**Exhibit10.1**

** **

**WAIVERAND AMENDMENT TO WARRANTS**

 

THIS WAIVER AND AMENDMENT TO WARRANTS (this “Agreement”)is entered into as of September 7, 2007 (the “Effective Date”), by and betweenVendingData Corporation, a Nevada corporation (the “Company”), on the one hand,and each of Bricoleur Partners, L.P., Bricoleur Enhanced, L.P., BRIC 6, L.P.and Bricoleur Offshore Ltd. (collectively, the “Bricoleur Funds”), on the otherhand.

 

R E C I T A L S

 

WHEREAS, theCompany and the Bricoleur Funds are parties to that certain 8% Senior SecuredNote Purchase Agreement, dated as of May 1, 2006 and amended as of September19, 2006 (the “Note Purchase Agreement”), pursuant to which, among otherthings, the Bricoleur Funds purchased from the Company 8% senior secured notes(the “Notes”) in the principal amount of Thirteen Million Dollars ($13,000,000)and warrants (“Warrants”) to purchase up to Two Million Six Hundred Thousand(2,600,000) shares of the Company’s common stock, par value $0.001 (“CommonStock”), for an exercise price of $2.00 per share, upon and subject to theterms and conditions set forth in the Note Purchase Agreement, the Notes andthe Warrants.

 

WHEREAS, onJune 12, 2007, the Company entered into a Securities Purchase and ProductParticipation Agreement with Elixir Group Limited (“Elixir”), a Hong Kongcompany, pursuant to which the Company will issue to Elixir the Company’sequity securities and warrants, subject to Elixir’s placement on the Company’sbehalf of electronic gaming machines with gaming operators located Asia.  Such Securities Purchase and ProductParticipation Agreement, as in effect on the date hereof and without furtheramendment, is referred to herein as the “Participation Agreement.”

 

WHEREAS, thetransactions contemplated by the Participation Agreement would constitute a “Changein Control” as defined in the Notes and give the Bricoleur Funds the option todeclare the entire principal amount and all interest under the Notesimmediately due and payable.

 

WHEREAS, theCompany has indicated its willingness to use its best efforts to close prior toDecember 31, 2007 one or more financings that would result in gross proceeds tothe Company sufficient for the payment of the Notes in full under theterms of the Note Purchase Agreement.

 

WHEREAS, subjectto the terms of this Agreement, the Company and the Bricoleur Funds have agreedto (a) amend the Warrants to add net exercise provisions to the Warrants, (b)effect a net exercise of those portions of the Warrants representing the rightto purchase 2,275,000 shares of Common Stock at a mutually agreed value of$3.50 per share of the Company’s Common Stock for purposes of such netexercise, resulting in the issuance by the Company to the Bricoleur Fundsholding such Warrants of 975,000 shares of Common Stock pursuant to such netexercise, (c) waive any application of the “Change in Control” provision of theNotes with respect to the transactions under the Participation Agreement, and(d) defer until December 31, 2007 the $825,000 in principal amount currentlydue to be repaid by the Company to the Bricoleur Funds pursuant to Section 4.11of the Note Purchase Agreement as a result of equity issuances by the Companyon June 7, 2007.

 

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A G RE E M E N T

 

NOW, THEREFORE, in consideration of the premises and themutual covenants, obligations and agreements contained herein, and for othergood and valuable consideration, the receipt and sufficiency of which is herebyacknowledged, and intending to be legally bound, the Company and the BricoleurFunds hereby agree as follows:

 

1.             Amendmentof Warrants.  The Warrants are herebyamended to add a new clause “vii” at the end of Section 2(c) of the Warrants asfollows:

 

“vii.         Net Exercise.  Notwithstanding any provisions herein to thecontrary, if the fair market value of one share of Common Stock is greater thanthe Exercise Price (at the date of calculation as set forth below), in lieu ofexercising this Warrant for cash, the Holder may elect to receive shares equalto the value (as determined below) of this Warrant (or the portion thereofbeing canceled) by surrender of this Warrant at the principal office of theCompany together with the properly endorsed Notice of Exercise and notice ofsuch election in which event the Company shall issue to the Holder a number of sharesof Common Stock computed using the following formula:

 

X = Y(A-B)

                A

Where

 

X =          the number of shares of Common Stock tobe issued to the Holder

 

Y =          the number of shares of Common Stockpurchasable under the Warrant or, if only a portion of the Warrant is beingexercised, the portion of the Warrant being canceled (at the date of suchcalculation)

 

A =         the fair market value of one share ofthe Company’s Common Stock (at the date of such calculation)

 

B =          Exercise Price (as adjusted to thedate of such calculation)

 

For purposes of the abovecalculation, fair market value of one share of Common Stock shall be either (a)the price mutually agreed by the Company and the Holder, or (b) if the Companyand the Holder do not agree on such price, the average of the closing bid andasked prices of the Common Stock quoted in the Over-The-Counter Market Summaryor the last reported sale price of the Common Stock or the closing price quotedon the NASDAQ Global Market or on any exchange on which the Common Stock islisted, whichever is applicable, as published in the Western Edition of theWall Street Journal for the ten (10) trading days prior to the date ofdetermination of fair market value.”

 

2.             Amendmentof Notice of Exercise.  The Companyhereby agrees to amend the Notice of Exercise attached to the Warrants to allowfor exercise by means of the net exercise provisions added to the Warrants bythis Agreement.

 

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3.             NetExercise of Portions of the Warrants. Bricoleur Offshore Ltd. and Bricoleur Enhanced, L.P. currently holdWarrants to purchase One Million Four Hundred Thousand (1,400,000) and OneMillion Two Hundred Thousand (1,200,000) shares of Common Stock,respectively.  Of those Warrants,Bricoleur Offshore Ltd.’s Warrant to purchase One Million Two HundredTwenty-Five Thousand (1,225,000) shares of Common Stock and Bricoleur Enhanced,L.P.’s Warrant to purchase One Million Fifty Thousand (1,050,000) shares ofCommon Stock are non-cancelable as per the terms of the Warrants.  Pursuant to this Agreement, the Company,Bricoleur Offshore Ltd. and Bricoleur Enhanced, L.P. hereby agree to effect thenet exercise of such non-cancelable portions of the Warrants, based on the$3.50 per share fair market value for the Company’s Common Stock as mutuallyagreed by the Company and the Bricoleur Funds, and without further actionrequired of the Bricoleur Funds. Accordingly, the Company hereby agrees to issue Five Hundred Twenty FiveThousand (525,000) shares of its Common Stock to Bricoleur Offshore Ltd. andFour Hundred Fifty Thousand (450,000) shares of its Common Stock to BricoleurEnhanced, L.P., respectively, as a result of such net exercise of thenon-cancelable portions of the Warrants. The Bricoleur Funds shall return the currently outstanding Warrants tothe Company for cancellation of Warrants to purchase 1,225,000 shares of CommonStock held by Bricoleur Offshore Ltd. and Warrants to purchase 1,050,000 sharesof Common Stock held by Bricoleur Enhanced, L.P., and the Company shall deliver525,000 shares of its Common Stock to Bricoleur Offshore Ltd. and 450,000shares of its Common Stock to Bricoleur Enhanced, L.P.  and replacement Warrants incorporating theamendments described in this Agreement and representing the balance of theWarrants held by Bricoleur Offshore Ltd. and Bricoleur Enhanced, L.P. (Warrantsfor 175,000 shares of Common Stock and 150,000 shares of Common Stock,respectively).  The shares of CommonStock delivered by the Company pursuant to this Agreement shall be “WarrantShares” as defined in the Warrants and “Registrable Securities” as defined inthe Registration Rights Agreement dated as of May 1, 2006 between the Companyand the Bricoleur Funds.

 

4.             Company’sBest Efforts to Complete Financing. The Company hereby agrees to use its best efforts to close prior toDecember 31, 2007 one or more financings that would result in gross proceeds tothe Company of at least twenty million dollars ($20,000,000) and the Company’spayment of the Notes in full.

 

5.             Waiverof Change in Control Provision of the Notes.  The Closing (as defined in the ParticipationAgreement) of the transactions between the Company and Elixir as contemplatedby the Participation Agreement would constitute a Change in Control (as definedin the Notes) entitling the Bricoleur Funds to declare the entire principalamount and all interest under the Notes immediately due and payable.  Subject to the Closing (as defined in theParticipation Agreement) of the Participation Agreement occurring on or beforeSeptember 30, 2007 and the Company’s obligation pursuant to Section 4 of thisAgreement, the Bricoleur Funds hereby agree to waive their right to cause theentire principal amount and all interest under the Notes to become immediatelydue and payable as a result of the Closing and the other equity transactionsunder the Participation Agreement constituting a Change in Control.  No other rights of acceleration of the Notesare waived in any manner by the Bricoleur Funds.

 

6.             Deferralof Certain Amounts Currently Due Under the Notes.  Subject to the Closing (as defined in theParticipation Agreement) of the Participation Agreement occurring on or beforeSeptember 30, 2007, the Bricoleur Funds hereby waive until December 31, 2007any breach of the Note Purchase Agreement, the Notes and the related SecurityAgreement resulting

 

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from the Company’s failure to pay the Eight Hundred Twenty FiveThousand Dollars ($825,000) in principal currently owed by the Company to theBricoleur Funds pursuant to Section 4.11 of the Note Purchase Agreement as aresult of equity issuances by the Company on June 7, 2007, and  the Bricoleur Funds hereby agree that theCompany’s payment of such amount may be deferred until not later than December31, 2007.  No other rights of repaymentof the Notes are waived in any manner by the Bricoleur Funds.

 

                7.             No Further Modifications.  Except as specifically set forth herein,nothing in this Agreement shall be construed to enlarge, restrict, or otherwisemodify the terms of the Note Purchase Agreement, Notes or Warrants or therespective duties and obligations of the parties thereto.

 

8.             Authorization;Enforceability. Each of the Company and the Bricoleur Funds represents tothe other that: (i) it has all corporate right, power and authority to enterinto this Agreement and to consummate the transactions contemplated hereunder;(ii) the execution and delivery by it of this Agreement and the consummation ofthe transactions contemplated hereunder will not result in the violation by itof any law, statute, rule, regulation, judgment or decree of any court orgovernmental authority to or by which it is bound, or of any provision of itsorganizational documents; and (iii) no consent, approval, authorization orother order of any governmental authority or other third party is required tobe obtained by it in connection with the authorization, execution and deliveryof this Agreement.

 

9.             Miscellaneous.

                                9.1           Amendments and Waivers.  This Agreement, together with the amendedWarrants, sets forth the entire agreement and understanding between the partiesas to the subject matter hereof and thereof and supersedes and replaces allprior and contemporaneous discussions, negotiations, agreements andunderstandings (oral or written) with respect to such subject matter.  This Agreement or any provision hereof may be(i) amended only by mutual written agreement of the Company and the BricoleurFunds or (ii) waived only by written agreement of the waiving party.

 

9.2           Successors and Assigns.  This Agreement shall be binding upon andinure to the benefit of the Company and its successors and assigns and each ofthe Bricoleur Funds and their respective successors and assigns.

 

9.3           Notices.  All notices, demands and other communicationsto be given or delivered under or by reason of the provisions of this Agreementshall be in writing and shall be deemed to duly given and received whendelivered personally or transmitted by facsimile, one business day after beingdeposited for next-day delivery with a nationally recognized overnightdelivery service, or three business days after being deposited as first classmail with the United States Postal Service, all charges or postage prepaid, andproperly addressed to the party to receive the same at the address set forthbelow or at such other address as such party may have designated by advancewritten notice to the other parties.

 

| To the Company: | VendingData Corporation      |
|-----------------|------------------------------|
|            | 1120 Town Center Dr, Ste 260 |
|            | Las Vegas, Nevada 89144      |
|            | Attn: Mark R. Newburg        |
|            | Facsimile: (702) 733-7197    |

 

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| To the Bricoleur Funds: | c/o Bricoleur Capital Management, LLC |
|-------------------------|---------------------------------------|
|                    | 12230 El Camino Real, Suite 100       |
|                    | San Diego, CA 92130                   |
|                    | Attn: Robert Poole                    |
|                    | Facsimile: 858-523-2010               |

 

9.4           Governing Law.  This Agreement shall be governed by theinternal laws of the State of California, without giving effect to its conflictof law principles.

 

9.5           Attorneys’ Fees.  If any action at law or in equity is necessaryto enforce or interpret the terms of this Agreement, the prevailing party, asspecifically determined by the court, shall be entitled to reasonable attorneys’fees, costs and necessary disbursements in addition to any other relief towhich such party may be entitled.

 

9.6           Counterparts.  This Agreement may be executed in any numberof counterparts, all of which when taken together shall constitute one and thesame instrument binding on all of the parties hereto.  Delivery of an executed counterpart of asignature page to this Agreement by facsimile shall be as effective as deliveryof a manually executed counterpart of a signature page of this Agreement.

 

9.7           Headings. The headings of theSections hereof are inserted as a matter of convenience and for reference onlyand in no way define, limit or describe the scope of this Agreement or themeaning of any provision hereof.

 

9.8           Severability. In the eventthat any provision of this Agreement or the application of any provision hereofis declared to be illegal, invalid or otherwise unenforceable by a court ofcompetent jurisdiction, the remainder of this Agreement shall not be affectedexcept to the extent necessary to delete such illegal, invalid or unenforceableprovision unless the provision held invalid shall substantially impair thebenefit of the remaining portion of this Agreement.

 

IN WITNESS WHEREOF, theparties have caused this Waiver and Amendment to Warrants to be duly executedand delivered as of the date first set forth above.

 
|   | “Company”                    |                  |
|--------|----------------------------------------|-----------------------|
|   |                                   |
|   | **VENDINGDATA CORPORATION,**           |
|   | a Nevada corporation                   |                  |
|   |                                   |
|   | By:                                    | /*s/ Mark R. Newburg* |   |
|   | Mark R. Newburg                        |
|   | Chief Executive Officer                |
|   |                                   |
|   | “Bricoleur Funds”            |                  |
|   |                                   |
|   | **BRICOLEUR PARTNERS, L.P.**           |
|   | By: Bricoleur Capital Management, LLC, |
|   | Its General Partner                    |
|        |                                        |                       |  |  |

 

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|   | By:                          | */s/ Robert Poole*                 |   |
|--------|------------------------------|------------------------------------|--------|
|   | Robert Poole, Member of      |                               |
|   | Management Board             |                               |
|   |                         |                               |
|   | **BRICOLEUR ENHANCED, L.P.** |
|   | ** **                   |
|   | By:                          | Bricoleur Capital Management, LLC, |
|   | Its General Partner          |                               |
|   |                         |                               |
|   | By:                          | */s/ Robert Poole*                 |   |
|   | Robert Poole, Member of      |                               |
|   | Management Board             |                               |
|   |                         |                               |
|   | **BRIC 6, L.P.**             |
|   | ** **                   |
|   | By:                          | Bricoleur Capital Management, LLC, |
|   | Its General Partner          |                               |
|   |                         |                               |
|   | By:                          | */s/ Robert Poole*                 |   |
|   | Robert Poole, Member of      |                               |
|   | Management Board             |                               |
|   |                         |                               |
|   | **BRICOLEUR OFFSHORE LTD.**  |
|   | ** **                   |
|   | By:                          | Bricoleur Capital Management, LLC, |
|   | Its Investment Adviser       |                               |
|   |                         |                               |
|   | By:                          | */s/ Robert Poole*                 |   |
|   | Robert Poole, Member of      |                               |
|   | Management Board             |                               |
|        |                              |                                    |        |  |  |

 

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