Document:

Exhibit
        10.4

       

      REGISTRATION
        RIGHTS AGREEMENT

       

      This
        Registration Rights Agreement (this “Agreement”)
        is
        made and entered into as of May 1, 2006, among VendingData Corporation, a
        Nevada
        corporation (the “Company”),
        Bricoleur Partners, L.P., Bricoleur Enhanced, L.P., BRIC 6, L.P. and Bricoleur
        Offshore Ltd. (collectively the “Lenders”).

       

      RECITALS 

       

      A. WHEREAS,
        the Company will (i) sell $13 million of 8% Senior Secured Notes to the Lenders
        pursuant to that certain Note Purchase Agreement (“Note
        Purchase Agreement”),
        dated
        as of May 1, 2006 by and among the Company and the Lenders, and, in addition,
        (ii) acquire a put option to sell, from time to time, up to $5 million of
        the
        Company’s Common Stock to the Lenders pursuant that certain Amended and Restated
        Securities Put Agreement (“Securities
        Put Agreement”)
        dated
        as of May 1, 2006 by and among the Company and the Lenders. 

       

      AGREEMENT

      

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

       

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

       

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

       

      “Effectiveness
        Date”
means,
        with respect to the initial Registration Statement required to be filed
        hereunder, the 75th
        calendar
        day following the date hereof (the 90th calendar day in the case of a “full
        review” by the Commission.

       

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

       

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

       

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

       

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

      
        
          
          

        

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

       

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

       

      “Plan
        of Distribution”
shall
        have the meaning set forth in Section 2. 

       

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

       

      “Registrable
        Securities”
means
        all of (i) the shares of Common Stock underlying the common stock purchase
        warrants issued to the Lenders pursuant to the Note Purchase Agreement, (ii)
        the
        shares of Common Stock issuable to the Lenders from time to time pursuant
        to the
        Securities Put Agreement, and (iii) any shares of Common Stock issued or
        issuable upon any stock split, dividend or other distribution, recapitalization
        or similar event with respect to the foregoing; provided, however, a security
        shall no longer be a Registrable Security once it has been sold, or may be
        sold,
        without volume restrictions pursuant to Rule 144(k) or sold pursuant to a
        Registration Statement. 

       

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

       

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

       

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

       

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

      
        
          
          

        

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

       

      3. Registration
        Procedures

       

      In
        connection with the Company’s registration obligations hereunder, the Company
        shall:

       

      (a) Not
        less
        than five Trading Days prior to the filing of each Registration Statement
        and
        not less than two Trading Day prior to the filing of any related amendment
        or
        supplement thereto, the Company shall, (i) furnish to each Holder the selling
        stockholder and plan of distribution sections made a part thereof, along
        with
        any other section that specifically references a Holder, and (ii) cause its
        officers, directors and counsel to respond to all reasonable inquiries from
        the
        Holders as shall be necessary for each Holder to conduct a reasonable
        investigation within the meaning of the Securities Act. Each Holder agrees
        to be
        named in the Registration Statement and to carry out the offer and sale of
        Registrable Securities held by such Holder in a conformance with the Plan
        of
        Distribution attached hereto as Annex A, as modified by the Company as necessary
        to conform to comments from the Commission. Each Holder agrees to furnish
        to the
        Company a completed Questionnaire in the form attached to this Agreement
        as
        Annex B (a “Selling
        Shareholder Questionnaire”)
        by the
        end of the fourth Trading Day following the date on which such Holder receives
        the Selling Shareholder Questionnaire and draft materials in accordance with
        this Section.

      
        
          
          

        

        
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      (b) (i)
        Prepare and file with the Commission such amendments, including post-effective
        amendments, to a Registration Statement and the Prospectus used in connection
        therewith as may be necessary to keep a Registration Statement continuously
        effective as to the applicable Registrable Securities for the Effectiveness
        Period; (ii) cause the related Prospectus to be amended or supplemented by
        any
        required Prospectus supplement (subject to the terms of this Agreement),
        and as
        so supplemented or amended to be filed pursuant to Rule 424; (iii) respond
        as
        promptly as reasonably possible to any comments received from the Commission
        with respect to a Registration Statement or any amendment thereto; and (iv)
        comply in all material respects with the provisions of the Securities Act
        and
        the Exchange Act applicable to the Company with respect to the disposition
        of
        all Registrable Securities covered by a Registration Statement during the
        applicable period in accordance with the intended methods of disposition
        by the
        Holders thereof set forth in such Registration Statement as so amended or
        in
        such Prospectus as so supplemented.

       

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

       

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

       

      
        
          
          

        

        
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      (e) Furnish
        to each Holder, without charge, at least one conformed copy of each such
        final
        Prospectus and each final amendment or supplement thereto, promptly after
        the
        filing of such documents with the Commission, for Holder’s delivery in
        connection with a sale of the Registrable Securities.

       

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

       

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

       

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

       

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

      
        
          
          

        

        
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      (j) Upon
        the
        occurrence of any event contemplated by this Section 3, as promptly as
        reasonably possible under the circumstances taking into account the Company’s
        good faith assessment of any adverse consequences to the Company and its
        stockholders of the premature disclosure of such event, prepare a supplement
        or
        amendment, including a post-effective amendment, to a Registration Statement
        or
        a supplement to the related Prospectus or any document incorporated or deemed
        to
        be incorporated therein by reference, and file any other required document
        so
        that, as thereafter delivered, neither a Registration Statement nor such
        Prospectus will contain an untrue statement of a material fact or omit to
        state
        a material fact required to be stated therein or necessary to make the
        statements therein, in light of the circumstances under which they were made,
        not misleading. If the Company notifies the Holders in accordance with clauses
        (ii) through (iv) of Section 3(c) above to suspend the use of any Prospectus
        until the requisite changes to such Prospectus have been made, then the Holders
        shall suspend use of such Prospectus. The Company will use its best efforts
        to
        ensure that the use of the Prospectus may be resumed as promptly as is
        practicable. The Company shall be entitled to exercise its right under this
        Section 3(j) to suspend the availability of a Registration Statement and
        Prospectus, for a period not to exceed 60 calendar days (which need not be
        consecutive days) in any 12 month period.

       

      (k) Comply
        with all applicable rules and regulations of the Commission.

       

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

       

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

      
        
          
          

        

        
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      5. Indemnification

       

      (a) Indemnification
        by the Company.
        The
        Company shall, notwithstanding any termination of this Agreement, indemnify
        and
        hold harmless each Holder, the officers, directors, members, partners, employees
        of each of them, each Person who controls any such Holder (within the meaning
        of
        Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
        officers, directors, members, shareholders, partners, and employees of each
        such
        controlling Person, to the fullest extent permitted by applicable law, from
        and
        against any and all losses, claims, damages, liabilities, costs (including,
        without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”),
        as
        incurred, arising out of or relating to (1) any untrue statement of a material
        fact contained in a Registration Statement, any Prospectus or any form of
        prospectus or in any amendment or supplement thereto or in any preliminary
        prospectus, or arising out of or relating to any omission of a material fact
        required to be stated therein or necessary to make the statements therein
        (in
        the case of any Prospectus or form of prospectus or supplement thereto, in
        light
        of the circumstances under which they were made) not misleading, or (2) any
        violation by the Company of the Securities Act, Exchange Act or any state
        securities law, or any rule or regulation thereunder, in connection with
        the
        performance of its obligations under this Agreement, except to the extent,
        but
        only to the extent, that (i) such untrue statements or omissions are based
        solely upon information regarding such Holder furnished in writing to the
        Company by such Holder expressly for use therein, or to the extent that such
        information relates to such Holder or such Holder’s proposed method of
        distribution of Registrable Securities and was reviewed and expressly approved
        in writing by such Holder expressly for use in a Registration Statement,
        such
        Prospectus or such form of Prospectus or in any amendment or supplement thereto
        (it being understood that the Holder has approved Annex A hereto for this
        purpose), (ii) in the case of an occurrence of an event of the type specified
        in
        Section 3(c)(ii)-(iv), the use by such Holder of an outdated or defective
        Prospectus after the Company has notified such Holder in writing that the
        Prospectus is outdated or defective and prior to the receipt by such Holder
        of
        the Advice contemplated in Section 6(d), or (iii) any such untrue statement,
        omission or violation is directly related to and primarily the result of
        a
        material breach of this Agreement or violation of law by Holder.

       

      (b) Indemnification
        by Holders.
        Each
        Holder shall, severally and not jointly, indemnify and hold harmless the
        Company, its directors, officers, agents, attorneys and employees, each Person
        who controls the Company (within the meaning of Section 15 of the Securities
        Act
        and Section 20 of the Exchange Act), and the directors, officers, agents,
        attorneys or employees of such controlling Persons, to the fullest extent
        permitted by applicable law, from and against all Losses, as incurred, to
        the
        extent arising out of or based solely upon: (x) such Holder’s failure to comply
        with the prospectus delivery requirements of the Securities Act, (y) a material
        breach of this Agreement or violation of law by Holder, or (z) any untrue
        or
        alleged untrue statement of a material fact contained in any Registration
        Statement, any Prospectus, or any form of prospectus, or in any amendment
        or
        supplement thereto or in any preliminary prospectus, or arising out of or
        relating to any omission or alleged omission of a material fact required
        to be
        stated therein or necessary to make the statements therein not misleading
        (i) to
        the extent, but only to the extent, that such untrue statement or omission
        is
        contained in any information so furnished in writing by such Holder to the
        Company specifically for inclusion in such Registration Statement or such
        Prospectus or (ii) to the extent that such information relates to such Holder’s
        proposed method of distribution of Registrable Securities and was reviewed
        and
        expressly approved in writing by such Holder expressly for use in a Registration
        Statement (it being understood that the Holder has approved Annex A hereto
        for
        this purpose), such Prospectus or such form of Prospectus or in any amendment
        or
        supplement thereto or (iii) in the case of an occurrence of an event of the
        type
        specified in Section 3(c)(ii)-(iv), the use by such Holder of an outdated
        or
        defective Prospectus after the Company has notified such Holder in writing
        that
        the Prospectus is outdated or defective and prior to the receipt by such
        Holder
        of the Advice contemplated in Section 6(d). In no event shall the liability
        of
        any selling Holder hereunder be greater in amount than the dollar amount
        of the
        net proceeds received by such Holder upon the sale of the Registrable Securities
        giving rise to such indemnification obligation.

       

      
        
          
          

        

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

       

      An
        Indemnified Party shall have the right to employ separate counsel in any
        such
        Proceeding and to participate in the defense thereof, but the fees and expenses
        of such counsel shall be at the expense of such Indemnified Party or Parties
        unless: (1) the Indemnifying Party has agreed in writing to pay such fees
        and
        expenses; (2) the Indemnifying Party shall have failed promptly to assume
        the
        defense of such Proceeding and to employ counsel reasonably satisfactory
        to such
        Indemnified Party in any such Proceeding; or (3) the named parties to any
        such
        Proceeding (including any impleaded parties) include both such Indemnified
        Party
        and the Indemnifying Party, and a material conflict of interest is likely
        to
        exist if the same counsel were to represent such Indemnified Party and the
        Indemnifying Party, in which case, if such Indemnified Party notifies the
        Indemnifying Party in writing that it elects to employ separate counsel at
        the
        expense of the Indemnifying Party, the Indemnifying Party shall not have
        the
        right to assume the defense thereof and the reasonable fees and expenses
        of no
        more than one separate counsel shall be at the expense of the Indemnifying
        Party. The Indemnifying Party shall not be liable for any settlement of any
        such
        Proceeding effected without its written consent. 

       

      Subject
        to the terms of this Agreement, all reasonable fees and expenses of the
        Indemnified Party owing under this Section 5 (including reasonable fees and
        expenses to the extent incurred in connection with investigating or preparing
        to
        defend such Proceeding in a manner not inconsistent with this Section) shall
        be
        paid to the Indemnified Party. 

       

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

      
        
          
          

        

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

       

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

       

      6. Miscellaneous

       

      (a) Remedies.
        In the
        event of a breach by the Company or by a Holder, of any of their respective
        obligations under this Agreement, each Holder or the Company, as the case
        may
        be, in addition to being entitled to exercise all rights granted by law and
        under this Agreement, including recovery of damages, will be entitled to
        specific performance of its rights under this Agreement. The Company and
        each
        Holder agree that monetary damages would not provide adequate compensation
        for
        any losses incurred by reason of a breach by it of any of the provisions
        of this
        Agreement and hereby further agrees that, in the event of any action for
        specific performance in respect of such breach, it shall not assert or shall
        waive the defense that a remedy at law would be adequate.

       

      (b) No
        Piggyback on Registrations.
        Except
        as set forth on Schedule
        6(b)
        attached
        hereto, neither the Company nor any of its security holders (other than the
        Holders in such capacity pursuant hereto) may include securities of the Company
        in the initial Registration Statement other than the Registrable Securities.
        

       

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

       

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

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (e) Piggy-Back
        Registrations.
        If at
        any time during the Effectiveness Period there is not an effective Registration
        Statement covering all of the Registrable Securities and the Company shall
        determine to prepare and file with the Commission a registration statement
        relating to an offering for its own account or the account of others under
        the
        Securities Act of any of its equity securities, other than on Form S-4 or
        Form
        S-8 (each as promulgated under the Securities Act) or their then equivalents
        relating to equity securities to be issued solely in connection with any
        acquisition of any entity or business or equity securities issuable in
        connection with the stock option or other employee benefit plans, then the
        Company shall send to each Holder a written notice of such determination
        and, if
        within fifteen days after the date of such notice, any such Holder shall
        so
        request in writing, the Company shall include in such registration statement
        all
        or any part of such Registrable Securities such Holder requests to be
        registered.

       

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

       

      (g) Notices.
        Any and
        all notices or other communications or deliveries required or permitted to
        be
        provided hereunder shall be delivered as set forth in the Note Purchase
        Agreement or Securities Put Agreement, as the case may be.

       

      (h) Successors
        and Assigns.
        This
        Agreement shall inure to the benefit of and be binding upon the successors
        and
        permitted assigns of each of the parties and shall inure to the benefit of
        each
        Holder. The Company may not assign its rights (except by merger) or obligations
        hereunder without the prior written consent of at least a majority of the
        Holders of the then-outstanding Registrable Securities. Each Holder may assign
        their respective rights hereunder only (i) to a Permitted Transferee (as
        such
        term is defined in the Note Purchase Agreement and Securities Put Agreement
        ) or
        (ii) in connection with the transfer of all of their Registrable Securities
        in
        the manner and to the Persons as permitted under the Note Purchase Agreement
        or
        Securities Put Agreement, as the case may be.

       

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

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

      (m) Severability.
        If any
        term, provision, covenant or restriction of this Agreement is held by a court
        of
        competent jurisdiction to be invalid, illegal, void or unenforceable, the
        remainder of the terms, provisions, covenants and restrictions set forth
        herein
        shall remain in full force and effect and shall in no way be affected, impaired
        or invalidated, and the parties hereto shall use their commercially reasonable
        efforts to find and employ an alternative means to achieve the same or
        substantially the same result as that contemplated by such term, provision,
        covenant or restriction. It is hereby stipulated and declared to be the
        intention of the parties that they would have executed the remaining terms,
        provisions, covenants and restrictions without including any of such that
        may be
        hereafter declared invalid, illegal, void or unenforceable.

       

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

       

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

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGES FOLLOW]

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

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

       

      VENDINGDATA
        CORPORATION 

      

      By:
         /s/
        Mark R. Newburg

      Mark
        Newburg, 

      President
        and Chief Executive Officer

      

      

      BRICOLEUR
        PARTNERS, L.P.

      

      By:
        Bricoleur Capital Management, LLC,

      Its
        General Partner

      

      By: /s/
        Robert
        Poole                        
   

      Robert
        Poole, Member of 

      Management
        Board

      

      BRICOLEUR
        ENHANCED, L.P.

      

      By:
        Bricoleur Capital Management, LLC,

      Its
        General Partner

      

      By: /s/
        Robert
        Poole                         
   

      Robert
        Poole, Member of 

      Management
        Board

      

      BRIC
        6, L.P.

      

      By:
        Bricoleur Capital Management, LLC,

      Its
        General Partner

      

      By: /s/
        Robert
        Poole                            

      Robert
        Poole, Member of 

      Management
        Board

      

      BRICOLEUR
        OFFSHORE LTD.

      

      By:
        Bricoleur Capital Management, LLC,

      Its
        Investment Adviser

      

      By: /s/
        RobertPoole                         
   

      Robert
        Poole, Member of

      Management
        Board

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      ANNEX
        A

       

      Plan
        of Distribution

       

      The
        selling stockholders may, from time to time, sell any or all of their shares
        of
        common stock on any stock exchange, market or trading facility on which the
        shares are traded or in private transactions. These sales may be at fixed
        or
        negotiated prices. The selling stockholders may use any one or more of the
        following methods when selling shares:

       

      
        	
                ·

              	
                ordinary
                  brokerage transactions and transactions in which the broker-dealer
                  solicits purchasers;

              
	 	 
	
                ·

              	
                block
                  trades in which the broker-dealer will attempt to sell the shares
                  as agent
                  but may position and resell a portion of the block as principal
                  to
                  facilitate the transaction;

              
	 	 
	
                ·

              	
                purchases
                  by a broker-dealer as principal and resale by the broker-dealer
                  for its
                  account;

              
	 	 
	
                ·

              	
                an
                  exchange distribution in accordance with the rules of the applicable
                  exchange;

              
	 	 
	
                ·

              	
                privately
                  negotiated transactions;

              
	 	 
	
                ·

              	
                short
                  sales;

              
	 	 
	
                ·

              	
                broker-dealers
                  may agree with the selling stockholders to sell a specified number
                  of such
                  shares at a stipulated price per share;

              
	 	 
	
                ·

              	
                a
                  combination of any such methods of sale; and

              
	 	 
	
                ·

              	
                any
                  other method permitted pursuant to applicable
                  law.

              

      

       

      The
        selling stockholders may also sell shares under Rule 144 under the Securities
        Act, if available, rather than under this prospectus.

       

      The
        selling stockholders may also engage in puts and calls and other transactions
        in
        our securities or derivatives of our securities and may sell or deliver shares
        in connection with these trades.

       

      Broker-dealers
        engaged by the selling stockholders may arrange for other brokers-dealers
        to
        participate in sales. Broker-dealers may receive commissions or discounts
        from
        the selling stockholders (or, if any broker-dealer acts as agent for the
        purchaser of shares, from the purchaser) in amounts to be negotiated. The
        selling stockholders do not expect these commissions and discounts to exceed
        what is customary in the types of transactions involved. Any profits on the
        resale of shares of common stock by a broker-dealer acting as principal might
        be
        deemed to be underwriting discounts or commissions under the Securities Act.
        Discounts, concessions, commissions and similar selling expenses, if any,
        attributable to the sale of shares will be borne by a selling stockholder.
        The
        selling stockholders may agree to indemnify any agent, dealer or broker-dealer
        that participates in transactions involving sales of the shares if liabilities
        are imposed on that person under the Securities Act.

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      The
        selling stockholders may from time to time pledge or grant a security interest
        in some or all of the shares of common stock owned by them and, if they default
        in the performance of their secured obligations, the pledgees or secured
        parties
        may offer and sell the shares of common stock from time to time under this
        prospectus after we have filed a supplement to this prospectus under Rule
        424(b)(3) or other applicable provision of the Securities Act of 1933 amending
        the list of selling stockholders to include the pledgee, transferee or other
        successors in interest as selling stockholders under this
        prospectus.

       

      The
        selling stockholders also may transfer the shares of common stock in other
        circumstances, in which case the transferees, pledgees or other successors
        in
        interest will be the selling beneficial owners for purposes of this prospectus
        and may sell the shares of common stock from time to time under this prospectus
        after we have filed a supplement to this prospectus under Rule 424(b)(3)
        or
        other applicable provision of the Securities Act of 1933 amending the list
        of
        selling stockholders to include the pledgee, transferee or other successors
        in
        interest as selling stockholders under this prospectus.

       

      The
        selling stockholders and any broker-dealers or agents that are involved in
        selling the shares of common stock may be deemed to be "underwriters" within
        the
        meaning of the Securities Act in connection with such sales. In such event,
        any
        commissions received by such broker-dealers or agents and any profit on the
        resale of the shares of common stock purchased by them may be deemed to be
        underwriting commissions or discounts under the Securities Act. 

       

      We
        are
        required to pay all fees and expenses incident to the registration of the
        shares
        of common stock. We have agreed to indemnify the selling stockholders against
        certain claims, damages and liabilities, including liabilities under the
        Securities Act.

       

      The
        selling stockholders have advised us that they have not entered into any
        agreements, understandings or arrangements with any underwriters or
        broker-dealers regarding the sale of their shares of common stock, nor is
        there
        an underwriter or coordinating broker acting in connection with a proposed
        sale
        of shares of common stock by any selling stockholder. If we are notified
        by any
        selling stockholder that any material arrangement has been entered into with
        a
        broker-dealer for the sale of shares of common stock, if required, we will
        file
        a supplement to this prospectus. If the selling stockholders use this prospectus
        for any sale of the shares of common stock, they will be subject to the
        prospectus delivery requirements of the Securities Act.

       

      The
        anti-manipulation rules of Regulation M under the Securities Exchange Act
        of
        1934 may apply to sales of our common stock and activities of the selling
        stockholders.

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      Annex
        B

       

      VendingData
        Corporation 

       

      Selling
        Securityholder Notice and Questionnaire

       

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

       

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

       

      NOTICE

       

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

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

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

       

      QUESTIONNAIRE

       

      1. Name.

       

      
        	 	
                (a)

              	
                Full
                  Legal Name of Selling
                  Securityholder

              

      

       

      
        	 
	 

      

      

      
        	 	
                (b)

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

              

      

       

      
        	 
	 

      

      

      
        	 	
                (c)

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

              

      

       

      
        	 
	 

      

      

       

      2.
        Address for Notices to Selling Securityholder:

       

      
        	 
	 
	 
	 
	 
	
                Telephone: 

              	 

	
                Fax: 

              	 

	
                Contact
                  Person: 

              	 

      

      

      3.
        Beneficial Ownership of Registrable Securities:

       

      
        	 	
                (a)

              	
                Type
                  and Number of Registrable Securities beneficially
                  owned:

              

      

       

      
        	 
	 
	 
	 
	 
	 

      

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      4.
        Broker-Dealer Status:

       

      
        	 	
                (a)

              	
                Are
                  you a broker-dealer?

              

      

       

      Yes o     No
o

       

      
        	 	
                (b)

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

              

      

       

      Yes o     No
o

       

      
        	 	
                Note:

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

              

      

       

      
        	 	
                (c)

              	
                Are
                  you an affiliate of a
                  broker-dealer?

              

      

       

      Yes o     No
o

       

      
        	 	
                (d)

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

              

      

       

      Yes o     No
o

       

      
        	 	
                Note:

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

              

      

       

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

       

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

       

      
        	 	
                (a)

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

              

      

       

      
        	 
	 
	 
	 

      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      6.
        Relationships with the Company:

       

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

       

      State
        any
        exceptions here:

       

      
        	 
	 
	 
	 
	 

      

      

       

      7.
        Relationships with the Company’s Independent Accountant:

       

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

       

      State
        any
        exceptions here:

       

      
        	 
	 
	 
	 
	 

      

      

       

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

       

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

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

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

       

      Dated: ____________________                   Beneficial
        Owner:                                  

      

      By:                               

                     

      Name:

      Title: 

      

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

      

      

       

      Daniel
        Donahue, Esq.

      Preston
        Gates Ellis LLP

      1900
        Main
        Street, Suite 600

      Irvine,
        CA 92614

      

      Fax:
        949-253-0902

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      SCHEDULE
        6(B)

       

      PIGGYBACK
        REGISTRATIONS

       

      The
        Company intends to include on the initial Registration Statement:

      

      1. 3,000,000
        common shares underlying the warrants issued to the lenders pursuant to that
        certain credit agreement with the Company dated October 6, 2005.

      
        
          
          

        

        
          20Exhibit
        10.5

    

    

      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

       

      8%
        SENIOR 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 __________ Dollars
        ($_______). This Note shall bear interest on the unpaid Principal Amount
        at the
        rate of eight percent (8%) per annum (“Interest”). The Principal Amount shall be
        payable as follows: (i) four installments of $_____________ [RATABLE PORTION
        OF
        $1.5 MILLION] on each of May 2, 2007, 2008, 2009 and 2010, subject to adjustment
        as set forth in Section 4.11 of the Note Purchase Agreement (defined below),
        and
        (ii) the balance due and payable on March 31, 2011. 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 paid in full. 

       

      3. Manner
        and Place of Payment.
        Payments of the Principal Amount and Interest shall be made in lawful money
        of
        the United States of America. Principal and Interest are payable at
        _______________________ or at such other place as Holder may designate in
        writing. 

       

      4. Prepayment.
        Maker
        shall have the right, at any time or from time to time, to prepay, in whole
        or
        in part, the unpaid Principal Amount of this Note, without penalty or premium.
        

       

      5. 8%
        Senior Secured Promissory Note; Security Agreement.
        This
        Note is being delivered under that certain 8% Senior Secured Note Purchase
        Agreement (“Note Purchase Agreement”) between Maker and Holder dated May 1,
        2006. 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

          
            

          

        

        
          
          

        

      

       

      6. 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 Note Purchase Agreement, the Registration Rights Agreement
        or the
        Warrant 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.

       

      7. Acceleration
        Upon Event of Default or Change in Control.
        Upon
        the occurrence of an Event of Default specified in Section 6 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. 

       

      8. 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

          
            

          

        

        
          
          

        

      

       

      9. 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. 

       

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

       

      11. 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 Note Purchase 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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