EXHIBIT
4.1





FORM
OF PROMISSORY NOTE





THIS NOTE
AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THIS NOTE AND THE COMMON SHARES ISSUABLE UPON
CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IDO
SECURITY INC. THAT SUCH REGISTRATION IS NOT REQUIRED.





Principal
Amount
$___________                                                                                                Issue
Date: _______________





SECURED CONVERTIBLE
PROMISSORY NOTE





FOR VALUE RECEIVED, IDO SECURITY INC.,
a Nevada corporation (hereinafter called "Borrower"), hereby promises to pay to
______________________________,
______________________________________________________________ (the "Holder") or
order, without demand, the sum of __________________________________ Dollars
($_________) (“Principal Amount”), with simple and unpaid interest accruing
thereon, on ___________ (the "Maturity Date"), if not retired
sooner.





This Note
has been entered into pursuant to the terms of a subscription agreement between
the Borrower and the Holder, dated of even date herewith (the “Subscription
Agreement”), and shall be governed by the terms of such Subscription
Agreement.  Unless otherwise separately defined herein, all
capitalized terms used in this Note shall have the same meaning as is set forth
in the Subscription Agreement.  The following terms shall apply to
this Note:





ARTICLE
I





INTEREST:
AMORTIZATION; SECURITY AGREEMENT





1.1. 
Interest
Rate.   Subject to Section 6.7 hereof, interest payable on
this Note shall accrue on the outstanding Principal Amount at a rate per annum
(the "Interest Rate") of ten percent (10%).  Interest on the
outstanding Principal Amount shall accrue from the date of this Note and shall
be payable in arrears together with, at the same time and in the same manner as
payment of Principal Amount and on the Maturity Date, whether by acceleration or
otherwise.  For purposes of calculating the conversion price pursuant
to Section 2.1(ii)(B), each interest due date shall be deemed the Repayment
Date, as defined in Section 1.2.





1.2.    Minimum Monthly Principal
Payments.   Amortizing payments of the outstanding
Principal Amount of this Note and accrued interest shall commence on the fourth
month anniversary date of this Note and on the same day of each month thereafter
(each a “Repayment Date”) until the Principal Amount has been repaid in full,
whether by the payment of cash or by the conversion of such Principal Amount and
interest into Common Stock pursuant to the terms hereof.  Subject to
Section 2.1 and Article 3 below, on each Repayment Date, the Borrower shall make
payments to the Holder in an amount equal to 5% of the initial Principal Amount,
the amount of accrued but unpaid or unconverted interest on the entire Principal
Amount as of such Repayment Date, and any other amounts which are then owing
under this Note that have not been paid (collectively, the “Monthly
Amount”).  Amounts of conversions of Principal Amount and made by the
Holder or Borrower pursuant to Section 2.1 or Article III and amounts redeemed
pursuant to Section 2.3 of this Noteshall
be applied first against outstanding fees and damages, then outstanding already
payable accrued interest and then to Principal Amounts of not yet due Monthly
Amounts commencing with the last Monthly Amount next payable and thereafter to
Monthly Amounts in reverse chronological order.  Any Principal Amount,
interest and any other sum arising under this Note and the Subscription
Agreement that remains outstanding on the Maturity Date shall be due and payable
on the Maturity Date.




1




1.3.  Default Interest
Rate.  Following the occurrence and during the continuance of
an Event of Default (as defined in Article IV), which, if susceptible to cure is
not cured within five (5) days, otherwise then from the first date of such
occurrence, the annual interest rate on this Note shall (subject to Section 4.7)
be fifteen percent (15%).  Such interest shall be due and payable
together with regular scheduled Monthly Amounts.





ARTICLE
II





CONVERSION
REPAYMENT





2.1.   Payment of Monthly Amount in
Cash or CommonStock.  Subject
to Section 3.2 hereof, the Borrower, at the Borrower’s election, shall pay the
Monthly Amount (i) in cash in an amount equal to 110% of the Principal Amount
component of the Monthly Amount and 100% of all other components of the Monthly
Amount, within four (4) business days after the applicable Repayment Date, or
(ii) in registered Common Stock at an applied conversion rate equal to the
lesser of (A) the Fixed Conversion Price (as defined in section 3.1 hereof), or
(B) seventy-five percent (75%) of the average of the closing bid price of the
common stock as reported by Bloomberg L.P. for the Principal Market for the ten
trading days preceding the date a Notice of Conversion, if any, [as described in
Section 3(a)] is given to the Borrower by Holder after Borrower notifies Holder
of its election to pay the Monthly Amount with shares of Common Stock pursuant
to the following sentence.  The Borrower must send notice to the
Holder by confirmed telecopier not later than 6:00 P.M., New York City time on
the twenty-second trading day preceding a Repayment Date notifying Holder of
Borrower’s election to pay the Monthly Redemption Amount in cash or Common
Stock.  The Notice must state the amount of cash to be paid and
include supporting calculations.  If the Borrower elects to pay the
Monthly Amount with Common Stock and if the Holder does not give Notice of
Conversion then the Repayment Date shall be deemed the Conversion Date and the
Conversion Price shall be the lessor of (A) the Fixed Conversion Price (as
defined in section 3.1 hereof) or (B) seventy five (75%) of the average of the
closing bid price for the five trading days preceding the Repayment
Date.  Until fifteen (15) trading days after notice is given by the
Borrower that the Borrower has elected to pay the Monthly Amount with Common
Stock, the holder may elect to defer such payment of Common Stock until the
Holder has elected to deliver a Notice of Conversion with respect to such
Monthly Amount.  The Conversion Price with respect to such deferred
Monthly Amount shall be the Conversion Price set forth above in subsection (ii)
of this Section 2.1.  Amounts paid with shares of Common Stock must be
delivered to the Holder as described in Section
3.3(b).    Elections by the Borrower must be made to all
Other Holders in proportion to the relative Note principal held by the Holder
and the Other Holders.  If such notice is not timely sent or if the
Monthly Redemption Amount is not timely delivered, then Holder shall have the
right, instead of the Company, to elect at any time from when such notice was
required to be given until the applicable Repayment Date whether to be paid in
cash or Common Stock.  Such Holder’s election shall not be construed
to be a waiver of any default by Borrower relating to non-timely compliance by
Borrower with any of its obligations under this Note.




2




2.2. 
No Effective
Registration.   Notwithstanding anything to the contrary
herein, no amount payable hereunder may be paid in shares of Common Stock by the
Borrower without the consent of 66.67% of the Holders of the outstanding
principal amounts of the Notes, unless (a) either (i) an effective current
Registration Statement covering the shares of Common Stock to be issued in
satisfaction of such obligations exists,  (ii) an exemption from
registration of the Common Stock is available pursuant to Rule 144(k) of the
1933 Act without volume restriction, or (iii) such shares can be under Rule 144
within the volume limitations specified in subsection (e) thereof, and (b) no
Event of Default hereunder (or an event that with the passage of time or the
giving of notice could become an Event of Default), exists and is continuing,
unless such event or Event of Default is cured within any applicable cure period
or is otherwise waived in writing by the Holder in whole or in part at the
Holder's option.   Shares issued pursuant to sections (ii) and
(iii) in the immediately preceding sentence must be immediately resellable and
transferable by the Holder without any additional holding
period.  Such shares, when delivered to the Holder, must be
accompanied by an opinion of Borrower’s counsel reasonably acceptable to Holder
and the Borrower’s transfer agent that all such shares are immediately
resellable or transferable pursuant to Rule 144 of the 1933 Act, by each Holder
who receives such shares.




2.3.
 Optional
Redemption of Principal Amount.  Provided an Event of Default
or an event which with the passage of time or the giving of notice could become
an Event of Default has not occurred, whether or not such Event of Default has
been cured, the Borrower will have the option of prepaying the outstanding
Principal amount of this Note ("Optional Redemption"), in whole or in part, by
paying to the Holder its pro-rata portion of a sum of money equal to one hundred
and fifteen percent (115%) of the Principal amount to be redeemed, together with
accrued but unpaid interest thereon and any and all other sums due, accrued or
payable to the Holder arising under this Note or any Transaction Document
through the Redemption Payment Date as defined below (the "Redemption
Amount").  Borrower’s election to exercise its right to prepay must be
by notice in writing (“Notice of Redemption”).  The Notice of
Redemption shall specify the date for such Optional Redemption (the "Redemption
Payment Date"), which date shall be thirty (30) business days after the date of
the Notice of Redemption (the "Redemption Period"). A Notice of Redemption shall
not be effective with respect to any portion of the Principal Amount for which
the Holder has a pending election to convert, or for conversions initiated or
made by the Holder during the Redemption Period.   On the
Redemption Payment Date, the Redemption Amount, less any portion of the
Redemption Amount against which the Holder has exercised its conversion rights,
shall be paid in good funds to the Holder. In the event the Borrower fails to
pay the Redemption Amount on the Redemption Payment Date as set forth herein,
then (i) such Notice of Redemption will be null and void, (ii) Borrower will
have no right to deliver another Notice of Redemption, and (iii) Borrower’s
failure may be deemed by Holder to be a non-curable Event of
Default.  A Redemption Notice may be given only at a time a
Registration Statement is effective.  A Notice of Redemption may not
be given nor may the Borrower effectuate a Redemption without the consent of the
Holder, if at any time during the Redemption Period an Event of Default or an
Event which with the passage of time or giving of notice could become an Event
of Default (whether or not such Event of Default has been cured), has occurred
or the Registration Statement registering the Registrable Securities is not
effective each day during the Redemption Period.




2.4   Mandatory
Conversion.  Provided an Event of Default or an event which
with the passage of time or giving of notice could become an Event of Default
has not occurred, then, commencing after the Actual Effective Date, the Borrower
will have the option by written notice to the Holder (“Notice of Mandatory
Conversion”) of compelling the Holder to convert all or a portion of the
outstanding and unpaid principal of the Note and accrued interest, thereon, into
Common Stock at the Conversion Price then in affect (“Mandatory Conversion”).
The Notice of Mandatory Conversion, which notice must be given on the first day
following twenty (20) consecutive trading days (“Lookback Period”) during which
the closing price for the Common Stock as reported by Bloomberg, LP for the
Principal Market shall be greater than






3








ARTICLE
III





CONVERSION
RIGHTS




3.1.    Holder's Conversion
Rights.   Subject to Section 3.2, the Holder shall have
the right, but not the obligation at all times, to convert all or any portion of
the then aggregate outstanding Principal Amount of this Note, into shares of
Common Stock, subject to the terms and conditions set forth in this Article III
at the rate of $1.00 per share of Common Stock (“Fixed Conversion Price”) as
same may be adjusted pursuant to this Note and the Subscription Agreement. The
Holder may exercise such right by delivery to the Borrower of a written Notice
of Conversion pursuant to Section 3.3.  After the occurrence of an
Event of Default, the Fixed Conversion Price shall be the lesser of the Fixed
Conversion Price or 75% of the average of the closing bid prices of the Common
Stock for the five trading days prior to a Conversion Date.





3.2.    Conversion
Limitation.   The Holder shall not be entitled to convert
on a Conversion Date that amount of the Note in connection with that number of
shares of Common Stock which would be in excess of the sum of (i) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock of the Borrower on such Conversion
Date.  For the purposes of the provision to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder.  Subject to the foregoing, the Holder shall be limited to
aggregate conversions of 4.99%.  The Holder shall have the authority
and obligation to determine whether the restriction contained in this Section
2.3 will limit any conversion hereunder and to the extent that the Holder
determines that the limitation contained in this Section applies, the
determination of which portion of the Notes are convertible shall be the
responsibility and obligation of the Holder.   The Holder may
waive the conversion limitation described in this Section 2.3, in whole or in
part, upon and effective after 61 days prior written notice to the Borrower to
increase such percentage to up to 9.99%.  In all circumstances, the
delivery by the Holder of a Notice of Conversion as provided below shall be
deemed to be the Holder’s representation that such conversion conforms to the
provisions of this Section 3.2 and the Company shall be under no obligation to
verify or ascertain compliance by the Holder with this provision.




4




3.3.  Mechanics of Holder's
Conversion.





(a)    In
the event that the Holder elects to convert any amounts outstanding under this
Note into Common Stock, the Holder shall give notice of such election by
delivering an executed and completed notice of conversion (a "Notice of
Conversion") to the Borrower, which Notice of Conversion shall provide a
breakdown in reasonable detail of the Principal Amount, accrued interest and
amounts being converted.  The original Note is not required to be
surrendered to the Borrower until all sums due under the Note have been
paid.  On each Conversion Date (as hereinafter defined) and in
accordance with its Notice of Conversion, the Holder shall make the appropriate
reduction to the Principal Amount, accrued interest and fees as entered in its
records.  Each date on which a Notice of Conversion is delivered or
telecopied to the Borrower in accordance with the provisions hereof shall be
deemed a "Conversion Date." A form of Notice of Conversion to be employed by the
Holder is annexed hereto as Exhibit A.





(b)   Pursuant
to the terms of a Notice of Conversion, the Borrower will issue instructions to
the transfer agent accompanied by an opinion of counsel, if so required by the
Borrower's transfer agent and shall cause the transfer agent to transmit the
certificates representing the Conversion Shares to the Holder by crediting the
account of the Holder's designated broker with the Depository Trust Corporation
("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within
four (4) business days after receipt by the Borrower of the Notice of Conversion
(the "Delivery Date"). In the case of the exercise of the conversion rights set
forth herein the conversion privilege shall be deemed to have been exercised and
the Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Borrower of the Notice of Conversion. The
Holder shall be treated for all purposes as the record holder of such shares of
Common Stock, unless the Holder provides the Borrower written instructions to
the contrary.   Notwithstanding the foregoing to the contrary,
the Borrower or its transfer agent shall only be obligated to issue and deliver
the shares to the DTC on the Holder’s behalf via DWAC (or certificates free of
restrictive legends) if the registration statement providing for the resale of
the shares of Common Stock issuable upon the conversion of this Note is
effective and the Holder has complied with all applicable securities laws in
connection with the sale of the Common Stock, including, without limitation, the
prospectus delivery requirements.  In the event that Conversion Shares
cannot be delivered to the Holder via DWAC, the Borrower shall deliver physical
certificates representing the Conversion Shares by the Delivery
Date.





3.4.  Conversion
Mechanics.





(a)           The
number of shares of Common Stock to be issued upon each conversion of this Note
pursuant to this Article III shall be determined by dividing that portion of the
Principal Amount and interest and fees to be converted, if any, by the then
applicable Fixed Conversion Price.




(b)           The Fixed
Conversion Price and number and kind of shares or other securities to be issued
upon conversion shall be subject to adjustment from time to time upon the
happening of certain events while this conversion right remains outstanding, as
follows:





A.           Merger,Saleof Assets,
etc.  If the Borrower at any time shall consolidate with or
merge into or sell or convey all or substantially all its assets to any other
corporation, this Note, as to the unpaid principal portion thereof and accrued
interest thereon, shall thereafter be deemed to evidence the right to purchase
such number and kind of shares or other securities and property as would have
been issuable or distributable on account of such consolidation, merger, sale or
conveyance, upon or with respect to the securities subject to the conversion or
purchase right immediately prior to such consolidation, merger, sale or
conveyance.  The foregoing provision shall similarly apply to
successive transactions
of a similar nature by any such successor or purchaser.  Without
limiting the generality of the foregoing, the anti-dilution provisions of this
Section shall apply to such securities of such successor or purchaser after any
such consolidation, merger, sale or conveyance.




5




B.           Reclassification,
etc.  If the Borrower at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of
securities of any class or classes, this Note, as to the unpaid principal
portion thereof and accrued interest thereon, shall thereafter be deemed to
evidence the right to purchase an adjusted number of such securities and kind of
securities as would have been issuable as the result of such change with respect
to the Common Stock immediately prior to such reclassification or other
change.





C.           Stock Splits, Combinations
and Dividends.  If the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares of Common Stock, or if a
dividend is paid on the Common Stock in shares of Common Stock, the Conversion
Price shall be proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.





D.           Share
Issuance.   So long as this Note is outstanding, if the
Borrower shall issue any Common Stock except for the Excepted Issuances (as
defined in the Subscription Agreement), prior to the complete conversion or
payment of this Note, for a consideration less than the Fixed Conversion Price
that would be in effect at the time of such issue, then, and thereafter
successively upon each such issuance, the Fixed Conversion Price shall be
reduced to such other lower issue price.  For purposes of this
adjustment, the issuance of any security or debt instrument of the Borrower
carrying the right to convert such security or debt instrument into Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Fixed Conversion Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option and again
upon the issuance of shares of Common Stock upon exercise of such conversion or
purchase rights if such issuance is at a price lower than the then applicable
Conversion Price.  The reduction of the Fixed Conversion Price
described in this paragraph is in addition to the other rights of the Holder
described in the Subscription Agreement.





(c)           Whenever
the Conversion Price is adjusted pursuant to Section 3.4(b) above, the Borrower
shall promptly mail to the Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a statement of the facts requiring such
adjustment.





3.5.           Reservation.   During
the period the conversion right exists, Borrower will reserve from its
authorized and unissued Common Stock not less than 125% of the number of shares
to provide for the issuance of Common Stock upon the full conversion of this
Note. Borrower shall reserve Common Stock issuable upon conversion of this Note
as described in the Subscription Agreement.  Borrower represents that
upon issuance, such shares will be duly and validly issued, fully paid and
non-assessable.  Borrower agrees that its issuance of this Note shall
constitute full authority to its officers, agents, and transfer agents who are
charged with the duty of executing and issuing stock certificates to execute and
issue the necessary certificates for shares of Common Stock upon the conversion
of this Note.





3.6           Issuance of Replacement
Note.  Upon any partial conversion of this Note, a replacement
Note containing the same date and provisions of this Note shall, at the written
request of the Holder, be issued by the Borrower to the Holder for the
outstanding Principal Amount of this Note and accrued interest which shall not
have been converted or paid, provided Holder has surrendered an original Note to
the Company. In the event that the Holder elects not to surrender a Note for
reissuance upon partial payment
or conversion, the Holder hereby indemnifies the Borrower against any and all
loss or damage attributable to a third-party claim in an amount in excess of the
actual amount then due under the Note.




6




ARTICLE
IV





SECURITY
INTEREST





4.         Security Interest/Waiver of
Automatic Stay.   This Note is secured by a security
interest granted to the Collateral Agent for the benefit of the Holder pursuant
to a Security Agreement, as delivered by Borrower to Holder.  The
Borrower acknowledges and agrees that should a proceeding under any bankruptcy
or insolvency law be commenced by or against the Borrower, or if any of the
Collateral (as defined in the Security Agreement) should become the subject of
any bankruptcy or insolvency proceeding, then the Holder should be entitled to,
among other relief to which the Holder may be entitled under the Transaction
Documents and any other agreement to which the Borrower and Holder are parties
(collectively, "Loan Documents") and/or applicable law, an order from the court
granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section
362 to permit the Holder to exercise all of its rights and remedies pursuant to
the Loan Documents and/or applicable law.  TO THE EXTENT PERMITTED BY
LAW, THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY
11 U.S.C. SECTION 362.  FURTHERMORE, THE BORROWER EXPRESSLY
ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION
OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN
ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES
UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW.  The Borrower hereby
consents to any motion for relief from stay that may be filed by the Holder in
any bankruptcy or insolvency proceeding initiated by or against the Borrower
and, further, agrees not to file any opposition to any motion for relief from
stay filed by the Holder.  The Borrower represents, acknowledges and
agrees that this provision is a specific and material aspect of the Loan
Documents, and that the Holder would not agree to the terms of the Loan
Documents if this waiver were not a part of this Note. The Borrower further
represents, acknowledges and agrees that this waiver is knowingly, intelligently
and voluntarily made, that neither the Holder nor any person acting on behalf of
the Holder has made any representations to induce this waiver, that the Borrower
has been represented (or has had the opportunity to he represented) in the
signing of this Note and the Loan Documents and in the making of this waiver by
independent legal counsel selected by the Borrower and that the Borrower has
discussed this waiver with counsel.





ARTICLE
V





EVENTS
OF DEFAULT





The
occurrence of any of the following events of default ("Event of Default") shall,
at the option of the Holder hereof, make all sums of principal and interest then
remaining unpaid hereon and all other amounts payable hereunder immediately due
and payable, upon demand, without presentment, or grace period, all of which
hereby are expressly waived, except as set forth below:





5.1           Failure to Pay Principal or
Interest.  The Borrower fails to pay any installment of
Principal Amount, interest or other sum due under this Note or any Transaction
Document when due and such failure continues for a period of five (5) business
days after the due date.




7




5.2           Breach of
Covenant.  The Borrower breaches any material covenant or other
material term or condition of the Subscription Agreement, this Note, or other
Transaction Document in any material respect and such breach, if subject to
cure, continues for a period of ten (10) business days after written notice to
the Borrower from the Holder.





5.3           Breach of Representations
and Warranties.  Any material representation or warranty of the
Borrower made herein, in the Subscription Agreement, Transaction Document or in
any agreement, statement or certificate given in writing pursuant hereto or in
connection herewith or therewith shall be false or misleading in any material
respect as of the date made and the Closing Date.





5.4           Receiver or
Trustee.  The Borrower or any Subsidiary of Borrower shall make
an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for them or for a substantial part of their
property or business; or such a receiver or trustee shall otherwise be
appointed.





5.5           Judgments.  Any
money judgment, writ or similar final process shall be entered or filed against
Borrower or any subsidiary of Borrower or any of their property or other assets
for more than $500,000, and shall remain unpaid, unvacated, unbonded or unstayed
for a period of forty-five (45) days.





5.6           Non-Payment.   A
default by the Borrower under any one or more obligations in an aggregate
monetary amount in excess of two hundred thousand dollars ($200,000.00) for more
than twenty days after the due date unless the Borrower is contesting the
validity of such obligation in good faith, beyond any applicable grace
period;





5.7           Bankruptcy.  Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings or
relief under any bankruptcy law or any law, or the issuance of any notice in
relation to such event, for the relief of debtors shall be instituted by or
against the Borrower or any Subsidiary of Borrower and if instituted against
them are not dismissed within sixty (60) days of initiation.





5.8           Delisting.   Failure
of the Common Stock to be quoted or listed on the OTC Bulletin Board (“Bulletin
Board”) or other Principal Market; failure to comply with the requirements for
continued listing on the Bulletin Board for a period of 15 consecutive trading
days.





5.9           Stop
Trade.  An SEC or judicial stop trade order or Principal Market
trading suspension with respect to Borrower’s Common Stock that lasts for five
or more consecutive trading days.





5.10         Failure to Deliver Common
Stock or Replacement Note.  Borrower's failure to timely
deliver Common Stock to the Holder pursuant to and in the form required by this
Note and Sections 7 and 11 of the Subscription Agreement, and, if required, a
replacement Note, within 10 business days following the required delivery
date.





5.11         Non-Registration
Event.  The occurrence of a Non-Registration Event as described
in the Subscription Agreement, subject to Section 11.1(v)  of the
Subscription Agreement.





5.12         Reverse
Splits.   The Borrower effectuates a reverse split of its
Common Stock without twenty days prior written notice to the
Holder.





5.13         Reservation
Default.  Failure by the Borrower to have reserved for issuance
upon conversion of the Note the amount of Common Stock as set forth in this Note
and the Subscription Agreement.




8




5.14         Restated
Numbers.  A material restatement by the Borrower of any prior
financial statements included in any of the Reports.





5.15         Material Breach of Security
Agreement.   Any default by the Company of any of its
material obligations pursuant to the Security Agreement.





5.16         Cross
Default.  A default by the Borrower of a material term,
covenant, warranty or undertaking of any Transaction Document or other agreement
to which the Borrower and Holder are parties, or the occurrence of a material
event of default under any such other agreement which is not cured after any
required notice and/or cure period.





ARTICLE
VI





MISCELLANEOUS





6.1           Failure or Indulgence Not
Waiver.  No failure or delay on the part of Holder hereof in
the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.





6.2           Notices.  All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be: (i) if to the Borrower to: IDO
Security Inc., 17 State Street, New York, NY 10004, Fax: (646) 285-0026, with a
copy by telecopier only to: Aboudi & Brounstein, 3 Gavish St., Kfar Saba,
Israel, Fax: 972-9-764-4834, and (ii) if to the Holder, to the name, address and
telecopy number set forth on the front page of this Note, with a copy by
telecopier only to Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601,
New York, New York 10176, Fax: (212) 697-3575.





6.3           Amendment
Provision.  The term "Note" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or
supplemented.





6.4           Assignability.  This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and
assigns.





6.5           Cost of
Collection.  If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys' fees.




9




6.6           Governing
Law.  This Note shall be governed by and construed in
accordance with the laws of the State of New York.  Any action brought
by either party against the other concerning the transactions contemplated by
this Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York.  Both parties and the
individual signing this Agreement on behalf of the Borrower agree to submit to
the jurisdiction of such courts.  The prevailing party shall be
entitled to recover from the other party its reasonable attorney's fees and
costs.





6.7           Maximum
Payments.  Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law.  In the event that
the rate of interest required to be paid or other charges hereunder exceed the
maximum permitted by such law, any payments in excess of such maximum shall be
credited against amounts owed by the Borrower to the Holder and thus refunded to
the Borrower.





6.8           Construction.   Each
party acknowledges that its legal counsel participated in the preparation of
this Note and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Note to favor any party against the
other.





6.9           Remedies.   This
Note shall be deemed an unconditional obligation of Borrower for the payment of
money and, without limitation to any other remedies available to
Holder.  This Note may be enforced against Borrower by summary
proceeding pursuant to N.Y. Civil Procedure Law and rules Sect. 3213 or any
similar rule or statute in the jurisdiction where enforcement is
sought.








[THIS
SPACE INTENTIONALLY LEFT BLANK]







10





IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by an authorized officer as of the
____ day of __________.







IDO SECURITY
      INC.




By:


Name:Title:WITNESS:







11




NOTICE OF
CONVERSION





(To be
executed by the Registered Holder in order to convert the Note)








The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by IDO Security Inc. on _____________
into Shares of Common Stock of IDO Security Inc. (the "Borrower") according to
the conditions set forth in such Note, as of the date written
below.











Date of
Conversion:____________________________________________________________________








Conversion
Price:______________________________________________________________________








Shares To
Be
Delivered:_________________________________________________________________








Signature:____________________________________________________________________________








Print
Name:__________________________________________________________________________








Address:_____________________________________________________________________________





_____________________________________________________________________________