Exhibit 4.5
                                PROMISSORY NOTE
$1,000,000.00
                                                                 January 2, 2003
I.D. Systems, Inc.
One University Plaza
Hackensack, New Jersey 07601
(Individually and collectively "Borrower")

Wachovia Bank, National Association
190 River Road
Summit, New Jersey 07901
(Hereinafter referred to as "Bank")

Borrower  promises  to pay to the order of Bank,  in lawful  money of the United
States of  America,  at its office  indicated  above or  wherever  else Bank may
specify,  the sum of One Million and No/100 Dollars  ($1,000,000.00) or such sum
as may be  advanced  and  outstanding  from time to time,  with  interest on the
unpaid  principal  balance  at the  rate  and  on the  terms  provided  in  this
Promissory Note  (including all renewals,  extensions or  modifications  hereof,
this "Note").

LOAN  AGREEMENT.  This Note is subject to the  provisions  of that  certain Loan
Agreement between Bank and Borrower of even date herewith, as modified from time
to time.

USE OF PROCEEDS.  Borrower  shall use the  proceeds of the loan(s)  evidenced by
this Note for the  commercial  purposes  of  Borrower,  as  follows:  to finance
working capital.

SECURITY.  Borrower  has  granted  Bank a security  interest  in the  collateral
described  in the  Loan  Documents,  including,  but not  limited  to,  personal
property  collateral  described in that certain Security  Agreement of even date
herewith.

INTEREST  RATE.  Interest shall accrue on the unpaid  principal  balance of this
Note during each Interest  Period from the date hereof at a rate per annum equal
to 1-month  LIBOR plus 1.75%  ("Interest  Rate").  "Interest  Period" means each
period  commencing  on and  including  the date an  interest  payment  is due as
provided in the Repayment  Terms  paragraph and ending on but excluding the date
the next interest  payment is due, with the first interest period  commencing on
the date of closing.  Upon  determination  by Bank of the Interest  Rate for any
Interest  Period,  such  lnterest  Rate  shall  remain in effect  for the entire
Interest  Period until  redetermined  for the next successive  Interest  Period.
"LIBOR" is the rate for U.S. dollar deposits with a maturity equal to the number
of months  specified  above, as reported on Telerate page 3750 as of 11:OO a.m.,
London time,  on the second  London  business  day before the relevant  Interest
Period  begins (or if not so reported,  then as  determined by Bank from another
recognized source or interbank quotation).

INDEMNIFICATION. Borrower shall indemnify Bank against Bank's loss or expense as
a consequence of (a) Borrower's  failure to make any payment when due under this
Note, (b) any payment, prepayment or conversion of any loan on a date other than
the last day of the lnterest  Period,  or (c) any failure to make a borrowing or
conversion  after giving notice  thereof  ("Indemnified  Loss or Expense").  The
amount of such  Indemnified  Loss or Expense  shall be  determined by Bank based
upon the  assumption  that Bank funded  100% of that  portion of the loan in the
London interbank market.

DEFAULT  RATE.  In addition to all other  rights  contained  in this Note,  if a
Default  (as  defined  herein)  occurs and as long as a Default  continues,  all
outstanding  Obligations  shall  bear  interest  at the  Interest  Rate  plus 3%
("Default Rate").  The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.

<PAGE>

INTEREST AND FEE(S) COMPUTATION  (ACTUAL/360).  Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual  number of days in the
applicable  period  ("Actua1/360   Computation").   The  Actual/360  Computation
determines the annual  effective yield by taking the stated (nominal) rate for a
year's period and then dividing said rate by 360 to determine the daily periodic
rate to be applied for each day in the  applicable  period.  Application  of the
Actual/360  Computation  produces an  annualized  effective  rate  exceeding the
nominal rate.

REPAYMENT TERMS. This Note shall be due and payable in principal payments as set
forth in  Schedule  A  attached  hereto  and made a part  hereof,  plus  accrued
interest  thereon  on the date each  principal  payment  is due.  All  remaining
principal and interest shall be due and payable on January 2, 2008.

AUTOMATIC DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT.  Borrower  authorizes Bank
to debit demand deposit account number  2000009722840  or any other account with
Bank (routing  number  021200025)  designated in writing by Borrower,  beginning
February  3,  2003 for any  payments  due  under  this  Note.  Borrower  further
certifies  that  Borrower  holds  legitimate   ownership  of  this  account  and
preauthorizes this periodic debit as part of its right under said ownership.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations  shall be applied to accrued interest and then
to principal.  If a Default occurs,  monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.

If any  payment  received  by Bank under this Note or other  Loan  Documents  is
rescinded,  avoided or for any reason  returned  by Bank  because of any adverse
claim or threatened  action,  the returned  payment  shall remain  payable as an
obligation  of all persons  liable  under this Note or other Loan  Documents  as
though such payment had not been made.

DEFINITIONS. LOAN DOCUMENTS. The term "Loan Documents", as used in this Note and
the other Loan Documents, refers to all documents executed in connection with or
related to the loan  evidenced  by this Note and any prior notes which  evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued  pursuant  to any loan  agreement  to which  this  Note is  subject,  any
applications  for such  letters of credit and any other  documents  executed  in
connection therewith or related thereto, and may include,  without limitation, a
commitment letter that survives closing,  a loan agreement,  this Note, guaranty
agreements,  security agreements,  security  instruments,  financing statements,
mortgage  instruments,  any  renewals  or  modifications,  whenever  any  of the
foregoing are executed,  but does not include swap  agreements (as defined in 11
U.S.C. ss 101).  OBLIGATIONS.  The term "Obligations",  as used in this Note and
the  other  Loan  Documents,  reiers  to any  and  all  indebtedness  and  other
obligations  under  this  Note,  all other  obligations  under  any  other  Loan
Document(s),  and all  obligations  under any swap  agreements (as defined in 11
U.S.C. ss 101) between Borrower and Bank whenever executed. CERTAIN OTHER TERMS.
All terms that are used but not otherwise  defined in any of the Loan  Documents
shall have the definitions provided in the Uniform Commercial Code.

LATE CHARGE.  If any payments  are not timely made,  Borrower  shall also pay to
Bank a late charge equal to 5% of each payment past due for 10 or more days.

Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.

ATTORNEYS'  FEES AND OTHER  COLLECTION  COSTS.  Borrower shall pay all of Bank's
reasonable  expenses  incurred  to  enforce or  collect  any of the  Obligations
including, without limitation, reasonable arbitration,  paralegals',  attorneys'
and experts' fees and expenses,  whether  incurred without the commencement of a
suit,  in  any  trial,  arbitration,  or  administrative  proceeding,  or in any
appellate or bankruptcy proceeding.


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<PAGE>

USURY. If at any time the effective interest rate under this Note would, but for
this  paragraph,  exceed the maximum  lawful rate,  the effective  interest rate
under this Note shall be the maximum  lawful  rate,  and any amount  received by
Bank in excess of such rate shall be applied to  principal  and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.

DEFAULT.  If any of the following occurs, a default  ("Default") under this Note
shall  exist:  NONPAYMENT;  NONPERFORMANCE.  The  failure  of timely  payment or
performance  of the  Obligations  or  Default  under this Note or any other Loan
Documents.  FALSE WARRANTY.  A warranty or representation made or deemed made in
the Loan  Documents or furnished  Bank in connection  with the loan evidenced by
this  Note  proves  materially  false,  or if of a  continuing  nature,  becomes
materially  false.  CROSS DEFAULT.  At Bank's option,  any default in payment or
performance of any obligation under any other loans,  contracts or agreements of
Borrower, any Subsidiary or Affiliate of Borrower, any general partner of or the
holder(s)  of the  majority  ownership  interests  of Borrower  with Bank or its
affiliates  ("Affiliate"  shall have the meaning as defined in 11 U.S.C. ss 101,
except  that the term  "Borrower"  shall be  substituted  for the term  "Debtor"
therein;  "Subsidiary" shall mean any business in which Borrower holds, directly
or indirectly,  a controlling interest).  CESSATION;  BANKRUPTCY.  The death of,
appointment of a guardian for, dissolution of, termination of existence of, loss
of good standing  status by,  appointment of a receiver for,  assignment for the
benefit  of  creditors  of, or  commencement  of any  bankruptcy  or  insolvency
proceeding by or against  Borrower,  its Subsidiaries or Affiliates,  if any, or
any general partner of or the holder(s) of the majority  ownership  interests of
Borrower,  or any party to the Loan  Documents.  MATERIAL  BUSINESS  ALTERATION.
Without prior written consent of Bank, a material alteration in the kind or type
of  Borrower's  business.  MATERIAL  CAPITAL  STRUCTURE OR BUSINESS  ALTERATION.
Without prior written consent of Bank, (i) a material  alteration in the kind or
type of Borrower's business or that of Borrower's Subsidiaries or Affiliates, if
any; (ii) the sale of  substantially  all of the business or assets of Borrower,
any of Borrower's  Subsidiaries  or Affiliates or any  guarantor,  or a material
portion  (10% or more) of such  business or assets if such a sale is outside the
ordinary  course of business of Borrower,  or any of Borrower's  Subsidiaries or
Affiliates or any guarantor, or more than 50% of the outstanding stock or voting
power  of or  in  any  such  entity  in a  single  transaction  or a  series  of
transactions;  (iii) the  acquisition  of  substantially  all of the business or
assets or more than 50% of the  outstanding  stock or voting  power of any other
entity;  or (iv)  should  any  Borrower  or any of  Borrower's  Subsidiaries  or
Affiliates or any  guarantor  enter into any merger or  consolidation.  MATERIAL
ADVERSE CHANGE. Bank determines in good faith, in its sole discretion,  that the
prospects for payment or  performance of the  Obligations  are impaired or there
has occurred a material adverse change in the business or prospects of Borrower,
financial or otherwise.

REMEDIES  UPON  DEFAULT.  If a  Default  occurs  under  this  Note  or any  Loan
Documents,  Bank may at any time thereafter,  take the following  actions:  BANK
LIEN.  Foreclose  its  security  interest or lien  against  Borrower's  accounts
without notice.  ACCELERATION UPON DEFAULT. Accelerate the maturity of this Note
and, at Bank's  option,  any or all other  Obligations,  other than  Obligations
under any swap agreements (as defined in 11 U.S.C. ss 101) between  Borrower and
Bank, which shall be governed by the default and termination  provisions of said
swap agreements;  whereupon this Note and the accelerated  Obligations  shall be
immediately due and payable;  provided,  however, if the Default is based upon a
bankruptcy  or  insolvency  proceeding  commenced by or against  Borrower or any
guarantor  or endorser of this Note,  all  Obligations  (other than  Obligations
under  any  swap  agreement  as  referenced   above)  shall   automatically  and
immediately be due and payable. CUMULATIVE.  Exercise any rights and remedies as
provided  under the Note and other  Loan  Documents,  or as  provided  by law or
equity.

FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time,  including without limitation,
financial   statements  and  information   pertaining  to  Borrower's  financial
condition. Such information shall be true, complete, and accurate.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan  Documents  shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same  Default on a future  occasion.  Neither the failure nor any
delay on the part of Bank in exercising any right,  power,  or remedy under this
Note and other Loan  Documents  shall operate as a waiver  thereof,  nor shall a
single or  partial  exercise  thereof  preclude  any other or  further  exercise
thereof or the exercise of any other right, power or remedy.


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<PAGE>

Each Borrower or any person liable under this Note waives presentment,  protest,
notice of  dishonor,  demand for  payment,  notice of  intention  to  accelerate
maturity,  notice  of  acceleration  of  maturity,  notice of sale and all other
notices of any kind. Further,  each agrees that Bank may extend, modify or renew
this Note or make a novation of the loan  evidenced by this Note for any period,
and  grant  any  releases,  compromises  or  indulgences  with  respect  to  any
collateral  securing  this Note,  or with  respect to any other  Borrower or any
other person liable under this Note or other Loan Documents,  all without notice
to or consent of each  Borrower or each person who may be liable under this Note
or any other Loan  Document and without  affecting  the liability of Borrower or
any person who may be liable under this Note or any other Loan Document.

MISCELLANEOUS  PROVISIONS.  ASSIGNMENT.  This Note and the other Loan  Documents
shall  inure to the  benefit  of and be  binding  upon  the  parties  and  their
respective  heirs,  legal  representatives,   successors  and  assigns.   Bank's
interests in and rights under this Note and the other Loan  Documents are freely
assignable,  in whole or in part, by Bank. In addition,  nothing in this Note or
any of the other Loan  Documents  shall prohibit Bank from pledging or assigning
this Note or any of the other  Loan  Documents  or any  interest  therein to any
Federal  Reserve  Bank.  Borrower  shall not  assign  its  rights  and  interest
hereunder without the prior written consent of Bank, and any attempt by Borrower
to assign without Bank's prior written  consent is null and void. Any assignment
shall not  release  Borrower  from the  Obligations.  APPLICABLE  LAW;  CONFLICT
BETWEEN  DOCUMENTS.  This Note and, unless otherwise  provided in any other Loan
Document,  the other Loan Documents shall be governed by and construed under the
laws of the state  named in Bank's  address  on the first  page  hereof  without
regard to that state's  conflict of laws  principles.  If the terms of this Note
should  conflict with the terms of any loan agreement or any  commitment  letter
that  survives  closing,  the  terms  of this  Note  shall  control:  BORROWER'S
ACCOUNTS.  Except as prohibited by law, Borrower grants Bank a security interest
in all of Borrower's accounts with Bank and any of its affiliates. JURISDICTION.
Borrower irrevocably agrees to non-exclusive  personal jurisdiction in the state
named in Bank's address on the first page hereof. SEVERABILITY. If any provision
of this Note or of the other Loan Documents shall be prohibited or invalid under
applicable  law, such provision  shall be ineffective  but only to the extent of
such  prohibition  or  invalidity,  without  invalidating  the remainder of such
provision  or ihe  remaining  provisions  of this Note or other  such  document.
NOTICES.  Any notices to Borrower shall be sufficiently given, if in writing and
mailed or delivered to the Borrower's  address shown above or such other address
as provided  hereunder,  and to Bank,  if in writing and mailed or  delivered to
Wachovia Bank, National Association, Mail Code VA7391, P. 0. Box 13327, Roanoke,
VA 24040 or Wachovia  Bank,  National  Association,  Mail Code VA7391,  10 South
Jefferson Street, Roanoke, VA 24011 or such other address as Bank may specify in
writing from time to time.  Notices to Bank must  include the mail code.  In the
event that Borrower changes Borrower's address at any time prior to the date the
Obligations are paid in full, Borrower agrees to promptly give written notice of
said  change  of  address  by  registered  or  certified  mail,  return  receipt
requested,  all charges prepaid.  PLURAL;  CAPTIONS.  All references in the Loan
Documents to Borrower,  guarantor,  person, document or other nouns of reference
mean  both the  singular  and  plural  form,  as the  case may be,  and the term
"person" shall mean any individual,  person or entity. The captions contained in
the Loan  Documents are inserted for  convenience  only and shall not affect the
meaning or interpretation of the Loan Documents. ADVANCES. Bank may, in its sole
discretion,  make other advances which shall be deemed to be advances under this
Note, even though the stated  principal amount of this Note may be exceeded as a
result thereof. POSTING OF PAYMENTS. All payments received during normal banking
hours  after 2:00 p.m.  local time at the office of Bank first shown above shall
be deemed  received at the opening of the next  banking  day.  JOINT AND SEVERAL
OBLIGATIONS.  Each person who signs this Note as a Borrower (as defined  herein)
is jointly and severally obligated.  FEES AND TAXES. Borrower shall promptly pay
all documentary, intangible recordation and/or similar taxes on this transaction
whether assessed at closing or arising from time to time.

ARBITRATION.  Upon  demand of any party  hereto,  whether  made  before or after
institution of any judicial proceeding,  any claim or controversy arising out of
or relating to the Loan Documents  between parties hereto (a "Dispute") shall be
resolved by binding  arbitration  conducted under and governed by the Commercial
Financial Disputes  Arbiiration Rules (the "Arbitration  Rules") of the American
Arbitration  Association (the "AAA") and the Federal  Arbitration Act.  Disputes
may include, without limitation, tort

                                     Page 4


<PAGE>

claims,  counterclaims,  a  dispute  as  to  whether  a  matter  is  subject  to
arbitration,  claims brought as class actions,  or claims arising from documents
executed  in the future.  A judgment  upon the award may be entered in any court
having jurisdiction.  Notwithstanding the foregoing,  this arbitration provision
does not apply to disputes under or related to swap  agreements.  SPECIAL RULES.
All arbitration  hearings shall be conducted in the city named in the address of
Bank first  stated  above.  A hearing  shall begin  within 90 days of demand for
arbitration  and all  hearings  shall  conclude  within  120 days of demand  for
arbitration.  These time  limitations  may not be extended  unless a party shows
cause for extension and then for no more than a total of 60 days.  The expedited
procedures  set  forth  in Rule 51 ET SEQ.  of the  Arbitration  Rules  shall be
applicable to claims of less than  $1,000,000.00.  Arbitrators shall be licensed
attorneys  selected from the Commercial  Financial Dispute  Arbitration Panel of
the AAA. The parties do not waive  applicable  Federal or state  substantive law
except  as  provided   herein.   PRESERVATION   AND   LIMITATION   OF  REMEDIES.
Notwithstanding the preceding binding arbitration provisions,  the parties agree
to preserve,  without  diminution,  certain remedies that any party may exercise
before or after an arbitration proceeding is brought. The parties shall have the
right to proceed in any court of proper jurisdiction or by self-help to exercise
or prosecute the following remedies, as applicable:  (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale or under applicable law by judicial  foreclosure  including a proceeding to
confirm the sale; (ii) all rights of self-help  including peaceful occupation of
real  property and  collection  of rents,  set-off,  and peaceful  possession of
personal property;  (iii) obtaining  provisional or ancillary remedies including
injunctive  relief,  sequestration,   garnishment,  attachment,  appointment  of
receiver  and  filing  an  involuntary  bankruptcy  proceeding;  and  (iv)  when
applicable,  a judgment by confession of judgment. Any claim or controversy with
regard to any  party's  entitlement  to such  remedies  is a Dispute.  WAIVER OF
EXEMPLARY  DAMAGES.  The  parties  agree  that  they  shall not have a remedy of
punitive or exemplary  damages  against  other parties in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or which
may arise in the future in  connection  with any Dispute  whether the Dispute is
resolved  by  arbitration  or  judicially.  WAIVER OF JURY  TRIAL.  THE  PARTIES
ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED
ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE.

IN WITNESS  WHEREOF,  Borrower,  on the day and year first  above  written,  has
caused this Note to be executed under seal.

PLACE OF EXECUTION AND DELIVERY.  Borrower  hereby  certifies that this Note and
the Loan  Documents  were  executed in the State of New Jersey and  delivered to
Bank in the State of New Jersey.

                         I.D. Systems, Inc.
                         Taxpayer Identification Number: 22-3270799


                         By: Ned Mavrommatis                  (SEAL)
                             --------------------------------
                             Ned Mavrommatis, CFO
Tracking #: 15086SUM
CAT - Deal # 168419 Facility ID 120679

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