**Exhibit
      10.3**




**SECURITIES
      PURCHASE AGREEMENT**




This
      Securities Purchase Agreement (this “ Agreement ”)
      is
      dated as of October 11, 2006, among VendingData Corporation, a Nevada
      corporation (the “ Company ”),
      and
      each purchaser identified on the signature pages hereto (each, including its
      successors and assigns, a “ Purchaser ”
and
      collectively the “ Purchasers ”).




RECITALS




WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Section 4(2) of the Securities Act of 1933, as amended (the “ Securities
      Act ”)
      and
      Rule 506 promulgated thereunder, the Company desires to issue and sell to
      each Purchaser, and each Purchaser, severally and not jointly, desires to
      purchase from the Company, certain securities of the Company as more fully
      described in this Agreement.




AGREEMENT





NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration, the receipt and adequacy of
      which
      are hereby acknowledged, the Company and each Purchaser agree as
      follows:




ARTICLE
      I.


DEFINITIONS




1.2  Definitions .
      In
      addition to the terms defined elsewhere in this Agreement, for all purposes
      of
      this Agreement, the following terms have the meanings indicated in this Section
      1.1:




“ 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 more intermediaries,
      controls or is controlled by or is under common control with a Person as such
      terms are used in and construed under Rule 144 under the Securities
      Act.




“ Amendment ”
means
      the filing of an amendment to the Company’s Articles of Incorporation, in the
      form and substance acceptable to the Purchaser’s in their reasonable discretion,
      with the Nevada Secretary of State for purposes of increasing the Company’s
      authorized Common Stock to an amount sufficient to provide for the Company’s
      issuance of all of the Securities pursuant to this Agreement.




“ Business
      Day ”
means
      any day except Saturday, Sunday and any day which shall be a federal legal
      holiday in the United States.




“ Change
      of Control Offer ”
means
      a
      written offer to the Company or its stockholders to enter into a transaction
      or
      a series of related transactions which will result in either (i) a change in
      ownership of the Company’s capital stock or voting power in an amount greater
      than fifty percent (50%) or (ii) the acquisition of substantially all of the
      Company’s assets, in either case whether by merger, consolidation, acquisition
      of assets, tender offer or the like.









“ Closing ”
means
      the Closing of the purchase and sale of the Shares and Warrants pursuant to
      Section 2.1.




“ Closing
      Date ”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all conditions precedent to
      (i) the Purchasers’ obligations to pay the Subscription Amount and
      (ii) the Company’s obligations to deliver the applicable Shares and
      Warrants 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 per share, and any other
      class
      of securities into which such securities may hereafter be reclassified or
      changed into.




“ Common
      Stock Equivalents ”
means
      any securities of the Company or any Subsidiary which would entitle the holder
      thereof to acquire at any time Common Stock, including, without limitation,
      any
      debt, preferred stock, rights, options, warrants or other instruments that
      are
      at any time convertible into or exercisable or exchangeable for, or otherwise
      entitles the holder thereof to receive, Common Stock.




“ Company
      Counsel ”
means
      Preston Gates & Ellis LLP.




“ Disclosure
      Schedules ”
means
      the Disclosure Schedules of the Company delivered to the Purchasers prior to
      the
      date hereof.




“ Effective
      Date ”
means
      the date that the initial Registration Statement filed by the Company pursuant
      to the Registration Rights Agreement is first declared effective by the
      Commission.




“ Exchange
      Act ”
means
      the Securities Exchange Act of 1934, as amended, and the rules 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 in Section 3.1(q).




“ Liens ”
means
      a
      lien, charge, security interest, encumbrance, right of first refusal, preemptive
      right or other restriction of any kind.




“ Material
      Adverse Effect ”
shall
      have the meaning assigned to such term in Section 3.1(b).




“ Material
      Permits ”
shall
      have the meaning ascribed to such term in Section 3.1(o).




“ Melco ”
means
      Melco International Development Limited, a Hong Kong company.




2




“ Melco-PBL
      Joint Venture ”
means
      the joint venture established between Melco and Publishing and Broadcasting
      Limited.




“ Person ”
means
      an individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      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 a deposition),
      whether commenced or threatened.




“ Purchaser
      Counsel ”
means
      Latham & Watkins, with offices located at 41 st Floor,
      One Exchange Square, 8 Connaught Place, Central, Hong Kong.




“ Registration
      Rights Agreement ”
means
      the Registration Rights Agreement, to be delivered at the Closing, among the
      Company and the Purchasers, substantially in the form of Exhibit
      A attached
      hereto.




“ Registration
      Statement ”
means
      a
      registration statement meeting the requirements set forth in the Registration
      Rights Agreement and covering the resale by the Purchasers of the Registrable
      Securities (as defined in the Registration Rights Agreement).




“ Required
      Approvals ”
shall
      have the meaning ascribed to such term in Section 3.1(e).




“ Rule
      144 ”
means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as
      such Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.




“ SEC
      Reports ”
shall
      have the meaning ascribed to such term in Section 3.1(h).




“ Securities ”
means
      the Shares, the Warrants and the Warrant Shares.




“ Shares ”
means
      the shares of Common Stock issued to the Purchasers at the Closing.




“ Shareholder
      Approval ”
means
      such approval as may be required by the applicable rules and regulations of
      the
      American Stock Exchange (or any successor entity) from the shareholders of
      the
      Company in accordance with Section 14 of the Exchange Act with respect to
      the Company’s issuance of the Shares
      and the Warrants .




“ Short
      Sales ”
shall
      include all “short sales” as defined in Rule 200 of Regulation SHO under
      the Exchange Act (but shall not be deemed to include the location and/or
      reservation of borrowable shares of Common Stock).




3




“ Subscription
      Amount ”
means,
      as to each Purchaser, the aggregate amount specified below such Purchaser’s name
      on the signature page of this Agreement and next to the heading “Subscription
      Amount”, in United States Dollars.




“ Subsidiary ”
means
      any subsidiary of the Company as set forth on Schedule 3.1(a) .




“ Trading
      Day ”
means
      a
      day on which the Common Stock is traded on a Trading Market provided that,
      in
      the event that the Common Stock is not listed or quoted on a Trading Market,
      Trading Day shall mean a Business Day.




“ Trading
      Market ”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the Nasdaq Capital Market, the American
      Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or
      the
      OTC Bulletin Board.




“ Transaction
      Documents ”
means
      this Agreement, the Registration Rights Agreement, and the Warrants and
      any
      other documents or agreements executed
      in connection with this Agreement, the Registration Rights Agreement or the
      Warrants but excluding the agreements identified in Section
      2.3(a)(v).




“ Warrants ”
      mean s
      the
      Common Stock purchase warrants, substantially in the form of Exhibit B attached
      hereto, issued to the Purchasers at the Closing.




“ Warrant
      Shares ”
means
      the shares of Common Stock underlying the Warrants issuable
      upon exercise of the Warrants .




ARTICLE
      II.


PURCHASE
      AND SALE




2.1  Closing .
      Upon
      the terms and subject to the conditions set forth herein, at the Closing the
      Company hereby
      agrees to issue
      and sell to each Purchaser, and each Purchaser hereby
      agrees to purchase
      from the Company, severally and not jointly, the number of Shares and Warrants
      set forth on each respective Purchaser’s signature page attached hereto, for the
      Subscription Amount set forth thereon. The aggregate Subscription Amount shall
      equal $2,650,000 and the Shares and Warrants shall in the aggregate consist
      of:




(b)  1,000,000
      Shares; and




(c)  Warrants
      to purchase the following:




(i)  6,000,000
      shares of Common Stock at $2.65 per share;




(ii)  4,000,000
      shares of Common Stock at $3.00 per share;




(iii)  2,000,000
      shares of Common Stock at $3.50 per share;




(iv)  1,000,000
      shares of Common Stock at $4.00 per share;




4




(v)  1,000,000
      shares of Common Stock at $4.50 per share;




(vi)  1,000,000
      shares of Common Stock at $5.00 per share; and




(vii)  1,000,000
      shares of Common Stock at $5.50 per share.




On
      the
      Closing Date (the “ Closing
      Date ”),
      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 deliver to each Purchaser full legal
      and
      beneficial ownership of **** their
      respective Shares and Warrants. Upon satisfaction of the conditions set forth
      in
      Sections 2.2 and 2.3, the Closing shall occur at the offices of Latham
& Watkins, 41 st Floor,
      One Exchange Square, 8 Connaught Place, Central, Hong Kong, or such other
      location as the parties shall mutually agree.




2.2  Deliveries .




(b)  On
      or
      prior to the Closing Date, the Company shall deliver or cause to be delivered
      to
      each Purchaser the following:




(i)  this
      Agreement duly executed by the Company;




(ii)  one
      or
      more certificates evidencing the number of Shares as set forth opposite such
      Purchaser’s name on the signature page of this Agreement, registered in the name
      of such Purchaser;




(iii)  a
      legal
      opinion of Company Counsel, in the form and substance satisfactory to the
      Purchasers;




(iv)  The
      Warrants purchased by each Purchaser hereunder registered in the name of each
      Purchaser and duly executed by the Company; and




(v)  the
      Registration Rights Agreement duly executed by the Company.




(c)  On
      or
      prior to the Closing Date, each Purchaser shall deliver or cause to be delivered
      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 check to the
      account specified by the Company in writing; and




(iii)  the
      Registration Rights Agreement duly executed by such Purchaser.




5




2.3  Closing
      Conditions .




(b)  The
      obligations of the Company hereunder in connection with the Closing are subject
      to the following conditions being met:




(i)  the
      representations and warranties of the Purchasers contained in the Transaction
      Documents and qualified as to materiality shall be true and correct and any
      such
      representations and warranties not so qualified shall be true and correct in
      all
      material respects, as of the date hereof and as of the Closing
      Date;




(ii)  all
      obligations, covenants and agreements of the Purchasers required to be performed
      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;




(iv)  the
      Company’s receipt of Shareholder Approval, if required;




(v)  the
      execution and delivery by the parties thereto of (a) an amendment to the Sales
      Representative Agreement dated January 5, 2006 (“ Sales
      Representative Agreement ”)
      entered into between the Company and Elixir Group Limited, a Hong Kong company
      (“ Elixir ”),
      in
      form and substance satisfactory to the parties thereto; and (b) an Alliance
      Agreement (“ Alliance
      Agreement ”)
      between the Company and Elixir, in form and substance satisfactory to the
      parties thereto;




(vi)  the
      filing of the Amendment by the Company with the Nevada Secretary of State and
      the effectiveness of the Amendment;




(vii)  on
      the
      Closing Date, (A) no legal action, suit or proceeding shall be pending or
      threatened which seeks to restrain or prohibit the transactions contemplated
      by
      the Transaction Documents and (B) there shall exist no actual or potential
      regulatory impediment to the legal and beneficial ownership of the Securities
      by
      the Purchasers; and




(viii)  all
      consents, waivers, approvals, authorizations, registrations, filings with
      governmental entities should have been obtained.




(c)  The
      respective obligations of the Purchasers hereunder in connection with the
      Closing are subject to the following conditions being met:




(i)  the
      representations and warranties of the Company contained in the Transaction
      Documents and qualified as to materiality shall be true and correct and any
      such
      representations and warranties not so qualified shall be true and correct in
      all
      material respects, as of the date hereof and as of the Closing
      Date;




(ii)  all
      obligations, covenants and agreements of the Company required to be performed
      at
      or prior to the Closing Date shall have been performed;




(iii)  on
      the
      Closing Date, (A) no legal action, suit or proceeding shall be pending or
      threatened which seeks to restrain or prohibit the transactions contemplated
      by
      the Transaction Documents and (B) there shall exist no actual or potential
      regulatory impediment to the legal and beneficial ownership of the Securities
      by
      the Purchasers;




6




(iv)  the
      execution and delivery by the parties thereto of (a) an amendment to the Sales
      Representative Agreement, in form and substance satisfactory to the parties
      thereto; and (b) an Alliance Agreement between the Company and Elixir, in form
      and substance satisfactory to the parties thereto;




(v)  the
      Company shall have received Shareholder Approval, if required;




(vi)  the
      filing of the Amendment by the Company with the Nevada Secretary of State and
      the effectiveness of the Amendment;




(vii)  the
      delivery by the Company of the items set forth in Section 2.2(a) of this
      Agreement;




(viii)  the
      Purchasers shall have completed such due diligence as they consider necessary
      in
      connection with the Transaction Documents and the transactions contemplated
      therein, to their satisfaction, in their sole discretion;




(ix)  all
      consents, waivers, approvals, authorizations, registrations, filings with
      governmental entities should have been obtained.




(x)  the
      Company shall have delivered to the Purchasers a certificate, dated the Closing
      Date, duly executed by its Chief Executive Officer to the effect set forth
      in
      clauses (i) and (ii) above; and




(xi)  the
      Company shall have delivered to the Purchasers a certificate, dated the Closing
      Date, of the Secretary or Assistant Secretary of the Company certifying (i)
      the
      certificate of incorporation and bylaws of the Company as in effect on the
      Closing Date, (ii) all resolutions of the board of directors (and committees
      thereof) of the Company relating to the Transaction Documents and the
      transactions contemplated thereby (including a resolution concerning the matters
      set forth in clause (i) of Section 4.10(b)) and (iii) the incumbency of all
      officers of the Company executing the Transaction Documents and any other
      agreement or document contemplated thereby.




7




ARTICLE
      III.


REPRESENTATIONS
      AND WARRANTIES




3.1  Representations
      and Warranties of the Company . Except
      as
      set forth under the corresponding section of the disclosure schedules delivered
      to the Purchasers prior
      to
      the date hereof (the
      “ Disclosure
      Schedules ”)
      which
      Disclosure Schedules shall be deemed a part hereof, the Company hereby makes
      the
      representations and warranties set forth below to each Purchaser:




(a)  Subsidiaries .
      All of
      the direct and indirect subsidiaries of the Company are set forth on Schedule
      3.1(a) .
      The
      Company owns, directly or indirectly, all of the 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 validly issued and
      are fully paid, non-assessable and free of preemptive and similar rights to
      subscribe for or purchase securities.




(b)  Organization
      and Qualification .
      The
      Company and each of the Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under 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
      carry on its business as currently conducted. Neither the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not,
      individually or in the aggregate, have or reasonably be expected to result
      in
      (i) a material adverse effect on the legality, validity or enforceability
      of any Transaction Document, (ii) a material adverse effect on the results
      of operations, assets, business or condition (financial or otherwise) of the Company
      and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
      on the Company’s ability to consummate the transactions contemplated by the
      Transaction Documents or to perform its obligations under any Transaction
      Document (any of (i), (ii) or (iii), a “ Material
      Adverse Effect ”)
      and no
      Proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification.




(c)  Authorization;
      Enforcement . The
      Company has all requisite power and authority to execute, deliver and perform
      its obligations under this Agreement and each other Transaction Document and
      to
      consummate the transactions contemplated hereby and thereby. The execution,
      delivery and performance of this Agreement and the other Transaction Documents
      and the consummation of the transactions contemplated herein and therein have
      been duly authorized by all necessary action on the part of the Company and
      no
      further corporate proceedings by the Company are necessary to authorize this
      Agreement or the other Transaction Documents (other than the Shareholder
      Approval, if required, and approval of the Amendment by the shareholders of
      the
      Company). This Agreement and each other Transaction Document has been (or upon
      delivery will have been) duly executed by the Company and, when delivered in
      accordance with the terms hereof and thereof, will constitute the legal, valid
      and binding obligation of the Company, enforceable against the Company in
      accordance with its terms except
      (i) as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by
      laws relating to the availability of specific performance, injunctive relief
      or
      other equitable remedies and (iii) insofar as indemnification and
      contribution provisions may be limited by applicable law.




8




(d)  No
      Conflicts .
      The
      execution, delivery and performance of the Transaction Documents by the Company,
      the issuance and sale of the Securities and the consummation by the Company
      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 or articles 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 or both would become a default) under, result
      in the creation of any Lien upon any of the properties or assets of the Company
      or any Subsidiary, or give to others any rights of termination, amendment,
      acceleration or cancellation (with or without notice, lapse of time or both)
      of,
      any agreement (including, without limitation, the Gaming Chip Manufacturing
      and
      License Agreement between Progressive Gaming International Corporation and
      Dolphin Advanced Technologies Pty Limited dated June 22, 2006), credit facility,
      debt or other instrument (evidencing a Company or Subsidiary debt or otherwise)
      or other understanding to which the Company or any Subsidiary is a party or
      by
      which any property or asset of the Company or any Subsidiary is bound or
      affected, or (iii)  assuming
      receipt of the
      Required Approvals, conflict with or result in a violation of any law, rule,
      regulation, order, judgment, injunction, decree or other restriction of any
      court or governmental authority to which the Company or a Subsidiary is subject
      (including federal and state securities laws and regulations), or by which
      any
      property or asset of the Company or a Subsidiary is bound or affected; except
      in
      the case of each of clauses (ii) and (iii), such as could not individually
      or in
      the aggregate have or reasonably be expected to result in a Material Adverse
      Effect.




(e)  Filings,
      Consents and Approvals . T he
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority or other Person
      in
      connection with the execution, delivery and performance by the Company of the
      Transaction Documents, other than (i) filings required pursuant to Section
      4.4 of this Agreement, (ii) the filing with the Commission of the
      Registration Statement, (iii) the Company’s receipt of Shareholder
      Approval ,
      if
      required; (iv) application(s) to each applicable Trading Market for the
      listing of the Shares and the Warrant Shares for trading thereon in the time
      and
      manner required thereby, (v) approval of the Amendment by the shareholders
      of
      the Company and the filing of the Amendment by the Company with the Nevada
      Secretary of State and (vi) the filing of Form D with the Commission and
      such filings as are required to be made under applicable state securities laws
      (collectively, the “ Required
      Approvals ”).




(f)  Issuance
      of the Securities .
      Upon
      the filing of the Amendment by the Company with the Nevada Secretary of State,
      and no later than the Closing, the Securities will be duly authorized and,
      when
      issued and paid for in accordance with the applicable Transaction Documents,
      will be duly and validly issued, fully paid and nonassessable, free and clear
      of
      all Liens caused by the Company (except as resulting from the restrictions
      on
      transfer set forth in the Transaction Documents) or imposed under any U.S.
      law,
      rule or regulation. Upon the filing of the Amendment with the Nevada Secretary
      of State, and no later than the Closing, the Company will have reserved from
      its
      duly authorized capital stock, all of the Shares issuable pursuant to this
      Agreement and the Warrants.




9




(g)  Capitalization .
      The
      capitalization of the Company is as set forth on Schedule
      3.1(g) .
      No
      Person has any right of first refusal, preemptive right, right of participation,
      or any similar right to participate in the transactions contemplated by the
      Transaction Documents. Except as a result of the purchase and sale of the
      Securities or as set forth on Schedule
      3.1(g), there
      are no outstanding options, warrants, script rights to subscribe to, calls
      or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exercisable or exchangeable for, or giving
      any
      Person any right to subscribe for or acquire, any shares of Common Stock, or
      contracts, commitments, understandings or arrangements by which the Company
      or
      any Subsidiary is or may become bound to issue additional shares of Common
      Stock
      or Common Stock Equivalents. The issuance and sale of the Shares and the
      Warrants will not obligate the Company to issue shares of Common Stock or other
      securities to any Person (other than the Purchasers) and will 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 duly authorized and validly issued,
      fully paid and nonassessable, have been issued in compliance with all federal
      and state securities laws, and none of such outstanding shares was issued in
      violation of any preemptive rights or similar rights to subscribe for or
      purchase securities. Other
      than the Shareholder Approval, if required, and approval of the Amendment by the
      shareholders of the Company, no further approval or authorization of any
      stockholder, the Board of Directors of the Company or any other person is
      required for the issuance and sale of the Securities. Except as set forth on Schedule
      3.1(g) ,
      there
      are no stockholders agreements, voting agreements or other similar agreements
      with respect to the Company’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.




(h)  SEC
      Reports; Financial Statements .
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it under the Securities Act and the Exchange Act,
      including pursuant to Section 13(a) or 15(d) thereof, for the period commencing
      January 1, 2005 through the date hereof (the foregoing materials, including
      the
      exhibits and schedules thereto and documents incorporated by reference therein,
      being collectively referred to herein as the “ SEC
      Reports ”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. Except
      as set forth on Schedule
      3.1(h) ,
      as of
      their respective dates, the SEC Reports complied in all material respects with
      the requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, as applicable, and none
      of
      the SEC Reports, when filed, contained any untrue statement of a material fact
      or omitted to state a material fact required to be stated therein or necessary
      in order to make the statements therein, in the light of the circumstances
      under
      which they were made, not misleading. Except as set forth on Schedule
      3.1(h) ,
      the
      financial statements of the Company included in the SEC Reports complied in
      all
      material respects with applicable accounting requirements and the rules and
      regulations of the Commission with respect thereto as in effect at the time
      of
      filing. Except as set forth on Schedule
      3.1(h) ,
      such
      financial statements have been prepared in accordance with United States
      generally accepted accounting principles applied on a consistent basis during
      the periods involved (“ GAAP ”),
      except as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial position of the Company and its consolidated subsidiaries as of and
      for the dates thereof and the results of operations and cash flows for the
      periods then ended, subject, in the case of unaudited statements, to normal,
      immaterial, year-end audit adjustments.




10




(i)  Material
      Changes; Undisclosed Events, Liabilities or Developments .
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as 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 to
      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 the ordinary course of business consistent with
      past practice and (B)  liabilities
      not required to be reflected in the Company’s financial statements pursuant to
      GAAP or disclosed in filings made with the Commission, in
      each
      case that could not reasonably be expected to have a Material Adverse
      Effect , (iii) the
      Company has not altered its method of accounting, (iv) the Company has not
      declared or made any dividend or distribution of cash or other property to
      its
      stockholders or purchased, redeemed or made any agreements to purchase or redeem
      any shares of its capital stock, (v) none of the Company nor any of its
      Subsidiaries has (A) sold, assigned, transferred, abandoned, mortgaged,
      pledged or subjected to lien any of its material properties, tangible or
      intangible, or rights under any material contract, permit, license, franchise
      or
      other agreement or
      (B) waived or cancelled any material amounts of indebtedness or other
      obligations owed to the Company or any such Subsidiary; and (vi) the
      Company has not issued any equity securities to any officer, director or
      Affiliate, except pursuant to existing Company stock option plans and in amounts
      in accordance with past practice. The Company does not have pending before
      the
      Commission any request for confidential treatment of information.




(j)  Litigation .
      There
      is no action, suit, inquiry, notice of violation, proceeding or investigation
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company, any Subsidiary or any of their respective properties before or by
      any
      court, arbitrator, governmental or administrative agency or regulatory authority
      (federal, state, county, local or foreign) (collectively, an “ Action ”)
      which
      materially adversely affects or challenges the legality, validity or
      enforceability of any of the Transaction Documents or the Securities. Except
      as
      previously disclosed in writing to Purchaser Counsel,
      neither the Company nor any Subsidiary, nor any director or officer thereof,
      is
      or has been the subject of any material Action involving a claim of violation
      of
      or liability under federal or state securities laws or a claim of breach of
      fiduciary duty. There has not been, and to the knowledge of the Company, there
      is not pending or contemplated, any material investigation by the Commission
      involving the Company or any current or former director or officer of the
      Company. The Commission has not issued any stop order or other order suspending
      the effectiveness of any registration statement filed by the Company or any
      Subsidiary under the Exchange Act or the Securities Act.




11




(k)  Labor
      Relations .
      No
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company which could reasonably
      be
      expected to result in a Material Adverse Effect. None of the Company’s or its
      Subsidiaries’ employees is a member of a union that relates to such employee’s
      relationship with the Company, and neither the Company or any of its
      Subsidiaries is a party to a collective bargaining agreement, and the Company
      and its Subsidiaries believe that their relationships with their employees
      are
      good. No executive officer, to the knowledge of the Company, is, or is now
      expected to be, in violation of any material term of any employment contract,
      confidentiality, disclosure or proprietary information agreement or
      non-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 or any of its Subsidiaries to any liability with respect
      to
      any of the foregoing matters. The Company and its Subsidiaries are in compliance
      with all U.S. federal, state, local and foreign laws and regulations relating
      to
      employment and employment practices, terms and conditions of employment and
      wages and hours, except where the failure to be in compliance could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect.




(l)  Business
      Relationships . (i) No major customer of the Company or any Subsidiary has, since December
      31, 2005, canceled or otherwise terminated or indicated an intent to cancel
      or
      otherwise terminate its relationship with the Company or any Subsidiary or
      to
      materially decrease the volume of business it conducts with the Company or
      any
      Subsidiary. (ii) No major supplier of the Company or any Subsidiary has
      stopped or indicated an intent to stop or materially reduce the rate at which
      it
      supplies materials, products or services to the Company or any
      Subsidiary.




(m)  Solvency .
      Based
      on the financial condition of the Company as of the Closing the Company’s fair
      saleable value of its assets exceeds the amount that will be required to be
      paid
      on or in respect of the Company’s existing debts and other liabilities
      (including known contingent liabilities) as they mature.




(n)  Compliance .
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and
      no event has occurred that has not been waived that, with notice or lapse 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 under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws relating to taxes, the
      environment, occupational health and safety and gaming matters, except in each
      case as could not have or reasonably be expected to result in a Material Adverse
      Effect.




(o)  Regulatory
      Permits .
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Reports, except where the failure to possess such permits could not have
      or
      reasonably be expected to result in a Material Adverse Effect (“ Material
      Permits ”),
      and
      neither the Company nor any Subsidiary has received any notice of proceedings
      relating to the revocation or modification of any Material Permit.




12




(p)  Title
      to Assets .
      The
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to the business of the Company
      and
      the Subsidiaries and good and marketable title to all personal property owned
      by
      them that is material to the business of the Company and the Subsidiaries,
      in
      each case free and clear of all Liens, except for Liens as do not materially
      affect the value of such property and do not materially interfere with the
      use
      made and proposed to be made of such 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
      are
      held by them under valid, subsisting and enforceable leases with which the
      Company and the Subsidiaries are in full compliance.




(q)  Patents
      and Trademarks .
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      trade secrets, inventions, copyrights, licenses and other intellectual property
      rights and similar rights necessary or material for use in connection with
      their
      respective businesses as currently conducted, and which the failure to so have
      could have a Material Adverse Effect (collectively, the “ Intellectual
      Property Rights ”).
      Neither the Company nor any Subsidiary has received a notice (written or
      otherwise) or has any knowledge that the Intellectual Property Rights used
      by
      the Company or any Subsidiary violates or infringes upon the asserted rights
      of
      any Person. To the knowledge of the Company, all such Intellectual Property
      Rights are enforceable and there is no existing infringement by another Person
      of any of the Intellectual Property Rights. The Company and its Subsidiaries
      have taken reasonable security measures to protect the secrecy, confidentiality
      and value of all of their intellectual properties, except where failure to
      do so
      could not, individually or in the aggregate, reasonably be expected to have
      a
      Material Adverse Effect.




(r)  Insurance .
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged. Neither the Company nor any Subsidiary has any reason to believe that
      it will not be able to renew its existing insurance coverage as and when such
      coverage expires or to obtain similar coverage from similar insurers as may
      be
      necessary to continue its business without a significant increase in
      cost.




(s)  Transactions
      With Affiliates and Employees .
      Except
      as set forth in the SEC Reports, none of the officers or directors of the
      Company and, to the knowledge of the Company, none of the employees of the
      Company is presently a party to any transaction with the Company or any
      Subsidiary (other than for services as employees, officers and directors),
      including any contract, agreement or other arrangement providing for the
      furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such 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 salary, (ii) reimbursement for expenses
      properly incurred on behalf of the Company and (iii) for other employee
      benefits, including stock option agreements under any stock option plan of
      the
      Company.




13




(t)  Sarbanes-Oxley;
      Internal Accounting Controls .
      The
      Company is in material compliance with all provisions of the Sarbanes-Oxley
      Act
      of 2002 which are applicable to it as of the Closing Date. Except as disclosed
      in the SEC Reports, the Company and its Subsidiaries maintain a system of
      internal accounting controls sufficient to
      provide reasonable assurance that (i) transactions are executed in accordance
      with management’s general or specific authorizations, (ii) transactions are
      recorded as necessary to permit preparation of financial statements in
      conformity with generally accepted accounting principles and to maintain asset
      accountability, (iii) access to assets is permitted only in accordance with
      management’s general or specific authorization and (iv) the recorded
      accountability for assets is compared with the existing assets at reasonable
      intervals and appropriate action is taken with respect to any
      differences.




(u)  Certain
      Fees .
      No
      brokerage or finder’s fees or commissions are or will be payable by the Company
      to any broker, financial advisor or consultant, finder, placement agent,
      investment banker, bank or other Person with respect to the transactions
      contemplated by the Transaction Documents. The Purchasers shall have no
      obligation with respect to any fees or with respect to any claims made by or
      on
      behalf of other Persons (save and except for the Purchasers’ own financial
      advisor) for fees of a type contemplated in this Section that may be due in
      connection with the transactions contemplated by the Transaction Documents
      as a
      result of any action taken by the Company or its Affiliates.




(v)  Private
      Placement .
      Assuming the accuracy of the Purchasers’ representations and warranties set
      forth in Section 3.2(b)-(e), (g) and (h), no registration under the Securities
      Act is required for the offer and sale of the Securities by the Company to
      the
      Purchasers under the Transaction Documents. Assuming Shareholder
      Approval ,
      if
      required pursuant to the AMEX Rules, the issuance and sale of the Securities
      hereunder does not contravene the rules and regulations of the Trading
      Market.




(w)  Investment
      Company. The
      Company is not, and is not an Affiliate of, and immediately after giving effect
      to the transactions contemplated by this Agreement, 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 the Investment Company
      Act.




(x)  Certain
      Registration Matters.  The
      Company will be eligible to register the Common Stock for resale by the
      Purchasers under Form S-3 promulgated under the Securities Act no later than
      September 29, 2007. Except
      as
      set forth on Schedule 3.1(x) ,
      no
      Person has any mandatory right (including “piggy-back” registration rights) to
      cause the Company to effect the registration under the Securities Act of any
      securities of the Company.




14




(y)  Listing
      and Maintenance Requirements .
      The
      Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the
      Exchange Act, and the Company has taken no 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 Company received any
      notification that the Commission is contemplating terminating such registration.
      The Company has not, in the two years preceding the date hereof, received notice
      from any Trading Market on which the Common Stock is or has been listed or
      quoted to the effect that the Company is not in compliance with the listing
      or
      maintenance requirements of such Trading Market. Subject to the Company’s
      receipt of Shareholder Approval, if required, the Company is, and has no reason
      to believe that it will not in the foreseeable future continue to be, in
      compliance with all such listing and maintenance requirements.




(z)  Application
      of Takeover Protections .
      The
      Company and its Board of Directors have taken all necessary action, if any,
      in
      order to render inapplicable any control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the Company’s certificate of
      incorporation (or similar charter documents), the Company’s by-laws (as amended
      and in effect) or the laws of its state of incorporation that is or could
      reasonably be expected to become applicable to the Purchasers as a result of
      the
      Purchasers and the Company fulfilling their obligations or exercising their
      rights under the Transaction Documents, including without limitation as a result
      of the Company’s issuance of the Securities and the Purchasers’ ownership of the
      Securities.




(aa)  No
      Integrated Offering . Assuming
      the accuracy of the Purchasers’ representations and warranties set forth in
      Section 3.2(b)-(e), neither the Company, nor any of its Affiliates, nor any
      Person acting on its or their behalf has, directly or indirectly, made any
      offers or sales of any security or solicited any offers to buy any security,
      under circumstances that would cause this offering of the Securities to be
      integrated with prior offerings by the Company for purposes of the Securities
      Act or any applicable shareholder approval provisions of any Trading Market
      on
      which any of the securities of the Company are listed or designated.




(bb)  Tax
      Status .
      Except
      as set forth on Schedule
      3.1(bb) , the
      Company has filed all material federal, state and local income and franchise
      and
      other tax returns required to be filed and has paid all taxes due in accordance
      therewith, and no tax deficiency has been determined adversely to the Company
      which has had (nor does the Company have any knowledge of any tax deficiency
      which, if determined adversely to the Company, could have) a Material Adverse
      Effect.




(cc)  No
      General Solicitation .
      Neither
      the Company nor any person acting on behalf of the Company has offered or sold
      any of the Shares or Warrants by any form of general solicitation or general
      advertising. The Company has offered the Shares and Warrants for sale only
      to
      the Purchasers and certain other “accredited investors” within the meaning of
      Rule 501 under the Securities Act.




15




(dd)  Acknowledgment
      Regarding Purchasers’ Purchase of Shares and Warrants .
      The
      Company acknowledges and agrees that each of the Purchasers is acting solely
      in
      the capacity of an arm’s length purchaser with respect to the Transaction
      Documents and the transactions contemplated thereby. The Company further
      acknowledges that no Purchaser is acting as a financial advisor or fiduciary
      of
      the Company (or in any similar capacity) with respect to the Transaction
      Documents and the transactions contemplated thereby and any advice given by
      any
      Purchaser or any of their respective representatives or agents in connection
      with the Transaction Documents and the transactions contemplated thereby is
      merely incidental to the Purchasers’ purchase of the Shares and Warrants. The
      Company further represents to each Purchaser that the Company’s decision to
      enter into this Agreement and the other Transaction Documents has been based
      solely on the independent evaluation of the transactions contemplated hereby
      by
      the Company and its representatives.




(ee)  Disclosure .
      All
      disclosure furnished by or on behalf of the Company to the Purchasers regarding
      the Company, its business and the transactions contemplated hereby, (including
      the Company’s representations and warranties set forth in this Agreement and the
      Disclosure Schedules to this Agreement) ,
      are
      true and correct and do not contain any untrue statement of a material fact
      or
      omit to state any material fact necessary in order to make the statements made
      therein, in light of the circumstances under which they were made, not
      misleading. The Company has not taken and will not take any action designed
      to
      or that might reasonably be expected to cause or result in an unlawful
      manipulation of the price of the Common Stock to facilitate the sale or resale
      of the Securities.




3.2  Representations
      and Warranties of the Purchasers .
      Each
      Purchaser hereby, for itself and for no other Purchaser, represents and warrants
      as of the date hereof and as of the Closing 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 organization with all
      requisite corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by the Transaction Documents and otherwise to carry
      out its obligations hereunder and thereunder. The execution ,  delivery and
      performance of this Agreement and each of the other Transaction
      Document s by such
      Purchaser and
      the
      consummation by it of
      the
      transactions contemplated by this Agreement and each
      other Transaction Document have been or
      upon
      delivery will have been duly
      authorized by all necessary corporate or similar action on the part of such
      Purchaser. Each Transaction Document to which it is a party has been duly
      executed by such Purchaser, and when delivered by such Purchaser in accordance
      with the terms hereof, will constitute the valid and legally binding obligation
      of such Purchaser, enforceable against it in accordance with its terms, except
      (i) as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies and (iii) insofar as indemnification and contribution
      provisions may be limited by applicable law.




16




(b)  Own
      Account .
      Such
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account and not
      with a view to or for distributing or reselling such Securities or any part
      thereof without prejudice, however, to such Purchaser’s right, subject to the
      provisions of this Agreement and the Registration Rights Agreement, at all
      times
      to sell or otherwise dispose of all or any part of such Securities pursuant
      to
      an effective registration statement under the Securities Act or under an
      exemption from such registration and in compliance with applicable federal
      and
      state securities laws. Subject to the immediately preceding sentence, nothing
      contained herein shall be deemed a representation or warranty by such Purchaser
      to hold the Securities for any period of time. Such Purchaser does not have
      any
      agreement, plan or understanding, directly or indirectly, with any Person to
      distribute any of the Securities. Such Purchaser is acquiring the Securities
      hereunder in the ordinary course of its business.




(c)  Purchaser
      Status .
      At the
      time such Purchaser was offered the Securities, it was, 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 required to
      be
      registered as a broker-dealer under Section 15 of the Exchange Act.




(d)  Experience
      of Such Purchaser .
      Such
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Shares and Warrants, 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 Warrants and, at the present time, is able to afford a complete
      loss of such investment.




(e)  General
      Solicitation .
      Such
      Purchaser is not purchasing the Shares and Warrants as a result of any
      advertisement, article, notice or other communication regarding the Shares
      published in any newspaper, magazine or similar media or broadcast over
      television or radio or presented at any seminar or any other general
      solicitation or general advertisement.




(f)  Short
      Sales and Confidentiality Prior To The Date Hereof .
      Other
      than the transactions contemplated hereunder, such Purchaser has not directly
      or
      indirectly, nor has any Person acting on behalf of or pursuant to any
      understanding with such Purchaser, engaged in any transaction, including Short
      Sales, in the securities of the Company since the earlier to occur of (i) the
      time that such Purchaser was first contacted by the Company regarding an
      investment in the Company, or (ii) the 30 th day
      prior to the date of this Agreement (such
      earlier date, “ Discussion
      Date ”) .
      Notwithstanding the foregoing, in the case of a Purchaser that is a
      multi-managed investment vehicle whereby separate portfolio managers manage
      separate portions of such Purchaser’s assets and the portfolio managers have no
      direct knowledge of the investment decisions made by the portfolio managers
      managing other portions of such Purchaser’s assets, the representation set forth
      above shall only apply with respect to the portion of assets managed by the
      portfolio manager that made the investment decision to purchase the Shares
      and
      Warrants covered by this Agreement. Purchaser at all times acted in compliance
      with Confidentiality Deed dated April 21, 2006 between the parties.




17




(g)  Access
      to Information .
      Such
      Purchaser acknowledges that it has received and had the opportunity to review
      copies of the SEC Reports. Such Purchaser further acknowledges that it or its
      representatives have been afforded (i) the opportunity to ask such questions
      as
      it has deemed necessary of, and to receive answers from, representatives of
      the
      Company concerning the terms and conditions of the offering of the Securities,
      and the merits and risks of investing in the Securities; (ii) access to
      information about the Company and the Company’s financial condition, results of
      operations, business, properties, management and prospects sufficient to enable
      it to evaluate its investment in the Securities; and (iii) the opportunity
      to
      obtain such additional information which the Company possesses or can acquire
      without unreasonable effort or expense that is necessary to verify the accuracy
      and completeness of the information contained in the SEC Reports. Neither such
      inquiries nor any other investigation conducted by or on behalf of such
      Purchaser or its representatives or counsel shall modify, amend or affect such
      Purchaser’s right to rely on the truth, accuracy and completeness of the SEC
      Reports and the Company’s representations and warranties contained in this
      Agreement and the other Transaction.




(h)  Restrictions
      on Shares and Warrants .
      Such
      Purchaser understands that the Securities have not been registered under the
      Securities Act and may not be offered, resold, pledged or otherwise transferred
      except (a) pursuant to an exemption from registration under the Securities
      Act
      or pursuant to an effective registration statement in compliance with Section
      5
      under the Securities Act and (b) in accordance with all applicable securities
      laws of the states of the United States and other jurisdictions.




(i)  Compliance . Neither
      Elixir or any of its subsidiary (i) is in violation of any order of any court,
      arbitrator or governmental body, or (ii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws relating to taxes, the
      environment, occupational health and safety and gaming regulatory matters,
      except in each case in
      (i)
      and (ii) as
      could
      not have or reasonably be expected to result in a material adverse
      effect.




(j)  Regulatory
      Permits .
      Elixir
      and its subsidiaries possess all certificates, authorizations and permits issued
      by the appropriate federal, state, local or gaming and other regulatory
      authorities necessary to conduct their respective current businesses as
      currently conducted, except where the failure to possess such permits could
      not
      have or reasonably be expected to result in a material adverse effect
      (“ Material
      Elixir Permits ”),
      and
      Elixir has not received any notice of proceedings relating to the revocation
      or
      modification of any Material Elixir Permit.




18




ARTICLE
      IV.


OTHER
      AGREEMENTS OF THE PARTIES




4.1  Transfer
      Restrictions .




(b)  The
      Securities may only be disposed of in compliance with state and federal
      securities laws. In connection with any transfer of the Securities other than
      (i) pursuant to an effective registration statement, (ii) pursuant to
      Rule 144; (iii) to the Company or (iv) to an Affiliate of a Purchaser,
      the Company may require the transferor thereof to provide to the Company an
      opinion of counsel selected by the transferor, the form and substance of which
      opinion shall be reasonably satisfactory to the Company, to the effect that
      such
      transfer does not require registration of such transferred Shares under the
      Securities Act.




(c)  The
      Purchasers agree to the imprinting, so long as is required by this
      Section 4.1(b), of a legend on any of the Securities in the following
      form:




THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
      AS
      AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND ARE
“RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES
      ACT. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE
      TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
      EXEMPTION FROM REGISTRATION THEREUNDER, AS EVIDENCED BY A LEGAL OPINION OF
      COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
      REASONABLY SATISFACTORY TO THE COMPANY




4.2  Furnishing
      of Information .
      As long
      as any Purchaser owns any Securities, the Company covenants to timely file
      (or
      obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date hereof
      pursuant to the Exchange Act. As long as any Purchaser owns any Securities,
      if
      the Company is not required to file reports pursuant to the Exchange Act, it
      will prepare and furnish to the Purchasers and make publicly available in
      accordance with Rule 144(c) such information as is required for the Purchasers
      to sell the Securities under Rule 144. The Company further covenants that it
      will take such further action as any holder of Securities may reasonably
      request, to the extent required from time to time to enable such Person to
      sell
      such Shares and Warrant Shares without registration under the Securities Act
      within the requirements of the exemption provided by Rule 144.




4.3  Integration .
      The
      Company shall not ,
      and
      shall use its best efforts to ensure that no Affiliate of the Company shall
      not sell,
      offer for sale or solicit offers to buy or otherwise negotiate in respect of
      any
      security (as defined in Section 2 of the Securities Act) that would be
      integrated with the offer or sale of the Securities in a manner that would
      require the registration under the Securities Act of the sale of the Securities
      to the Purchasers or that would be integrated with the offer or sale of the
      Securities for purposes of the rules and regulations of any Trading Market
      such
      that it would require shareholder approval prior to the closing of such other
      transaction unless shareholder approval is obtained before the closing of such
      subsequent transaction.




19




4.4  Securities
      Laws Disclosure; Publicity .
      The
      Company shall, within one Business Day of the Closing Date, issue a press
      release disclosing the material terms of the transactions contemplated hereby,
      and shall file a Current Report on Form 8-K which shall attach the
      Transaction Documents thereto by the fourth Business Day following the Closing
      Date. The
      press
      release and Form 8-K shall be acceptable to the Purchasers in their
      reasonable discretion. No Purchaser shall issue any such press release or
      otherwise make a public announcement, statement or other disclosure without
      the
      prior consent of the Company unless such public announcement, statement or
      disclosure is required by the laws, rules or regulations applicable to such
      Purchaser (including, without limitation, those stipulated by any applicable
      stock exchange), in which case such Purchaser shall provide the Company with
      prior notice of its requirement to do so. The Company shall not publicly
      disclose the name of any Purchaser, or include the name of any Purchaser in
      any
      filing with the Commission or 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 statement
      contemplated by the Registration Rights Agreement, (B) any proxy or
      information statement filed in connection with the Company’s receipt of
      Shareholder Approval and (C) the filing of final Transaction Documents
      (including signature pages thereto) with the Commission and (ii) to the
      extent such disclosure is required by law or Trading Market regulations in
      which
      case the Company shall provide the Purchasers with prior notice of such
      disclosure.




4.5  Use
      of
      Proceeds .
      The
      Company shall use the net proceeds from the sale of the Shares and Warrants
      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 the listing of the Common
      Stock on each Trading Market in which it is traded, and as soon as reasonably
      practicable but in no event later than 45 days following the Closing, to
      list all of the Shares and not later
      than 15 days following issuance thereof to list any Warrant
      Shares , on each
      such Trading Market). The Company further agrees, if the Company applies to
      have
      the Common Stock traded on any other Trading Market, it will include in such
      application all of the Shares and the Warrant Shares, and will take such other
      action as is necessary to cause all of the Shares and Warrant Shares to be
      listed on such other Trading Market as promptly as possible. The Company will
      take all action reasonably necessary to continue the listing and trading of
      its
      Common Stock on a Trading Market and will comply in all respects with the
      Company’s reporting, filing and other obligations under the bylaws or rules of
      the Trading Market.




4.7  Short
      Sales and Confidentiality After The Date Hereof . Each
      Purchaser, severally and not jointly with the other Purchasers, covenants that
      neither it nor any Affiliate acting on its behalf or pursuant to any
      understanding with it will engage in any transactions, including any Short
      Sales, in the securities of the Company during the period commencing at the
      Discussion Time and ending at the time that the transactions contemplated by
      this Agreement are first publicly announced as described in
      Section 4.4. Each
      Purchaser, severally and not jointly with the other Purchasers, covenants that
      neither it nor any Affiliate acting on its behalf or pursuant to any
      understanding with it will engage in any Short Sales in the securities of the
      Company during the period commencing at the Discussion Time and ending on the
      Effective Date (“ Black-out
      Termination Date ”) .
      Each
      Purchaser, severally and not jointly with the other Purchasers, covenants that
      until such time as the transactions contemplated by this Agreement are publicly
      disclosed by the Company as described in Section 4.4, such Purchaser will
      maintain the confidentiality of all disclosures made to it in connection with
      this transaction (including the existence and terms of this transaction). Each
      Purchaser understands and acknowledges, severally and not jointly with any
      other
      Purchaser, that the Commission currently takes the position that coverage of
      short sales of shares of the Common Stock “against the box” prior to the
      Effective Date of the Registration Statement with the Shares is a violation
      of
      Section 5 of the Securities Act, as set forth in Item 65, Section A, of the
      Manual of Publicly Available Telephone Interpretations, dated July 1997,
      compiled by the Office of Chief Counsel, Division of Corporation Finance. Notwithstanding
      the foregoing, no Purchaser makes any representation, warranty or covenant
      hereby that it will not engage in Short Sales in the securities of the Company
      after the Black-out Termination Date. Notwithstanding
      the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
      separate portions of such Purchaser’s assets and the portfolio managers have no
      direct knowledge of the investment decisions made by the portfolio managers
      managing other portions of such Purchaser’s assets, the covenant set forth above
      shall only apply with respect to the portion of assets managed by the portfolio
      manager that made the investment decision to purchase the Securities covered
      by
      this Agreement.




20




4.8  Form
      D; Blue Sky Filings .
      The
      Company agrees to timely file a Form D with respect to the Securities as
      required under Regulation D and to provide a copy thereof to each Purchaser.
      The
      Company shall take such action as the Company shall reasonably determine is
      necessary in order to obtain an exemption for, or to qualify the Securities
      for,
      sale to the Purchasers at 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.




4.9  Reduction
      in Number of Warrants .




(b)  Acceleration/Termination
      upon Change in Control .
      If at
      any time prior to the date any Warrant first becomes exercisable in accordance
      with its terms, the Company receives a Change of Control Offer from a person
      other the Purchasers or one of their Affiliates and such Change of Control
      Offer
      is not withdrawn and is accepted by the Company, then, upon consummation of
      such
      transaction (i) 4,000,000 of the Warrants to purchase Common Stock at $2.65
      per
      share described in Section 2.1(b)(i) hereof shall automatically become
      exercisable for the kind and amount of securities, cash or other assets which
      the holder of the Warrant would have owned immediately after such Change of
      Control transaction if the holder had exercised the Warrant immediately before
      the effective date of such transaction in the manner and subject to the
      provisions set forth in Section 4(f) of the Warrants without further action
      required on the part of any party (ii) the balance of the Warrants listed in
      Section 2.1(b)(i) hereof shall be automatically cancelled without further action
      required on the part of any party.




21




(c)  Termination
      upon Breach .
      If
      Elixir or the holder of a Warrant breaches (unless such breach is due to fault
      on the part of the Company or its Affiliates) any of their material obligations
      under this Agreement or the Warrants, and the breaching party does not remedy
      such breach within ninety (90) days of receiving written notice of the same
      from
      the Company, the Company may, at its option, cancel any portion or all of any
      Warrant that remains unexercised at the end of such 90 day period. Any such
      cancellation shall not affect the agreements of the parties under the
      Transaction Documents with respect to any exercised Warrants or the Warrant
      Shares.




4.10  Repurchase
      of Shares by the Company .




(b)  If
      at any
      time following the Closing Elixir believes, in its sole discretion, that it
      is,
      or may be, subject to a material regulatory examination, review, process,
      investigation, compliance obligation, prohibition or other regulatory
      requirement (in each case, a “material regulatory requirement”) arising out of,
      or resulting from, its direct ownership of Securities and which may subject
      Melco, Elixir or any of their Affiliates, directors or officers to licensing,
      gaming or other requirements in the United States of America and it believes,
      in
      its sole discretion, that it is, or will be, unable to cooperate or comply,
      as
      the case may be, with such requirements without an unreasonable amount of time,
      expense or effort, Elixir may, if advised by counsel in writing that such
      transfer would substantially eliminate such time, expense or effort, take all
      necessary steps to transfer ownership of the affected Securities to a voting
      trust. The parties agree that a “probity” or “suitability” review or process by
      United States federal or state gaming regulators with respect to Melco and/or
      Elixir or any of their subsidiaries, Affiliates, directors or officers shall
      be
      deemed to be a “material regulatory requirement”. If Elixir believes, in its
      sole discretion, that, taking into account the time, expense and effort that
      may
      be required to transfer the affected Securities to a voting trust, such a course
      of action is not commercially advisable, or if such transfer would not
      substantially eliminate such time, expense or effort, and the material
      regulatory requirement is continuing, the Company will use its best efforts
      to,
      as expeditiously as possible, (i) assist Elixir to sell all of the Shares,
      Warrant Shares and Warrants to a third party at a price not less than (A) with
      respect to such Shares, the Subscription Amount, or ratable portion thereof,
      (B)
      with respect to such Warrant Shares, the aggregate exercise amount and (C)
      with
      respect to such Warrants, the relevant portion of the Subscription Amount,
      if
      any, that was allocated to the Warrants (A, B and C, together the “ Targeted
      Proceeds ”),
      or,
      in the event such a transaction cannot be consummated within 90 days, (ii)
      repurchase all of the Shares, Warrant Shares and Warrants for cash consideration
      in an amount not less than the Targeted Proceeds, subject to the Board of
      Directors’ determination in good faith, after consultation with outside legal
      counsel, that such repurchase would not be inconsistent with its fiduciary
      duties to the Company’s shareholders under applicable Law.




(c)  Reference
      is made to Article IX of the Company’s Articles of Incorporation, as amended.
      The parties acknowledge and agree that Article IX permits the Company, following
      a determination by the Nevada Gaming Commission or the governing gaming
      regulatory agency of a jurisdiction in which the Company holds a privileged
      license (collectively the “Gaming Regulatory Authorities”) that a holder of
      stock or other security of the Company is unsuitable, to require such holder
      to
      relinquish ownership of such stock or security and to purchase such stock or
      security for cash at “fair market value” to be determined at the sole discretion
      of the Company. The parties further agree that (i) if the Company at any time
      requires Elixir to relinquish all of its Securities at “fair market value”
pursuant to Article IX or any successor or similar provision, the Targeted
      Proceeds shall constitute a reasonable determination of the “fair market value”
of such Securities and (ii) the Company will not raise any objection or defense
      (including, without limitation, *ultra
      vires* or
      otherwise) regarding the agreements set forth in this Section
      4.10(b).




22




4.11  Shareholder
      Approval .
      If
      Shareholder Approval is required to consummate the transactions contemplated
      by
      the Transaction Documents (a) the Company’s Board of Directors (including
      Jim Crabbe and Mark Newburg) shall take all lawful action to (i) cause a
      special meeting of its shareholders (the “ Company
      Shareholder Meeting ”)
      to be
      duly called and held as soon as practicable after the date hereof for the
      purpose of voting on the approval and adoption of the Transaction Documents
      and
      (ii) solicit proxies from its shareholders to obtain the required vote for
      the approval and adoption of this Agreement and the other Transaction Documents
      and any action necessary or desirable to effectuate the transactions
      contemplated herein and therein and (b) each of Jim Crabbe and Mark Newburg
      shall  vote all
      shares over which they have voting control in favor of the approval and adoption
      of the Transaction Documents and any action necessary or desirable to effectuate
      the transactions contemplated herein and therein. The Board of Directors of
      the
      Company shall (i) recommend that the shareholders of the Company adopt this
      Agreement and the other Transaction Documents and thereby approve the
      transactions contemplated hereby and thereby and (ii) take all lawful
      action (including the solicitation of proxies) to solicit such adoption;
      provided, however, that the Board of Directors may, at any time prior to the
      time of the Company Shareholder Meeting, withdraw, modify or change any such
      recommendation to the extent that the Board of Directors’ determines in good
      faith, after consultation with outside legal counsel, that such repurchase
      would
      not be consistent with its
      fiduciary duties to the Company’s shareholders under applicable Law.




4.12  S-3
      Eligibility .
      The
      Company will use its best efforts to become eligible to register the Common
      Stock for resale by the Purchasers under Form S-3 promulgated under the
      Securities Act as promptly as possible.




4.13  Board
      Representation .
      From
      and after the Closing, Elixir will be entitled to appoint one director to the
      Board of Directors of the Company and appoint a replacement director in the
      event such board seat becomes vacant. From and after its exercise of any of
      the
      Warrants, Elixir will be entitled to appoint a number of directors to the Board
      of Directors of the Company proportionate to its equity ownership of the Company
      on a Fully Diluted Basis (as well as appoint a replacement director in respect
      of any of its board seats that become vacant). By way of example, if Elixir’s
      equity ownership of the Company is equal to 30%, on a Fully Diluted Basis,
      Elixir shall be entitled to appoint a number of directors equal to the product
      of 30% and the authorized number of directors set forth in the organizational
      documents of the Company (as adjusted upwards, but not downwards, for any
      modifications of such maximum number in such organizational documents from
      time
      to time). Any fraction resulting from such calculation shall be rounded up
      if it
      is equal to or greater than 1⁄2 and down if it is less than 1⁄2.




23




The
      Company (including Jim Crabbe and Mark Newburg in their capacity as
      shareholders) and the Board of Directors of the Company will do and will cause
      to be done all things necessary or desirable (including amending the
      organizational documents of the Company) as expeditiously as possible to give
      effect to this provision (it being agreed that, if incorporated in the
      organizational documents of the Company such provision shall not thereafter
      be
      amended or canceled without the written consent of Elixir). For the purpose
      of
      this Agreement, the term “Fully Diluted Basis” shall refer, as of any specified
      date, to (i) shares of Common Stock outstanding as of a specified date and
      (ii)
      shares of Common Stock into or for which Common Stock Equivalents are
      convertible, exercisable or exchangeable (other than the Warrants).




4.14  Indemnification .




(a)  Except
      as
      otherwise provided in this Section 4.14, the Company (the “ Indemnifying
      Party ”)
      agrees
      to indemnify, defend and
      hold
      harmless each of the Purchasers and its Affiliates and their respective
      officers, directors, agents, employees, subsidiaries, partners, members and
      controlling persons (each, an “ Indemnified
      Party ”)
      to the
      fullest extent permitted by law from and against any and all losses, actions,
      suits, proceedings, claims, complaints, disputes, arbitrations or investigations
      (collectively, “ Claims ”),
      or
      written threats thereof (including, without limitation, any Claim by a third
      party), damages, expenses (including reasonable fees, disbursements and other
      charges of counsel incurred by the Indemnified Party in any action between
      the
      Indemnifying Party and the Indemnified Party or between the Indemnified Party
      and any third
      party or otherwise) or other liabilities (collectively, “ Losses ”)
      resulting from, arising out of or relating to:




(i)
            any
                breach of any representation or warranty in this Agreement any amendment
                thereto, the other Transaction Documents or any of the certificates,
                schedules or Disclosure Schedules delivered in connection
                therewith;





(ii)
            any
                breach, or failure to perform any covenant or agreement by the Company
                in
                this Agreement or the other Transaction Documents;
                and





(iii)
            an
                acquisition by the Company, or any of its Affiliates, of any Securities
                from Elixir in breach of the agreements between the parties set forth
                in
                Section 4.10(b) hereof.





In
      connection with the obligation of the Indemnifying Party to indemnify for
      expenses as set forth above, the Indemnifying Party shall, upon presentation
      of
      appropriate invoices containing reasonable detail, reimburse each Indemnified
      Party for all such expenses (including reasonable fees, disbursements and other
      charges of counsel incurred by the Indemnified Party in any action between
      the
      Indemnifying Party and the Indemnified Party or between the Indemnified Party
      and any third party) as they are incurred by such Indemnified Party; provided,
      however, that if an Indemnified Party is reimbursed under this Section 4.14
      for any expenses, such reimbursement of expenses shall be promptly refunded
      to
      the extent it is finally judicially determined
      that the Losses in question resulted primarily from the willful misconduct
      or
      gross negligence of such Indemnified Party.




24




(b)  Each
      Indemnified Party under this Section 4.14 shall, promptly after the receipt
      of
      notice of the commencement of any Claim against such Indemnified Party in
      respect of which indemnity may be sought from the Indemnifying Party under
      this
      Section 4.14, notify the Indemnifying Party in writing of the commencement
      thereof. The omission of any Indemnified Party to so notify the Indemnifying
      Party of any such action shall not relieve the Indemnifying Party from any
      liability which it may have to such Indemnified Party (a) other than
      pursuant to this Section 4.14 or (b) under this Section 4.14 unless, and
      only to the extent that, such omission results in the Indemnifying Party's
      forfeiture of substantive rights or defenses. In case any such Claim shall
      be
      brought against any Indemnified Party, and it shall notify the Indemnifying
      Party of the commencement thereof, the Indemnifying Party shall be entitled
      to
      assume the defense thereof at its own expense, with counsel satisfactory to
      such
      Indemnified Party in its reasonable judgment; provided , however ,
      that
      any Indemnified Party may, at its own expense, retain separate counsel to
      participate in such defense at its own expense. Notwithstanding the foregoing,
      in any Claim in which both the Indemnifying Party, on the one hand, and an
      Indemnified Party, on the other hand, are, or are reasonably likely to become,
      a
      party, such Indemnified Party shall have the right to employ separate counsel
      and to control its own defense of such Claim if, in the reasonable opinion
      of
      counsel to such Indemnified Party, either (x) one or more defenses are available
      to the Indemnified Party that are not available to the Indemnifying Party or
      (y)
      a conflict or potential conflict exists between the Indemnifying Party, on
      the
      one hand, and such Indemnified Party, on the other hand, that would make such
      separate representation advisable; provided , however ,
      that
      the Indemnifying Party (i) shall not be liable
      for the fees and expenses of more than one counsel to all Indemnified Parties
      and (ii) shall reimburse the Indemnified Parties for all of such fees and
      expenses of such counsel incurred in any action between the Indemnifying Party
      and the Indemnified Parties or between the Indemnified Parties and any third
      party, as such expenses are incurred. The Indemnifying Party agrees that it
      will
      not, without the prior written consent of the Purchasers, settle, compromise
      or
      consent to the entry of any judgment in any pending or threatened Claim relating
      to the matters contemplated hereby (if any Indemnified
      Party is a party thereto or has been actually threatened to be made a party
      thereto) unless such settlement, compromise or consent includes an unconditional
      release of each Indemnified Party from all liability arising or that may arise
      out of such Claim. The Indemnifying Party shall not be liable for any settlement
      of any Claim effected against an Indemnified Party without the Indemnifying
      Party’s written consent, which consent shall not be unreasonably withheld. The
      rights accorded to an Indemnified Party hereunder shall be in addition to any
      rights that any Indemnified Party may have at common law, by separate agreement
      or otherwise; provided , however ,
      that
      notwithstanding the foregoing or anything to the contrary contained in this
      Agreement, nothing in this Section 4.14 shall restrict or limit any rights
      that
      any Indemnified Party may have to seek equitable relief.




25




ARTICLE
      V.


MISCELLANEOUS




5.1  Termination .
      This
      Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations
      hereunder only and without any effect whatsoever on the obligations between
      the
      Company and the other Purchasers, or the Company by written notice to the other
      parties, if the Closing has not been consummated on or before January 31, 2007,
      or prior to this date, if Shareholder Approval has not been obtained at the
      Company Shareholder Meeting, provided, however, that no such termination will
      affect the right of any party to sue for any breach by the other party (or
      parties).




5.2  Fees
      and Expenses .
      Except
      as expressly set forth in the Transaction Documents to the contrary, each party
      shall pay the fees and expenses of its advisers, counsel, accountants and other
      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 all transfer agent fees, stamp taxes and other taxes
      and
      duties levied in connection with the delivery of any Securities to the
      Purchasers and the sale of such Securities.




5.3  Entire
      Agreement .
      The
      Transaction Documents, together with the exhibits and schedules thereto, contain
      the entire understanding of the parties with respect to the subject matter
      hereof and supersede and replace in their entirety all prior and contemporaneous
      agreements, discussions, negotiations and understandings, oral or written,
      with
      respect to such matters, which the parties acknowledge have been merged into
      such documents, exhibits and schedules.




5.4  Notices .
      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 number set forth on the signature
      pages attached hereto prior to 3:00 p.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
      the signature pages attached hereto on a day that is not a Business Day or
      later
      than 3:00 p.m. (Las Vegas time) on any Business Day, (c) the 2 nd Business
      Day following the date of mailing, if sent by U.S. 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 set forth on the signature pages attached hereto.




5.5  Amendments;
      Waivers .
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and the
      Purchasers holding not more than 50% of the Shares then outstanding or, in
      the
      case of a waiver, by the party against whom enforcement of any such waived
      provision is sought. No waiver of any default with respect to any provision,
      condition or requirement of this Agreement shall be deemed to be a continuing
      waiver in the future or a waiver of any subsequent default or a waiver of any
      other provision, condition or requirement hereof, nor shall any delay or
      omission of any party to exercise any right hereunder in any manner impair
      the
      exercise of any such right.




26




5.6  Headings .
      The
      headings herein are for convenience only, do not constitute a part of 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 the benefit of the parties and
      their successors and permitted assigns. Neither the Company nor any Purchaser
      may assign this Agreement or any rights or obligations hereunder without the
      prior written consent of each other party (other than by merger) except
      that each Purchaser may assigns its rights and obligations hereunder to
      Melco,
      the Melco-PBL Joint Venture or any subsidiary of the foregoing .




5.8  No
      Third-Party Beneficiaries .
      This
      Agreement is intended for the benefit of the parties 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.




5.9  Governing
      Law .
      All
      questions concerning the construction, validity, enforcement and interpretation
      of the Transaction Documents shall be governed by and construed and enforced
      in
      accordance with the internal laws of the State of New York, without regard
      to
      the principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of the
      transactions contemplated by this Agreement and any other Transaction Documents
      (whether brought against a party hereto or its respective affiliates, directors,
      officers, shareholders, employees or agents) shall be commenced exclusively
      in
      the state and federal courts sitting in the State of New York. The parties
      hereby waive all rights to a trial by jury. If either party shall commence
      an
      action or proceeding to enforce any provisions of the Transaction Documents,
      then the prevailing party in such action or proceeding shall be reimbursed
      by
      the other party for its reasonable attorneys’ fees and other costs and expenses
      incurred with the investigation, preparation and prosecution of such action
      or
      proceeding.




5.10  Survival .
      The
      representations and warranties contained herein shall survive the Closing and
      the delivery of the Shares and the Warrants and continue in full force and
      effect until the second anniversary of the Closing. The representations,
      warranties, covenants and indemnity obligations contained herein shall in no
      way
      be affected by any investigation of the subject matter thereof made by or on
      behalf of the Purchasers or the Company .
      The
      Company expressly agrees that it may not invoke knowledge of the Purchasers
      (actual, constructive or imputed) of a fact or circumstance that might make
      a
      statement untrue, inaccurate, incomplete or misleading as a defense to a claim
      for breach of the Company’s representations and warranties .




5.11  Execution .
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission or by e-mail delivery of a “.pdf” format data file, such signature
      shall create a valid and binding obligation of the party executing (or on whose
      behalf such signature is executed) with the same force and effect as if such
      facsimile or “.pdf” signature page were an original thereof.




27




5.12  Severability .
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction.




5.13  Rescission
      and Withdrawal Right .
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) any of the other Transaction Documents, whenever any
      Purchaser exercises a right, election, demand or option under a Transaction
      Document and the Company does not timely perform its related obligations within
      the periods therein provided, then such Purchaser may rescind or withdraw,
      in
      its sole discretion from time to time upon written notice to the Company, any
      relevant notice, demand or election in whole or in part without prejudice to
      its
      future actions and rights.




5.14  Replacement
      of Shares .
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall promptly issue or cause to be issued in exchange
      and substitution for and upon cancellation thereof (in the case of mutilation),
      or in lieu of and substitution therefor, a new certificate or instrument, but
      only upon receipt of evidence reasonably satisfactory to the Company of such
      loss, theft or destruction. The applicant for a new certificate 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  Independent
      Nature of Purchasers’ Obligations and Rights .
      The
      obligations of each Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance or non-performance of the obligations
      of any other Purchaser under any Transaction Document. Nothing contained herein
      or in any other Transaction Document, and no action taken by any Purchaser
      pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
      an association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by the
      Transaction Documents. Each Purchaser shall be entitled to independently protect
      and enforce its rights, including without limitation, the rights arising out
      of
      this Agreement or out of the other Transaction Documents, and it shall not
      be
      necessary for any other Purchaser to be joined as an additional party in any
      proceeding for such purpose. Each Purchaser has been represented by its own
      separate legal counsel in their review and negotiation of the Transaction
      Documents. The Company has elected to provide all Purchasers with the same
      terms
      and Transaction Documents for the convenience of the Company and not because
      it
      was required or requested to do so by the Purchasers.




5.16  Construction .
      The
      parties agree that each of them and/or their respective counsel has reviewed
      and
      had an opportunity to revise the Transaction Documents and, therefore, the
      normal rule of construction to the effect that any ambiguities are to be
      resolved against the drafting party shall not be employed in the interpretation
      of the Transaction Documents or any amendments hereto.




28




*(Signature
      Pages Follow)*




29





IN
      WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
      Agreement to be duly executed by their respective authorized signatories as
      of
      the date first indicated above.




**VENDINGDATA
                CORPORATION**
            
            
            Address
                for Notice:By: 
              /s/ Mark R. Newburg
            
            
            6830
                Spencer StreetMark
                R. Newburg,
              President
                and Chief Executive Officer
            
            
            Las
                Vegas, NV 89119
              Fax:
                702.733.7197




*As
      to
      Sections 4.11 and 4.13 only*


/s/
              Mark R.
              NewburgMARK
                NEWBURG, an individual





/s/
              James
              CrabbeJAMES
                CRABBE, an individual




[REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]


30


[PURCHASER
      SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]





IN
      WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
      to be duly executed by their respective authorized signatories as of the date
      first indicated above.




Name
      of
      Purchaser: Elixir
      Group
      Limited




*Signature
      of Authorized Signatory of Purchaser* : /s/
      LeongVan
      Tak




Name
      of
      Authorized
      Signatory: Leong
      Van
      Tak




Title
      of
      Authorized Signatory:
      _____________________________________________________




Email
      Address of
      Purchaser:________________________________________________




Fax
      Number of Purchaser:
      ________________________________________________




Address
      for Notice of Purchaser:





Address
      for Delivery of Shares for Purchaser (if not same as above):




Subscription
      Amount: US$2,650,000




Shares:
      ____One Million _______________________





Warrants: 16
      Million shares at $________ per share





EIN
      Number: **[PROVIDE
      THIS UNDER SEPARATE COVER]**




[SIGNATURE
      PAGES CONTINUE]




31




**EXHIBIT
      A**




REGISTRATION
      RIGHTS AGREEMENT




This
      Registration Rights Agreement (this “ Agreement ”)
      is
      made and entered into as of _________, 2006, among VendingData Corporation,
      a
      Nevada corporation (the “ Company ”),
      and
      the other parties identified on the signature pages hereto (collectively the
      “ Selling
      Shareholders ”).




R E C I T A L S




WHEREAS,
      the Company will sell up to 1,000,000 shares of its common stock, par value
      $0.001 per share (“ Common
      Stock ”),
      and
      warrants to purchase up to 16,000,000 shares of Common Stock (“ Warrants ”)
      to
      certain Selling Shareholders pursuant to that certain Securities Purchase
      Agreement (“ Securities
      Purchase Agreement ”)
      dated
      as of October 11, 2006 by and among the Company and the parties thereto.




A G R E E M E N T





NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration, the receipt and adequacy of
      which
      are hereby acknowledged, the Company and the Selling Shareholders agree as
      follows:




*Definitions* *.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      given such terms in the Securities Purchase Agreement. As used in this
      Agreement, the following terms shall have the following
      meanings:*




“Adverse
      Disclosure” means public disclosure of material non-public information, which
      disclosure in the good faith judgment of a majority of the Board of Directors
      of
      the Company after consultation with counsel to the Company would have a material
      adverse effect on the ability of the Company to consummate a material
      acquisition, disposition or other comparable extraordinary
      transaction.





“ Advice ”
shall
      have the meaning set forth in Section 6(d).




“ Effectiveness
      Date ”
means,
      with respect to the initial Registration Statement required to be filed
      hereunder, the 60 h calendar
      day following the Closing (the
      75 h calendar
      day in the case of a “full review” by the Commission.




“ Effectiveness
      Period ”
shall
      have the meaning set forth in Section 2.




“ Filing
      Date ”
means,
      with respect to the initial **** “Shelf”
      Registration Statement required
      hereunder, the 30 th calendar
      day following the **** Closing **.**




“ Holder ”
or
      “ Holders ”
means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.




“ Indemnified
      Party ”
shall
      have the meaning set forth in Section 5(c).




“ Indemnifying
      Party ”
shall
      have the meaning set forth in Section 5(c).




32




“ Losses ”
shall
      have the meaning set forth in Section 5(a).




“ Prospectus ”
means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by a Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.




“ Registrable
      Securities ”
means
      all of (i) any Warrants Shares, (ii) the shares of Common Stock issued pursuant
      to the Securities Purchase Agreement, and (iii) any shares of Common Stock
      issued or issuable upon any stock split, dividend or other distribution,
      recapitalization or similar transaction with respect to the foregoing; provided,
      however, a security shall no longer be a Registrable Security once it has been
      sold, or may be sold, without volume restrictions pursuant to Rule 144 or
      pursuant to a Registration Statement that has been declared effective under
      the
      Securities Act.




“ Registration
      Statement ”
means
      the registration statements required to be filed hereunder, including (in each
      case) the Prospectus, amendments and supplements to such registration statement
      or Prospectus, including pre- and post-effective amendments, all exhibits
      thereto, and all material incorporated by reference or deemed to be incorporated
      by reference in such registration statement.




“ Rule
      415 ”
means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule.




“ Rule
      424 ”
means
      Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule.




“ Selling
      Shareholder Questionnaire ”
shall
      have the meaning set forth in Section 3(a).




33




*Shelf* ** and
      Demand *Registration* *.*




5.17  Demand
      Registration .
      If, on
      or at any time after the Effectiveness Date there is no currently effective
      “Shelf” Registration Statement, then at any time thereafter, upon written notice
      (a “ Demand ”)
      from a
      Holder or Holders holding at least 50% of the Registrable Securities requesting
      that the Company effect the registration under the Securities Act of any or
      all
      of the Registrable Securities held by such Holder or Holders, which notice
      shall
      specify the intended method or methods of disposition of such Registrable
      Securities, the Company shall, within **** five **** ( 5 )
      days
      after receiving the Holder’s or Holders’ Demand, give written notice (the
“ Request
      Notice ”)
      of
      such registration request to all other Holders, except if all the Registrable
      Securities are held by a single Holder, no Request Notice shall be
      required **.** The
      Request Notice shall offer to each such Holder the opportunity to include in
      such Registration Statement such number of Registrable Securities as such Holder
      may request within ten (10) days after the date of the Request Notice, subject
      to the limitations of this Section 2(a) and to compliance with the other
      provisions of this Agreement. As promptly as possible after such ten (10) day
      period, but no later than the 30th day following receipt of the Demand, the
      Company shall file a Registration Statement with the Commission for purposes
      of
      effecting, in the manner set forth in this Section 2 and Section 3 hereof,
      the
      registration under the Securities Act of all such Registrable Securities for
      disposition in accordance with the intended method or methods of disposition
      stated in the Holder’s or Holders’ request and
      shall use its best efforts to cause such Registration Statement to be declared
      effective under the Securities Act as promptly as possible after the filing
      thereof ,
      provided that:




if
      the
      filing of a Registration Statement in respect of a Demand would require the
      Company (A) to make an Adverse Disclosure or (B) if the Company has already
      commenced a bona fide financing plan through a formal “all hands” meeting or comparable
      action **,** and, in
      the good - faith
      business judgment of a majority of the Board of Directors, a Demand registration at the time and on the terms requested would  have
      a
      material adverse effect on the ability of the Company to obtain such financing,
      the Company may, upon giving prompt written notice of such action to the
      Holders, delay the filing of such Registration Statement for the shortest period
      of time determined in good faith by the Company to be necessary for such
      purpose; provided, however that the
      Company shall not be permitted
      to do so (A) more than three times during any twenty-four month period, (B)
      for
      a period not exceeding 40 days on any one occasion or (C) for a period exceeding
      60 days in any 12 month period. The Company shall immediately notify the Holders
      of the expiration of any period during which it exercised its rights under
      this
      Section 2(a)(i);




the
      Company shall not be obligated to file a Registration Statement relating to
      a
      registration request pursuant to this Section 2(a): (A) on more than three occasions (it being understood and agreed that the Company shall only be
      responsible for Registration Expenses for the first two occasions), (B) within
      a
      period of one
      ( 1 ) month
      after the effective date of any other Registration Statement of the Company
      demanded pursuant to this Section 2(a); or (C) if such registration request
      is
      for a number of Registrable Securities that represent in the aggregate (on
      an as
      converted basis) less than one
      third of the
      number of Shares **** originally
      acquired by the Holders;




the
      Company shall be deemed to have effected a Demand registration if (i) the
      applicable Registration Statement is withdrawn at the request of the Purchasers
      after having been filed with the Commission or (ii) the applicable Registration
      Statement is declared effective by the Commission and remains effective for
      not  less
      than
      180 days, or, if such Registration Statement relates to an underwritten
      offering, such longer period as, in the opinion of counsel for the underwriter
      or underwriters is required by law for the delivery of a Prospectus in
      connection with the sale of Registrable Securities by an underwriter or
      dealer;  a
      Holder
      may elect to withdraw its Registrable Securities from a Demand Registration
      at
      any time. If all such Holders do so, the Company shall cease its efforts to
      secure registration; and  Registrations
      pursuant to this Section 2(a) shall be on Form S-3 (except if the Company is
      not
      then eligible to register for resale the Registrable Securities on Form S-3,
      in
      which case such registration shall be on another appropriate form, reasonably
      acceptable to the Holders of a majority of the Registrable Securities, and
      as
      shall permit the disposition of the Registrable Securities in accordance with
      the intended method of distribution or methods of distribution specified in
      the
      applicable Holder’s or Holders’ requests for such registration.




34





5.18  Shelf
      Registration . On
      or
      prior to the Filing Date, the Company shall prepare and file with the Commission
      a “Shelf” Registration Statement covering the resale of the Registrable
      Securities by the Holders thereof from time to time in accordance with the
      methods of distribution elected by such Holders, to be made on a continuous
      basis pursuant to Rule 415. The Shelf Registration Statement shall be on Form
      S-3 (except if the Company is not then eligible to register for resale the
      Registrable Securities on Form S-3, in which case such registration shall be
      on
      another appropriate form in accordance herewith ,
      reasonably acceptable to Holders of a majority of the Registrable
      Securities ) ,
      as
      modified by the Company as necessary to conform to comments from the Commission.
      Subject to the terms of this Agreement, the Company shall use its best efforts
      to cause the Registration Statement to be declared effective under the
      Securities Act as promptly as possible after the filing thereof, but in any
      event prior to the applicable Effectiveness Date, and shall use its best efforts
      to keep such Registration Statement continuously effective under the Securities
      Act until all Registrable Securities covered by such Registration Statement
      have
      been sold, or may be sold without volume restrictions pursuant to Rule 144(k),
      as determined by the counsel to the Company pursuant to a written opinion letter
      to such effect, addressed and acceptable to the Company’s transfer agent and the
      affected Holders (the “ Effectiveness
      Period ”).
      Within two Trading Days after the Registration Statement is declared effective,
      the Company shall (i) file a final Prospectus with the Commission pursuant
      to
      Rule 424 and (ii) notify the Holders via facsimile of effectiveness of the
      Registration Statement.




5.19  If ,
      in
      connection with a registration statement pursuant to either Section 2(a) or
      2(b), the
      Holders intend to distribute the Registrable Securities by means of an
      underwriting, they shall so advise the Company (and the
      Company shall, if necessary amend or supplement the Shelf Registration Statement
      for such purpose) . The
      underwriter will be selected by a majority in interest (as determined by the
      number of Registrable Securities held) of the Holders after
      consultation with the Company .




Incidental
      Registrations .




Participation.
      (A) If the Company at any time proposes to file a Registration Statement with
      respect to any offering of its securities for its own account or for the account
      of any holders of its securities (other than (1) a registration under Section
      2(a) or 2(b) hereof, (2) a registration on Form S-4 or S-8 or any successor
      form
      to such forms, (3) a registration of securities solely relating to an offering
      and sale to employees or directors of the Company pursuant to any employee
      stock
      plan or other employee benefit plan arrangement or (4) a registration of
      securities for the benefit of the holders pursuant to Section 6(e) of that
      certain registration rights agreement (the “Bric Registration Rights Agreement”)
      dated as of May 1, 2006 among the Company, Bricoleur Partners, L.P., Bricoleur
      Enhanced, L.P., BRIC 6, L.P. and Bricoleur Offshore Ltd. (the “Bricoleur
      Parties”) but only for so long as there is not an effective registration
      statement covering the registrable securities of the Bricoleur Parties, then,
      as
      soon as practicable (but in no event less than 20 days prior to the proposed
      date of filing such Registration Statement), the Company shall give written
      notice of such proposed filing to all Holders of Registrable Securities and
      (unless all such Registrable Securities are then registered pursuant to Section
      2(a) or a Shelf Registration Statement under Section 2(b) is in effect) such
      notice shall offer the Holders of such Registrable Securities the opportunity
      to
      register such number of Registrable Securities as each such Holder may request
      in writing (an “Incidental Registration”). Subject to Section 2(d)(ii), the
      Company shall include in such Registration Statement all such Registrable
      Securities which are requested to be included therein within 10 days after
      the
      receipt by such Holder of any such notice. If at any time after giving written
      notice of its intention to register any securities and prior to the effective
      date of the Registration Statement filed in connection with such registration,
      the Company shall determine for any reason not to register or to delay
      registration of such securities, the Company may, at its election, give written
      notice of such determination to each Holder of Registrable Securities and,
      (x)
      in the case of a determination not to register, shall be relieved of its
      obligation to register any Registrable Securities in connection with such
      registration, and (y) in the case of a determination to delay registering,
      shall
      be permitted to delay registering any Registrable Securities for the same period
      as the delay in registering such other securities.




35





(B)  If
      the
      offering pursuant to an Incidental Registraton is to be an underwritten
      offering, then each Holder making a request for its Registrable Securities
      to be
      included therein must, and the Company shall make such arrangements with the
      underwriters so that each such Holder may, participate in such underwritten
      offering on the same terms as the Company and other Persons selling securities
      in such underwritten offering. If the offering pursuant to such registration
      is
      to be on any other basis, then each Holder making a request for an Incidental
      Registration pursuant to this Section 2(d) must participate in such offering
      on
      such basis.





(C)  Each
      Holder shall be permitted to withdraw all or part of such Holder’s Registrable
      Securities from an Incidental Registration at any time prior to effectiveness
      of
      the Registration Statement.




36




Priority
      of Incidental Registration. If the managing underwriter or underwriters of
      any
      proposed underwritten offering of a class of securities included in an
      Incidental Registration (or in the case of an Incidental Registration not being
      underwritten, the Company) informs the Holders of Registrable Securities sought
      to be included in such registration in writing that, in its or their opinion,
      the total amount or kind of securities which such Holders and any other Persons
      intend to include in such offering exceeds the number which can be sold in
      such
      offering without being likely to have a significant adverse effect on the price,
      timing or distribution of the class or classes of the securities offered or
      the
      market for the class or classes of securities offered, then the securities
      of
      each class to be included in such registration shall be allocated as
      follows:





(A)  first,
      100% of the securities that the Company or the Bricoleur Parties (with respect
      to the Bricoleur Parties, subject to the conditions in Section
      2(d)(i)(4));





(B)  second,
      and only if all the securities referenced in clause (i) have been included,
      the
      number of Registrable Securities of such class that, in the opinion of such
      underwriter or underwriters (or in the case of an Incidental Registration not
      being underwritten, the Company), can be sold without having such adverse effect
      shall be included therein, with such number to be allocated pro rata among
      the
      Holders which have requested participation in the Incidental Registration
      (based, for each such Holder, on the percentage derived by dividing (x) the
      number of Registrable Securities of such class which such Holder has requested
      to include in such Incidental Registration by (y) the aggregate number of
      Registrable Securities of such class which all such Holders have requested
      to
      include); and





(C)  third,
      and only if all of the Registrable Securities referenced in clauses (i) and
      (ii)
      have been included, any other securities eligible for inclusion in such
      registration shall be included therein.





*Registration
      Procedures*




In
      connection with the Company’s registration obligations under Sections 2(a),
      2(b) and 2(d), the Company shall:




5.20  Not
      less
      than five Trading
      Days prior to the filing of each Registration Statement and not less than two
      Trading Days prior to the filing of any related amendment or supplement thereto,
      the Company shall, (i) furnish to each Holder copies of all documents to be
      filed, and (ii) cause its officers, directors and counsel to respond to all
      reasonable inquiries from the Holders. Each Holder agrees to furnish to the
      Company a completed Questionnaire in the form attached to this Agreement as
      Annex B (a “ Selling
      Shareholder Questionnaire ”)
      by the
      end of the fourth Trading Day following the date on which such Holder receives
      the Selling Shareholder Questionnaire and draft materials in accordance with
      this Section.




5.21  (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to the Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep the Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period; (ii) cause the related Prospectus to be amended or supplemented by
      any
      required Prospectus supplement (subject to the terms of this Agreement), and
      as
      so supplemented or amended to be filed pursuant to Rule 424; (iii) respond
      as
      promptly as reasonably possible, and in any event within ten Business Days,
      to
      any comments received from the Commission with respect to the Registration
      Statement or any amendment thereto and, as promptly as reasonably possible
      provide the Holders true and complete copies of all correspondence from and
      to
      the Commission relating to such Registration Statement that pertains to the
      Holders as selling shareholders but not any comments that would result in the
      disclosure to the Holders of material and non-public information concerning
      the
      Company; and (iv) comply in all material respects with the provisions of the
      Securities Act and the Exchange Act with respect to a Registration Statement
      and
      the disposition of all Registrable Securities covered by each Registration
      Statement.




37




5.22  Notify
      the Holders of Registrable Securities to be sold (which notice shall, pursuant
      to clauses (ii) through (iv) hereof, be accompanied by an instruction to suspend
      the use of the Prospectus until the requisite changes have been made) as
      promptly as reasonably possible (i) with respect to a Registration Statement
      or
      any post-effective amendment, when the same has become effective; (ii) of the
      issuance by the Commission or any other federal or state governmental authority
      of any stop order suspending the effectiveness of a Registration Statement
      covering any or all of the Registrable Securities; (iii) of the receipt by
      the
      Company of any notification with respect to the suspension of the qualification
      or exemption from qualification of any of the Registrable Securities for sale
      in
      any jurisdiction; or (iv) of the occurrence of any event or passage of time
      that
      makes the financial statements included in a Registration Statement ineligible
      for inclusion therein or any statement made in a Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference untrue in any material respect or that requires any revisions to
      a
      Registration Statement, Prospectus or other documents so that, in the case
      of a
      Registration Statement or the Prospectus, as the case may be, it will not
      contain any untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading. Any
      and all of such information contemplated by subparagraphs (i) through (iv)
      shall
      remain confidential to each Holder until such information otherwise becomes
      public, unless disclosure by a Holder is required by law.




5.23  Use
      its
      best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of
      (i) any order suspending the effectiveness of a Registration Statement, or
      (ii)
      any suspension of the qualification (or exemption from qualification) of any
      of
      the Registrable Securities for sale in any jurisdiction, at the earliest
      practicable moment.




5.24  Furnish
      to each Holder, without charge, such
      number of each
      such final Prospectus and each final amendment or supplement thereto as each
      such Holder may reasonably request , promptly
      after the filing of such documents with the Commission, for Holder’s delivery in
      connection with a sale of the Registrable Securities.




38




5.25  Subject
      to the terms of this Agreement, the Company hereby consents to the use of each
      Prospectus and each amendment or supplement thereto, provided by the Company
      pursuant to subpart (e) above, by each of the selling Holders in connection
      with
      the offering and sale of the Registrable Securities covered by such Prospectus
      and any amendment or supplement thereto, except after the giving of any notice
      pursuant to Section 3(d).




5.26  If
      NASDR
      Rule 2710 requires any broker-dealer to make a filing prior to executing a
      sale
      by a Holder, the Company shall (i) make an Issuer Filing with the NASDR, Inc.
      Corporate Financing Department pursuant to proposed NASDR Rule
      2710(b)(10)(A)(i), (ii) respond within five Trading Days to any comments
      received from NASDR in connection therewith, and (iii) pay the filing fee
      required in connection therewith.




5.27  promptly
      incorporate in a Prospectus supplement or post-effective amendment to the
      applicable Registration Statement such information as the Holders of a majority
      of the Registrable Securities agree should be included therein relating to
      the
      plan of distribution with respect to such Registrable Securities .




5.28  cooperate
      with each seller of Registrable Securities and their respective counsel in
      connection with any filings required to be made with the NASD.




5.29  provide
      and cause to be maintained a transfer agent and registrar for all Registrable
      Securities covered by the applicable Registration Statement from and after
      a
      date not later than the effective date of such Registration
      Statement.




5.30  cause
      all
      Registrable Securities of a class covered by the applicable Registration
      Statement to be listed on each securities exchange on which any of the Company’s
      securities of such class are then listed or quoted and on each inter-dealer
      quotation system on which any of the Company’s securities of such class are then
      quoted.




5.31  The
      Company covenants that it will file ,
      on a
      timely basis, the
      reports required to be filed by it under the Securities Act and the Exchange
      Act
      and the rules and regulations adopted by the SEC thereunder (or, if the Company
      is not required to file such reports, it will upon the request of any Holder
      of
      Registrable Securities after the  Closing ,
      make
      publicly available other information so long as necessary to permit sales
      pursuant to Rule 144 or 144A under the Securities Act, and it will take such
      further action as any Holder of Registrable Securities may reasonably request,
      all to the extent required from time to time to enable such Holder to sell
      Registrable Securities without registration under the Securities Act within
      the
      limitation of the exemptions provided by (i) Rule 144 or 144A or Regulation
      S
      under the Securities Act, as such Rules may be amended from time to time, or
      (ii) any similar rule or regulation hereafter adopted by the
      Commission.




5.32  Prior
      to
      any resale of Registrable Securities by a Holder, use its reasonable best
      efforts to register or qualify or cooperate with the selling Holders in
      connection with the registration or qualification (or exemption from the
      registration or qualification) of such Registrable Securities for the resale
      by
      the Holder under the securities or Blue Sky laws of such jurisdictions within
      the United States as any Holder reasonably requests in writing, to keep each
      registration or qualification (or exemption therefrom) effective during the
      Effectiveness Period and to do any and all other acts or things reasonably
      necessary or advisable to enable the disposition in such jurisdictions of the
      Registrable Securities covered by each Registration Statement; provided, that
      the Company shall not be required to qualify generally to do business in any
      jurisdiction where it is not then so qualified, subject the Company to any
      material tax in any such jurisdiction where it is not then so subject or file
      a
      general consent to service of process in any such jurisdiction.




39




5.33  If
      requested by the Holders, cooperate with the Holders to facilitate the timely
      preparation and delivery of certificates representing Registrable Securities
      to
      be delivered to a transferee pursuant to a Registration Statement, which
      certificates shall be free, to the extent permitted by the Securities Act,
      of
      all restrictive legends, and to enable such Registrable Securities to be in
      such
      denominations and registered in such names as any such Holders may request.




Upon
      the
      occurrence of any event contemplated by clauses
      (ii) through (iv) of  Section
      3(c) hereof, as promptly as reasonably possible under the circumstances taking
      into account the Company’s good faith assessment of any adverse consequences to
      the Company and its stockholders of the premature disclosure of such event,
      prepare a supplement or amendment, including a post-effective amendment, to
      a
      Registration Statement or a supplement to the related Prospectus or any document
      incorporated or deemed to be incorporated therein by reference, and file any
      other required document so that, as thereaft er
      delivered, neither the Registration Statement nor such Prospectus will contain an 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, in light of the circumstances under
      which they were made, not misleading. If the Company notifies the Holders in
      accordance with clauses (ii) through (iv) of Section 3(c) above to suspend
      the
      use of any Prospectus until the requisite changes to such Prospectus have been
      made, then the Holders shall suspend use of such Prospectus. The Company will
      use its best efforts to ensure that the use of the Prospectus may be resumed
      as
      promptly as is practicable.




Use
      its
      best efforts to comply with all applicable rules and regulations of the
      Commission.




The
      Company may require each selling Holder to furnish to the Company a certified
      statement as to (i) the number of shares of Common Stock beneficially owned
      by
      such Holder, (ii) the natural persons thereof that have voting and dispositive
      control over the shares of Common Stock, and (iii) any affiliation between
      the
      Holder and either the Company’s independent accountants or any member of the
      NASD.




The
      Company may require each Holder of Registrable Securities as to which any
      registration is being effected to furnish to the Company such information
      regarding the distribution of such Registrable Securities and such other
      information as the Company may from time to time reasonably request. Each Holder
      agrees to furnish such information to the Company and to cooperate with the
      Company as necessary to enable the Company to comply with the provisions of
      this
      Agreement. The
      Company shall have the right to exclude any Holder that does not comply with
      the
      preceding sentence from the applicable registration.




40




Registration
      Expenses .
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to a Registration Statement. The fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses (A) with respect to filings or listings or
      quotations  required
      to be made with any Trading Market on which the Common Stock is then listed
      for
      trading, (B) in compliance with applicable state securities or Blue Sky laws
      reasonably agreed to by the Company in writing (including, without limitation,
      fees and disbursements of counsel for the Company in connection with Blue Sky
      qualifications or exemptions of the Registrable Securities) and (C) if not
      previously paid by the Company in connection with an Issuer Filing, with respect
      to any filing that may be required to be made by any broker through which a
      Holder intends to make sales of Registrable Securities with NASD Regulation,
      Inc. pursuant to the NASD Rule 2710, so long as the broker is receiving no
      more
      than a customary brokerage commission in connection with such sale, (ii)
      printing expenses incurred by the Company (including, without limitation,
      expenses of printing certificates for Registrable Securities, (iii) messenger,
      telephone and delivery expenses incurred by the Company, (iv) fees and
      disbursements of counsel for the Company and of
      all independent certified public accountants of the Company , (v)
      Securities Act liability insurance incurred by the Company, if the Company
      so
      desires such insurance , and
      (vi)
      fees and expenses of all other Persons retained by the Company in connection
      with the consummation of the transactions contemplated by this Agreement. In
      addition, the Company shall be responsible for all of its internal expenses
      incurred in connection with the consummation of the transactions contemplated
      by
      this Agreement (including, without limitation, all salaries and expenses of
      its
      officers and employees performing legal or accounting duties), the expense
      of
      any annual audit and the fees and expenses incurred in connection with the
      listing of the Registrable Securities on any securities exchange as required
      hereunder. In no event shall the Company be responsible for any broker or
      similar commissions of any Holder or, except to the extent provided for in
      the
      Transaction Documents, any legal fees or other costs of the
      Holders.




*Indemnification*




5.34  Indemnification
      by the Company .
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, members, partners, advisors,
      agents and employees of each of them, each Person who controls any such Person
      (within the meaning of Section 15 of the Securities Act or Section 20 of the
      Exchange Act) and the officers, directors, members, shareholders, partners,
      advisors, agents and employees of each such controlling Person, to the fullest
      extent permitted by applicable law, from and against any and all losses, claims,
      damages, liabilities or actions or proceedings thereof, whether or not such
      indemnified party is a party thereto, costs (including, without limitation,
      reasonable costs of investigation and reasonable attorneys’ fees) and expenses
      (collectively, “ Losses ”),
      as
      incurred, arising out of or relating to any untrue or alleged untrue statement
      of a material fact contained in a Registration Statement under
      which such Registrable Securities were registered under the Securities
      Act  (including
      any final, preliminary or summary Prospectus contained therein) or any amendment
      or supplement thereto or any omission or alleged omission of a material fact
      required to be stated therein or necessary to make the statements therein (in
      the case of any Prospectus or preliminary Prospectus or supplement thereto,
      in
      light of the circumstances under which they were made) not misleading, except
      to
      the extent, but only to the extent that any such Loss is based solely upon
      an
      untrue statement or alleged untrue statement or omission or alleged omission
      made in any such Registration Statement in reliance upon and in conformity
      with
      written information furnished to the Company by such Holder expressly for use
      in
      the preparation thereof. This indemnity shall be in addition to any liability
      the Company may otherwise have. This indemnity shall remain in full force and
      effect regardless of any investigations made by or on behalf of such Holder
      or
      any indemnified party and shall survive the transfer of such securities by
      such
      Holder.




41




5.35  Indemnification
      by Holders .
      Each
      Holder shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents, attorneys and employees, each Person
      who controls the Company (within the meaning of Section 15 of the Securities
      Act
      and Section 20 of the Exchange Act), and the directors, officers, agents,
      attorneys or employees of such controlling Persons, to the fullest extent
      permitted by applicable law, from and against all Losses, as incurred, to the
      extent arising out of or based solely upon any untrue or alleged untrue
      statement of a material fact contained in any Registration Statement, any
      Prospectus, or any form of prospectus, or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein not misleading in light of the
      circumstances in which they were made to the extent, but only to the extent,
      that such Loss
      is
      based solely upon an untrue
      statement or omission made
      in
      such Registration Statement in reliance upon and in conformity with
      written information furnished to
      the
      Company by such Holder to the Company expressly for use in the preparation
      thereof and was not corrected in a subsequent writing prior to or concurrently
      with the sale of the Registrable Securities to the Person asserting the
      Loss **.** This
      indemnity shall be in addition to any liability such Holder may otherwise have.
      In no event shall the liability of any selling Holder hereunder be greater
      in
      amount than the dollar amount of the net proceeds received by such Holder upon
      the sale of the Registrable Securities giving rise to such indemnification
      obligation.




5.36  Conduct
      of Indemnification Proceedings .
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “ Indemnified
      Party ”),
      such
      Indemnified Party shall promptly notify the Person from whom indemnity is sought
      (the “ Indemnifying
      Party ”)
      in
      writing, and the Indemnifying Party shall have the right to assume the defense
      thereof, including the employment of counsel reasonably satisfactory to the
      Indemnified Party and the payment of all fees and expenses incurred in
      connection with defense thereof; provided, that the failure of any Indemnified
      Party to give such notice shall not relieve the Indemnifying Party of its
      obligations or liabilities pursuant to this Agreement, except (and only) to
      the
      extent that such failure shall have materially prejudiced the Indemnifying
      Party.




42




An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (2) the Indemnifying
      Party shall have failed to assume the defense of such Proceeding within a
      reasonable time after having received notice of such claim from the person
      entitled to indemnification hereunder and to employ counsel reasonably
      satisfactory to such Indemnified Party in any such Proceeding ; (3)
      in
      the reasonable judgment of the Indemnified Party ,
      based
      upon advice of its counsel, a conflict of interest may exist between such
      Person and the
      Indemnifying Party with
      respect to such claims or (4) the Indemnified Party has reasonably concluded,
      based on the advice of counsel, that there are legal defenses available to
      it
      that are different from or in addition to those available to the
      Indemnifying Party, in which case, if such Indemnified Party notifies the
      Indemnifying Party in writing that it elects to employ separate counsel at
      the
      expense of the Indemnifying Party, the Indemnifying Party shall not have the
      right to assume the defense thereof and the reasonable fees and expenses of
      no
      more than one separate counsel shall be at the expense of the
      Indemnifying Party. If such defense is not assumed by the Indemnifying Party,
      the Indemnifying Party will not be subject to any liability for any settlement
      made without its consent, but such consent may not be unreasonably withheld; provided , however ,
      that an
      Indemnifying Party shall not be required to consent to any settlement involving
      the imposition of equitable remedies or involving the imposition of any material
      obligations on such Indemnifying Party other than financial obligations for
      which such Indemnified Party will be indemnified hereunder. If the Indemnifying
      Party assumes the defense, the Indemnifying Party shall have the right to settle
      such action without the consent of the Indemnified Party, provided , however ,
      that
      the Indemnifying Party shall be required to obtain such consent (which consent
      shall not be unreasonably withheld) if the settlement includes any admission
      of
      wrongdoing on the part of the Indemnified Party or any restriction on the
      Indemnified Party or its officers or directors. No
      Indemnifying Party shall consent to entry of any judgment or enter into any
      settlement which does not include as an unconditional term thereof the giving
      by
      the claimant or plaintiff to each Indemnified party of an unconditional release
      from all liability in respect of such claim or litigation.




Subject
      to and without limiting the terms of this Agreement, all reasonable fees and
      expenses of the Indemnified Party under this Section 5 (including reasonable
      fees and expenses incurred in connection with investigating or preparing to
      defend such Proceeding in a manner not inconsistent with this Section) shall
      be
      paid to the Indemnified Party as incurred by such Indemnified Party.




5.37  Contribution .
      If the
      indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
      Party or insufficient to hold an Indemnified Party harmless for any Losses,
      then
      each Indemnifying Party shall contribute to the amount paid or payable by such
      Indemnified Party, in such proportion as is appropriate to reflect the relative
      fault of the Indemnifying Party and Indemnified Party in connection with the
      actions, statements or omissions that resulted in such Losses as well as any
      other relevant equitable considerations. The relative fault of such Indemnifying
      Party and Indemnified Party shall be determined by reference to, among other
      things, whether any action in question, including any untrue or alleged untrue
      statement of a material fact or omission or alleged omission to state a material
      fact, has been taken or made by, or relates to information supplied by, such
      Indemnifying Party or Indemnified Party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in this Agreement, any reasonable attorneys’ or other fees or expenses incurred
      by such party in connection with any Proceeding to the extent such party would
      have been indemnified for such fees or expenses if the indemnification provided
      for in this Section was available to such party in accordance with its
      terms.




43




The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), no Holder shall be required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission. No person guilty of fraudulent misrepresentation
      (within the meaning of Section 11(f) of the Securities Act) shall be entitled
      to
      contribution from any Person who was not guilty of such fraudulent
      misrepresentation.




The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.




*Miscellaneous*




5.38  Remedies .
      It is
      hereby agreed and acknowledged that it will be impossible to measure in money
      the damages that would be suffered if the parties fail to comply with any of
      the
      obligations herein imposed on them and that in the event of any such failure
      an
      aggrieved Person will be irreparably damaged and will not have an adequate
      remedy at law. Any such person shall therefore be entitled (in addition to
      any
      other remedy to which it may be entitled in law or in equity) to injunctive
      relief, including, without limitation, specific performance, to enforce such
      obligations, and if any action should be brought in equity to enforce any of
      the
      provisions of this Agreement, none of the parties hereto shall raise the defense
      that there is an adequate remedy at law.




5.39  No
      Piggyback on Registrations . Except for
      the
      Bricoleur Parties exercising registration rights previously granted to them
      under the Bric Registration Rights Agreement (and only for so long as there
      is
      not an effective registration statement covering the registrable securities
      of
      the Bricoleur Parties )  neither
      the Company nor any of its present or future security holders (other than the
      Holders in such capacity pursuant hereto) may include securities of the Company
      in the initial “Shelf ” Registration
      Statement other than the Registrable Securities.




44




5.40  Compliance .
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to a Registration Statement.




5.41  Discontinued
      Disposition .
      Each
      Holder agrees by its acquisition of Registrable Securities that, upon receipt
      of
      a notice from the Company of the occurrence of any event of the kind described
      in Section 3(c)(ii) through (iv), such Holder will forthwith discontinue
      disposition of such Registrable Securities under a Registration Statement until
      it is advised in writing (the “ Advice ”)
      by the
      Company that the use of the applicable Prospectus (as it may have been
      supplemented or amended) may be resumed. The Company will use its best efforts
      to ensure that the use of the Prospectus may be resumed as promptly as it
      practicable.




Amendments
      and Waivers . The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and the Holders of at least a majority the then
      outstanding Registrable Securities. Notwithstanding the foregoing, a waiver
      or
      consent to depart from the provisions hereof with respect to a matter that
      relates exclusively to the rights of Holders and that does not directly or
      indirectly affect the rights of other Holders may be given by Holders of all
      of
      the Registrable Securities to which such waiver or consent relates; provided , however ,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the immediately preceding
      sentence.




Notices . Any
      and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be delivered as set forth in the Securities Purchase
      Agreement.




Successors
      and Assigns .
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign its rights (except by merger) or obligations
      hereunder without the prior written consent of at least a majority of the
      Holders of the then-outstanding Registrable Securities. Each Holder may assign
      their respective rights hereunder only to a permitted transferee of the
      Registrable Securities who agrees in writing to be bound by the provisions
      of
      this Agreement and where notice of such assignment shall have been provided
      to
      the Company.




No
      Inconsistent Agreements .
      Neither
      the Company nor any of its Subsidiaries has entered, as of the date hereof,
      nor
      shall the Company or any of its Subsidiaries, on or after the date of this
      Agreement, enter into any agreement with respect to its securities, that would
      be inconsistent with the rights granted to the Holders in this Agreement or
      otherwise conflicts with the provisions hereof.




Execution
      and Counterparts .
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission or by e-mail delivery of a “.pdf” format data file, such signature
      shall create a valid and binding obligation of the party executing (or on whose
      behalf such signature is executed) with the same force and effect as if such
      facsimile or “.pdf” signature page were an original thereof.




45




Governing
      Law .
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of the
      transactions contemplated by this Agreement (whether brought against a party
      hereto or its respective affiliates, directors, officers, shareholders,
      employees or agents) shall be commenced exclusively in the state and federal
      courts sitting in the State of New York. The parties hereby waive all rights
      to
      a trial by jury. If either party shall commence an action or proceeding to
      enforce any provisions of this Agreement, then the prevailing party in such
      action or proceeding shall be reimbursed by the other party for its reasonable
      attorneys’ fees and other costs and expenses incurred with the investigation,
      preparation and prosecution of such action or proceeding.




Cumulative
      Remedies .
      The
      remedies provided herein are cumulative and not exclusive of any other remedies
      provided by law.




Severability .
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction.




Headings .
      The
      headings in this Agreement are for convenience only, do not constitute a part
      of
      this Agreement, and shall not be deemed to limit or affect any of the provisions
      hereof.




Independent
      Nature of Holders’ Obligations and Rights .
      The
      obligations of each Holder hereunder are several and not joint with the
      obligations of any other Holder hereunder, and no Holder shall be responsible
      in
      any way for the performance of the obligations of any other Holder hereunder.
      Nothing contained herein or in any other agreement or document delivered at
      any
      closing, and no action taken by any Holder pursuant hereto or thereto, shall
      be
      deemed to constitute the Holders as a partnership, an association, a joint
      venture or any other kind of entity, or create a presumption that the Holders
      are in any way acting in concert with respect to such obligations or the
      transactions contemplated by this Agreement. Each Holder shall be entitled
      to
      protect and enforce its rights, including without limitation the rights arising
      out of this Agreement, and it shall not be necessary for any other Holder to
      be
      joined as an additional party in any proceeding for such purpose.




46




[REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
      PAGES FOLLOW]




47


IN
      WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
      as
      of the date first written above.




**VENDINGDATA
              CORPORATION**By:Mark
                Newburg,
              President
                and Chief Executive Officer**[NAME]**By:
            _______________________________________________,




1


**Annex
      B**




**VendingData
      Corporation**




**Selling
      Securityholder Notice and Questionnaire**




The
      undersigned beneficial owner of common stock, par value $0.001 per share (the
      “ Common
      Stock ”),
      of
      VendingData Corporation, a Nevada corporation (the “ Company ”),
      (the
“ Registrable
      Securities ”)
      understands that the Company has filed or intends to file with the Securities
      and Exchange Commission (the “ Commission ”)
      a
      registration statement on Form S-3 (the “ Registration
      Statement ”)
      for
      the registration and resale under Rule 415 of the Securities Act of 1933, as
      amended (the “ Securities
      Act ”),
      of
      the Registrable Securities, in accordance with the terms of the Registration
      Rights Agreement, dated as of __________, 2006 (the “ Registration
      Rights Agreement ”),
      among
      the Company and the Holders named therein. A copy of the Registration Rights
      Agreement is available from the Company upon request at the address set forth
      below. All capitalized terms not otherwise defined herein shall have the
      meanings ascribed thereto in the Registration Rights Agreement.




Certain
      legal consequences arise from being named as a selling securityholder in the
      Registration Statement and the related prospectus. Accordingly, holders and
      beneficial owners of Registrable Securities are advised to consult their own
      securities law counsel regarding the consequences of being named or not being
      named as a selling securityholder in the Registration Statement and the related
      prospectus.




**NOTICE**




The
      undersigned beneficial owner (the “ Selling
      Securityholder ”)
      of
      Registrable Securities hereby elects to include the Registrable Securities
      owned
      by it and listed below in Item 3 (unless otherwise specified under such Item
      3)
      in the Registration Statement.




2


The
      undersigned hereby provides the following information to the Company and
      represents and warrants that such information is accurate:




**QUESTIONNAIRE**




**1.**
            **Name.**




(a)
            Full
                Legal Name of Selling
                Securityholder










(b)
            Full
                Legal Name of Registered Holder (if not the same as (a) above) through
                which Registrable Securities Listed in Item 3 below are
                held:










(c)
            Full
                Legal Name of Natural Control Person (which means a natural person
                who
                directly or indirectly alone or with others has power to vote or
                dispose
                of the securities covered by the
                questionnaire):












**2.**
            **Address
                for Notices to Selling
                Securityholder:**




Telephone:
                _______________________________________________________________________________________Fax:
                _____________________________________________________________________________________________Contact
                Person:
                ____________________________________________________________________________________





**3.**
            **Beneficial
                Ownership of Registrable
                Securities:**




(a)
            Type
                and Number of Registrable Securities beneficially
                owned:












3


**4.**
            **Broker-Dealer
                Status:**




(a)
            Are
                you a broker-dealer?




Yes
o  No
o




(b)
            If
                “yes” to Section 4(a), did you receive your Registrable Securities as
                compensation for investment banking services to the
                Company.




Yes
o  No
o




Note:
            If
                no, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration
                Statement.




(c)
            Are
                you an affiliate of a
                broker-dealer?




Yes
o  No
o




(d)
            If
                you are an affiliate of a broker-dealer, do you certify that you
                bought
                the Registrable Securities in the ordinary course of business, and
                at the
                time of the purchase of the Registrable Securities to be resold,
                you had
                no agreements or understandings, directly or indirectly, with any
                person
                to distribute the Registrable
                Securities?




Yes
o  No
o




Note:
            If
                no, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration
                Statement.




**5.
      Beneficial Ownership of Other Securities of the Company Owned by the Selling
      Securityholder.**




*Except
      as set forth below in this Item 5, the undersigned is not the beneficial or
      registered owner of any securities of the Company other than the Registrable
      Securities listed above in Item 3.*




(a)
            Type
                and Amount of Other Securities beneficially owned by the Selling
                Securityholder:







4


**6.**
            **Relationships
                with the Company:**




*Except
      as set forth below, neither the undersigned nor any of its affiliates, officers,
      directors or principal equity holders (owners of 5% of more of the equity
      securities of the undersigned) has held any position or office or has had any
      other material relationship with the Company (or its predecessors or affiliates)
      during the past three years.*




State
      any
      exceptions here:







**7.**
            **Relationships
                with the Company’s Independent
                Accountant:**




*Except
      as set forth below, neither the undersigned nor any of its affiliates, officers,
      directors or principal equity holders (owners of 5% of more of the equity
      securities of the undersigned) has held any position or office or has had any
      other material relationship with the Company’s independent accountants, Piercy
      Bowler Taylor & Kern, of Las Vegas , Nevada (or its predecessors or
      affiliates) during the past three years.*




State
      any
      exceptions here:







The
      undersigned agrees to promptly notify the Company of any inaccuracies or changes
      in the information provided herein that may occur subsequent to the date hereof
      at any time while the Registration Statement remains effective.




By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers to Items 1 through 7 and the inclusion of such
      information in the Registration Statement and the related prospectus and any
      amendments or supplements thereto. The undersigned understands that such
      information will be relied upon by the Company in connection with the
      preparation or amendment of the Registration Statement and the related
      prospectus.




5


IN
      WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
      and Questionnaire to be executed and delivered either in person or by its duly
      authorized agent.




Beneficial
                Owner:Dated:
            By:Name:
              Title:




**PLEASE
      FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
      THE ORIGINAL BY OVERNIGHT MAIL, TO:**




Daniel
      Donahue, Esq.


Preston
      Gates Ellis LLP


1900
      Main
      Street, Suite 600


Irvine,
      CA 92614





Fax:
      949-253-0902




6


**SCHEDULE
      6(B)**




**PIGGYBACK
      REGISTRATIONS**




The
      Company intends to include on the initial Registration
      Statement:


7




**EXHIBIT
        B**
  NEITHER
        THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
        HAVE
        BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND ARE “RESTRICTED
        SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT. SUCH
        SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
        EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
        ACT
        AND THE APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
        REGISTRATION THEREUNDER, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
        TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
        SATISFACTORY TO THE COMPANY





**COMMON
      STOCK PURCHASE WARRANT**





To
      Purchase ________ Shares of Common Stock of




**VENDINGDATA
      CORPORATION**




THIS
      COMMON STOCK PURCHASE WARRANT (the “ Warrant ”)
      certifies that, for value received, _____________ (together with its successors
      or assigns the “ Holder ”),
      is
      entitled, upon the terms and subject to the limitations on exercise and the
      conditions hereinafter set forth, at any time on or after March 31, 2007 (the
      “ Initial
      Exercise Date ”)
      and on
      or prior to the close of business on December 31, 2009 (the “ Termination
      Date ”)
      but
      not thereafter, to subscribe for and purchase from VendingData Corporation,
      a
      Nevada corporation (the “ Company ”),
      up to
      _________ shares (the “ Warrant
      Shares ”)
      of
      Common Stock, par value $0.001 per share, of the Company (the “ Common
      Stock ”),
      subject to adjustment as set forth herein. The purchase price of one share
      of
      Common Stock under this Warrant shall be equal to the Exercise Price, as defined
      in Section 3(b). The Initial Exercise Date and the Termination Date may be
      extended as described in this Warrant.




Section
      1 .  Definitions .
      Capitalized terms used and not otherwise defined herein shall have the meanings
      set forth in that certain Securities Purchase Agreement (the “ Purchase
      Agreement ”)
      dated
      October 11, 2006 between the Company and the Holder.




Section
      2 .  Modification
      of Initial Exercise Date and Termination Date .




a)  Extension .
      On or
      before January 25, 2007, the Holder may send a written notice to the Company
      requesting that the Initial Exercise Date be delayed until December 31, 2007,
      and that the Termination Date be extended to a date no later than December
      31,
      2010. At any time after January 25, 2007, the Initial Exercise Date and/or
      Termination Date may be delayed or extended only by written agreement between
      the Holder and the Company.




8




b)  Acceleration .
      If at
      any time after the date hereof **[** whether
      prior to or following the Initial Exercise Date **]** ,
      the
      Company acquires any securities of the Holder this Warrant shall be immediately
      exercisable in full subject to the ability of the Holder to delay such Holder’s
      ability to exercise this Warrant for up to 90 days, on a rolling basis, for
      multiple occasions, by notice to the Company.




c)  [ Acceleration/Termination]
      upon Change in Control .
      If at
      any time prior to the date this Warrant first becomes exercisable in accordance
      with its terms, the Company receives a Change of Control Offer from a person
      other than Elixir or one if its Affiliates and such Change of Control Offer
      is
      not withdrawn and is accepted by the Company, then, upon consummation of such
      transaction this Warrant shall automatically **[** be
      cancelled **][** become
      exercisable for the kind and amount of securities, cash or other assets which
      the Holder of the Warrant would have owned immediately after such Change of
      Control transaction if the Holder had exercised the Warrant immediately before
      the effective date of such transaction in the manner and subject to the
      provisions set forth in Section 4(f) **]** without
      further action required on the part of any party.




d)  Termination
      upon Breach If
      Elixir, Melco or Holder breach (unless such breach is due to fault on the part
      of the Company or its Affiliates) any of their material obligations under this
      Warrant or the Purchase Agreement, and the breaching party does not remedy
      such
      breach within ninety (90) days of receiving written notice of the same from
      the
      Company, the Company may, at its option, cancel any portion or all of this
      Warrant that remains unexercised at the end of such 90 day period. Any such
      cancellation of this Warrant shall not affect the agreements of the parties
      under the Transaction Documents with respect to other Warrants, any exercised
      Warrants or the Warrant Shares.




Section
      3 .  Exercise .




a)  Exercise
      of Warrant .
      Subject
      to Section 2(b), exercise of the purchase rights represented by this Warrant
      may
      be made, in whole or in part, at any time or times on or after the Initial
      Exercise Date and on or before the Termination Date by delivery to the Company
      of a duly executed Notice of Exercise Form annexed hereto (or such other office
      or agency of the Company as it may designate by notice in writing to the
      registered Holder at the address of such Holder appearing on the books of the
      Company) and, in the case of an exercise that is not a Cashless Exercise
      pursuant to Section 3(c) hereof, along with payment of the aggregate
      Exercise Price of the shares thereby purchased by wire transfer or cashier’s
      check drawn on a United States bank (such exercise a “ Cash
      Exercise ”).
      Notwithstanding anything herein to the contrary, the Holder shall not be
      required to physically surrender this Warrant to the Company until the Holder
      has purchased all of the Warrant Shares available hereunder and the Warrant
      has
      been exercised in full, in which case, the Holder shall surrender this Warrant
      to the Company for cancellation within 3 Trading Days of the date the final
      Notice of Exercise is delivered to the Company. Partial exercises of this
      Warrant resulting in purchases of a portion of the total number of Warrant
      Shares available hereunder shall have the effect of lowering the outstanding
      number of Warrant Shares purchasable hereunder in an amount equal to the
      applicable number of Warrant Shares purchased or reduced, as the case may be.
      The Holder and any assignee, by acceptance of this Warrant, acknowledge and
      agree that, by reason of the provisions of this paragraph, following the
      purchase or reduction of a portion of the Warrant Shares hereunder, the number
      of Warrant Shares available for purchase hereunder at any given time may be
      less
      than the amount stated on the face hereof.




9




b)  Exercise
      Price .
      The
      exercise price per share of the Common Stock under this Warrant shall be **$___** ,
      subject
      to adjustment herein (the “ Exercise
      Price ”).




c)  Cashless
      Exercise .
      This
      Warrant may also be exercised by means of a “cashless exercise” in which the
      Holder shall be entitled to tender Warrants for cancellation and in return
      receive a certificate for the number of Warrant Shares equal to the quotient
      obtained by dividing [(A-B) (X)] by (A), where:




(A)
      = the
      VWAP on the Trading Day immediately preceding the date of such
      election;





(B)
      = the
      Exercise Price of this Warrant, as adjusted; and





(X)
      = the
      number of Warrant Shares issuable upon exercise of the Warrants tendered for
      cancellation in accordance with the terms of this Warrant by means of a cash
      exercise rather than a cashless exercise.





“ VWAP ”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market
      other than the OTC Bulletin Board, the daily volume weighted average price
      of
      the Common Stock for such date (or the nearest preceding date) on the Trading
      Market on which the Common Stock is then listed or quoted for trading as
      reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
      (New
      York City time) to 4:02 p.m. (New York City time); (b) if the OTC Bulletin
      Board is the Trading Market, the volume weighted average price of the Common
      Stock for such date (or the nearest preceding date) on the OTC Bulletin Board;
      (c) if the Common Stock is not then quoted for trading on the OTC Bulletin
      Board
      and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding
      to
      its functions of reporting prices), the most recent bid price per share of
      the
      Common Stock so reported; or (d) in all other cases, the fair market value
      of a share of Common Stock as determined by the Board of Directors of the
      Company in good faith.





d)  Mechanics
      of Exercise .




i.  Authorization
      of Warrant Shares .
      The
      Company covenants that all Warrant Shares which may be issued upon the exercise
      of the purchase rights represented by this Warrant will, upon exercise of the
      purchase rights represented by this Warrant, be duly authorized, validly issued,
      fully paid and nonassessable and free and clear of all Liens caused
      by
      the Company (except as resulting from the restrictions on transfer set forth
      in
      the Transaction Documents) but not including the restrictions on resale of
      restricted securities set forth in the Securities Act or any Lien imposed under
      any other U.S. law, rule or regulation .




10




ii.  Delivery
      of Certificates Upon Exercise .
      Certificates for shares purchased hereunder shall be promptly transmitted by
      the
      transfer agent of the Company to the Holder subject to the Holder’s delivery to
      the Company of the Notice of Exercise Form, surrender of this Warrant (if
      required) and payment of the aggregate Exercise Price as set forth above, in
      the
      event of a Cash Exercise.




iii.  Delivery
      of New Warrants Upon Exercise .
      If this
      Warrant shall have been exercised in part, the Company shall, at the request
      of
      a Holder and upon surrender of this Warrant, at the time of delivery of the
      certificate or certificates representing Warrant Shares, deliver to the Holder
      a
      new Warrant evidencing the rights of the Holder to purchase the unpurchased
      Warrant Shares called for by this Warrant, which new Warrant shall in all other
      respects be identical with this Warrant.




iv.  No
      Fractional Shares or Scrip .
      No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. As to any fraction of a share which the Holder
      would otherwise be entitled to purchase upon such exercise, the Company shall
      at
      its election, either pay a cash adjustment in respect of such final fraction
      in
      an amount equal to such fraction multiplied by the VWAP of one Warrant Share
      or
      round up to the next whole share.




v.  Charges,
      Taxes and Expenses .
      Issuance and delivery of certificates for Warrant Shares shall be made without
      charge to the Holder for any issue or transfer tax, withholding tax, transfer
      agent fees or other incidental tax or expense in respect of the issuance of
      such
      certificate, all of which taxes and expenses shall be paid by the Company,
      and
      such certificates shall be issued in the name of the Holder or in such name
      or
      names as may be directed by the Holder; provided , however ,
      that in
      the event certificates for Warrant Shares are to be issued in a name other
      than
      the name of the Holder, this Warrant when surrendered for exercise shall be
      accompanied by the Assignment Form attached hereto duly executed by the Holder;
      and the Company may require, as a condition thereto, the payment of a sum equal
      to the transfer tax incurred by it as a result of such assignment.




vi.  Closing
      of Books .
      The
      Company will not close its stockholder books or records in any manner which
      prevents the timely exercise of this Warrant, pursuant to the terms
      hereof.




11




Section
      4 .  Certain  Adjustments .




a)  Stock
      Dividends and Splits .
      If the
      Company, at any time while this Warrant is outstanding: (A) pays a stock
      dividend or otherwise makes a distribution or distributions on shares of its
      Common Stock or any other equity or equity equivalent securities payable in
      shares of Common Stock (which, for avoidance of doubt, shall not include any
      shares of Common Stock issued by the Company upon exercise of this Warrant),
      (B)
      subdivides or reclassifies outstanding shares of Common Stock into a larger
      number of shares, (C) combines or reclassifies (including by way of reverse
      stock split) outstanding shares of Common Stock into a smaller number of shares,
      (D) makes a distribution on its Common Stock in shares of its capital stock
      other than Common Stock, or (E) issues by reclassification of shares of the
      Common Stock any shares of capital stock of the Company, then in each case
      the
      Exercise Price shall be multiplied by a fraction of which the numerator shall
      be
      the number of shares of Common Stock (excluding treasury shares, if any)
      outstanding immediately before such event and of which the denominator shall
      be
      the number of shares of Common Stock outstanding immediately after such event
      and the number of shares issuable upon exercise of this Warrant shall be
      proportionately adjusted so that the Holder of any Warrant thereafter exercised
      shall be entitled to receive the number of shares of capital stock of the
      Company which such Holder would have owned immediately following such action
      had
      such Warrant been exercised immediately prior thereto. If, after an adjustment,
      a Holder of a Warrant upon exercise of it may receive shares of two or more
      classes of capital stock of the Company, the Company shall determine the
      allocation of the adjusted Exercise Price between the classes of capital stock.
      The adjustment referenced herein shall be made successively whenever any event
      listed above shall occur. Any adjustment made pursuant to clause (A) of this
      Section 4(a) shall become effective immediately after the record date for the
      determination of stockholders entitled to receive such dividend or distribution
      and any adjustment pursuant to clause (B), (C), (D) or (E) shall become
      effective immediately after the effective date in the case of a subdivision,
      combination or re-classification.




b)  Subsequent
      Rights Offerings .
      If the
      Company, at any time while the Warrant is outstanding, shall issue rights,
      options or warrants to all holders of Common Stock entitling them to subscribe
      for or purchase shares of Common Stock at a price per share less than the VWAP
      at the record date mentioned below, then the Exercise Price shall be multiplied
      by a fraction, of which the denominator shall be the number of shares of the
      Common Stock outstanding on the date of issuance of such rights or warrants
      plus
      the number of additional shares of Common Stock offered for subscription or
      purchase, and of which the numerator shall be (A) the number of shares of the
      Common Stock outstanding on the date of issuance of such rights or warrants
      plus
      (B) the number of shares which the aggregate offering price of the total number
      of shares so offered (assuming receipt by the Company in full of all
      consideration payable upon exercise of such rights, options or warrants) would
      purchase at such VWAP. Such adjustment shall be made successively whenever
      such
      rights or warrants are issued, and shall become effective immediately after
      the
      record date for the determination of stockholders entitled to receive such
      rights, options or warrants.




12




c)  Pro
      Rata Distributions .
      If the
      Company, at any time prior to the Termination Date, shall distribute to all
      holders of Common Stock (i) evidences of indebtedness of the Company or any
      of
      its Subsidiaries, (ii) assets of the Company or any of its Subsidiaries
      (including cash and cash dividends) or (iii) rights, options or warrants to
      subscribe for or purchase any of the foregoing or any other security of the
      Company, then in each such case the Exercise Price shall be adjusted by
      multiplying the Exercise Price in effect immediately prior to the record date
      fixed for determination of stockholders entitled to receive such distribution
      by
      a fraction of which the denominator shall be the VWAP determined as of the
      record date mentioned above, and of which the numerator shall be such VWAP
      on
      such record date less the then per share fair market value at such record date
      of the portion of such assets or evidence of indebtedness so distributed
      applicable to one outstanding share of the Common Stock as determined by the
      Board of Directors in good faith. In either case the adjustments shall be
      described in a statement provided to the Holder of the portion of assets or
      evidences of indebtedness so distributed or such subscription rights applicable
      to one share of Common Stock. Such adjustment shall be made successively
      whenever any such distribution is made and shall become effective immediately
      after the record date mentioned above.




d)  Adjustment
      for Common Stock Issue .
      If the
      Company issues shares of Common Stock or on or after the date hereof for a
      consideration per share less than the VWAP on the date the Company fixes the
      offering price of such additional shares, the Warrant Shares shall be adjusted
      in accordance with the formula:




W’
=
      W
      x  A


O
      + P


M


where:





W’
                =
            the
                adjusted Warrant Shares





W
                =
            the
                Warrant Shares immediately prior to any such
                issuance.





O
                =
            the
                number of shares of Common Stock outstanding, on a Fully Diluted
                Basis,
                immediately prior to the issuance of such additional shares of Common
                Stock.





P
                =
            the
                aggregate consideration received for the issuance of such additional
                shares of Common Stock.





M
                =
            the
                VWAP per share of Common Stock on the date of issuance of such additional
                shares.





A
                =
            the
                number of shares of Common Stock outstanding, on a fully diluted
                basis,
                immediately after the issuance of such additional shares of Common
                Stock.




13




The
      adjustment shall be made successively whenever any such issuance is made, and
      shall become effective immediately after such issuance.





This
      subsection (d) does not apply to any of the transactions described in subsection
      (a) of this Section 4.





e)  Adjustment
      for Convertible Securities Issue .
      If the
      Company issues any options, warrants or other securities convertible into or
      exchangeable or exercisable for Common Stock (other than securities issued
      in
      transactions described in subsection (b) or (c) of this Section 4 and other
      than the Warrant) on or after the date hereof for a consideration per share
      of
      Common Stock initially deliverable upon conversion, exchange or exercise of
      such
      securities less than the VWAP on the date of issuance of such securities, the
      Warrant Shares shall be adjusted in accordance with this formula:




W’
=
      W
      x  O
      +
      D


O + P


M





where:





W’
                =
            the
                adjusted Warrant Shares.





W
                =
            the
                Warrant Shares immediately prior to any such
                issuance.





O
                =
            the
                number of outstanding immediately, on a fully diluted basis, prior
                to the
                issuance of such securities.





P
                =
            the
                aggregate consideration received for the issuance of such
                securities.





M
                =
            the
                VWAP per share of Common Stock on the date of issuance of such
                securities.





D
                =
            the
                maximum number of shares of Common Stock deliverable upon conversion or in
                exchange for or upon exercise of such securities at the initial
                conversion, exchange or exercise
                rate.





The
      adjustment shall be made successively whenever any such issuance is made, and
      shall become effective immediately after such issuance.





f)  Fundamental
      Transaction .
      If, at
      any time while this Warrant is outstanding, (A) the Company effects any merger
      or consolidation or other business combination with and into another Person,
      (B)
      the Company effects any sale of all or substantially all of its assets in one
      or
      a series of related transactions (C) any tender offer or exchange offer (whether
      by the Company or another Person) is completed pursuant to which holders of
      Common Stock are permitted to tender or exchange their shares for other
      securities, cash or property, or (D) the Company effects any reclassification
      of
      the Common Stock or any compulsory share exchange pursuant to which the Common
      Stock is effectively converted into or exchanged for other securities, cash
      or
      property (in any such case, a “ Fundamental
      Transaction ”),
      and
      such Fundamental Transaction constitutes a Change of Control then, upon
      consummation of such transaction the Warrant shall automatically **[** be
      cancelled, without further action required on the part of any party **]**  **[** become
      exercisable for the kind and amount of securities, cash or other assets which
      the Holder of a Warrant would have owned immediately after the Fundamental
      Transaction if the Holder had exercised the Warrant immediately before the
      effective date of such transaction, without further action required on the
      part
      of any party (the “ Alternate
      Consideration ”).
      If
      holders of Common Stock are given any choice as to the securities, cash or
      property to be received in a Fundamental Transaction, then the Holder shall
      be
      given the same choice as to the consideration it receives upon any exercise
      of
      this Warrant following such Fundamental Transaction. To the extent necessary
      to
      effectuate the foregoing provisions, any successor to the Company or surviving
      entity in such Fundamental Transaction shall issue to the Holder a new warrant
      consistent with the foregoing provisions and evidencing the Holder’s right to
      exercise such warrant into Alternate Consideration. The terms of any agreement
      pursuant to which a Fundamental Transaction is effected shall include terms
      requiring any such successor or surviving entity to expressly assume, by a
      supplemental warrant agreement or other acknowledgement executed and delivered
      to the Holder, the obligation to deliver to such Holder the Alternate
      Consideration as, in accordance with the foregoing provisions, such Holder
      may
      be entitled to purchase, and all other obligations and liabilities of the
      Company under this Agreement. **]**




14




g)  Calculations .
      All
      calculations under this Section 4 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      4,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      treasury shares, if any) issued and outstanding.




h)  Voluntary
      Adjustment by Company .
      The
      Company may at any time during the term of this Warrant reduce the then current
      Exercise Price to any amount and for any period of time deemed appropriate
      by
      the Board of Directors of the Company. A reduction of the Exercise Price shall
      not change or adjust the Exercise Price otherwise in effect for purposes of
      subsections (a), (b), (c), (d) or (e).




i)  Notice
      to Holders .




i.  Adjustment
      to Exercise Price .
      Upon
      any adjustment pursuant to Section 4 hereof, the Company shall promptly
      thereafter cause to be mailed to the Holder a notice setting forth the number
      of
      underlying shares of Common Stock with respect to the Warrant and the Exercise
      Price after such adjustment, and setting forth in reasonable detail the method
      of calculation and the facts upon which such calculations are based.




15




ii.  Notice
      to Allow Exercise by Holder .
      If (A)
      the Company shall declare a dividend (or any other distribution in whatever
      form) on the Common Stock; (B) the Company shall declare a special nonrecurring
      cash dividend on or a redemption of the Common Stock; (C) the Company shall
      authorize the granting to all holders of the Common Stock rights or warrants
      to
      subscribe for or purchase any shares of capital stock of any class or of any
      rights; (D) the approval of any stockholders of the Company shall be required
      in
      connection with any reclassification of the Common Stock, any consolidation,
      merger or other business combination to which the Company is a party or any
      sale
      or transfer of all or substantially all of the assets of the Company, whereby
      the Common Stock is converted into other securities, cash or property; (E)
      a
      tender offer or exchange offer will be commenced (whether by the Company or
      another person) pursuant to which holders of the Common Stock will be permitted
      to tender or exchange their shares for other securities, cash or property;
      (F)
      the Company shall authorize the voluntary or involuntary dissolution,
      liquidation or winding up of the affairs of the Company; or (G) the Company
      proposes to take any other action that would require an adjustment of Exercise
      Price pursuant to Section 4; then, in each case, the Company shall cause to
      be mailed to the Holder at its last address as it shall appear upon the Warrant
      Register of the Company, at least 30 calendar days prior to the applicable
      record or effective date hereinafter specified, a notice stating (x) the date
      on
      which a record is to be taken for the purpose of such dividend, distribution,
      redemption, rights or warrants, or if a record is not to be taken, the date
      as
      of which the holders of the Common Stock of record to be entitled to such
      dividend, distribution, redemption, rights or warrants are to be determined,
      (y)
      the date on which such reclassification, consolidation, merger, other business
      combination, sale, transfer dissolution, liquidation or winding up is expected
      to become effective or close or (z) the initial expiration date set forth in
      any
      tender offer or exchange offer for Common Stock, and the date as of which it
      is
      expected that holders of the Common Stock of record shall be entitled to
      exchange their shares of the Common Stock for securities, cash or other property
      deliverable upon such reclassification, consolidation, merger, other business
      combination, sale, transfer or share exchange; provided that the failure to
      mail
      such notice or any defect therein or in the mailing thereof shall not affect
      the
      validity of the corporate action required to be specified in such notice.




j)  In
      the
      event of any issuance, sale, grant or distribution by the Company of any capital
      stock of the Company, or any other voting or other security of the Company
      whose
      participation varies with the income or value of the Company (collectively,
      an
“Equity Security”) or any security convertible into or exchangeable for any such
      Equity Security of the Company, or any contract right measured or otherwise
      valued by reference thereto, (i) the Company shall provide written notice
      thereof to the Holder at least 30 days prior to such issuance, sale, grant
      or
      distribution and (ii) the Company shall issue to the Holder, in conjunction
      with
      the proposed transaction, such number of additional Warrants (the “Additional
      Warrants”), if any, to purchase additional shares of Common Stock so that
      following such issuance (and taking into account any adjustments pursuant to
      Section 4 hereof), the Holder will have the same percentage of the equity
      ownership of the Company (on a fully diluted basis) as such Holder had (on
      a
      fully diluted basis) prior to such issuance, sale, grant, or distribution.
      The
      exercise price of the Additional Warrants shall be $3.37.




16




k)  The
      Holder will not be entitled to any Additional Warrants pursuant to subsections
      (d), (e) or (j) of this Section 4 in the event of the issuance of Common Stock
      (i) upon the exercise of any employee stock options outstanding on the date
      hereof or upon the exercise of any employee stock options issued after the
      date
      hereof, (ii) upon the exercise of any common stock purchase warrants outstanding
      on the date hereof or (iii) upon the exercise any of the equity put rights,
      outstanding and unexercised as of the date here, pursuant to the terms of that
      certain agreement between the Company and Bricoleur Capital Management dated
      May
      1, 2006.




Section
      5 .  Transfer
      of Warrant .




a)  Transferability .
      Subject
      to compliance with any applicable securities laws and the conditions set forth
      in Section 5(d) hereof, this Warrant and all rights hereunder (including,
      without limitation, any registration rights) are transferable, in whole or
      in
      part, upon surrender of this Warrant at the principal office of the Company
      or
      its designated agent, together with a written assignment of this Warrant
      substantially in the form attached hereto duly executed by the Holder or its
      agent or attorney and funds sufficient to pay any transfer taxes payable upon
      the making of such transfer. Upon such surrender and, if required, such payment,
      the Company shall execute and deliver a new Warrant or Warrants in the name
      of
      the assignee or assignees and in the denomination or denominations specified
      in
      such instrument of assignment, and shall issue to the assignor a new Warrant
      evidencing the portion of this Warrant not so assigned, and this Warrant shall
      promptly be cancelled. A Warrant, if properly assigned, may be exercised by
      a
      new Holder for the purchase of Warrant Shares without having a new Warrant
      issued. Notwithstanding the foregoing, this Warrant may be transferred only
      to
      Melco International Development Limited, a Hong Kong company (“Melco”), the
      joint venture established between Melco and Publishing and Broadcasting Limited,
      an Australian company (“the Melco-PBL Joint Venture”) or to any subsidiary of
      Melco or any member of the Melco-PBL Joint Venture.




b)  New
      Warrants .
      This
      Warrant may be divided or combined with other Warrants upon presentation hereof
      at the aforesaid office of the Company, together with a written notice
      specifying the names and denominations in which new Warrants are to be issued,
      signed by the Holder or its agent or attorney. Subject to compliance with
      Section 4(a), as to any transfer which may be involved in such division or
      combination, the Company shall execute and deliver a new Warrant or Warrants
      in
      exchange for the Warrant or Warrants to be divided or combined in accordance
      with such notice.




c)  Warrant
      Register .
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “ Warrant
      Register ”),
      in
      the name of the record Holder hereof from time to time. The Company may deem
      and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.




17




d)  Transfer
      Restrictions .
      The
      Company may require, as a condition of allowing the transfer of this Warrant
      (i)
      the opinion of counsel to the Holder reasonably satisfactory in the form and
      substance to the Company that such transfer may be made without registration
      under the Securities Act and under applicable state securities or blue sky
      laws
      and (ii) that the holder or transferee execute and deliver to the Company an
      investment letter in form and substance acceptable to the Company and (iii)
      that
      the transferee be an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
      (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a “qualified
      institutional buyer” as defined in Rule 144A(a) under the Securities Act.




e)  Legend
      Removal .
      The
      Warrant Shares shall bear a restrictive legend substantially in the form of
      the
      legend appearing on the first page of this Warrant until such time as the
      Warrant Shares (A) have been sold pursuant to an effective Registration
      Statement, (B) have been sold pursuant to Rule 144 (or any similar rule or
      regulation), or (C) may be sold pursuant to Rule 144(k) in the opinion of
      counsel to Holder reasonably satisfactory in the form and substance to the
      Company.




Section
      6 .  Miscellaneous .




a)  No
      Rights as Shareholder Until Exercise .
      This
      Warrant does not entitle the Holder to any voting rights or other rights as
      a
      shareholder of the Company prior to the exercise hereof as set forth herein.




b)  Loss,
      Theft, Destruction or Mutilation of Warrant .
      The
      Company covenants that upon receipt by the Company of evidence reasonably
      satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
      or any stock certificate relating to the Warrant Shares, and in case of loss,
      theft or destruction, of indemnity or security reasonably satisfactory to it
      (which, in the case of the Warrant, shall not include the posting of any bond),
      and upon surrender and cancellation of such Warrant or stock certificate, if
      mutilated, the Company will make and deliver a new Warrant or stock certificate
      of like tenor and dated as of such cancellation, in lieu of such Warrant or
      stock certificate.




c)  Saturdays,
      Sundays, Holidays, etc .
      If the
      last or appointed day for the taking of any action or the expiration of any
      right required or granted herein shall not be a Business Day, then such action
      may be taken or such right may be exercised on the next succeeding Business
      Day.




d)  Authorized
      Shares .




The
      Company covenants that during the period the Warrant is outstanding, it will
      reserve from its authorized and unissued Common Stock a sufficient number of
      shares to provide for the issuance of the Warrant Shares upon the exercise
      of
      any purchase rights under this Warrant. The Company further covenants that
      its
      issuance of this Warrant shall constitute full authority to its officers who
      are
      charged with the duty of executing stock certificates to execute and issue
      the
      necessary certificates for the Warrant Shares upon the exercise of the purchase
      rights under this Warrant. The Company will take all such reasonable action
      as
      may be necessary to assure that such Warrant Shares may be issued as provided
      herein without violation of any applicable law or regulation, or of any
      requirements of the Trading Market upon which the Common Stock may be listed.




18




Except
      and to the extent as waived or consented to by the Holder, the Company shall
      not
      by any action, including, without limitation, amending its certificate of
      incorporation or through any reorganization, transfer of assets, consolidation,
      merger, dissolution, issue or sale of securities or any other voluntary action,
      avoid or seek to avoid the observance or performance of any of the terms of
      this
      Warrant, but will at all times in good faith assist in the carrying out of
      all
      such terms and in the taking of all such actions as may be necessary or
      appropriate to protect the rights of the Holder as set forth in this Warrant
      against impairment. Without limiting the generality of the foregoing, the
      Company will (a) not increase the par value of any Warrant Shares above the
      amount payable therefor upon such exercise immediately prior to such increase
      in
      par value, (b) take all such action as may be necessary or appropriate in order
      that the Company may validly and legally issue fully paid and nonassessable
      Warrant Shares upon the exercise of this Warrant at the Exercise Price as so
      adjusted, and (c) use commercially reasonable efforts to obtain all such
      authorizations, exemptions or consents from any public regulatory body having
      jurisdiction thereof as may be necessary to enable the Company to perform its
      obligations under this Warrant.




e)  Jurisdiction .
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be determined in accordance with the provisions of the
      Purchase Agreement. Where used in this Agreement, the singular includes the
      plural and vice versa.




f)  Restrictions .
      The
      Holder acknowledges that the Warrant Shares acquired upon the exercise of this
      Warrant, if not registered, will have restrictions upon resale imposed by state
      and federal securities laws.




g)  Nonwaiver
      and Expenses .
      No
      course of dealing or any delay or failure to exercise any right hereunder on
      the
      part of Holder shall operate as a waiver of such right or otherwise prejudice
      Holder’s rights, powers or remedies, notwithstanding the fact that all rights
      hereunder terminate on the Termination Date.




h)  Notices .
      Any
      notice, request or other document required or permitted to be given or delivered
      to the Holder by the Company shall be delivered in accordance with the notice
      provisions of the Purchase Agreement.




i)  Limitation
      of Liability .
      No
      provision hereof, in the absence of any affirmative action by Holder to exercise
      this Warrant to purchase Warrant Shares, and no enumeration herein of the rights
      or privileges of Holder, shall give rise to any liability of 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.




19




j)  Remedies .
      Holder,
      in addition to being entitled to exercise all rights granted by law, including
      recovery of damages, will be entitled to specific performance of its rights
      under this Warrant. The Company agrees that monetary damages would not be
      adequate compensation for any loss incurred by reason of a breach by it of
      the
      provisions of this Warrant and hereby agrees to waive and not to assert the
      defense in any action for specific performance that a remedy at law would be
      adequate.




k)  Successors
      and Assigns .
      Subject
      to applicable securities laws, this Warrant and the rights and obligations
      evidenced hereby shall inure to the benefit of and be binding upon the
      successors of the Company and the successors and permitted assigns of Holder.
      The provisions of this Warrant are intended to be for the benefit of all Holders
      from time to time of this Warrant and shall be enforceable by any such Holder
      or
      holder of Warrant Shares and, without limiting the generality of the foregoing
      it is acknowledged and agreed that the term “Holder” shall include the
      successors and permitted assigns of the initial Holder.




l)  Amendment .
      This
      Warrant may be modified or amended or the provisions hereof waived with the
      written consent of the Company and the Holder.




m)  Severability .
      Wherever possible, each provision of this Warrant shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Warrant shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provisions or the remaining
      provisions of this Warrant.




n)  Registration
      Rights .
      This
      Warrant and the Warrant Shares are entitled to the benefits of that certain
      Registration Rights Agreement dated as of even date herewith between the
      Company, Holder and the other signatories thereto (the “ Registration
      Rights Agreement ”).
      The
      Company shall keep a copy of the Registration Rights Agreement, and any
      amendments thereto, at its principal office, and shall furnish copies thereof
      to
      the Holder upon request. The parties hereto acknowledge and agree that a holder
      of Warrant Shares issued upon the exercise of this Warrant, in whole or in
      part,
      shall continue to be entitled with respect to such shares to all rights to
      which
      it would have been entitled as a “Holder” under the Registration Rights
      Agreement.




o)  Headings .
      The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant.







********************


20




IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
      officer thereunto duly authorized.




**VENDINGDATA
                CORPORATION**Dated:
                ______________, 2006
            By:Mark
                R. Newburg,
              President
                and Chief Executive Officer




21




**Exhibit
        10.3**




**NOTICE
      OF EXERCISE**





TO:  VENDINGDATA
      CORPORATION





(1)  The
      undersigned hereby elects to purchase ________ Warrant Shares of the Company
      pursuant to the terms of the attached Warrant (only if exercised in full),
      and
      tenders herewith payment of the exercise price in full **[if
      this Notice of Exercise concerns a Cash Exercise] [transfer taxes for account
      of
      Company per Section 3(d)(v), if applicable** .]




(2)  Please
      issue a certificate or certificates representing said Warrant Shares in the
      name
      of the undersigned or in such other name as is specified below:




_______________________________





The
      Warrant Shares shall be delivered to the following DWAC Account Number or by
      physical delivery of a certificate to:





_______________________________




_______________________________




_______________________________





(3) Accredited
      Investor .
      The
      undersigned is an “accredited investor” as defined in Regulation D promulgated
      under the Securities Act of 1933, as amended.





[SIGNATURE
      OF HOLDER]




Name
      of
      Investing Entity:
      ________________________________________________________________________


*Signature
      of Authorized Signatory of Investing Entity* :
      __________________________________________________


Name
      of
      Authorized Signatory:
      ____________________________________________________________________


Title
      of
      Authorized Signatory:
      _____________________________________________________________________


Date:________________________________________________________________________________________







**Exhibit
        10.3**




**ASSIGNMENT
      FORM**





(To
      assign the foregoing Warrant, execute


this
      form
      and supply required information.


Do
      not
      use this form to exercise the Warrant.)











FOR
      VALUE
      RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
      rights evidenced thereby are hereby assigned to







_______________________________________________
      whose address is




_______________________________________________________________.




_______________________________________________________________





Dated:
      ______________, _______








Holder’s
      Signature:  _____________________________





Holder’s
      Address:  _____________________________




_____________________________





Signature
      Guaranteed: ___________________________________________




NOTE:
      The
      signature to this Assignment Form must correspond with the name as it appears
      on
      the face of the Warrant, without alteration or enlargement or any change
      whatsoever, and must be guaranteed by a bank or trust company. Officers of
      corporations and those acting in a fiduciary or other representative capacity
      should file proper evidence of authority to assign the foregoing
      Warrant.