Document:

EXHIBIT B

                         COMMON STOCK PURCHASE WARRANT

NEITHER THIS WARRANT NOR ANY SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"),
OR ANY STATE SECURITIES LAWS, AND NEITHER THIS WARRANT NOR ANY SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH THE ACT AND SUCH STATE SECURITIES LAWS, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND SUCH STATE SECURITIES LAWS.

                             VENDINGDATA CORPORATION

                          COMMON STOCK PURCHASE WARRANT
                          -----------------------------

                           Expiring ___________, 2006

                                                             Warrant No. 00-[__]

         THIS IS TO CERTIFY that __________, or its registered assigns
("______"), is entitled to purchase from VENDINGDATA CORPORATION, a Nevada
corporation (the "Company"), at any time on and after the Date of Issuance (as
hereinafter defined) but not later than 5:00 p.m., New York City time, on
___________, 2006 (the "Expiration Date"), Stock Units (as hereinafter defined)
equal to the Determined Number (as hereinafter defined) at the Exercise Price
(as hereinafter defined), subject to the terms and conditions herein provided.

         This Warrant is one of a series of the Company's common stock purchase
warrants (collectively, the "Warrants") issued by the Company in connection with
its use of a stand-by credit facility provided by Josephthal and the issuance of
a series of 10% secured promissory notes thereon.

         1. Definitions.

         As used in this Warrant, the following terms have the following
respective meanings:

         (a) "Act" means the Securities Act of 1933, as amended.

         (b) "Affiliate" has the meaning set forth in Rule 405 under the Act.

         (c) "Company" has the meaning set forth in the preamble of this
Warrant.

         (d) "Convertible Security" means Securities of the Company which may be
convertible into Shares.

         (e) "Date of Issuance" means the date set forth next to the signature
of the Company on the signature page hereof.

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         (f) "Determined Number" means the principal amount of the corresponding
Note divided by the Exercise Price.

         (g) "Exercise Price" means $2.50 per share.

         (h) "Expiration Date" has the meaning set forth in the preamble of this
Warrant.

         (i) "Holder" means any owner of all or any part of this Warrant from
time to time.

         (j) "Majority" means in excess of fifty percent (50%) of then
outstanding Warrants that are not held by the Company, an affiliate, officer,
employee or agent thereof or any of their respective affiliates, members of
their family, persons acting as nominees or in conjunction therewith.

         (k) "Private Equity Placement" means the sale of Shares or Convertible
Securities by the Company or any subsidiary of the Company now or hereafter
existing in a transaction exempt from the registration requirements of the Act
pursuant to Section 3(b) or 4(2) thereof or any applicable laws of jurisdictions
of other countries or any rule or regulation thereunder.

         (l) "Securities" has the meaning assigned to such term in the Act or
any rule or regulation thereunder.

         (m) "Shares" means shares of the Company's common stock, $0.001 par
value per share.

         (n) "Stock Unit" means one (1) Share, as same may be adjusted from time
to time in accordance with paragraph 4(a) below, and shall include any
additional securities, cash or property in respect thereof in accordance with
paragraph 4 below.

         (o) "Warrant Stock" means, collectively, (i) the Shares purchasable by
the Holder hereof upon the exercise of this Warrant, and (ii) any other
securities forming a part of any Stock Unit in accordance with paragraph 4
below.

         2. EXERCISE OF WARRANT.

         (a) In order to exercise this Warrant, in whole or in part, the Holder
hereof shall deliver to the Company, at its office set forth in paragraph 10
below, at any time and from time to time between the Date of Issuance and the
Expiration Date, (i) a written notice of such Holder's election to exercise,
which shall specify the number of whole Stock Units to be purchased, (ii) such
Holder's check payable to the Company in an aggregate amount equal to the
aggregate Exercise Price for those Stock Units being purchased, and (iii) this
Warrant. Upon receipt thereof, the Company shall, as promptly as practicable and
in any event within ten (10) days thereafter, cause to be executed and delivered
to such Holder a certificate or certificates representing the aggregate number
of fully paid and nonassessable shares of Warrant Stock, or any other property
forming a part of the subject Stock Unit(s) or both, issuable upon such
exercise. Such stock certificate(s) shall be in such denominations as may be
specified in the Holder's notice, and shall be registered in the name of such
Holder or such other name or names as shall be designated in such notice.

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         (b) In addition to the method of payment set forth in paragraph 2(a)
and in lieu of any cash payment required thereunder, the Holder(s) of the
Warrants shall have the right at any time and from time to time to exercise the
Warrants in whole or in part by surrendering the Warrant in the manner specified
in paragraph 2(a) above in exchange for that number of shares of Common Stock
equal to the product of (x) the number of shares as to which such Warrants are
being exercised multiplied by (y) a fraction, the numerator of which is the
market price of the Common Stock less the Exercise Price and the denominator of
which is such market price. Solely for the purposes of this paragraph 2(b),
market price shall be calculated either (i) on the date on which notice of the
Holder's election to exercise is given pursuant to paragraph 2(a) above or (ii)
as the average of the market prices for each of the five trading days preceding
such notice date, whichever results in a higher market price. If at any time the
Common Stock is not listed on the New York Stock Exchange, the American Stock
Exchange, any other domestic securities exchange or quoted in the Nasdaq Stock
Market, the "market price" shall be the fair value thereof determined jointly by
the Company and the Holders of Warrants representing two-thirds of all Warrant
Stock then outstanding; provided, that if such parties are unable to reach
agreement within a reasonable period of time, such "market price" shall be
determined by an appraiser jointly selected by the Company and the Holders of
Warrants representing two-thirds of all Warrant Stock then outstanding. The
determination of such appraiser shall be final and binding on the Company and
the Holders of the Warrants, and the fees and expenses of such appraiser shall
be paid by the Company. Any fractional share resulting from such cashless
exercise shall be eliminated.

         (c) All certificates representing Warrant Stock as aforesaid shall be
deemed to have been issued, and the Holder or other person designated to be
named therein shall be deemed to become a holder of record of the subject
Warrant Stock (including, to the extent permitted by law, the right to vote such
securities or grant consents or receive notices as a stockholder), as of the
time the Holder's notice and payment is received by the Company as aforesaid. If
this Warrant shall have been exercised only in part, the Company shall,
concurrently with its delivery pursuant to paragraph 2(a) above, deliver to the
subject Holder a new warrant (in substantially the form of this Warrant)
evidencing the rights of such Holder to purchase the remaining Stock Units
called for by this Warrant.

         (d) All Warrant Stock issuable upon the exercise of this Warrant in
whole or in part shall, upon payment therefor in accordance herewith, be validly
issued, fully paid and nonassessable.

         3. TRANSFER AND ASSIGNMENT.

         This Warrant and all rights hereunder are transferable, in whole or in
part, on the books of the Company to be maintained for such purposes, upon
surrender of this Warrant at the office of the Company set forth in paragraph 10
below, accompanied by a written assignment duly executed by the Holder hereof
indicating the number of Warrants being transferred and the name, address and
tax identification number of each transferee. Upon any such delivery, the
Company shall execute and deliver to the Holder or the transferee(s) or both (as
the case may be) new warrants (in substantially the form of this Warrant) in the
appropriate denominations, and this Warrant shall thereupon be canceled.

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<PAGE>

         4. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. In order to
prevent dilution of the rights granted under this Warrant and grant the Holder
hereof certain additional rights, the Exercise Price and the number of Shares or
any other property then constituting a Stock Unit obtainable upon exercise of
this Warrant shall be subject to adjustment from time to time as provided in
this Section 4.

         (a) ADJUSTMENT OF EXERCISE PRICE UPON ISSUANCE OF COMMON STOCK. If and
whenever on or after the Date of Issuance, the Company issues or sells, or is
deemed to have issued or sold, any Share for a consideration per share less than
the Exercise Price in effect immediately prior to such time, then immediately
upon such issue or sale the Exercise Price shall be reduced to the lowest net
price per share at which such Share has been issued or sold or is deemed to have
been issued or sold. No adjustment of the Exercise Price shall be made upon the
issuance or sale of Shares (i) pursuant to the exercise or conversion of
warrants, options or other convertible securities outstanding on the date hereof
as set forth on Schedule 4(a) attached hereto or (ii) pursuant to the exercise
of options to purchase a maximum of 2,020,600 Shares issuable upon exercise of
options available for future grant pursuant to the Company's employee stock
option plans.

         (b) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding Shares into a greater number
of Shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced and the number of Shares obtainable upon
exercise of this Warrant shall be proportionately increased. If the Company at
any time combines (by reverse stock split or otherwise) one or more classes of
its outstanding shares into a smaller number of Shares, the Exercise Price in
effect immediately prior to such combination shall be proportionately increased
and the number of Shares obtainable upon exercise of this Warrant shall be
proportionately decreased.

         (c) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets or other transaction,
in each case which is effected in such a way that the holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "Organic Change." Prior to the consummation of any Organic Change,
the Company shall make appropriate provision (in form and substance satisfactory
to the Holders of the Warrants representing a Majority) to insure that each of
the Holders of the Warrants shall thereafter have the right to acquire and
receive, in lieu of or addition to (as the case may be) the Shares immediately
thereto fore acquirable and receivable upon the exercise of such Holder's
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of Shares immediately theretofore
acquirable and receivable upon exercise of such Holder's Warrant had such
Organic Change not taken place. In any such case, the Company shall make
appropriate provision (in form and substance satisfactory to the Holders of the
Warrants representing a Majority) with respect to such holders' rights and
interests to insure that the provisions of this Section 4 hereof shall

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<PAGE>

thereafter be applicable to the Warrants (including, in the case of any such
consolidation, merger or sale in which the successor entity or purchasing entity
is other than the Company, an immediate adjustment of the Exercise Price to the
value for the Common Stock reflected by the terms of such consolidation, merger
or sale, and a corresponding immediate adjustment in the number of shares of
Common Stock acquirable and receivable upon exercise of the Warrants, if the
value so reflected is less than the Exercise Price in effect immediately prior
to such consolidation, merger or sale). The Company shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof, the
successor entity (if other than the Company) resulting from consolidation or
merger or the entity purchasing such assets assumes by written instrument (in
form and substance satisfactory to the Holders of Warrants representing a
Majority obtainable upon exercise of all of the Warrants then outstanding), the
obligation to deliver to each such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.

         (d) CERTAIN EVENTS. If any event occurs of the type contemplated by the
provisions of this Section 4 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Board of
Directors shall make an appropriate adjustment in the Exercise Price and the
number of Shares obtainable upon exercise of this Warrant so as to protect the
rights of the Holders of the Warrants; provided, that no such adjustment shall
increase the Exercise Price or decrease the number of shares of Common Stock
obtainable as otherwise determined pursuant to this Section 4.

         (e) LIQUIDATING DIVIDENDS. If the Company declares or pays a dividend
upon the Common Stock payable otherwise than in cash out of earnings or earned
surplus (determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend payable in shares of Common
Stock (a "Liquidating Dividends"), then the Company shall pay to the registered
Holder of this Warrant at the time of payment thereof the Liquidating Dividend
which would have been paid to such registered Holder on the Common Stock had
this Warrant been fully exercised immediately prior to the date on which a
record is taken for such Liquidating Dividend, or, if no record is taken, the
date as of which the record holders of Common Stock entitled to such dividends
are to be determined.

         5. NOTICE OF CERTAIN EVENTS.

                  (i) Immediately upon any adjustment of the Exercise Price, the
         Company shall give written notice thereof to the Holder, setting forth
         in reasonable detail and certifying the calculation of such adjustment.

                  (ii) The Company shall give written notice to the Holder at
         least twenty (20) days prior to the date on which the Company closes
         its books or takes a record (A) with respect to any dividend or
         distribution upon the Common Stock, (B) with respect to any pro rata
         subscription offer to holders of Common Stock or (C) for determining
         rights to vote with respect to any Liquidating Dividend, Organic Change
         or other dissolution or liquidation.

                  (iii) The Company shall also given written notice to the
         registered Holders at least twenty (20) days prior to the date on which
         any Liquidation Event, Organic Change or other dissolution or
         liquidation shall take pace.

                                      -96-
<PAGE>

         6. SALE OF CONTROL.

         If any person or group of persons (as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) to whom Shares are proposed to
be transferred (a "Proposed Transferee") would become a holder, directly or
indirectly, of fifty percent (50%) or more of the outstanding Shares as the
result of a transfer of common stock of the Company by any stockholder or
stockholders (such acquiring person being referred to as a "Control Person"), no
such purchase or transfer shall be made, closed, effected or recorded in the
Company's books or records unless the Control Person or the person or group of
persons who would become the owner of fifty percent (50%) or more of the Shares
as a result of any transfer of Shares shall offer, in writing to each holder of
Warrants, to purchase such Warrants from the holders of Warrants who desire to
sell, at the same price (on an "as converted" basis), terms and conditions as
such Control Person has offered to purchase the Shares to be sold by such
selling stockholder or stockholders. Each holder of Warrants shall have twenty
(20) days from the receipt of an executed copy of any offer in which to accept
such offer.

         7. RESERVATION OF SHARES.

         The Company shall at all times reserve and keep available for issuance
upon the exercise hereof such number of authorized but unissued or treasury
Shares as shall be sufficient to permit the full exercise of this Warrant.

         8. EXPENSES.

         The Company shall pay any and all expenses, transfer taxes and other
charges, including all costs associated with the preparation, issuance and
delivery of stock or warrant certificates, that may be incurred in respect of
the issuance or delivery of Warrant Stock upon any exercise of this Warrant.

         9. NO RIGHTS AS STOCKHOLDER.

         This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.

         10. NOTICES.

         Any and all notices to be given to the Company hereunder shall be given
to the Company at its offices located at, 6830 Spencer Street, Las Vegas, Nevada
89119, Attention: Steven J. Bard, President and Chief Executive Officer. A copy
should be sent to Kummer Kaempfer Bonner & Renshaw, 3800 Howard Hughes Parkway,
7th Floor, Las Vegas, Nevada 89109, Attention: Michael J. Bonner, Esq. Any and
all notices to be given to the Holder hereof shall be given to such Holder at
his address as same appears on the records of the Company.

         11. REGISTRATION.

         (a) LEGEND. Upon exercise, in part or in whole, of the Warrants,
certificates representing the Warrant Stock shall bear the following legend:

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         The securities represented by this certificate have not been registered
         under the Securities Act of 1933, as amended ("Act"), and may not be
         offered or sold except pursuant to (i) an effective registration
         statement under the Act, (ii) to the extent applicable, Rule 144 under
         the Act (or any similar rule under such Act relating to the disposition
         of securities), or (iii) an opinion of counsel, if such opinion shall
         be reasonably satisfactory to counsel to the issuer, that an exemption
         from registration under such Act is available.

         (b) REGISTRATION RIGHTS. Upon exercise, in whole or in part, of this
Warrant into Warrant Stock, the Holder shall be entitled to the registration
rights set forth herein.

                  (i)      PIGGYBACK REGISTRATION.

                           A. GRANT. Commencing on the date hereof and until
five (5) years from the earliest to occur of (i) the date on which a public
offering of capital stock of the Company registered under the Securities Act of
1933, as amended (the "Securities Act") is consummated or (ii) the date on which
any class of securities (as defined in the Securities Act ("Securities") of the
Company is listed on a national securities exchange or authorized for quotation
on the Nasdaq Stock Market (such date, the "Effective Date"), if the Company
proposes to register any of its Securities under the Securities Act (other than
pursuant to Form S-4 or Form S-8) for itself or on behalf of any selling
security holder, including in an initial public offering of the Company's
Securities, the Company will give written notice by registered mail, at least
thirty (30) days prior to the filing of each such registration statement, to the
Holders of its intention to do so. If any Holders notify the Company within
twenty (20) days after receipt of any such notice of their desire to include any
such Shares in such proposed registration statement, the Company shall afford
each of such Holders the opportunity to have any such Shares registered under
such registration statement, provided that in the case of an underwritten
offering made by the Company, such Holders agree to sell their Shares to or
through the Company's underwriter(s) pursuant to customary underwriting
agreements.

                           B. UNDERWRITER'S CUTBACK. If a registration made
pursuant to this Section 1 is an underwritten primary registration on behalf of
the Company, and the managing underwriters advise the Company in writing that in
their reasonable opinion based upon market conditions the number of Securities
requested to be included in such registration exceeds the number which can be
sold in such offering, the Company will include in such registration (i) first,
the Securities the Company proposes to sell, (ii) second, the Shares requested
to be included in such registration, pro rata among the Holders of such Shares,
on the basis of the number of Shares requested by such Holders to be included,
and (iii) third, any other Securities to be included in such registration.

                           If a registration made pursuant to this subparagraph
(i) is an underwritten secondary registration on behalf of holders of the
Company's Securities pursuant to a demand registration right, and the managing
underwriters advise the Company in writing that in their reasonable opinion
based upon market conditions the number of Securities requested to be included
in such registration exceeds the number which can be sold in such offering, the
Company will include in such registration (i) first, the Securities requested to
be included therein by the holders requesting such registration pursuant to a
demand registration right, (ii) second, the Shares requested to be included by
the Holders of such Shares, pro rata among the Holders of such Shares on the
basis of the number of Shares requested by such Holders to be included, and
(iii) third, any other Securities requested to be included in such registration.

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                           C. TERMINATION OR WITHDRAWAL OF REGISTRATION. The
Company shall have the right to terminate or withdraw any registration made
pursuant to this subparagraph (i) prior to the effectiveness of such
registration whether or not any Holder has elected to include such Holder's
Shares in such registration.

                           D. INFORMATION. If any Holder's Shares are to be
included in any registration pursuant to this subparagraph (i), such Holder
shall furnish to the Company such information as the Company may reasonably
request in writing and as shall be required in connection with such
registration.

                           E. TERMINATION OF PIGGY-BACK RIGHTS. The registration
rights granted under this subparagraph (i) shall expire with respect to any
Shares on the date on which (i) such Shares have been sold pursuant to an
effective registration statement, (ii) such Shares have been sold pursuant to
Rule 144, promulgated under the Securities Act, as Rule 144 may be subsequently
amended, modified, or supplemented ("Rule 144"), or (iii) such Shares are
eligible to be sold pursuant to Rule 144(k) without volume limitation.

                           F. NO CONVERSION OR EXERCISE REQUIRED. Nothing
contained in this Agreement shall be construed as requiring any Holder to
convert the Notes or exercise the Warrants into Shares prior to the initial
filing of any registration statement or the effectiveness thereof.

                  (ii) DEMAND REGISTRATION.

                           A. GRANT, COMPANY'S EXPENSE. For a period of five (5)
years from the Effective Date, the Holders representing a Majority (as
hereinafter defined) of such Shares (assuming the conversion in full of the
Notes and exercise in full of the Warrants) shall have the right (which right is
in addition to the registration rights under subparagraph (i) hereof),
exercisable by written notice (a "Demand Notice") to the Company, to have the
Company prepare and file with the Securities and Exchange Commission, on one
occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel for the Company
and counsel for the Holders, in order to comply with the provisions of the
Securities Act, so as to permit a public offering and sale of their respective
Shares for nine (9) consecutive months (or such shorter time until all
registered Shares have been sold) by such Holders and any Other Holders (as
defined below) who notify the Company within twenty (20) days after receiving
notice from the Company of the Demand Notice.

                           B. GRANT, HOLDER'S EXPENSE. In addition to the
registration rights under subparagraph (i) hereof and subparagraph (ii)(A)
hereof, for a period of five (5) years from the Effective Date, the Holders
representing a Majority (as hereinafter defined) of such Shares (assuming the
conversion in full of the Notes and exercise in full of the Warrants) shall have
the right, exercisable by Demand Notice to the Company, to have the Company
prepare and file with the Securities and Exchange Commission, on one occasion, a
registration statement and such other documents, including a prospectus, as may

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be necessary in the opinion of both counsel for the Company and counsel for the
Holders, in order to comply with the provisions of the Securities Act, so as to
permit a public offering and sale of their respective Shares for nine (9)
consecutive months (or such shorter time until all registered Shares have been
sold) by such Holders and any Other Holders (as defined below) who notify the
Company within twenty (20) days after receiving notice from the Company of the
Demand Notice; provided, however, that the provisions of Section 3(b) hereof
shall not apply to any such registration request and the registration and all
costs incident thereto shall be at the expense of the Holders making such
demand.

                           C. COMPANY DEMAND NOTICE. Within ten (10) days of
receipt of a Demand Notice by the Company, the Company shall send a written
notice (the "Company Demand Notice") to all Holders other than Holders
participating in the Demand Notice (the "Other Holders") inquiring whether such
Other Holders wish their Shares to be registered in such registration. The
Company shall use its best efforts to file, as soon as practicable following the
date of the Company Demand Notice, a registration statement covering all of the
then issued Shares specified in the Demand Notice and in written responses
delivered to the Company by the Other Holders within 20 days of receipt by the
Other Holders of the Company Demand Notice; provided, however, that in any event
the Company shall provide the Other Holders with at least 15 days from the date
of the Company Demand Notice to exercise the Other Holders' Warrants or convert
the Other Holders' Notes in accordance with the terms of such Warrants and Notes
to receive Shares for inclusion in such registration.

                           D. MANAGING UNDERWRITER. In the event of an
underwritten offering, the managing underwriter or underwriters of an
underwritten public offering covered by these demand registration rights shall
be selected by demanding Holders of a Majority of the Shares.

                           E. INFORMATION. If any Holder's Shares are to be
included in any registration statement pursuant to this subparagraph (ii), such
Holder shall furnish to the Company such information as the Company may
reasonably request in writing and as shall be required in connection with such
registration.

                           F. OTHER COMPANY SECURITIES. The Company may permit
Securities other than the Shares or other Securities held by the Holders to be
included in any registration statement filed pursuant this subparagraph (ii)
without the prior written consent of the Holders of a Majority of the Shares
included in such registration statement, provided that, in the event of an
underwritten offering, no Securities other than the Shares or other Securities
held by the Holders shall be included in any registration statement filed
pursuant to this subparagraph (ii) unless the managing underwriter or
underwriters shall advise the Company and such Holders in writing that the
inclusion of such additional Securities will not materially adversely affect the
price or success of the offering of the Shares or other Securities held by the
Holders. If the managing underwriters advise the Company in writing that in
their reasonable opinion, based upon market conditions, the number of such
additional Securities requested to be included in such registration exceeds the
number which can be sold in such offering without materially adversely affecting
the price or success of the offering of the Shares or other Securities held by
the Holders, the Company will reduce the number of additional Securities

                                     -100-
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requested to be included in such registration pro rata among the holders of such
additional Securities, or by such other proportions as may be agreed among such
holders of additional Securities. In no event shall the Company reduce the
number of Shares or other Securities held by the Holders to be included in such
registration.

                           G. TERMINATION OF DEMAND RIGHTS. The registration
rights granted under this subsection (ii) shall expire with respect to any
Shares on the date on which (i) such Shares have been sold pursuant to an
effective registration statement, (ii) such Shares have been sold pursuant Rule
144, or (iii) such Shares are eligible be sold pursuant to Rule 144(k) without
volume limitation.

                           H. NO CONVERSION OR EXERCISE REQUIRED. Nothing
contained in this Agreement shall be construed as requiring any Holder to
convert the Notes or exercise the Warrants into Shares prior to the initial
filing of any registration statement or the effectiveness thereof.

         12. MISCELLANEOUS.

         (a) No provision hereof, in the absence of affirmative action by the
Holder to effect any exercise hereunder, shall give rise to any liability of
such Holder for the Exercise Price or as a stockholder of the Company,
regardless of whether such liability is asserted by the Company or by any
creditor or creditors of the Company.

         (b) Neither this Warrant nor any of the terms or conditions hereof may
be waived, amended or modified, except with the written consent of the Company
and the registered Holder hereof.

         (c) This Warrant shall be governed by and construed in accordance with
the laws of the State of New York. The Company hereby agrees that the Holder, at
his election, may bring any such action or proceeding in federal or state courts
situated in the County and State of New York, and hereby submits to the
jurisdiction of the State of New York.

         (d) The captions and paragraph headings used in this Warrant are for
convenience of reference only, and shall not be referred to in connection with
any interpretation or construction hereof.

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<PAGE>

         IN WITNESS WHEREOF, the Company, having validly authorized the issuance
of this Warrant and all performance hereunder, has caused this Warrant to be
executed by its duly authorized officer on the Date of Issuance.

Dated:   ___________, 2001

                                        VENDINGDATA CORPORATION

                                        By:
                                            --------------------------------
                                            Steven J. Blad
                                            President & Chief Executive Officer

                                     -102-
<PAGE>

                                 [SCHEDULE 4(a)]

                                     -103-VENDINGDATA CORPORATION

                               SECURITY AGREEMENT
                               ------------------

         THIS SECURITY AGREEMENT, dated as of February 6, 2001 (the
"Agreement"), is between VENDINGDATA CORPORATION, a Nevada corporation having
its principal place of business at 6830 Spencer Street, Las Vegas, Nevada 89119
("Debtor"), and JOSEPHTHAL & CO., INC, a New York corporation having its
principal place of business at 200 Park Avenue, 25th Floor, New York, New York
10166 ("Secured Party").

                                   WITNESSETH:
                                   -----------

         WHEREAS, the Debtor has borrowed money from the Secured Party pursuant
to a standby credit facility and has executed one or a series of 10% secured
convertible promissory notes up to the aggregate principal amount of $500,000
payable to the order of the Secured Party (all obligations arising under the
promissory notes referred to above, including any changes thereto, present or
future, without limitation, are hereinafter referred to collectively as the
"Obligations," and all notes referred to above issued by Debtor to the Secured
Party in respect of the Obligations are hereinafter collectively referred to as
the "Notes"); and

         WHEREAS, it is a condition precedent to the Secured Party making loans
to the Debtor under the Notes that the Debtor execute and deliver this Agreement
to the Secured Party;

         NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

         1. SECURITY INTEREST. The Debtor hereby grants to the Secured Party a
security interest in all of Debtor's right, title and interest in all property
and interests of Debtor, tangible or intangible, whether now or hereafter
existing, wherever located, including all:

         (a)      Accounts, including but not limited to, all accounts, all
                  rights of the Debtor to payment for goods sold or leased or
                  for services rendered, all accounts receivable of the Debtor;
                  all obligations owing to the Debtor evidenced by an instrument
                  or chattel paper; all obligations owing to the Debtor of any
                  kind or nature, including all writings, if any, evidencing the
                  same, including all instruments, drafts, acceptances and
                  chattel paper; any and all proceeds of any of the foregoing.
                  Further included within the term "Accounts" are all right,
                  title and interest of Debtor in and any security and liens
                  with respect to any Account, and all Accounts, Documents and
                  Contract Rights of Debtor as defined in the Uniform Commercial
                  Code as enacted in the State of New York (the "Uniform
                  Commercial Code"); and

         (b)      Investment Property, including all of the Debtor's investment
                  property (as defined in the Uniform Commercial Code) and all
                  of the Debtor's other securities (whether certificated or
                  uncertificated), security entitlements, financial assets,
                  securities accounts, commodity contracts, and commodity
                  accounts (as each such

                                     -104-
<PAGE>

                  term is defined in the Uniform Commercial Code), including all
                  substitutions and additions thereto, all dividends,
                  distributions and sums distributable or payable from, upon or
                  in respect of such property, and all rights and privileges
                  incident to such property.

         (c)      Instruments and Chattel Paper, including all instruments and
                  chattel paper as defined in the Uniform Commercial Code and
                  all proceeds thereof; and

         (d)      General Intangibles, including but not limited to, all general
                  intangibles as defined in the Uniform Commercial Code and all
                  proceeds thereof, including without limitation, any and all
                  rights of Debtor to any refund of any tax assessed against
                  Debtor or paid by Debtor, loss carry-back tax refunds,
                  insurance premium rebates, unearned premiums, insurance
                  proceeds, chooses in action, names, trade names, goodwill,
                  trade secrets, computer programs, computer records, data,
                  computer software, customer lists, patents, patent rights,
                  patent applications, patents pending, patent licenses or
                  assignments, development ideas and concepts, licenses,
                  permits, franchises, literary rights, rights to performance,
                  trademarks, trademark applications, trademark rights, logos,
                  intellectual property, copyrights, proprietary or other
                  processes, drawings, designs, diagrams, plans, reports,
                  charts. catalogs, manuals, research, literature, proposals and
                  other reproductions on paper or otherwise, of any and all
                  concepts or ideas, whether or not related to the business or
                  operations of Debtor; and

         (e)      Equipment as defined in the Uniform Commercial Code, including
                  but not limited to, all equipment, vehicles, machinery, tools,
                  furniture, fixtures, trade fixtures and parts. Further
                  included within the term "Equipment" is all tangible personal
                  property utilized in the conduct of the Debtor's business and
                  all additions, accessions, substitutions, components, and
                  replacements thereto, therefor and thereof and all proceeds
                  thereof; and

         (f)      Inventory as defined in the Uniform Commercial Code, including
                  without limitation, all raw materials and other materials and
                  supplies, work-in-progress and finished goods and any products
                  made or processed therefrom and all substances, if any,
                  commingled therewith or added thereto; mid

         (g)      all products and proceeds of the above, including insurance
                  proceeds (collectively, the "Collateral").

         2. OBLIGATIONS SECURED. The security interest granted hereby secures
payment and performance of all debts, loans and liabilities hereunder, and all
interest, fees, charges and expenses, including without limitation, such debts,
loans and liabilities of Debtor to Secured Party arising under the Note.

         3. DEBTOR'S REPRESENTATIONS AND WARRANTIES. Debtor represents and
warrants that:

                                     -105-
<PAGE>

                  3.1. AUTHORIZATION. The execution, delivery and performance of
this Agreement and the Note are within Debtor's corporate powers, and are not in
contravention of law nor of the terms of Debtor's Articles of Incorporation or
By-laws, nor of any indenture, agreement or undertaking to which the Debtor is a
party or by which it is bound.

                  3.2. PLACE OF BUSINESS. Debtor's principal place of business
and chief executive office is located at the address provided in the first
paragraph of this Agreement, and Debtor keeps its inventory and records
concerning accounts, contract rights and other property at that location.

                  3.4. TITLE TO COLLATERAL. Debtor owns all of its personal
property and has good, clear and marketable title thereto, free and clear of all
liens and encumbrances, except liens created hereunder or set forth in Schedule
3.4, attached hereto and made a part hereof, and except in connection with lines
of credit obtained by Debtor from institutional lenders acceptable to Josephthal
& Co., Inc. pursuant to intercreditor agreements in form and substance
acceptable to Josephthal & Co., Inc. Secured Party acknowledges the existence
and acceptability of those encumbrances set forth in Schedule 3.4 attached
hereto.

                  3.5 COLLATERAL AND PERFECTION. Neither the Debtor nor, to the
best of the Debtor's knowledge, any affiliate (as such term is used in Rule 405
under the Securities Act of 1933, as amended ("Affiliates")) have performed any
acts which might prevent the Secured Party from enforcing any of the terms of
this Agreement or which would limit the Seemed Party in any such enforcement. No
collateral is in the possession of any person (other than Debtor) asserting any
claim thereto or security interest therein. The security interests created
hereunder constitute valid security interests under the Uniform Commercial Code
securing the Obligations to the extent that a security interest may be created
in the Collateral.

         4. GENERAL OBLIGATIONS OF DEBTOR.

                  4.1. FINANCING STATEMENTS. Debtor agrees to execute one or
more financing statements, to pay the cost of filing the same in all public
offices wherever filing is required by applicable law to perfect a security
interest or is deemed by the Secured Party to be necessary or desirable and to
execute such other documents as the Secured Party shall reasonably request.

                  4.2. INSURANCE. Debtor agrees to keep or cause to be kept all
the Collateral insured with coverages in amounts not less than usually carried
by one engaged in a like business.

                  4.3. INSPECTION. Debtor will keep accurate and complete
records of the Collateral, neither Debtor nor any Affiliates shall move the
Collateral without notice to the Secured Party and the Secured Party or any of
their agents shall have the right to inspect the Collateral wherever located and
to visit Debtor's place or places of business, at reasonable intervals without
Debtor's or any Affiliate's hindrance or delay, to inspect audit, check and make
extracts from any copies of books, records, journals, orders, receipts and
correspondence that relate to the Collateral or to the general financial
condition of Debtor or any Affiliate.

                                     -106-
<PAGE>

                  4.4. NEGATIVE PLEDGE. The Debtor will not assign any accounts
or other Collateral to any person other than the Secured Party, nor create or
permit to be created any lien, encumbrance or security interest of any kind on
any of its accounts, contract rights or inventory other than for the benefit of
the Secured Party, nor grant or permit to be granted any corporate guaranty
other than for the benefit of the Secured Party, except in connection with (i)
lines of credit obtained by Debtor from institutional lenders acceptable to
Josephthal & Co. Inc. pursuant to intercreditor agreements in form and substance
acceptable to Josephthal & Co. Inc., (ii) debt expressly subordinate to the
Notes, or (iii) purchase price liens.

                  4.5. EXISTENCE; PERFECTION. Debtor will maintain its corporate
existence in good standing comply with all laws and regulations of the United
States or any state or political subdivision thereof or of any governmental
authority which may have jurisdiction over it or its business. Debtor will not
change its name, identity or corporate structure in any manner unless it shall
have given the Secured Party prior notice thereof and delivered an opinion of
counsel satisfactory to the Secured Party with respect thereto. Debtor will not
establish or change the location of its chief executive office or its chief
place of business or except in the ordinary course of business, the locations
where it keeps or holds any Collateral or records relating thereto or in any
event change the location of any Collateral if such change would cause the
security interests hereunder to lapse or cease to be perfected.

                  4.6. TAXES. Debtor will pay all real and personal property
taxes, assessments and charges as well as all franchise, income, unemployment,
old age benefit, withholding, sales and other taxes assessed against it, or
payable by it at such times and in such manner as to prevent any penalty from
accruing or any lien or charge from attaching to its property, and wilt furnish
the Secured Party upon request, receipts or other evidence that deposits or
payments have been made.

                  4.7. SALES. Debtor will not sell or dispose of any of its
assets, including the Collateral, except in the ordinary and usual course of its
business

                  4,8. REPAIR. Debtor will maintain its equipment and property
in good repair and working order.

                  4.9. CONTINUING REPRESENTATIONS. The warranties and
representations made by Debtor in this Agreement arc continuing. In the event
that any obligation, representation or warranty is no longer true or correct,
Debtor will immediately notify the Secured Party in writing.

         5. DEFAULT. Debtor shall be in default under this Agreement and under
any other agreement with the Secured Party upon the happening of' any of the
following events or conditions, without demand or notice:

                  5.1. Failure of Debtor to pay when due any Obligation, whether
by maturity, acceleration or otherwise;

                  5.2. Failure of Debtor to perform any of its agreements,
warranties or representations in this Agreement or in the Note;

                                     -107-
<PAGE>

                  5.3. Material loss or theft, substantial damage or destruction
or unauthorized sale or encumbrance of any material portion of the Collateral in
excess of reasonably expected recoveries under insurance policies, or the making
of any levy on, or seizure or attachment of a material portion of the
Collateral; or

                  5.4. The occurrence of a default under the Note.

         6. SECURED PARTIES' RIGHTS UPON DEFAULT. The Secured Party shall upon
the occurrence of a default hereunder and at any time thereafter, without
presentment, demand, notice, protest or advertisement of any kind have the
following rights in addition to all other rights hereunder:

                  6.1. ACCELERATION. The Secured Party may make all Obligations
under this or any other agreement with the Debtor immediately due and payable
without presentment, demand, protest, heating or notice of any kind and may
exercise the rights of a secured party under law or under the terms of this or
any other agreement with the Debtor.

                  6.2. POSSESSION. The Secured Party may enter and take
possession of all Equipment, Inventory and other Collateral and the premises on
which they are located, and in the Secured Party's sole discretion operate and
use Debtor's equipment, whether or not Collateral hereunder, complete work in
process, apply as Debtor's attorney-in-fact for domestic or foreign patents or
other intellectual property rights with respect to inventions and seek
registration or assignment, foreign and domestic, of any trademarks, trade
names, styles, logos or copyrights, and sell, lease or license the Collateral to
third persons or associations without being liable to Debtor on account of any
losses, damage or depreciation that may occur as a result thereof so long as the
Secured Party shall act reasonably and in good faith; and at the Secured Party's
option and without notice to Debtor (except as specifically herein provided) the
Secured Party may sell, lease, assign and deliver the whole or any part of the
Collateral, or any substitute therefor or any addition thereto, at public or
private sale, for cash, upon credit, or for future delivery, at such prices and
upon such terms as the Secured Party deems advisable, including without
limitation, the right to sell or lease in conjunction with other property, real
or personal, and allocate the sale or lease proceeds among the items of property
sold without the necessity of the Collateral being present at any such sale or
lease, or in view of prospective purchasers thereof. The Secured Party shall
give Debtor at ten least (10) days' notice by hand delivery at or by United
States certified mail, postage prepaid (in which event notice shall be deemed to
have been given when so delivered), to the address specified herein, of the time
and place of any public or private sale or other disposition unless the
Collateral is perishable, threatens to decline speedily in value, or is the type
customarily sold in a recognized market. Upon such sale, the Secured Party may
become the purchaser of the whole or any part of the Collateral, discharged from
all claims and free from any right of redemption. In case of any such sale by
the Secured Party of all or any of said Collateral on credit or for future
delivery, property so sold may be retained by the Secured Party until the
selling price is paid by the purchaser. The Secured Party shall incur no
liability in case of the failure of the purchaser to take up and pay for the
property so sold. In case of any such failure, the said property may again be
sold.

                  6.3. POWER OF ATTORNEY AND NOTIFICATION. At Debtor's expense,
the Secured Party in its own name or in the name of others may communicate with
account debtors in

                                     -108-
<PAGE>

order to verify with them to the Secured Party's satisfaction the existence,
amount and terms of any accounts or contract rights and also notify account
debtors that Collateral has been assigned to the Secured Party and that payments
shall be made directly to the Secured Party. Upon request of the Secured Party,
Debtor will so notify such account debtors and will indicate on all billings to
such account debtors that their accounts must be paid to the Secured Party.
Debtor does hereby appoint the Secured Party and its agents as Debtor's
attorney-in-fact: to, upon an event of default hereunder, collect, compromise,
endorse, sell or otherwise deal with the Collateral or proceeds thereof in its
own name or in the name of the Debtor; to endorse the name of Debtor upon any
Note, checks, drafts, money orders, or other instruments, documents, receipts or
Collateral that may come into its possession and to apply the same in full or
part payment of any amounts owing to the Secured Party; to sign and endorse the
name of Debtor upon any documents, instruments, drafts against account debtors,
assignments, verifications and notices in connection with Accounts, and any
instrument or document relating thereto or to Debtor's rights therein; and to
give written notice to any office and officials of the United States Post Office
to effect such change or changes of address tat all mail addressed to Debtor may
be delivered directly to the Secured Party. Debtor hereby grants to its said
attorney-in-fact full power to do any and all things necessary to be done in and
about the premises as frilly and effectually as Debtor might or could do, and
hereby ratifies all that its attorney-in-fact shall lawfully do or cause to be
done by virtue hereof. This power of attorney is coupled with an interest and is
irrevocable for the term of this Agreement for all transactions hereunder and
thereafter as long as the Debtor may be indebted to the Secured Party.

                  6.4. APPLICATION OF PROCEEDS. Any and all proceeds of any
Collateral realized or obtained by the Secured Party upon exercise of its rights
and remedies hereunder, shall be applied, after payment of any and all costs and
expenses, fees and commission and taxes of such sale, collection or other
realization, in accordance with the following:

         (a)      With respect to any surplus proceeds of any Collateral then
                  remaining, to the payment of the Obligations, and any costs,
                  fees or expenses incurred in connection with the
                  administration, collection or enforcement thereof, including,
                  without limitation, reasonable attorney's fees and other
                  professionals' out of pocket costs and fees, until payment and
                  satisfaction in full thereof; and

         (b)      Any surplus remaining after application as provided in
                  paragraph (a) above, shall be paid to the Debtor, or its
                  successors or assigns, or to whomsoever may be lawfully
                  entitled to receive the same.

         7. DEBTOR'S OBLIGATION TO PAY EXPENSES OF SECURED PARTIES. Debtor shall
pay to the Secured Party on demand any and all reasonable expenses (including,
but not limited to, a collection charge on all accounts collected, all
reasonable attorney's fees and expenses, and all other expenses of like or
unlike nature) that may be incurred or paid by the Secured Party to obtain or
enforce payment of any account against the account debtor, Debtor or any
guarantor or surety of or in the prosecution or defense of any action or
concerning any matter growing out of or connected with the subject matter of
this Agreement, the Obligations, such Collateral or the Secured Party's rights
or interests therein or thereto. All such

                                     -109-
<PAGE>

expenses may be added to the principal amount of any indebtedness owed by Debtor
to the Secured Party and shall constitute part of such Obligations secured
hereby.

         8. WAIVERS. Debtor waives demand, presentment, protest, notice of
nonpayment and all other notices. No delay or omission by the Secured Party in
exercising any rights shall operate as a waiver of such right or any other
right. Waiver on any one occasion shall not be construed as a bar to or waiver
of any right or remedy on any future occasion. The Secured Party's rights arid
remedies, whether evidenced hereby or by any other agreement, instrument or
paper, shall be cumulative and may be exercised singularly or concurrently.

         9. FURTHER ASSURANCES. The Debtor, at its own expense, shall do, make,
execute and deliver all such additional and further acts, deeds, assurances,
documents, instruments and certificates as the Secured Party may reasonably
require, including, without limitation, (a) executing, delivering and filing
financial statements and continuation statements under the Uniform Commercial
Code as applicable in any relevant jurisdiction, (b) obtaining governmental and
other third party consents and approvals, and (c) obtaining waivers from
mortgagees and landlords.

         10. CHOICE OF LAW. THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF NEW YORK.

         11. WAIVER OF JURY TRIAL. THE DEBTOR HEREBY WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MANNER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS AGREEMENT OR THE NOTE OR THE RELATIONSHIP ESTABLISHED
HEREUNDER, THEREUNDER.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     -110-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day and year first above written.

                                        DEBTOR:

                                             VENDINGDATA CORPORATION

                                             By: /s/ Steven J. Blad
                                                 --------------------------
                                             Name: Steven J. Blad
                                             Title: President & CEO

                                        SECURED PARTY:

                                             JOSEPHTHAL & CO., INC.

                                             By: /s/ Faith Griffin
                                                 -------------------------
                                             Name: Faith Griffin
                                             Title: Managing Director

                                     -111-

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