased solely by virtue of provisions therein contained for an
        automatic increase in such consideration per share upon the occurrence of
        a
        specified date or event, then for each outstanding Warrant such previous
        adjustment shall be rescinded and annulled and the shares of Common Stock
        which
        were deemed to have been issued by virtue of the computation made in connection
        with the adjustment so rescinded and annulled shall no longer be deemed to
        have
        been issued by virtue of such computation made in connection with the adjustment
        so rescinded and annulled shall no longer be deemed to have been issued by
        virtue of such computation. Thereupon, a re-computation shall be made of
        the
        effect of such rights or options or other Convertible Securities on the basis
        of:
 
 (A) treating
        the number of shares of Common Stock or other property, if any, theretofore
        actually issued or issuable pursuant to the previous exercise of any such
        warrants or rights or any such right of conversion or exchange, as having
        been
        issued on the date or dates of any such exercise and for the consideration
        actually received and receivable therefor, and
  (B) treating
        any
        such warrants or rights or any such other Convertible Securities which then
        remain outstanding as having been granted or issued immediately after the
        time
        of such increase of the consideration per share for which shares of Common
        Stock
        or other property are issuable under such warrants or rights or other
        convertible Securities; whereupon a new adjustment of the number of shares
        of
        Common Stock for which this Warrant is exercisable and the Warrant Exercise
        Price(s) shall be made, which new adjustment shall supersede the previous
        adjustment so rescinded and annulled.
 
 (e) No
        adjustment in the Warrant Exercise Price shall be required unless such
        adjustment would require an increase or decrease of at least One Cent ($0.01)
        in
        such price; provided, however, that any adjustments which by reason of this
        Section 6(f) are not required to be made shall be carried forward and taken
        into
        account in any subsequent adjustment. All calculations under this Section
        7(e)
        shall be made to the nearest cent or to the nearest one-hundredth of a share,
        as
        the case may be.
  (f) The
        Company may retain a firm of independent public accountants of recognized
        standing selected by the Board (who may be the regular accountants employed
        by
        the Company) to make any computation required by this Section 7.
 
 (g) In
        the
        event that at any time, as a result of an adjustment made pursuant to Section
        6(a) or 6(b) of this Warrant, the Holder of any Warrant thereafter shall
        become
        entitled to receive any shares of the Company's capital stock, other than
        Common
        Stock, thereafter the number of such other shares so receivable upon exercise
        of
        this Warrant shall be subject to adjustment from time to time in a manner
        and on
        terms as nearly equivalent as practicable to the provisions with respect
        to the
        Common Stock contained in Sections 6(a) through (h), inclusive, of this
        Warrant.
   -11-
  **8.** **OFFICER'S
        CERTIFICATE** .
        Whenever the Warrant Exercise Price(s) shall be adjusted as required by the
        provisions of Section 7 of this Warrant, the Company shall forthwith file
        in the
        custody of its Secretary or an Assistant Secretary at its principal office
        and
        with its stock transfer agent, if any, an officer's certificate showing the
        adjusted Warrant Exercise Price(s) and the adjusted number of shares of Common
        Stock issuable upon exercise of this Warrant, determined as herein provided,
        setting forth in reasonable detail the facts requiring such adjustment,
        including a statement of the number of additional shares of Common Stock,
        if
        any, and such other facts as shall be necessary to show the reason for and
        the
        manner of computing such adjustment. Each such officer's certificate shall
        be
        forwarded to the Holder in the manner provided in Section 13 hereof.
  **9.** **NOTICES
        TO WARRANT HOLDERS** .
        So long
        as this Warrant shall be outstanding, (a) if the Company shall pay any dividend
        or make any distribution upon Common Stock, or (b) if the Company shall offer
        to
        the holders of Common Stock for subscription or purchase by them any share
        of
        any class or any other rights, or (c) if any capital reorganization of the
        Company, reclassification of the capital stock of the Company, consolidation
        or
        merger of the Company with or into another entity, tender offer transaction
        for
        the Company's Common Stock, sale, lease or transfer of all or substantially
        all
        of the property and assets of the Company, or voluntary or involuntary
        dissolution, liquidation or winding up of the Company shall be effected,
        or (d)
        if the Company shall file a registration statement under the Securities Act,
        on
        any form other than on Form S-4 or S-8 or any successor form, then in any
        such
        case, the Company shall cause to be mailed by certified mail to the Holder,
        at
        least ten (10) days prior to the date specified in clauses (a), (b), (c)
        or (d),
        as the case may be, of this Section 9 a notice containing a brief description
        of
        the proposed action and stating the date on which (i) a record is to be taken
        for the purpose of such dividend, distribution or rights, or (ii) such
        reclassification, reorganization, consolidation, merger, tender offer
        transaction, conveyance, lease, dissolution, liquidation or winding up is
        to
        take place and the date, if any is to be fixed, as of which the holders of
        Common Stock or other securities shall receive cash or other property
        deliverable upon such reclassification, reorganization, consolidation, merger,
        conveyance, dissolution, liquidation or winding up, or (iii) such registration
        statement is to be filed with the Commission.
 
 **10.** **RECLASSIFICATION,
        REORGANIZATION OR MERGER** .
        In case
        of any reclassification, capital reorganization or other change of outstanding
        shares of Common Stock of the Company, or in case of any consolidation or
        merger
        of the Company with or into another corporation (other than a merger with
        a
        subsidiary in which merger the Company is the continuing or surviving
        corporation and which does not result in any reclassification, capital
        reorganization or other change of outstanding shares of Common Stock of the
        class issuable upon exercise of this Warrant) or in case of any sale, lease
        or
        conveyance of all or substantially all of the assets of the Company, the
        Company
        shall, as a condition precedent to such transaction, cause effective provisions
        to be made so that (i) the Holder shall have the right thereafter by exercising
        this Warrant, to purchase the kind and amount of shares of stock and other
        securities and property receivable upon such reclassification, capital
        reorganization and other change, consolidation, merger, sale or conveyance
        by a
        holder of the number of shares of Common Stock which could have been purchased
        upon exercise of this Warrant immediately prior to such reclassification,
        change, consolidation, merger, sale or conveyance, and (ii) the successor
        or
        acquiring entity shall expressly assume the due and punctual observance and
        performance of each covenant and condition of this Warrant to be performed
        and
        observed by the Company and all obligations and liabilities hereunder. Any
        such
        provision shall include provision for adjustments which shall be as nearly
        equivalent as possible to the adjustments provided for in this Warrant. The
        foregoing provisions of this Section 10 shall similarly apply to successive
        reclassifications, capital reorganizations and changes of shares of Common
        Stock
        and to successive consolidations, mergers, sales or conveyances.
  -12-
 
 **11.** **GOVERNING
        LAW; JURISDICTION** .
        The
        corporate laws of the State of Nevada shall govern all issues concerning
        the
        relative rights of the Company and its stockholders. All issues concerning
        the
        construction, validity, enforcement and interpretation of this Warrant shall
        be
        governed by and construed in accordance with the internal laws of the State
        of
        Nevada without giving effect to the principles of conflicts of law thereof.
        The
        parties hereto agree that venue in any and all actions and proceedings related
        to the subject matter of this Warrant shall be in the state and federal courts
        in and for Clark County, Nevada, which courts shall have exclusive jurisdiction
        for such purpose, and the parties hereto irrevocably submit to the exclusive
        jurisdiction of such courts and irrevocably waive the defense of an inconvenient
        forum to the maintenance of any such action or proceeding. Service of process
        may be made in any manner recognized by such courts. This Warrant and any
        term
        hereof may be changed, waived, discharged or terminated only by an instrument
        in
        writing signed by the party against which enforcement of the change, waiver,
        discharge or termination is sought.
 
 **12.** **NOTICES** .
        Except
        as provided in Section 9 hereof, any and all notices or other communications
        or
        deliveries required or permitted to be provided hereunder shall be in writing
        and shall be deemed given and effective on the earliest of (a) the date of
        transmission, if such notice or communication is delivered via facsimile
        at the
        facsimile telephone number specified in this Section prior to 5:00 p.m. (Pacific
        Standard Time) on a Business Day, (b) the Business Day after the date of
        transmission, if such notice or communication is delivered via facsimile
        at the
        facsimile telephone number specified in this Agreement later than 5:00 p.m.
        (Pacific Standard Time) on any date and earlier than 11:59 p.m. (Pacific
        Standard Time) on such date, (c) the Business Day following the date of mailing,
        if sent by nationally recognized overnight courier service, or (d) upon actual
        receipt by the party to whom such notice is required to be given. The address
        for such notices and communications shall be as follows:
 If to the Company:
              VendingData
                Corporation6830
                Spencer StreetLas Vegas, NV 89119Attention:
                Arnold GalassiPhone: 702-733-7195Fax:
                702-733-7197If to the Holder
              To
                the Address Set Forth In the Records of the CompanyWith copies to:
              Craig H. Norville, Esq.Jones Vargas3773 Howard Hughes Parkway, Third
                Floor
                SouthLas
                Vegas, Nevada 89109Phone:
                702-862-3300Fax:
                702-734-2722
   -13-
  **13.** **PAYMENT
        OF TAXES** .
        The
        Company will pay the cost of all applicable documentary stamp taxes, if any,
        attributable to the issuance of shares of Common Stock underlying this Warrant
        upon exercise of this Warrant; provided, however, that the Company shall
        not be
        required to pay any tax which may be payable in respect of any transfer involved
        in the registration of any certificate for shares of Common Stock underlying
        this Warrant in a name other that of the Holder. The Holder is responsible
        for
        all other tax liability that may arise as a result of holding or transferring
        this Warrant or receiving shares of Common Stock underlying this Warrant
        upon
        exercise hereof.
 
 **14.** **INCONSISTENCIES** .
        To the
        extent there are any inconsistencies between the terms and provisions of
        this
        Warrant and the terms and provisions of the Credit Agreement, the terms and
        provisions of this Warrant shall govern and be controlling.
 
 **IN
        WITNESS WHEREOF** ,
        this
        Warrant has been duly executed as of October 6, 2005.
 
 
 VENDINGDATA
        CORPORATION,
 a
        Nevada
        corporation
  ______________________________
 By:
        ___________________________
 Its:
        ___________________________
 
  -14-