Document:

Exhibit 4.4

                                 LOAN AGREEMENT

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

I.D. Systems, Inc.
One University Plaza
Hackensack, New Jersey 07601
(Individually and collectively "Borrower")

This Loan  Agreement  ("Agreement")  is entered  into  January  2, 2003,  by and
between Bank and Borrower.

This Agreement applies to the loan or loans (individually and collectively,  the
"Loan") evidenced by one or more promissory notes dated January 2, 2003 or other
notes subject  hereto,  as modified from time to time (whether one or more,  the
"Note") and all Loan Documents. The terms "Loan Documents" and "Obligations," as
used in this Agreement, are defined in the Note.

Relying upon the covenants, agreements, representations and warranties contained
in this  Agreement,  Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions  set forth herein,  and Bank and Borrower agree as
follows:

REPRESENTATIONS.  Borrower  represents  that from the date of this Agreement and
until  final  payment  in full of the  Obligations:  ACCURATE  INFORMATION.  All
information now and hereafter furnished to Bank is and will be true, correct and
complete.  Any such information  relating to Borrower's financial condition will
accurately  reflect  Borrower's  financial  condition as of the date(s) thereof,
(including  all  contingent  liabilities  of every type),  and Borrower  further
represents that its financial  condition has not changed materially or adversely
since the  date(s)  of such  documents.  AUTHORIZATION;  NON-CONTRAVENTION.  The
execution,   delivery  and  performance  by  Borrower  and  any  guarantor,   as
applicable,  of this  Agreement and other Loan  Documents to which it is a party
are within its power,  have been duly  authorized  as may be  required  and,  if
necessary,  by making appropriate  filings with any governmental  agency or unit
and are the legal,  binding,  valid and enforceable  obligations of Borrower and
any guarantors;  and do not (i) contravene,  or constitute  (with or without the
giving of  notice  or lapse of time or both) a  violation  of any  provision  of
applicable law, a violation of the  organizational  documents of Borrower or any
guarantor, or a default under any agreement, judgment, injunction, order, decree
or other instrument  binding upon or affecting  Borrower or any guarantor,  (ii)
result in the creation or imposition of any lien (other than the lien(s) created
by the Loan Documents) on any of Borrower's or any guarantor's  assets, or (iii)
give cause for the  acceleration of any obligations of Borrower or any guarantor
to any other creditor.  ASSET OWNERSHIP.  Borrower has good and marketable title
to all of the  properties  and  assets  reflected  on  the  balance  sheets  and
financial  statements  supplied Bank by Borrower,  and all such  properties  and
assets are free and clear of mortgages, security deeds, pledges, liens, charges,
and all other encumbrances, except as otherwise disclosed to Bank by Borrower in
writing and approved by Bank ("Permitted  Liens"). To Borrower's  knowledge,  no
default  has  occurred  under any  Permitted  Liens  and no claims or  interests
adverse to Borrower's  present  rights in its properties and assets have arisen.
DISCHARGE OF LIENS AND TAXES.  Borrower has duly filed,  paid and/or  discharged
all  taxes or other  claims  that may  become a lien on any of its  property  or
assets,  except to the extent that such items are being appropriately  contested
in  good  faith  and an  adequate  reserve  for the  payment  thereof  is  being
maintained.  SUFFICIENCY OF CAPITAL.  Borrower is not, and after consummation of
this  Agreement and after giving effect to all  indebtedness  incurred and liens
created by Borrower in  connection  with the Note and any other Loan  Documents,
will not be,  insolvent  within the meaning of 11 U.S.C. ss 101(32).  COMPLIANCE
WITH LAWS. Borrower is in compliance in all respects with all federal, state and
local laws,  rules and  regulations  applicable to its  properties,  operations,
business, and finances, including, without limitation, any federal or state laws
relating  to  liquor  (including  18  U.S.C.  ss 3617,  et  seq.)  or  narcotics
(including 21 U.S.C. ss 801, et seq.)

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and/or any commercial crimes; all applicable  federal,  state and local laws and
regulations  intended to protect the  environment;  and the Employee  Retirement
Income Security Act of 1974, as amended ("ERISA"),  if applicable.  ORGANIZATION
AND  AUTHORITY.  Each  corporation,  partnership  or limited  liability  company
Borrower and/or guarantor, as applicable,  is duly created, validly existing and
in good standing  under the laws of the state of its  organization,  and has all
powers, governmental licenses,  authorizations,  consents and approvals required
to operate its  business as now  conducted.  Each  corporation,  partnership  or
limited  liability  company Borrower and/or  guarantor,  as applicable,  is duly
qualified,   licensed  and  in  good   standing  in  each   jurisdiction   where
qualification  or  licensing  is required  by the nature of its  business or the
character and location of its property,  business or customers, and in which the
failure  to so  qualify or be  licensed,  as the case may be, in the  aggregate,
could  have a  material  adverse  effect on the  business,  financial  position,
results  of  operations,  properties  or  prospects  of  Borrower  or  any  such
guarantor.  NO LITIGATION.  There are no pending or threatened suits,  claims or
demands  against  Borrower or any guarantor that have not been disclosed to Bank
by Borrower in writing, and approved by Bank. REGULATION U. None of the proceeds
of the credit  extended  pursuant to this  Agreement  shall be used  directly or
indirectly  for the  purpose of  purchasing  or  carrying  any  margin  stock in
violation of any of the  provisions of Regulation U of the Board of Governors of
the Federal Reserve System  ("Regulation  U"), or for the purpose of reducing or
retiring any  indebtedness  which was  originally  incurred to purchase or carry
margin  stock or for any other  purchase  which might render the Loan a "Purpose
Credit" within the meaning of Regulation U.

AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment  in full of the  Obligations,  unless  Bank shall  otherwise  consent in
writing,  Borrower will: ACCESS TO BOOKS AND RECORDS. Allow Bank, or its agents,
during  normal  business  hours,  access to the  books,  records  and such other
documents  of  Borrower as Bank shall  reasonably  require,  and allow Bank,  at
Borrower's expense, to inspect,  audit and examine the same and to make extracts
therefrom and to make copies thereof.  ACCOUNTS PAYABLE AGING.  Deliver to Bank,
from time to time  hereafter but not less than  quarterly  within 45 days of the
end of each such period, a detailed  payables report including aging of payables
by total,  vendor  names and  addresses,  a  reconciliation  statement,  and the
original date of each invoice.  ACCOUNTS RECEIVABLE AGING. Deliver to Bank, from
time to time hereafter but not less than quarterly  within 45 days of the end of
each such period, a detailed receivables report including totals, customer names
and  addresses,  a  reconciliation  statement,  and  the  original  date of each
invoice.  BUSINESS  CONTINUITY.  Conduct its business in substantially  the same
manner and locations as such business is now and has previously  been conducted.
CERTIFICATE  OF FULL  COMPLIANCE  FROM  ACCOUNTANT.  Deliver  to Bank,  with the
financial statements required herein, a certification by Borrower's  independent
certified  public  accountant  that Borrower is in full compliance with the Loan
Documents.   COMPLIANCE  WITH  OTHER  AGREEMENTS.  Comply  with  all  terms  and
conditions contained in this Agreement,  and any other Loan Documents,  and swap
agreements,  if  applicable,  as  defined  in the 11  U.S.C.  ss  101.  ESTOPPEL
CERTIFICATE.  Furnish, within 15 days after request by Bank, a written statement
duly  acknowledged  of the  amount  due under the Loan and  whether  offsets  or
defenses exist against the Obligations.  INSURANCE.  Maintain adequate insurance
coverage with respect to its properties  and business  against loss or damage of
the kinds  and in the  amounts  customarily  insured  against  by  companies  of
established  reputation  engaged  in the same or similar  businesses  including,
without limitation, commercial general liability insurance, workers compensation
insurance, and business interruption insurance; all acquired in such amounts and
from  such  companies  as Bank  may  reasonably  require.  MAINTAIN  PROPERTIES.
Maintain,  preserve  and keep its  property in good  repair,  working  order and
condition,  making all needed replacements,  additions and improvements thereto,
to the extent  allowed by this  Agreement.  NOTICE OF DEFAULT AND OTHER NOTICES.
(a) NOTICE OF DEFAULT.  Furnish to Bank  immediately  upon becoming aware of the
existence of any  condition or event which  constitutes a Default (as defined in
the Loan  Documents)  or any event which,  upon the giving of notice or lapse of
time or both,  may become a Default,  written  notice  specifying the nature and
period of existence  thereof and the action which Borrower is taking or proposes
to take with respect thereto. (b) OTHER NOTICES. Promptly notify Bank in writing
of (i) any material  adverse change in its financial  condition or its business;
(ii) any default under any material  agreement,  contract or other instrument to
which  it is a  party  or by  which  any of its  properties  are  bound,  or any
acceleration of the maturity of any  indebtedness  owing by Borrower;  (iii) any
material  adverse  claim  against  or  affecting  Borrower  or any  part  of its
properties;  (iv) the  commencement of, and any material  determination  in, any
litigation with any third party or any

                                     Page 2
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proceeding before any governmental agency or unit affecting Borrower; and (v) at
least 30 days prior thereto,  any change in Borrower's  name or address as shown
above, and/or any change in Borrower's structure.  OTHER FINANCIAL  INFORMATION.
Deliver  promptly  such other  information  regarding  the  operation,  business
affairs,  and financial  condition of Borrower which Bank may reasonably request
PAYMENT OF DEBTS.  Pay and discharge  when due, and before subject to penalty or
further  charge,  and otherwise  satisfy  before  maturity or  delinquency,  all
obligations,  debts, taxes, and liabilities of whatever nature or amount, except
those which  Borrower in good faith  disputes.  REPORTS AND PROXIES.  Deliver to
Bank, promptly, a copy of all financial statements,  reports, notices, and proxy
statements,  sent by  Borrower  to  stockholders,  and all  regular or  periodic
reports  required  to be  filed by  Borrower  with any  governmental  agency  or
authority.

NEGATIVE  COVENANTS.  Borrower  agrees that from the date of this  Agreement and
until final  payment in full of the  Obligations,  unless  Bank shall  otherwise
consent in writing,  Borrower will not: CHANGE IN FISCAL YEAR. Change its fiscal
year.  CHANGE OF CONTROL.  Make or suffer a change of ownership that effectively
changes  control of  Borrower  from  current  ownership.  ENCUMBRANCES.  Create,
assume, or permit to exist any mortgage,  security deed, deed of trust,  pledge,
lien,  charge or other  encumbrance  on any of its assets,  whether now owned or
hereafter  acquired,  other than:  (i) security  interests  required by the Loan
Documents; (ii) liens for taxes contested in good faith; (iii) liens accruing by
law for employee benefits;  or (iv) Permitted Liens. DEFAULT ON OTHER CONTRACTS
OR OBLIGATIONS.  Default on any material contract with or obligation when due to
a third party or default in the  performance  of any obligation to a third party
incurred for money borrowed.  GOVERNMENT  INTERVENTION.  Permit the assertion or
making of any  seizure,  vesting or  intervention  by or under  authority of any
governmental  entity,  as a result of which the  management  of  Borrower or any
guarantor  is  displaced  of its  authority  in the  conduct  of its  respective
business or such business is curtailed or materially impaired. JUDGMENT ENTERED.
Permit the entry of any monetary judgment or the assessment against,  the filing
of any  tax  lien  against,  or the  issuance  of any  writ  of  garnishment  or
attachment  against any property of or debts due.  RETIRE OR REPURCHASE  CAPITAL
STOCK. Retire or otherwise acquire any of its capital stock.

ANNUAL  FINANCIAL  STATEMENTS.  Borrower shall deliver to Bank,  within 120 days
after the close of each fiscal year, audited financial statements reflecting its
operations during such fiscal year,  including,  without  limitation,  a balance
sheet,  profit and loss statement and statement of cash flows,  with  supporting
schedules  and in  reasonable  detail,  prepared in  conformity  with  generally
accepted accounting  principles,  applied on a basis consistent with that of the
preceding year. If audited statements are required, all such statements shall be
examined by an independent  certified public accountant  acceptable to Bank. The
opinion of such independent  certified public accountant shall not be acceptable
to Bank if qualified due to any  limitations in scope imposed by Borrower or any
other person or entity. Any other qualification of the opinion by the accountant
shall render the  acceptability  of the financial  statements  subject to Bank's
approval.  If audited  statements  are  required,  Borrower's  accountant  shall
provide  Bank with a written  acknowledgment  of the  Bank's  reliance  upon the
statements in accordance with N.J.S. 2A:53A-25.

PERIODIC  FINANCIAL  STATEMENTS.   Borrower  shall  deliver  to  Bank  unaudited
management-prepared    quarterly   financial   statements   including,   without
limitation,  a balance  sheet,  profit and loss  statement and statement of cash
flows, with supporting  schedules,  as soon as available and in any event within
45 days  after the close of each  such  period;  all in  reasonable  detail  and
prepared in conformity with generally accepted accounting principles, applied on
a basis  consistent with that of the preceding  year.  Such statements  shall be
certified as to their  correctness by a principal  financial officer of Borrower
and in each  case,  if audited  statements  are  required,  subject to audit and
year-end adjustments.

FINANCIAL  COVENANTS.  Borrower agrees to the following provisions from the date
hereof  until  final  payment  in full of the  Obligations,  unless  Bank  shall
otherwise consent in writing,  using the financial information for Borrower, its
subsidiaries,  affiliates  and its  holding or parent  company,  as  applicable:
DEPOSIT  RELATIONSHIP.  Borrower shall maintain its primary  depository  account
with Bank.  REQUIRED HEDGE.  Borrower shall hedge the Loan's  floating  interest
expense for the full term of the Loan by  maintaining an interest rate swap, cap
or  collar  with Bank or other  counterparty  acceptable  to Bank in a  notional
amount equal to the then principal balance of the Loan and providing for a fixed
rate  satisfactory  to Bank, and  containing  such other items and conditions as
shall be reasonably acceptable to Bank.

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LIMITATION ON DEBT. Borrower shall not, directly or indirectly,  create,  incur,
assume or become liable for any additional  indebtedness,  whether contingent or
direct.  LIQUIDITY  REQUIREMENT.  Borrower shall, at all times,  maintain Liquid
Assets of not less than $3,000,000.00. "Liquid Assets" shall mean the sum of all
cash, time deposits and marketable securities.

CONDITIONS PRECEDENT.  The obligations of Bank to make the loan and any advances
pursuant to this  Agreement are subject to the following  conditions  precedent:
ADDITIONAL DOCUMENTS. Receipt by Bank of such additional supporting documents as
Bank or its counsel may reasonably request.

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

                         I.D. Systems, Inc.

                         By: /s/ Ned Mavrommatis      (SEAL)
                             -----------------------
                             Ned Mavrommatis, CFO

                         Wachovia Bank, National Association

                         By: /s/ Thomas Caputo                    (SEAL)
                             ------------------------------------
                             Thomas Caputo, Senior Vice President

Tracking #: 15086SUM
CAT - Deal # 168419 Facility ID 120679

                                     Page 4Exhibit 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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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.

                                     Page 3

<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

                                     Page 5

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