**Exhibit 10.1****EXECUTION COPY****SECURITIES PURCHASE AGREEMENT**This Securities Purchase Agreement (this “Agreement”) is dated as of May 3, 2007,among VendingData Corporation, a Nevada corporation (the “Company”), and each purchaseridentified on the signature pages hereto (each, including its successors and assigns, a“Purchaser” and collectively the “Purchasers”).RECITALSWHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant toSection 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506promulgated thereunder, the Company desires to issue and sell to each Purchaser, and eachPurchaser, severally and not jointly, desires to purchase from the Company, securities of theCompany as more fully described in this Agreement.AGREEMENTNOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and forother good and valuable consideration the receipt and adequacy of which are hereby acknowledged,the Company and each Purchaser agree as follows:ARTICLE I.DEFINITIONS1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, forall purposes of this Agreement, the following terms have the meanings indicated in this Section1.1:“Action” shall have the meaning ascribed to such term in Section 3.1(j).“Affiliate” means any Person that, directly or indirectly through one or moreintermediaries, controls or is controlled by or is under common control with a Person assuch terms are used in and construed under Rule 144 under the Securities Act. With respectto a Purchaser, any investment fund or managed account that is managed on a discretionarybasis by the same investment manager as such Purchaser will be deemed to be an Affiliate ofsuch Purchaser.“Business Day” means any day except Saturday, Sunday and any day which shall bea federal legal holiday in the United States.“Closing” means the Closing of the purchase and sale of the Shares pursuant toSection 2.1.“Closing Date” means the Business Day when all of the Transaction Documentshave been executed and delivered by the applicable parties thereto, and all conditionsprecedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) theCompany’s obligations to deliver the applicable Shares have been satisfied or waived.“Commission” means the Securities and Exchange Commission.
 
 

 
“Common Stock” means the common stock of the Company, par value $0.001 pershare, and any other class of securities into which such securities may hereafter bereclassified or changed into.“Common Stock Equivalents” means any securities of the Company or theSubsidiaries which would entitle the holder thereof to acquire at any time Common Stock,including, without limitation, any debt, preferred stock, rights, options, warrants or otherinstrument that is at any time convertible into or exercisable or exchangeable for, orotherwise entitles the holder thereof to receive, Common Stock.“Disclosure Schedules” means the Disclosure Schedules of the Company deliveredin connection with the Closing.“Effective Date” means the date that the initial Registration Statement filedby the Company pursuant to the Registration Rights Agreement is first declared effective bythe Commission.“Exchange Act” means the Securities Exchange Act of 1934, as amended, and therules and regulations promulgated thereunder.“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).“Intellectual Property Rights” shall have the meaning ascribed to such term inSection 3.1(o).“Liens” means a lien, charge, security interest, encumbrance, right of firstrefusal, preemptive right or other restriction.“Material Adverse Effect” shall have the meaning assigned to such term inSection 3.1(b).“Material Permits” shall have the meaning ascribed to such term in Section3.1(m).“Person” means an individual or corporation, partnership, trust, incorporatedor unincorporated association, joint venture, limited liability company, joint stockcompany, government (or an agency or subdivision thereof) or other entity of any kind.“Proceeding” means an action, claim, suit, investigation or proceeding(including, without limitation, an investigation or partial proceeding, such as adeposition), whether commenced or threatened.“Registration Rights Agreement” means the Registration Rights Agreement, datedthe date hereof, among the Company and the Purchasers, in the form of Exhibit Aattached hereto.
 
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“Registration Statement” means a registration statement meeting therequirements set forth in the Registration Rights Agreement and covering the resale by thePurchasers of the Shares.“Required Approvals” shall have the meaning ascribed to such term in Section3.1(e).“Rule 144” means Rule 144 promulgated by the Commission pursuant to theSecurities Act, as such Rule may be amended from time to time, or any similar rule orregulation hereafter adopted by the Commission having substantially the same effect as suchRule.“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).“Shares” means the Six Hundred Thousand (600,000) shares of Common Stock issuedor issuable to the Purchasers pursuant to this Agreement.“Short Sales” shall include all “short sales” as defined in Rule 200 ofRegulation SHO under the Exchange Act (but shall not be deemed to include the locationand/or reservation of borrowable shares of Common Stock).“Subscription Amount” means, as to each Purchaser, the aggregate amount to bepaid for Shares purchased hereunder as specified below such Purchaser’s name on thesignature page of this Agreement and next to the heading “Subscription Amount,” in UnitedStates Dollars and in immediately available funds.“Subsidiary” means any subsidiary of the Company as set forth on Schedule3.1(a).“Trading Market” means the following markets or exchanges on which the CommonStock is listed or quoted for trading on the date in question: the American Stock Exchange,the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, theNASDAQ Capital Market or the OTC Bulletin Board.“Transaction Documents” means this Agreement and the Registration RightsAgreement executed in connection with the transactions contemplated hereunder.ARTICLE II.PURCHASE AND SALE2.1 Closing. Upon the terms and subject to the conditions set forth herein, theCompany agrees to sell, and each Purchaser agrees to purchase, severally and not jointly, thenumber of Shares set forth on each respective Purchaser’s signature page attached hereto, for theSubscription Amount set forth thereon, which in the aggregate shall equal up to One Million, SixHundred Fifty Thousand Dollars ($1,650,000) of Shares. On the Closing Date (the “ClosingDate”), each Purchaser shall deliver to the Company, via wire transfer or a certified check,immediately available funds equal to their Subscription Amount, and the Company shall deliverto each Purchaser their respective Shares to be issued at the Closing (the “Closing”) atthe Closing. Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closingshall occur at the offices of Greenberg Traurig, LLP, 650 Town Center Drive, Suite 1700, CostaMesa, California 92626, or such other location as the parties shall mutually agree.
 
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2.2 Deliveries.(a) On or prior to the Closing Date, the Company shall deliver or cause to be deliveredto each Purchaser the following:(i) this Agreement duly executed by the Company;(ii) one or more stock certificates evidencing that number of Shares purchasedby each Purchaser hereunder, registered in the name of such Purchaser;(iii) the Registration Rights Agreement duly executed by the Company; and(iv) a certificate, executed by the Secretary of the Company and dated as ofthe Closing Date, as to (i) the resolutions consistent with Section 3.1(c) asadopted by the Company’s Board of Directors in a form reasonably acceptable to suchPurchaser, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as ineffect at the Closing, in the form attached hereto as Exhibit B.(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to bedelivered to the Company the following:(i) this Agreement duly executed by such Purchaser;(ii) such Purchaser’s Subscription Amount by wire transfer or cashier’s checkto the account as specified by the Company in writing; and(iii) the Registration Rights Agreement duly executed by such Purchaser.2.3 Closing Conditions.(a) The obligations of the Company hereunder in connection with the Closing are subjectto the following conditions being met:(i) the representations and warranties of the Purchasers shall be true andcorrect in all material respects (except for those representations and warrantiesthat are qualified by materiality or Material Adverse Effect, which shall be trueand correct in all respects) as of the date when made and as of the Closing Date asthough made at that time (except for representations and warranties that speak as ofa specific date, which shall remain true and correct as of such specific date);
 
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(ii) all obligations, covenants and agreements of the Purchasers required to beperformed at or prior to the Closing Date shall have been performed;(iii) the delivery by the Purchasers of the items set forth in Section 2.2(b)of this Agreement; and(iv) the Company’s additional listing application for the Shares filed with theAmerican Stock Exchange (“AMEX”) shall have been approved by the AMEX.(b) The respective obligations of the Purchasers hereunder in connection with theClosing are subject to the following conditions being met:(i) the representations and warranties of the Company and its Subsidiariesshall be true and correct in all material respects (except for those representationsand warranties that are qualified by materiality or Material Adverse Effect, whichshall be true and correct in all respects) as of the date when made and as of theClosing Date as though made at that time (except for representations and warrantiesthat speak as of a specific date, which shall remain true and correct as of suchspecific date);(ii) all obligations, covenants and agreements of the Company required to beperformed at or prior to the Closing Date shall have been performed;(iii) the delivery by the Company of the items set forth in Section 2.2(a) ofthis Agreement; and(iv) the Company shall have obtained all governmental, regulatory or thirdparty consents and approvals, if any, necessary for the sale of the Shares.ARTICLE III.REPRESENTATIONS AND WARRANTIES3.1 Representations and Warranties of the Company. Except as set forth under thecorresponding section of the disclosure schedules delivered to the Purchasers concurrently herewith(the “Disclosure Schedules”) which Disclosure Schedules shall be deemed a part hereof, the Companyhereby makes the representations and warranties set forth below to each Purchaser:(a) Subsidiaries. All of the direct and indirect subsidiaries of the Companyare set forth on Schedule 3.1(a). The Company owns, directly or indirectly, all ofthe capital stock or other equity interests of each Subsidiary free and clear of any Liens,and all the issued and outstanding shares of capital stock of each Subsidiary are validlyissued and are fully paid, non-assessable and free of preemptive and similar rights tosubscribe for or purchase securities.
 
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(b) Organization and Qualification. The Company and each of the Subsidiariesis an entity duly incorporated or otherwise organized, validly existing and in good standingunder the laws of the jurisdiction of its incorporation or organization (as applicable),with the requisite power and authority to own and use its properties and assets and to carryon its business as currently conducted. Neither the Company nor any Subsidiary is inviolation or default of any of the provisions of its respective certificate or articles ofincorporation, bylaws or other organizational or charter documents. Each of the Company andthe Subsidiaries is duly qualified to conduct business and is in good standing as a foreigncorporation or other entity in each jurisdiction in which the nature of the businessconducted or property owned by it makes such qualification necessary, except where thefailure to be so qualified or in good standing, as the case may be, could not have orreasonably be expected to result in (i) a material adverse effect on the legality, validityor enforceability of any Transaction Document, (ii) a material adverse effect on thebusiness, properties, assets, operations, prospects, results of operations or financialcondition of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverseeffect on the Company’s ability to perform in any material respect on a timely basis itsobligations under any Transaction Document (any of (i), (ii) or (iii), a “MaterialAdverse Effect”) and no Proceeding has been instituted in any such jurisdictionrevoking, limiting or curtailing or seeking to revoke, limit or curtail such power andauthority or qualification.(c) Authorization; Enforcement. The Company has the requisite corporate powerand authority to enter into and to consummate the transactions contemplated by each of theTransaction Documents and otherwise to carry out its obligations hereunder and thereunder.The execution and delivery of each of the Transaction Documents by the Company and theconsummation by it of the transactions contemplated hereby and thereby have been dulyauthorized by all necessary action on the part of the Company and no further action isrequired by the Company, its board of directors or its stockholders in connection therewithother than in connection with the required approvals set forth on Schedule 3.1(c)attached hereto (the “Required Approvals”). Each Transaction Document has been (orupon delivery will have been) duly executed by the Company and, when delivered in accordancewith the terms hereof and thereof, will constitute the valid and binding obligation of theCompany enforceable against the Company in accordance with its terms except (i) as limitedby general equitable principles and applicable bankruptcy, insolvency, reorganization,moratorium and other laws of general application affecting enforcement of creditors’ rightsgenerally, (ii) as limited by laws relating to the availability of specific performance,injunctive relief or other equitable remedies and (iii) insofar as indemnification andcontribution provisions may be limited by applicable law.
 
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(d) No Conflicts. The execution, delivery and performance of the TransactionDocuments by the Company, the issuance and sale of the Shares and the consummation by theCompany of the other transactions contemplated hereby and thereby do not and will not (i)conflict with or violate any provision of the Company’s or any Subsidiary’s certificate orarticles of incorporation, bylaws or other organizational or charter documents, or (ii)conflict with, or constitute a default (or an event that with notice or lapse of time orboth would become a default) under, result in the creation of any Lienupon any of the properties or assets of the Company or any Subsidiary, or give toothers any rights of termination, amendment, acceleration or cancellation (with or withoutnotice, lapse of time or both) of, any agreement, credit facility, debt or other instrument(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which theCompany or any Subsidiary is a party or by which any property or asset of the Company or anySubsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict withor result in a violation of any law, rule, regulation, order, judgment, injunction, decreeor other restriction of any court or governmental authority to which the Company or aSubsidiary is subject (including federal and state securities laws and regulations), or bywhich any property or asset of the Company or a Subsidiary is bound or affected; except inthe case of each of clauses (ii) and (iii), such as could not have or reasonably be expectedto result in a Material Adverse Effect.(e) Filings, Consents and Approvals. The Company is not required to obtain anyconsent, waiver, authorization or order of, give any notice to, or make any filing orregistration with, any court or other federal, state, local or other governmental authorityor other Person in connection with the execution, delivery and performance by the Company ofthe Transaction Documents, other than (i) filings required pursuant to Section 4.4 of thisAgreement, (ii) the filing with the Commission of the Registration Statement, (iii)application(s) to each applicable Trading Market for the listing of the Shares for tradingthereon in the time and manner required thereby, and (iv) the filing of Form D with theCommission and such filings as are required to be made under applicable state securitieslaws (collectively, the “Required Approvals”).(f) Issuance of the Shares. The Shares are duly authorized and, when issuedand paid for in accordance with the applicable Transaction Documents, will be duly andvalidly issued, fully paid and nonassessable, free and clear of all Liens imposed by theCompany other than restrictions on transfer provided for in the Transaction Documents. TheCompany has reserved from its duly authorized capital stock the Shares issuable pursuant tothis Agreement.(g) Capitalization. The capitalization of the Company is as set forth onSchedule 3.1(g). No Person has any right of first refusal, preemptive right, rightof participation, or any similar right to participate in the transactions contemplated bythe Transaction Documents. Except as a result of the purchase and sale of the Shares or asset forth on Schedule 3.1(g), there are no outstanding options, warrants, scriptrights to subscribe to, calls or commitments of any character whatsoever relating to, orsecurities, rights or obligations convertible into or exercisable or exchangeable for, orgiving any Person any right to subscribe for or acquire, any shares of Common Stock, orcontracts, commitments, understandings or arrangements by which the Company or anySubsidiary is or may become bound to issue additional shares of Common Stock or Common StockEquivalents. The issuance and sale of the Shares will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) andwill not result in a right of any holder of Company securities to adjust the exercise,conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable,have been issued in compliance with all federal and state securitieslaws, and none of such outstanding shares was issued in violation of any preemptive rights or similarrights to subscribe for or purchase securities. No further approval or authorization of anystockholder, the Board of Directors of the Company or others is required for the issuanceand sale of the Shares. Except as set forth on Schedule 3.1(g), there are nostockholders agreements, voting agreements or other similar agreements with respect to theCompany’s capital stock to which the Company is a party or, to the knowledge of the Company,between or among any of the Company’s stockholders.
 
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(h) SEC Reports; Financial Statements. The Company has filed all reports,schedules, forms, statements and other documents required to be filed by it under theSecurities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,for the period commencing on January 1, 2006 through the date hereof (the foregoingmaterials, including the exhibits thereto and documents incorporated by reference therein,being collectively referred to herein as the “SEC Reports”) on a timely basis or hasreceived a valid extension of such time of filing and has filed any such SEC Reports priorto the expiration of any such extension. As of their respective dates, the SEC Reportscomplied in all material respects with the requirements of the Securities Act and theExchange Act and the rules and regulations of the Commission promulgated thereunder, asapplicable, and none of the SEC Reports, when filed, contained any untrue statement of amaterial fact or omitted to state a material fact required to be stated therein or necessaryin order to make the statements therein, in the light of the circumstances under which theywere made, not misleading. The financial statements of the Company included in the SECReports complied in all material respects with applicable accounting requirements and therules and regulations of the Commission with respect thereto as in effect at the time offiling. Such financial statements have been prepared in accordance with United Statesgenerally accepted accounting principles applied on a consistent basis during the periodsinvolved (“GAAP”), except as may be otherwise specified in such financial statementsor the notes thereto and except that unaudited financial statements may not contain allfootnotes required by GAAP, and fairly present in all material respects the financialposition of the Company and its consolidated subsidiaries as of and for the dates thereofand the results of operations and cash flows for the periods then ended, subject, in thecase of unaudited statements, to normal, immaterial, year-end audit adjustments.(i) Material Changes; Undisclosed Events, Liabilities or Developments. Sincethe date of the latest audited financial statements included within the SEC Reports, exceptas specifically disclosed in a subsequent SEC Report, (i) there has been no event,occurrence or development that has had or that could reasonably be expected by the Companyto result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in theordinary course of business consistent with past practice and (B) liabilities not requiredto be reflected in the Company’s financial statements pursuant to GAAP or disclosed infilings made with the Commission, (iii) the Company has not altered its method ofaccounting, (iv) the Company has not declared or made any dividend or distribution of cashor other property to its stockholders or purchased, redeemed or made any agreements topurchase or redeem any shares of its capital stock and (v) the Company has not issued anyequity securities to any officer, director or Affiliate, exceptpursuant to existing Company stock option plans. The Company does not have pendingbefore the Commission any request for confidential treatment of information.
 
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(j) Litigation. There is no action, suit, inquiry, notice of violation,proceeding or investigation pending or, to the knowledge of the Company, threatened againstor affecting the Company, any Subsidiary or any of their respective properties before or byany court, arbitrator, governmental or administrative agency or regulatory authority(federal, state, county, local or foreign) (collectively, an “Action”) whichmaterially adversely affects or challenges the legality, validity or enforceability of anyof the Transaction Documents or the Shares. The Commission has not issued any stop order orother order suspending the effectiveness of any registration statement filed by the Companyor any Subsidiary under the Exchange Act or the Securities Act.(k) Labor Relations. No material labor dispute exists or, to the knowledge ofthe Company, is imminent with respect to any of the employees of the Company which couldreasonably be expected to result in a Material Adverse Effect. None of the Company’s or itsSubsidiaries’ employees is a member of a union that relates to such employee’s relationshipwith the Company, and neither the Company or any of its Subsidiaries is a party to acollective bargaining agreement, and the Company and its Subsidiaries believe that theirrelationships with their employees are good. No executive officer, to the knowledge of theCompany, is, or is now expected to be, in violation of any material term of any employmentcontract, confidentiality, disclosure or proprietary information agreement ornon-competition agreement, or any other contract or agreement or any restrictive covenant,and the continued employment of each such executive officer does not subject the Company orany of its Subsidiaries to any liability with respect to any of the foregoing matters. TheCompany and its Subsidiaries are in compliance with all U.S. federal, state, local andforeign laws and regulations relating to employment and employment practices, terms andconditions of employment and wages and hours, except where the failure to be in compliancecould not, individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect.(l) Compliance. Neither the Company nor any Subsidiary (i) is in default underor in violation of (and no event has occurred that has not been waived that, with notice orlapse of time or both, would result in a default by the Company or any Subsidiary under),nor has the Company or any Subsidiary received notice of a claim that it is in default underor that it is in violation of, any indenture, loan or credit agreement or any otheragreement or instrument to which it is a party or by which it or any of its properties isbound (whether or not such default or violation has been waived), (ii) is in violation ofany order of any court, arbitrator or governmental body, or (iii) is or has been inviolation of any statute, rule or regulation of any governmental authority, includingwithout limitation all foreign, federal, state and local laws applicable to its business andall such laws that affect the environment, except in each case as could not have orreasonably be expected to result in a Material Adverse Effect.
 
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(m) Regulatory Permits. The Company and the Subsidiaries possess allcertificates, authorizations and permits issued by the appropriate federal, state, local orforeign regulatory authorities necessary to conduct their respective businesses asdescribed in the SEC Reports, except where the failure to possess such permits couldnot have or reasonably be expected to result in a Material Adverse Effect (“MaterialPermits”), and neither the Company nor any Subsidiary has received any notice ofproceedings relating to the revocation or modification of any Material Permit.(n) Title to Assets. The Company and the Subsidiaries have good and marketabletitle in fee simple to all real property owned by them that is material to the business ofthe Company and the Subsidiaries and good and marketable title in all personal propertyowned by them that is material to the business of the Company and the Subsidiaries, in eachcase free and clear of all Liens, except for Liens as do not materially affect the value ofsuch property and do not materially interfere with the use made and proposed to be made ofsuch property by the Company and the Subsidiaries and Liens for the payment of federal,state or other taxes, the payment of which is neither delinquent nor subject to penalties.Any real property and facilities held under lease by the Company and the Subsidiaries areheld by them under valid, subsisting and enforceable leases with which the Company and theSubsidiaries are in compliance.(o) Patents and Trademarks. The Company and the Subsidiaries have, or haverights to use, all patents, patent applications, trademarks, trademark applications, servicemarks, trade names, trade secrets, inventions, copyrights, licenses and other intellectualproperty rights and similar rights necessary or material for use in connection with theirrespective businesses as described in the SEC Reports and which the failure to so have couldhave a Material Adverse Effect (collectively, the “Intellectual Property Rights”).Neither the Company nor any Subsidiary has received a notice (written or otherwise) that theIntellectual Property Rights used by the Company or any Subsidiary violates or infringesupon the rights of any Person. To the knowledge of the Company, all such IntellectualProperty Rights are enforceable and there is no existing infringement by another Person ofany of the Intellectual Property Rights. The Company and its Subsidiaries have takenreasonable security measures to protect the secrecy, confidentiality and value of all oftheir intellectual properties, except where failure to do so could not, individually or inthe aggregate, reasonably be expected to have a Material Adverse Effect.(p) Insurance. The Company and the Subsidiaries are insured by insurers ofrecognized financial responsibility against such losses and risks and in such amounts as areprudent and customary in the businesses in which the Company and the Subsidiaries areengaged, including, but not limited to, directors and officers insurance coverage at leastequal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary has anyreason to believe that it will not be able to renew its existing insurance coverage as andwhen such coverage expires or to obtain similar coverage from similar insurers as may benecessary to continue its business without a significant increase in cost.
 
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(q) Transactions With Affiliates and Employees. Except as set forth in the SECReports, none of the officers or directors of the Company and, to the knowledge of theCompany, none of the employees of the Company is presently a party to any transaction withthe Company or any Subsidiary (other than for services as employees,officers and directors), including any contract, agreement or other arrangementproviding for the furnishing of services to or by, providing for rental of real or personalproperty to or from, or otherwise requiring payments to or from any officer, director orsuch employee or, to the knowledge of the Company, any entity in which any officer,director, or any such employee has a substantial interest or is an officer, director,trustee or partner, in each case in excess of $60,000 other than (i) for payment of salaryor consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalfof the Company and (iii) for other employee benefits, including stock option agreementsunder any stock option plan of the Company.(r) Sarbanes-Oxley; Internal Accounting Controls. The Company is in materialcompliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to itas of the Closing Date. The Company maintains disclosure controls and procedures (as suchterm is defined in Rule 13a-15(e) under the Exchange Act) that are effective in ensuringthat information required to be disclosed by the Company in the reports that it files orsubmits under the Exchange Act is recorded, processed, summarized and reported, within thetime periods specified in the rules and forms of the SEC, including, without limitation,controls and procedures designed in to ensure that information required to be disclosed bythe Company in the reports that it files or submits under the Exchange Act is accumulatedand communicated to the Company’s management, including its principal executive officer orofficers and its principal financial officer or officers, as appropriate, to allow timelydecisions regarding required disclosure.(s) Certain Fees. No brokerage or finder’s fees or commissions are or will bepayable by the Company to any broker, financial advisor or consultant, finder, placementagent, investment banker, bank or other Person with respect to the transactions contemplatedby the Transaction Documents. The Purchasers shall have no obligation with respect to anyfees or with respect to any claims made by or on behalf of other Persons for fees of a typecontemplated in this Section that may be due in connection with the transactionscontemplated by the Transaction Documents as a result of any action taken by the Company orits Affiliates.(t) Private Placement. Assuming the accuracy of the Purchasers representationsand warranties set forth in Section 3.2, no registration under the Securities Act isrequired for the offer and sale of the Shares by the Company to the Purchasers ascontemplated hereby. The issuance and sale of the Shares hereunder does not contravene therules and regulations of the Trading Market.(u) Investment Company. The Company is not, and is not an Affiliate of, andimmediately after receipt of payment for the Shares, will not be or be an Affiliate of, an“investment company” within the meaning of the Investment Company Act of 1940, as amended.The Company shall conduct its business in a manner so that it will not become subject to theInvestment Company Act.
 
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(v) Registration Rights. Other than each of the Purchasers, no Person has anyright to cause the Company to effect the registration under the Securities Act of anysecurities of the Company.(w) Listing and Maintenance Requirements. The Company’s Common Stock isregistered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has takenno action designed to, or which to its knowledge is likely to have the effect of,terminating the registration of the Common Stock under the Exchange Act nor has the Companyreceived any notification that the Commission is contemplating terminating suchregistration. The Company has not, in the 12 months preceding the date hereof, receivednotice from any Trading Market on which the Common Stock is or has been listed or quoted tothe effect that the Company is not in compliance with the listing or maintenancerequirements of such Trading Market. The Company is, and has no reason to believe that itwill not in the foreseeable future continue to be, in compliance with all such listing andmaintenance requirements.(x) Application of Takeover Protections. The Company and its Board ofDirectors have taken all necessary action, if any, in order to render inapplicable anycontrol share acquisition, business combination, poison pill (including any distributionunder a rights agreement) or other similar anti-takeover provision under the Company’sCertificate of Incorporation (or similar charter documents) or the laws of its state ofincorporation that is or could become applicable to the Purchasers as a result of thePurchasers and the Company fulfilling their obligations or exercising their rights under theTransaction Documents, including without limitation as a result of the Company’s issuance ofthe Shares and the Purchasers’ ownership of the Shares.(y) Disclosure. All disclosure furnished by or on behalf of the Company to thePurchasers regarding the Company, its business and the transactions contemplated hereby,including the Disclosure Schedules to this Agreement, with respect to the representationsand warranties made herein are true and correct with respect to such representations andwarranties and do not contain any untrue statement of a material fact or omit to state anymaterial fact necessary in order to make the statements made therein, in light of thecircumstances under which they were made, not misleading.(z) No Integrated Offering. Assuming the accuracy of the Purchasers’representations and warranties set forth in Section 3.2, neither the Company, nor any of itsAffiliates, nor any Person acting on its or their behalf has, directly or indirectly, madeany offers or sales of any security or solicited any offers to buy any security, undercircumstances that would cause this offering of the Shares to be integrated with priorofferings by the Company for purposes of the Securities Act or any applicable shareholderapproval provisions of any Trading Market on which any of the securities of the Company arelisted or designated.(aa) Tax Status. Except for matters that would not, individually or in theaggregate, have or reasonably be expected to result in a Material Adverse Effect, theCompany and each Subsidiary has filed all necessary federal, state and foreign income andfranchise tax returns and has paid or accrued all taxes shown as due thereon, and theCompany has no knowledge of a tax deficiency which has been asserted or threatenedagainst the Company or any Subsidiary.
 
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(bb) No General Solicitation. Neither the Company nor any person acting onbehalf of the Company has offered or sold any of the Shares by any form of generalsolicitation or general advertising. The Company has offered the Shares for sale only tothe Purchasers and certain other “accredited investors” within the meaning of Rule 501 underthe Securities Act.(cc) Insolvency. The Company is not as of the date hereof, and after givingeffect to the transactions contemplated hereby to occur at the Closing, will not beInsolvent (as defined below). For purposes of this Section 3.1(cc), “Insolvent”means, with respect to any Person , (i) the present fair saleable value of such Person’sassets is less than the amount required to pay such Person’s total indebtedness, (ii) suchPerson is unable to pay its debts and liabilities, subordinated, contingent or otherwise, assuch debts and liabilities become absolute and matured, (iii) such Person intends to incuror believes that it will incur debts that would be beyond its ability to pay as such debtsmature or (iv) such Person has unreasonably small capital with which to conduct the businessin which it is engaged as such business is now conducted and is proposed to be conducted.(dd) Off Balance Sheet Arrangements. There is no transaction, arrangement, orother relationship between the Company and an unconsolidated or other off balance sheetentity that is required to be disclosed by the Company in its Exchange Act filings and isnot so disclosed or that otherwise would be reasonably likely to have a Material AdverseEffect.(ee) No Undisclosed Events, Liabilities, Developments or Circumstances. Exceptfor the transactions contemplated by this Agreement, no event, liability, development orcircumstance has occurred or exists with respect to the Company or its business, properties,prospects, operations or financial condition, that would be required to be disclosed by theCompany under applicable securities laws on a Current Report on Form 8-K filed with the SEC.(ff) Environmental Laws. The Company is in compliance with any and allEnvironmental Laws (as hereinafter defined), (ii) have received all permits, licenses orother approvals required of them under applicable Environmental Laws to conduct theirrespective businesses and (iii) are in compliance with all terms and conditions of any suchpermit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), thefailure to so comply would be reasonably expected to have, individually or in the aggregate,a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local orforeign laws relating to pollution or protection of human health or the environment(including, without limitation, ambient air, surface water, groundwater, land surface orsubsurface strata), including, without limitation, laws relating to emissions, discharges,releases or threatened releases of chemicals, pollutants, contaminants, or toxic orhazardous substances or wastes (collectively, “Hazardous Materials”) into theenvironment, or otherwise relating to the manufacture, processing, distribution, use,treatment, storage, disposal, transport or handling of Hazardous Materials, as well as allauthorizations, codes, decrees, demands or demand letters, injunctions, judgments,licenses, notices or notice letters, orders, permits, plans or regulations issued, entered,promulgated or approved thereunder.
 
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(gg) Manipulation of Price. The Company has not, and to its knowledge no oneacting on its behalf has taken, directly or indirectly, any action designed to cause or toresult in the stabilization or manipulation of the price of any security of the Company tofacilitate the sale or resale of any of the Shares.(hh) Foreign Corrupt Practices. Neither the Company, nor any of itsSubsidiaries, nor to the Company’s knowledge, any director, officer, agent, employee orother Person acting on behalf of the Company or any of its Subsidiaries has, in the courseof its actions for, or on behalf of, the Company (i) used any corporate funds for anyunlawful contribution, gift, entertainment or other unlawful expenses relating to politicalactivity; (ii) made any direct or indirect unlawful payment to any foreign or domesticgovernment official or employee from corporate funds; (iii) violated or is in violation ofany provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) madeany unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment toany foreign or domestic government official or employee.3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, foritself and for no other Purchaser, represents and warrants as of the date hereof and as of theClosing Date to the Company as follows:(a) Organization; Authority. Such Purchaser is an entity duly organized,validly existing and in good standing under the laws of the jurisdiction of its organizationwith full right, corporate or partnership power and authority to enter into and toconsummate the transactions contemplated by the Transaction Documents and otherwise to carryout its obligations hereunder and thereunder. The execution, delivery and performance bysuch Purchaser of the transactions contemplated by this Agreement have been duly authorizedby all necessary corporate or similar action on the part of such Purchaser. EachTransaction Document to which it is a party has been duly executed by such Purchaser, andwhen delivered by such Purchaser in accordance with the terms hereof, will constitute thevalid and legally binding obligation of such Purchaser, enforceable against it in accordancewith its terms, except (i) as limited by general equitable principles and applicablebankruptcy, insolvency, reorganization, moratorium and other laws of general applicationaffecting enforcement of creditors’ rights generally, (ii) as limited by laws relating tothe availability of specific performance, injunctive relief or other equitable remedies and(iii) insofar as indemnification and contribution provisions may be limited by applicablelaw.(b) Own Account. Such Purchaser understands that the Shares are “restrictedsecurities” and have not been registered under the Securities Act or any applicable statesecurities law and is acquiring the Shares as principal for its own account and not with aview to or for distributing or reselling such Shares or any part thereof in violation of theSecurities Act or any applicable state securities law, has no present intention ofdistributing any of such Shares in violation of the Securities Act orany applicable state securities law and has no direct or indirect arrangement or understandings with anyother persons to distribute or regarding the distribution of such Shares (thisrepresentation and warranty not limiting such Purchaser’s right to sell the Shares pursuantto the Registration Statement or otherwise in compliance with applicable federal and statesecurities laws) in violation of the Securities Act or any applicable state securities law.Such Purchaser is acquiring the Shares hereunder in the ordinary course of its business.
 
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(c) Purchaser Status. At the time such Purchaser was offered the Shares, itwas, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a)(1),(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act. Such Purchaser is not requiredto be registered as a broker-dealer under Section 15 of the Exchange Act.(d) Experience of Such Purchaser. Such Purchaser, either alone or togetherwith its representatives, has such knowledge, sophistication and experience in business andfinancial matters so as to be capable of evaluating the merits and risks of the prospectiveinvestment in the Shares, and has so evaluated the merits and risks of such investment.Such Purchaser is able to bear the economic risk of an investment in the Shares and, at thepresent time, is able to afford a complete loss of such investment.(e) General Solicitation. Such Purchaser is not purchasing the Shares as aresult of any advertisement, article, notice or other communication regarding the Sharespublished in any newspaper, magazine or similar media or broadcast over television or radioor presented at any seminar or any other general solicitation or general advertisement.(f) Short Sales and Confidentiality Prior To The Date Hereof. Other than thetransaction contemplated hereunder, such Purchaser has not directly or indirectly, nor hasany Person acting on behalf of or pursuant to any understanding with such Purchaser, engagedin any transaction, including Short Sales, in the securities of the Company since theearlier to occur of (i) the time that such Purchaser was first contacted by the Companyregarding an investment in the Company, or (ii) the 30th day prior to the date ofthis Agreement (such earlier date, “Discussion Date”). Notwithstanding theforegoing, in the case of a Purchaser that is a multi-managed investment vehicle wherebyseparate portfolio managers manage separate portions of such Purchaser’s assets and theportfolio managers have no direct knowledge of the investment decisions made by theportfolio managers managing other portions of such Purchaser’s assets, the representationset forth above shall only apply with respect to the portion of assets managed by theportfolio manager that made the investment decision to purchase the Shares covered by thisAgreement. Other than to other Persons party to this Agreement, such Purchaser hasmaintained the confidentiality of all disclosures made to it in connection with thistransaction (including the existence and terms of this transaction).
 
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(g) Access to Information. Such Purchaser acknowledges that it has receivedand had the opportunity to review (i) copies of the SEC Reports, and (ii) all exhibitsthereto. Such Purchaser further acknowledges that it or its representatives have beenafforded (iii) the opportunity to ask such questions as it has deemed necessary of, and toreceive answers from, representatives of the Company concerning the terms andconditions of the offering of the Shares, the merits and risks of investing in theShares, (iv) access to information about the Company and the Company’s financial condition,results of operations, business, properties, management and prospects sufficient to enableit to evaluate its investment in the Shares; and (v) the opportunity to obtain suchadditional information which the Company possesses or can acquire without unreasonableeffort or expense that is necessary to verify the accuracy and completeness of theinformation contained in the SEC Reports.(h) Restrictions on Shares. Such Purchaser understands that the Shares havenot been registered under the Securities Act and may not be offered, resold, pledged orotherwise transferred except (a) pursuant to an exemption from registration under theSecurities Act or pursuant to an effective registration statement in compliance with Section5 under the Securities Act and (b) in accordance with all applicable securities laws of thestates of the United States and other jurisdictions.ARTICLE IV.OTHER AGREEMENTS OF THE PARTIES4.1 Transfer Restrictions.(a) The Shares may only be disposed of in compliance with state and federal securitieslaws. In connection with any transfer of Shares other than pursuant to an effectiveregistration statement or Rule 144, the Company may require the transferor thereof toprovide to the Company an opinion of counsel to the Company, the form and substance of whichopinion shall be reasonably satisfactory to the Company, to the effect that such transferdoes not require registration of such transferred Shares under the Securities Act.(b) The Purchasers agree to the imprinting, so long as is required by this Section4.1(b), of a legend on any of the Shares in the following form:THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE “RESTRICTED SECURITIES” AS THATTERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT. SUCH SECURITIES MAY NOT BEOFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND THE APPLICABLE STATESECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER, THEAVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTION OF COUNSELTO THE ISSUER.
 
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4.2 Furnishing of Information. As long as any Purchaser owns Shares, the Company covenantsto timely file (or obtain extensions in respect thereof and file within the applicable graceperiod) all reports required to be filed by the Company after the date hereof pursuant to theExchange Act. As long as any Purchaser owns Shares, if the Company is not required to filereports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and makepublicly available in accordance with Rule 144(c) such information as is required for thePurchasers to sell the Shares under Rule 144. The Company further covenants that it will take suchfurther action as any holder of Shares may reasonably request, to the extent required from time totime to enable such Person to sell such Shares without registration under the Securities Act withinthe requirements of the exemption provided by Rule 144.4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy orotherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) thatwould be integrated with the offer or sale of the Shares in a manner that would require theregistration under the Securities Act of the sale of the Shares to the Purchasers or that would beintegrated with the offer or sale of the Shares for purposes of the rules and regulations of anyTrading Market such that it would require shareholder approval prior to the closing of such othertransaction unless shareholder approval is obtained before the closing of such subsequenttransaction.4.4 Securities Laws Disclosure; Publicity. The Company shall, within one Business Dayof the Closing Date, issue a press release disclosing the material terms of the transactionscontemplated hereby, and shall file a Current Report on Form 8-K (the “Closing 8-K”) whichshall attach the Transaction Documents thereto by the first Business Day following the ClosingDate. The press release and the Closing 8-K shall be acceptable to the Purchasers in theirreasonable discretion. No Purchaser shall issue any such press release or otherwise make any suchpublic statement without the prior consent of the Company. The Company shall not publicly disclosethe name of any Purchaser, or include the name of any Purchaser in any filing with the Commissionor any regulatory agency or Trading Market, without the prior written consent of such Purchaser,except (i) as required by federal securities law in connection with (A) any registration statementcontemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents(including signature pages thereto) with the Commission and (ii) to the extent such disclosure isrequired by law or Trading Market regulations, in which case the Company shall provide thePurchasers with prior notice of such disclosure permitted under this subclause (ii).4.5 Use of Proceeds. The Company shall use the net proceeds from the sale of theShares hereunder as set forth on Schedule 4.5 of the Disclosure Schedule.4.6 Listing of Common Stock. The Company hereby agrees to use best efforts to maintain thelisting of the Common Stock on a Trading Market, and as soon as reasonably practicable followingthe Closing to list all of the Shares on such Trading Market. The Company further agrees, if theCompany applies to have the Common Stock traded on any other Trading Market, it will include insuch application all of the Shares, and will take such other action as is necessary to cause all ofthe Shares to be listed on such other Trading Market as promptly as possible. The Company willtake all action reasonably necessary to continue the listing and trading of its Common Stock on aTrading Market and will comply in all respects with the Company’s reporting, filing and otherobligations under the bylaws or rules of the Trading Market.
 
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4.7 Short Sales and Confidentiality After The Date Hereof. Each Purchaser, severallyand not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting onits behalf or pursuant to any understanding with it will engage in any transactions, including anyShort Sales, in the securities of the Company during the period commencing at the Discussion Timeand ending at the time that the transactions contemplated by this Agreement are first publiclyannounced as described in Section 4.4. Each Purchaser, severally and not jointly with the otherPurchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to anyunderstanding with it will engage in any Short Sales in the securities of the Company during theperiod commencing at the Discussion Time and ending on the date the Closing 8-K is filed with theSEC (“Black-out Termination Date”). Each Purchaser, severally and not jointly with theother Purchasers, covenants that until such time as the transactions contemplated by this Agreementare publicly disclosed by the Company as described in Section 4.4, such Purchaser will maintain theconfidentiality of all disclosures made to it in connection with this transaction (including theexistence and terms of this transaction). Each Purchaser understands and acknowledges, severallyand not jointly with any other Purchaser, that the Commission currently takes the position thatcoverage of short sales of shares of the Common Stock “against the box” prior to the Effective Dateof the Registration Statement with respect to the Shares is a violation of Section 5 of theSecurities Act, as set forth in Item 65, Section A, of the Manual of Publicly Available TelephoneInterpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of CorporationFinance. Notwithstanding the foregoing, no Purchaser makes any representation, warranty orcovenant hereby that it will not engage in Short Sales in the securities of the Company after theBlack-out Termination Date. Notwithstanding the foregoing, in the case of a Purchaser that is amulti-managed investment vehicle whereby separate portfolio managers manage separate portions ofsuch Purchaser’s assets and the portfolio managers have no direct knowledge of the investmentdecisions made by the portfolio managers managing other portions of such Purchaser’s assets, thecovenant set forth above shall only apply with respect to the portion of assets managed by theportfolio manager that made the investment decision to purchase the Shares covered by thisAgreement.4.8 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respectto the Shares as required under Regulation D and to provide a copy thereof, promptly upon requestof any Purchaser. The Company shall take such action as the Company shall reasonably determine isnecessary in order to obtain an exemption for, or to qualify the Shares for, sale to the Purchasersat the Closing under applicable securities or “Blue Sky” laws of the states of the United States,and shall provide evidence of such actions promptly upon request of any Purchaser.ARTICLE V.MISCELLANEOUS5.1 Termination. This Agreement may be terminated by any Purchaser, as to suchPurchaser’s obligations hereunder only and without any effect whatsoever on the obligations betweenthe Company and the other Purchasers, or the Company by written notice to the other parties, if theClosing has not been consummated on or before May 18, 2007, provided, however, thatno such termination will affect the right of any party to sue for any breach by the other party (orparties).
 
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5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents tothe contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants andother experts, if any, and all other expenses incurred by such party incident to the negotiation,preparation, execution, delivery and performance of this Agreement. The Company shall pay alltransfer agent fees, stamp taxes and other taxes and duties levied in connection with the deliveryof any Shares to the Purchasers.5.3 Entire Agreement. The Transaction Documents, together with the exhibits andschedules thereto, contain the entire understanding of the parties with respect to the subjectmatter hereof and supersede all prior agreements and understandings, oral or written, with respectto such matters, which the parties acknowledge have been merged into such documents, exhibits andschedules.5.4 Notices. Any and all notices or other communications or deliveries required orpermitted to be provided hereunder shall be in writing and shall be deemed given and effective onthe earliest of (a) the date of transmission, if such notice or communication is delivered viafacsimile at the facsimile number set forth on the signature pages attached hereto prior to 3:30p.m. (Las Vegas time) on a Business Day, (b) the next Business Day after the date of transmission,if such notice or communication is delivered via facsimile at the facsimile number set forth on thesignature pages attached hereto on a day that is not a Business Day or later than 3:30 p.m. (LasVegas time) on any Business Day, (c) the 2nd Business Day following the date of mailing,if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by theparty to whom such notice is required to be given. The address for such notices and communicationsshall be as set forth on the signature pages attached hereto.5.5 Amendments; Waivers. No provision of this Agreement may be waived or amendedexcept in a written instrument signed, in the case of an amendment, by the Company and thePurchasers holding not less than 51% of the Shares or, in the case of a waiver, by the partyagainst whom enforcement of any such waived provision is sought. No waiver of any default withrespect to any provision, condition or requirement of this Agreement shall be deemed to be acontinuing waiver in the future or a waiver of any subsequent default or a waiver of any otherprovision, condition or requirement hereof, nor shall any delay or omission of any party toexercise any right hereunder in any manner impair the exercise of any such right.5.6 Headings. The headings herein are for convenience only, do not constitute a partof this Agreement and shall not be deemed to limit or affect any of the provisions hereof.5.7 Successors and Assigns. This Agreement shall be binding upon and inure to thebenefit of the parties and their successors and permitted assigns. The Company shall not assignthis Agreement or any rights or obligations hereunder without the prior written consent of theRequired Holders. No Purchaser may assign any of its rights hereunder without the consent of theCompany.5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of theparties hereto and their respective successors and permitted assigns and is not for the benefit of,nor may any provision hereof be enforced by, any other Person.
 
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5.9 Governing Law. All questions concerning the construction, validity, enforcementand interpretation of the Transaction Documents shall be governed by and construed and enforced inaccordance with the internal laws of the State of Nevada, without regard to the principles ofconflicts of law thereof. Each party agrees that all legal proceedings concerning theinterpretations, enforcement and defense of the transactions contemplated by this Agreement and anyother Transaction Documents (whether brought against a party hereto or its respective affiliates,directors, officers, shareholders, employees or agents) shall be commenced exclusively in the stateand federal courts sitting in the State of Nevada. Each party hereby irrevocably submits to theexclusive jurisdiction of the state and federal courts sitting in the State of Nevada, for theadjudication of any dispute hereunder or in connection herewith or with any transactioncontemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert inany suit, action or proceeding, any claim that it is not personally subject to the jurisdiction ofany such court, that such suit, action or proceeding is brought in an inconvenient forum or thatthe venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemedto limit in any way any right to serve process in any manner permitted by law. Each party herebyirrevocably waives any right it may have, and agrees not to request, a jury trial for theadjudication of any dispute hereunder or in connection with or arising out of this Agreement or anytransaction contemplated hereby. If either party shall commence an action or proceeding to enforceany provisions of the Transaction Documents, then the prevailing party in such action or proceedingshall be reimbursed by the other party for its reasonable attorneys’ fees and other costs andexpenses incurred with the investigation, preparation and prosecution of such action or proceeding.5.10 Survival. The representations and warranties contained herein shall survive theClosing and the delivery of the Shares.5.11 Execution. This Agreement may be executed in two or more counterparts, all ofwhich when taken together shall be considered one and the same agreement and shall become effectivewhen counterparts have been signed by each party and delivered to the other party, it beingunderstood that both parties need not sign the same counterpart. In the event that any signatureis delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, suchsignature shall create a valid and binding obligation of the party executing (or on whose behalfsuch signature is executed) with the same force and effect as if such facsimile or “.pdf” signaturepage were an original thereof.5.12 Severability. If any term, provision, covenant or restriction of this Agreementis held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, theremainder of the terms, provisions, covenants and restrictions set forth herein shall remain infull force and effect and shall in no way be affected, impaired or invalidated, and the partieshereto shall use their commercially reasonable efforts to find and employ an alternative means toachieve the same or substantially the same result as that contemplated by such term, provision,covenant or restriction. It is hereby stipulated and declared to be the intention of the partiesthat they would have executed the remaining terms, provisions, covenants and restrictions withoutincluding any of such that may be hereafter declared invalid, illegal, void or unenforceable.
 
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5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrarycontained in (and without limiting any similar provisions of) any of the other TransactionDocuments, whenever any Purchaser exercises a right, election, demand or option under aTransaction Document and the Company does not timely perform its related obligations within theperiods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion fromtime to time upon written notice to the Company, any relevant notice, demand or election in wholeor in part without prejudice to its future actions and rights.5.14 Replacement of Shares. If any certificate or instrument evidencing any Shares ismutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange andsubstitution for and upon cancellation thereof (in the case of mutilation), or in lieu of andsubstitution therefor, a new certificate or instrument, but only upon receipt of evidencereasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a newcertificate or instrument under such circumstances shall also pay any reasonable third-party costs(including customary indemnity) associated with the issuance of such replacement Shares.5.15 Construction. The parties agree that each of them and/or their respective counselhas reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normalrule of construction to the effect that any ambiguities are to be resolved against the draftingparty shall not be employed in the interpretation of the Transaction Documents or any amendmentshereto.*(Signature Pages Follow)*
 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to beduly executed by their respective authorized signatories as of the date first indicated above.       **VENDINGDATA CORPORATION**   Address for Notice:       By:     1120 Town Center   Mark R. Newburg,   Suite 260  President and Chief Executive Officer   Las Vegas, NV 89144      Fax: 702.733.7197[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK