Document:

Exhibit
      10.6

    

      EXHIBIT
        B

       

      NEITHER
        THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
        HAVE
        BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
        COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
        THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
        MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
        FROM,
        OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
        SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
        EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE ISSUER TO SUCH
        EFFECT

      

      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, _____________ (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 November __, 2006
        (the
“Initial
        Exercise Date”)
        and on
        or prior to the close of business on the fifth anniversary of the Initial
        Exercise Date (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 2(b). 

       

      Section
        1. Definitions.
        Capitalized terms used and not otherwise defined herein shall have the meanings
        set forth in that certain 8% Senior Secured Note Purchase Agreement (the
        “Purchase
        Agreement”)
        dated
        May 1, 2006 between the Company and the Holder.

       

      
        
          
          

        

        
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      Section
        2.     Exercise.

       

      a) Exercise
        of Warrant.
        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
        facsimile copy of the 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, within 3 Trading Days of the date said Notice of Exercise
        is
        delivered to the Company, the Company shall have received payment of the
        aggregate Exercise Price of the shares thereby purchased by wire transfer
        or
        cashier’s check drawn on a United States bank. 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. A portion of the Warrant Shares subject to purchase hereunder is
        subject to reduction pursuant to the clawback provisions of Section 3(e)
        below,
        and any portion of this Warrants subject to potential reduction pursuant
        to
        Section 3(e) may not be exercised until such time as it is no longer subject
        to
        potential reduction pursuant to Section 3(e). Partial exercises of this Warrant
        resulting in purchases of a portion of the total number of Warrant Shares
        available hereunder, and reductions pursuant to Section 3(e), 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 the Company shall
        maintain records showing the number of Warrant Shares purchased or reduced
        and
        the date of such purchases or reductions. 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.

       

      b) Exercise
        Price.
        The
        exercise price per share of the Common Stock under this Warrant shall be
        $2.50,
        subject to adjustment herein (the “Exercise
        Price”).

       

      c) 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 from all taxes, liens and charges created
        by the Company in respect of the issue thereof (other than taxes in respect
        of
        any transfer occurring contemporaneously with such issue). 

       

      
        
          
          

        

        
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      ii. Delivery
        of Certificates Upon Exercise.
        Subject
        to the Company’s ability to issue unlegended shares upon exercise of this
        Warrant in compliance with the Securities Act and Holder’s acknowledgement of
        its compliance or intended compliance with the registration and prospectus
        delivery requirements of the Securities Act, certificates for shares purchased
        hereunder shall be transmitted by the transfer agent of the Company to the
        Holder by crediting the account of the Holder’s prime broker with the Depository
        Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”)
        system
        if the Company is a participant in such system, and otherwise by physical
        delivery to the address specified by the Holder in the Notice of Exercise
        within
        3 Trading Days from the 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 (“Warrant
        Share Delivery Date”).
        

       

      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 certificate, at the time of delivery
        of the certificate or certificates representing Warrant Shares, deliver to
        Holder a new Warrant evidencing the rights of 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 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 Exercise Price or round up
        to
        the next whole share.

       

      v. Charges,
        Taxes and Expenses.
        Issuance of certificates for Warrant Shares shall be made without charge
        to the
        Holder for any issue or transfer tax or other incidental 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
        sufficient to reimburse it for any transfer tax incidental thereto.

       

      
        
          
          

        

        
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      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.

       

      Section
        3. 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 make 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 outstanding shares of Common Stock into a larger number of shares,
        (C) combines (including by way of reverse stock split) outstanding shares
        of
        Common Stock into a smaller number of shares, or (D) 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. Any adjustment made pursuant
        to
        this Section 3(a) shall become effective immediately after the record date
        for
        the determination of stockholders entitled to receive such dividend or
        distribution and 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 (and not to the Holder
        of
        this Warrant) 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 the number of shares of the Common Stock outstanding on the date
        of
        issuance of such rights or warrants plus 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 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. “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,
        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 an independent appraiser selected in good faith by the Holder
        and
        reasonably acceptable to the Company.

       

      
        
          
          

        

        
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      c) Pro
        Rata Distributions.
        If the
        Company, at any time prior to the Termination Date, shall distribute to all
        holders of Common Stock (and not to the Holder of this Warrant) evidences
        of its
        indebtedness or assets (including cash and cash dividends) or rights or warrants
        to subscribe for or purchase any security other than the Common Stock, 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 whenever any such distribution is made and shall
        become
        effective immediately after the record date mentioned above.

       

      d) Fundamental
        Transaction.
        If, at
        any time while this Warrant is outstanding, (A) the Company effects any merger
        or consolidation of the Company with or 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”),
        then,
        upon any subsequent exercise of this Warrant, the Holder shall have the right
        to
        receive, for each Warrant Share that would have been issuable upon such exercise
        immediately prior to the occurrence of such Fundamental Transaction, at the
        option of the Holder, (a) upon exercise of this Warrant, the number of shares
        of
        Common Stock of the successor or acquiring corporation or of the Company,
        if it
        is the surviving corporation, and any additional consideration (the
“Alternate
        Consideration”)
        receivable upon or as a result of such reorganization, reclassification,
        merger,
        consolidation or disposition of assets by a Holder of the number of shares
        of
        Common Stock for which this Warrant is exercisable immediately prior to such
        event or (b) if the Company is acquired in an all cash transaction, cash
        equal
        to the number of Warrant Shares multiplied by the excess, if any, of the
        cash
        paid on one share of Common Stock in such transaction over the Exercise Price.
        For purposes of any such exercise, the determination of the Exercise Price
        shall
        be appropriately adjusted to apply to such Alternate Consideration based
        on the
        amount of Alternate Consideration issuable in respect of one share of Common
        Stock in such Fundamental Transaction, and the Company shall apportion the
        Exercise Price among the Alternate Consideration in a reasonable manner
        reflecting the relative value of any different components of 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 Alternate 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 comply with the provisions of this Section 3(d) and insuring
        that this Warrant (or any such replacement security) will be similarly adjusted
        upon any subsequent transaction analogous to a Fundamental
        Transaction.

       

      
        
          
          

        

        
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      e) Clawback.
        If at
        any time prior to the first anniversary of the Closing Date, the aggregate
        outstanding principal balance of the Notes is reduced to $7,000,000 or less,
        then the number of Warrant Shares subject to purchase hereunder shall be
        reduced
        by ________. If the principal balance under the Notes is reduced to $7,000,000
        or less by the second anniversary of the Closing Date, then the number of
        Warrant Shares subject to purchase hereunder shall be reduced by ________.
        If
        the principal balance of the Notes is reduced to $7,000,000 or less by the
        third
        anniversary of the Closing Date, then the number of Warrant Shares subject
        to
        purchase hereunder shall be reduced by ________. The cancellation of Warrants
        and reduction of Warrant Shares subject to purchase hereunder pursuant to
        this
        subpart(e) shall be effected automatically and immediately upon the Company’s
        delivery of payment or other effective reduction of principal amount of the
        Notes without need of any other notice by or action on the part of any party.
        

       

      f) Calculations.
        All
        calculations under this Section 3 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
        3,
        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.

       

      g) 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.

       

      h) Notice
        to Holders.
        

       

      i. Adjustment
        to Exercise Price.
        Whenever the Exercise Price is adjusted pursuant to any provision of this
        Section 3, the Company shall promptly mail to each Holder a notice setting
        forth
        the Exercise Price after such adjustment and setting forth a brief statement
        of
        the facts requiring such adjustment. 

       

      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
        or
        merger to which the Company is a party, any sale or transfer of all or
        substantially all of the assets of the Company, of any compulsory share exchange
        whereby the Common Stock is converted into other securities, cash or property;
        (E) the Company shall authorize the voluntary or involuntary dissolution,
        liquidation or winding up of the affairs of the Company; 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 20 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, distributions, redemption, rights or warrants
        are to
        be determined or (y) the date on which such reclassification, consolidation,
        merger, sale, transfer or share exchange is expected to become effective
        or
        close, 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, 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. 

       

      
        
          
          

        

        
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      Section
        4.     Transfer
        of Warrant.

       

      a) Transferability.
        Subject
        to compliance with any applicable securities laws and the conditions set
        forth
        in Section 4(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. 

       

      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.

       

      d) Transfer
        Restrictions.
        The
        Company may require, as a condition of allowing the transfer of this Warrant
        (i)
        the opinion of counsel 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. The foregoing conditions
        shall
        not apply to any Permitted Transferee of Holder, subject to the Company’s
        reasonable determination that such transfer does not require registration
        of
        such transferred securities under the Securities Act. A “Permitted Transferee”
means the spouse or lineal descendants of Holder, any trust for the benefit
        of
        Holder or the benefit of the spouse or lineal descendants of Holder, any
        corporation or partnership in which Holder, the spouse and the lineal
        descendants of Holder are the direct and beneficial owners of substantially
        all
        of the equity interests (provided Holder, spouse and lineal descendants agree
        in
        writing to remain the direct and beneficial owners of all such equity
        interests), the personal representative of Holder upon Holder’s death for
        purposes of administration of Holder’s estate or upon Holder’s incompetency for
        purposes of the protection and management of the assets of Holder; or for
        any
        Holder that is a partnership, limited liability company, corporation or other
        entity to (i) a partner or former partner of such partnership, a member or
        former member of such limited liability company or a shareholder of such
        corporation, (ii) the estate of any such partner, member or shareholder,
        or
        (iii) any other Affiliate of Holder. 

       

      
        
          
          

        

        
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      e) Lock-Up.
        In
        addition to transfer restrictions under the Securities Act, the Holder agrees
        that any Warrant Shares purchased hereunder shall be subject to a lock-up
        for a
        period commencing on the date of this Warrant and expiring _____, 2006 [six
        months from the close of the Note Purchase Agreement] and during such period
        shall not be sold, assigned or otherwise disposed of by Holder except to
        a
        Permitted Transferee in accordance with subpart (d) above.

       

      Section
        5. 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.
        

       

      
        
          
          

        

        
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      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 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, 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.

       

      Before
        taking any action which would result in an adjustment in the number of Warrant
        Shares for which this Warrant is exercisable or in the Exercise Price, the
        Company shall obtain all such authorizations or exemptions thereof, or consents
        thereto, as may be necessary from any public regulatory body or bodies having
        jurisdiction thereof.

       

      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.

       

      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.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      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.

       

      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. 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.

       

      

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

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

      

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

       

      

      Dated:
        ______________, 2006

      

      
        	
                VENDINGDATA
                  CORPORATION

                 

              
	
                By:__________________________________________

                Mark
                  R. Newburg,

                President
                  and Chief Executive Officer

              

      

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      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, together with all
        applicable transfer taxes, if any.

       

      (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:                   
          

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      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.

      
        
          
          

        

        
          13Exhibit
      10.7

     

    
      EXHIBIT
        A 

       

      THESE
        SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
        AS
        AMENDED, 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, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE
        SATISFACTION OF COUNSEL TO THE ISSUER.

       

      $__________________,
        2006

       

      CONVERTIBLE
        SECURED PROMISSORY NOTE

       

      1.  Obligation.
        For
        value received, VENDINGDATA CORPORATION, a Nevada corporation (“Maker”),
        promises to pay to __________________ ("Holder"),
        the
        Principal Amount and Interest (both as defined below) in the manner and upon
        the
        terms and conditions set forth herein.

       

      2.  Principal
        Amount and Interest.
        The
        principal amount (“Principal Amount”) of this Note is [RATABLE PORTION OF
        $1,500,000] __________ Dollars ($_______). This Note shall bear interest
        on the
        unpaid Principal Amount at the rate of eight percent (8%) per annum
        (“Interest”). The accrued and unpaid Interest shall be paid in semi-annual
        installments, commencing on June 1, 2006 and continuing thereafter on each
        June
        1st
        and
        December 1st
        until
        all amounts owing under this Note are converted as described in Section 3
        below.
        Payments of the Interest shall be made in lawful money of the United States
        of
        America, at _______________________ or at such other place as Holder may
        designate in writing. 

       

      3.  Conversion
        of Principal Amount.
        On the
        earlier of (i) the date that Maker receives approval from its stockholders
        for
        such conversion, or (ii) August 31, 2006 (the first such to occur being the
        “Conversion Date”), the Principal Amount shall be converted into a total of
        _______________ shares of the Maker’s common stock, par value $0.001 per share
        (“Common Stock”), valued at $_________ per share. Conversion will occur
        immediately on the Conversion Date without any need for further action on
        the
        part of Holder. Certificates representing the shares of Common Stock issued
        pursuant to this Section 3 will be subject to the terms and conditions set
        forth
        in that certain Amended and Restated Put Agreement dated of even date herewith
        by and between Maker and Holder (the “Put Agreement”), except that the six month
        lock-up period on such shares shall start on May 2, 2006 and not on the date
        of
        issuance. 

       

      4.  Security
        Agreement.
        This
        Note is being delivered pursuant to that certain Letter Agreement dated May
        2,
        2006 between Maker and Holder. Maker’s obligations under this Note are subject
        to a security interest in the assets of Maker, pursuant to that certain Security
        Agreement (“Security Agreement”) dated May 1, 2006 entered into between Maker
        and Holder.

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      5.  Events
        of Default.
        The
        following shall each constitute an “Event of Default” under this Note: (i)
        default in the payment when due of any amount required hereunder, (ii) default
        in Maker’s performance of any other obligation hereunder or under the Security
        Agreement, the Put Agreement, or the Registration Rights Agreement that remains
        uncured ten days after receipt of written notice of default, or (iii) any
        of the following events of bankruptcy or insolvency: (A) the Maker shall
        file a
        voluntary bankruptcy or reorganization petition under the provisions of the
        Federal Bankruptcy Act, any other bankruptcy or insolvency law or any other
        similar statute applicable to the Maker (“Bankruptcy Laws”), (B) the Maker shall
        consent to the filing of any bankruptcy or reorganization petition against
        it
        under any Bankruptcy Law, (C) the Maker shall make an assignment for the
        benefit
        of his creditors, (D) the Maker shall admit in writing its inability to pay
        its
        debts generally as they become due, (E) the Maker shall consent to the
        appointment of a receiver, trustee, or by the order of a court of competent
        jurisdiction, a receiver, liquidator or trustee of the Maker or of any
        substantial part of its property shall not have been discharged within a
        period
        of sixty (60) days, (F) by decree of such a court, the Maker shall be
        adjudicated bankrupt or insolvent or any substantial part of the property
        of the
        Maker shall have been sequestered and such degree shall have continued
        undischarged and unstayed for a period of sixty (60) days after the entry
        thereof, or (G) an involuntary bankruptcy reorganization petition pursuant
        to
        any Bankruptcy Law shall be filed against the Maker (and, in the case of
        any
        such petition filed pursuant to any provision of a statute which requires
        the
        approval of such petition by a court, shall be approved by such a court)
        and
        shall not be dismissed within sixty (60) days after such filing.

       

      6.  Acceleration
        Upon Event of Default or Change of Control.
        Upon
        the occurrence of an Event of Default specified in Section 5 above or a Change
        in Control (as defined below), the entire Principal Amount and all Interest
        shall, at the option of Holder evidenced by a written notice to Maker, become
        immediately due and payable, without further presentment, notice or demand
        for
        payment. For purposes of this Note, a “Change
        in Control” shall mean the occurrence of any of the following events: (i) a
        sale of all or substantially all of the assets of the Maker; (ii) a liquidation
        or dissolution of the Maker; (iii) a merger or consolidation in which the
        Maker is not the surviving corporation, unless the
        stockholders of the Maker immediately prior to such consolidation, merger
        or
        reorganization, own more than 50% of the Maker’s voting power immediately after
        such;
        (iv) a reverse merger in which the Maker is the surviving corporation but
        the shares of Common Stock and securities convertible into Common Stock
        outstanding immediately preceding the merger are converted by virtue of the
        merger into other property, whether in the form of securities, cash or
        otherwise; (v) any
        consolidation or merger of the Maker, or any other corporate reorganization,
        in
        which the stockholders of the Maker immediately prior to such consolidation,
        merger or reorganization, own less than 50% of the Maker’s voting power
        immediately after such consolidation, merger or reorganization; or
        (vi) any Person other than James Crabbe becomes the owner, directly or
        indirectly, of securities of the Maker representing more than 50% of the
        combined voting power of the Maker’s then outstanding securities; provided,
        however,
        that a
“Change in Control” shall not include any transaction the sole purpose of which
        is to change the state of the Maker’s incorporation. 

       

      7.  Expenses
        of Enforcement.
        Maker
        agrees to pay all reasonable costs and expenses, including, without limitation,
        reasonable attorneys’ fees, as a court of competent jurisdiction shall award,
        which Holder shall incur in connection with any legal action or legal proceeding
        commenced for the collection of this Note or the exercise, preservation or
        enforcement of Holder’s rights and remedies thereunder.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      8.  Cumulative
        Rights and Remedies.
        All
        rights and remedies of Holder under this Note shall be cumulative and not
        alternative and shall be in addition to all rights and remedies available
        to
        Holder under applicable law. 

       

      9.  Governing
        Law.
        This
        Note shall be governed by and interpreted and construed in accordance with
        the
        laws of the State of Nevada.

       

      10.  Notices
        and Demands.
        Any
        notice or demand which by any provision of this Note is required or provided
        to
        be given shall be in writing and shall be deemed to have been given or served
        sufficiently for all purposes if sent as provided in the Put Agreement or
        through a nationally-recognized overnight courier and simultaneously transmitted
        by facsimile to the following respective addresses and facsimile telephone
        numbers:

      
                        

          	
                  Maker:

                	
                  VendingData
                    Corporation.

                
	 	
                  6830
                    Spencer Street

                
	 	
                  Las
                    Vegas, NV 89119

                
	 	
                  Attention:
                    Mark R. Newburg, 

                
	 	
                  President
                    and Chief Executive Officer

                
	 	
                  Facsimile:
                    (702) 733-7197

                

        

         

      

      or
        at any
        other address designated by Maker to Holder in writing.

       

      
        	
                Holder:

              	
              
	 	
                 

              
	 	
                 

              
	 	
                
                  Attention:
                    

                

              
	 	
                
                  Facsimile:
                    

                

              

       

      or
        at any
        other address designated by Holder to Maker in writing, and if to an assignee
        of
        Holder, to its address as designated to Maker in writing.

       

      IN
        WITNESS WHEREOF, Maker has caused this Note to be executed and delivered
        at Las
        Vegas, Nevada effective as of the day and year first above written.

       

      VENDINGDATA
        CORPORATION

      

      By:   
        ____________________________     

      Mark
        R.
        Newburg,

      President
        and Chief Executive Officer

      
        
          
          

        

        
          3

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