Document:

Exhibit 4.6

                               SECURITY AGREEMENT
                                                                 January 2, 2003
I.D. Systems, Inc.
One University Plaza
Hackensack, New Jersey 07601
(Individually and collectively "Debtor")

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

For  value  received  and to  secure  payment  and  performance  of any  and all
obligations  of Debtor (also  referred to herein as  "Borrower") to Bank however
created,  arising  or  evidenced,   whether  direct  or  indirect,  absolute  or
contingent,  now existing or hereafter  arising or acquired,  and whether or not
evidenced by a Loan Document, including swap agreements (as defined in 11 U.S.C.
ss 101), future advances, and all costs and expenses incurred by Bank to obtain,
preserve,  perfect and  enforce  the  security  interest  granted  herein and to
maintain,  preserve  and collect the property  subject to the security  interest
(collectively,  "Obligations"),  Debtor  hereby  grants  to  Bank  a  continuing
security interest in and lien upon the following described property, whether now
owned or hereafter acquired,  and any additions,  replacements,  accessions,  or
substitutions  thereof and all cash and non-cash  proceeds and products  thereof
(collectively, "Collateral"):

All of the  personal  property  of Debtor of every  kind and  nature  including,
without limitation,  all accounts,  equipment,  accessions,  inventory,  chattel
paper,  instruments,  investment property,  documents,  letter-of-credit rights,
deposit accounts, and general intangibles, wherever located.

All of the  investment  property,  financial  assets,  cash,  equity  interests,
instruments,  and/or  general  intangibles,  which are held in or credited to an
account with Wachovia  Securities,  Inc., who is a Securities  Intermediary  (as
defined herein) of the Debtor (the "Account"), and the Account itself, described
as  follows:  Account  No.  44500070;  and all  rights  to which  Debtor  now or
hereafter  becomes  entitled by reason of its interest in any of the  previously
described Collateral.

Debtor hereby represents and agrees that:

OWNERSHIP.  Debtor owns the Collateral.  The Collateral is free and clear of all
liens,  security  interests,  and claims  except  those  previously  reported in
writing to and approved by Bank,  and Debtor will keep the  Collateral  free and
clear from all liens, security interests and claims, other than those granted to
or approved by Bank. Debtor will not borrow on margin or other credit secured by
the Account or property  in the Account  from any party other than Bank,  either
directly  or by making any  purchases  in excess of any credit  balance or money
market mutual funds held in the Account,  or by trading in  instruments  such as
options  that  create   similar   obligations.   All   securities  and  security
entitlements  pledged  as  Collateral  are fully  paid and  non-assessable.  All
income, dividends,  earnings and profits with respect to the Collateral shall be
reported for state and federal income tax purposes as attributable to the Debtor
and not Bank and Third Party (as defined  herein),  and Bank or any other person
authorized to report income distributions, is authorized to issue IRS Forms 1099
indicating Debtor as the recipient of such income, earnings and profits.

NAME AND OFFICES;  JURISDICTION OF ORGANIZATION.  The name and address of Debtor
appearing at the beginning of this  Agreement are Debtor's  exact legal name and
the address of its chief executive office.  There has been no change in the name
of Debtor,  or the name under which Debtor  conducts  business,  within the five
years  preceding  the date hereof  except as  previously  reported in writing to
Bank.  Debtor  has not moved its chief  executive  office  within the five years
preceding  the date  hereof  except as  previously  reported in writing to Bank.
Debtor is organized under the laws of the State

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of Delaware and has not changed the jurisdiction of its organization  within the
five years preceding the date hereof except as previously reported in writing to
Bank.

TITLE/TAXES. Debtor has good and marketable title to Collateral and will warrant
and defend same against all claims.  Debtor will not  transfer,  sell,  or lease
Collateral (except as permitted herein). Debtor agrees to pay promptly all taxes
and  assessments  upon  or for  the  use of  Collateral  and  on  this  Security
Agreement. At its option, Bank may discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on Collateral.  Debtor agrees to
reimburse  Bank,  on demand,  for any such payment made by Bank.  Any amounts so
paid shall be added to the Obligations.

WAIVERS.  Debtor  agrees  not to  assert  against  Bank as a  defense  (legal or
equitable), as a set-off, as a counterclaim, or otherwise, any claims Debtor may
have against any seller or lessor that  provided  personal  property or services
relating to any part of the Collateral or against any other party liable to Bank
for  all or any  part of the  Obligations.  Debtor  waives  all  exemptions  and
homestead rights with regard to the Collateral. Debtor waives any and all rights
to any bond or security  which might be required by applicable  law prior to the
exercise of any of Bank's remedies  against any  Collateral.  All rights of Bank
and security interests hereunder, and all obligations of Debtor hereunder, shall
be absolute and unconditional,  not discharged or impaired  irrespective of (and
regardless of whether  Debtor  receives any notice of): (i) any lack of validity
or enforceability  of any Loan Document;  (ii) any change in the time, manner or
place  of  payment  or  performance,  or in  any  term,  of  all  or  any of the
Obligations  or the Loan  Documents  or any other  amendment or waiver of or any
consent  to any  departure  from  any Loan  Document;  or  (iii)  any  exchange,
insufficiency,    unenforceability,    enforcement,   release,   impairment   or
non-perfection  of any  collateral,  or any  release of or  modifications  to or
insufficiency,  unenforceability  or  enforcement  of  the  obligations  of  any
guarantor or other obligor. To the extent permitted by law, Debtor hereby waives
any rights under any valuation, stay, appraisement, extension or redemption laws
now existing or which may  hereafter  exist and which,  but for this  provision,
might be applicable to any sale or  disposition  of the  Collateral by Bank; and
any other circumstance which might otherwise  constitute a defense available to,
or a discharge of any party with respect to the Obligations.

NOTIFICATIONS;  LOCATION  OF  COLLATERAL.  Debtor will notify Bank in writing at
least 30 days  prior to any  change in: (i)  Debtor's  chief  place of  business
and/or   residence;   (ii)   Debtor's   name   or   identity;   (iii)   Debtor's
corporate/organizational  structure; or (iv) the jurisdiction in which Debtor is
organized.  In  addition,  Debtor  shall  promptly  notify Bank of any claims or
alleged  claims  of  any  other  person  or  entity  to  the  Collateral  or the
institution  of  any  litigation,  arbitration,  governmental  investigation  or
administrative proceedings against or affecting the Collateral. Debtor will keep
Collateral  at the  location(s)  previously  provided to Bank until such time as
Bank provides written advance consent to a change of location.  Debtor will bear
the cost of  preparing  and filing any  documents  necessary  to protect  Bank's
liens.

COLLATERAL CONDITION AND LAWFUL USE. Debtor represents that the Collateral is in
good repair and condition and that Debtor shall use  reasonable  care to prevent
Collateral  from being damaged or  depreciating,  normal wear and tear excepted.
Debtor  shall  immediately  notify  Bank  of any  material  loss  or  damage  to
Collateral.  Debtor shall not permit any item of  Collateral to become a fixture
to real estate or an accession to other personal  property  unless such property
is also  Collateral  hereunder.  Debtor  represents  it is in  compliance in all
respects with all laws,  rules and regulations  applicable to the Collateral and
its properties, operations, business, and finances.

RISK OF LOSS AND  INSURANCE.  Debtor shall bear all risk of loss with respect to
the  Collateral.  The injury to or loss of Collateral,  either partial or total,
shall not release Debtor from payment or other performance hereof. Debtor agrees
to obtain and keep in force property insurance on the Collateral with a Lender's
Loss  Payable  Endorsement  in favor of Bank and  commercial  general  liability
insurance naming Bank as Additional Insured. Such insurance is to be in form and
amounts  satisfactory  to  Bank  and  issued  by  reputable  insurance  carriers
satisfactory  to Bank with a Best Insurance  Report Key Rating of at least "A-".
All such policies  shall provide to Bank a minimum OF 30 days written  notice of
cancellation.  Debtor shall furnish to Bank such policies,  or other evidence of
such  policies  satisfactory  to Bank.  If Debtor fails to obtain or maintain in
force such insurance or fails to furnish such evidence, Bank is authorized,  but
not obligated,  to purchase any or all insurance or "Single Interest  Insurance"
protecting

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such interest as Bank deems appropriate against such risks and for such coverage
and for  such  amounts,  including  either  the  loan  amount  or  value  of the
Collateral,  all at its  discretion,  and at  Debtor's  expense.  In such event,
Debtor agrees to reimburse  Bank for the cost of such insurance and Bank may add
such cost to the  Obligations.  Debtor shall bear the risk of loss to the extent
of any  deficiency in the effective  insurance  coverage with respect to loss or
damage to any of the  Collateral.  Debtor hereby assigns to Bank the proceeds of
all  property  insurance  covering  the  Collateral  up to  the  amount  of  the
Obligations  and directs any insurer to make payments  directly to Bank.  Debtor
hereby  appoints  Bank  its   attorney-in-fact,   which   appointment  shall  be
irrevocable  and coupled with an interest for so long as Obligations are unpaid,
to file  proof of loss  and/or any other  forms  required  to  collect  from any
insurer any amount due from any damage or destruction of Collateral, to agree to
and bind Debtor as to the amount of said recovery, to designate payee(s) of such
recovery,  to grant  releases to  insurer,  to grant  subrogation  rights to any
insurer,  and to endorse any  settlement  check or draft.  Debtor  agrees not to
exercise  any of the  foregoing  powers  granted to Bank  without  Bank's  prior
written consent.

FINANCING  STATEMENTS,  CERTIFICATES OF TITLE,  POWER OF ATTORNEY.  No financing
statement  (other than any filed or approved by Bank) covering any Collateral is
on file in any public filing office. Debtor authorizes the filing of one or more
financing  statements  covering the Collateral in form satisfactory to Bank, and
without   Debtor's   signature  where  authorized  by  law,  agrees  to  deliver
certificates  of title on which  Bank's  lien has been  indicated  covering  any
Collateral  subject to a certificate of title statue, and will pay all costs and
expenses of filing or applying for the same or of filing this Security Agreement
in all public  filing  offices,  where filing is deemed by Bank to be desirable.
Debtor  hereby  constitutes  and appoints  Bank the true and lawful  attorney of
Debtor with full power of substitution  to take any and all  appropriate  action
and to execute any and all documents,  instruments or  applications  that may be
necessary or desirable to accomplish the purpose and carry out the terms of this
Security Agreement,  including,  without limitation,  to complete,  execute, and
deliver Control  Agreement(s) by Bank,  Debtor and Third Party(ies)  required in
connection  herewith  (individually  and collectively the "Control  Agreement"),
instructions  to Third  Party(ies)  regarding,  among other things,  control and
disposition  of any  Collateral,  and  endorsements  desirable  for  transfer or
delivery of any  Collateral,  registration  of any Collateral  under  applicable
laws,  retitling any Collateral,  receipt,  endorsement and/or collection of all
checks and other  orders for payment of money  payable to Debtor with respect to
Collateral.  The  foregoing  power of attorney is coupled  with an interest  and
shall be  irrevocable  until  all of the  Obligations  have  been  paid in full.
Neither  Bank nor  anyone  acting  on its  behalf  shall  be  liable  for  acts,
omissions,  errors  in  judgment,  or  mistakes  in  fact in  such  capacity  as
attorney-in-fact.  Debtor ratifies all acts of Bank as attorney-in-fact.  Debtor
agrees to take such other actions,  at Debtor's  expense,  as might be requested
for the perfection,  continuation  and  assignment,  in whole or in part, of the
security  interests  granted herein and to assure and preserve  Bank's  intended
priority  position.  If  certificates,  passbooks,  or  other  documentation  or
evidence is/are issued or outstanding as to any of the  Collateral,  Debtor will
cause  the  security  interests  of Bank  to be  properly  protected,  including
perfection by notation thereon or delivery thereof to Bank. Upon Bank's request,
Debtor will,  at its own  expense:  (i) do all things  determined  by Bank to be
desirable  to  register  such  Collateral  or  qualify  for  an  exemption  from
registration,  under the provisions of all applicable  securities laws, and (ii)
otherwise  do or cause to be done all other acts and things as may be  necessary
to make  the  sale of the  Collateral  valid,  binding  and in  compliance  with
applicable law.

LANDLORD/MORTGAGEE  WAIVERS.  Debtor shall cause each mortgagee of real property
owned by Debtor and each landlord of real  property  leased by Debtor to execute
and deliver instruments satisfactory in form and substance to Bank by which such
mortgagee or landlord subordinates its rights, if any, in the Collateral.

STOCK, DIVIDENDS.  If, with respect to any securities pledged hereunder, a stock
dividend is declared,  any stock split made or right to subscribe is issued, all
the certificates for the shares representing such stock dividend, stock split or
right to subscribe will be immediately delivered,  duly endorsed, to the Bank as
additional  Collateral,  and any cash or non-cash proceeds and products thereof,
including  investment  property and security  entitlements  will be  immediately
delivered to Bank.  Debtor  acknowledges that such grant includes all investment
property and security entitlements, now existing or hereafter arising, relating

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to such  securities.  In  addition,  Debtor  agrees to execute  such notices and
instructions to securities intermediaries as Bank may reasonably request.

VALUE  REQUIREMENT.  The Fair Market Value of the securities pledged to the Bank
under this Security Agreement shall at all times exceed  $500,000.00.  If at any
time the Fair Market Value of the securities pledged to the Bank hereunder falls
below this  amount,  Debtor  shall within 3 business  days,  deliver  additional
Collateral  to Bank in an amount  sufficient to restore the Fair Market Value to
the  required  amount.  "Fair Market  Value"  means the value of the  securities
pledged  hereunder  based on the closing price per unit of any of the investment
property  which is a part of the  Collateral  as quoted or  reported in THE WALL
STREET  JOURNAL  or,  if not  available,  other  customary  publication  of such
information,  plus the amount of any cash or other financial  assets  comprising
the  Collateral.  If the Fair Market Value of any securities  pledged  hereunder
cannot be determined by the foregoing  procedure,  the Fair Market Value of such
Collateral  shall  be  determined  by the  Bank  by  reference  to  such  public
information as may be available.

TRADING OF COLLATERAL.  Until a Default occurs, if securities  pledged hereunder
are held in the Account, Debtor shall have the right to vote such Collateral, to
exchange it or any part thereof for other easily marketable  investment property
or cash of at least  equivalent  value or purchase for cash  readily  marketable
investment  property,  all of which property or cash proceeds shall be placed or
paid into the Account,  to collect and receive all cash  dividends  and interest
distributed periodically in the ordinary course by the obligor or issuer of such
Collateral or part  thereof,  and unless  otherwise  restricted by this Security
Agreement,  to exercise  other  rights with respect to such  Collateral.  In the
event that,  notwithstanding  the above,  any such property or cash proceeds are
received by Debtor  (other than in the  Account) as a result of such an exchange
or purchase,  such  property or cash  proceeds  shall be held by Debtor in trust
for, and immediately delivered to, Bank.

CONTROL.  Debtor will cooperate  with Bank in obtaining  control with respect to
Collateral  consisting  of investment  property and  electronic  chattel  paper.
Debtor  authorizes  and  directs  Third  Party to comply  with the terms of this
Security  Agreement,  to enter into a Control Agreement,  to mark its records to
show the  security  interest  of and/or  the  transfer  to Bank of the  property
pledged  hereunder  and to mail monthly  statements  to the Bank, in addition to
Debtor, to the address provided herein.

CHATTEL PAPER,  ACCOUNTS,  GENERAL INTANGIBLES.  Debtor warrants that Collateral
consisting of chattel paper, accounts, or general intangibles is (i) genuine and
enforceable  in  accordance  with its terms;  (ii) not  subject to any  defense,
set-off,  claim or counterclaim of a material nature against Debtor except as to
which  Debtor has notified  Bank in writing;  and (iii) not subject to any other
circumstances that would impair the validity,  enforceability,  value, or amount
of such  Collateral  except as to which  Debtor has  notified  Bank in  writing.
Debtor shall not amend,  modify or supplement  any lease,  contract or agreement
contained in Collateral or waive any  provision  therein,  without prior written
consent of Bank.  Debtor  will not create any  tangible  chattel  paper  without
placing a legend on the chattel paper  acceptable to Bank  indicating  that Bank
has a  security  interest  in the  chattel  paper.  Debtor  will not  create any
electronic  chattel paper without  taking all steps deemed  necessary by Bank to
confer control of the electronic  chattel paper upon Bank in accordance with the
UCC.

ACCOUNT INFORMATION.  From time to time, at Bank's request, Debtor shall provide
Bank with schedules  describing all accounts,  including  customers'  addresses,
created or acquired by Debtor and at Bank's  request  shall  execute and deliver
written assignments of contracts and other documents evidencing such accounts to
Bank.  Together with each schedule,  Debtor shall, if requested by Bank, furnish
Bank with copies of Debtor's sales journals,  invoices, customer purchase orders
or the  equivalent,  and  original  shipping or delivery  receipts for all goods
sold, and Debtor warrants the genuineness thereof.

ACCOUNT DEBTORS.  If a Default should occur, Bank shall have the right to notify
the account  debtors  obligated on any or all of the  Collateral to make payment
thereof  directly to Bank and Bank may take  control of all proceeds of any such
Collateral,  which  rights  Bank  may  exercise  at any  time.  The cost of such
collection and  enforcement,  including  attorneys' fees and expenses,  shall be
borne  solely by Debtor  whether the same is  incurred  by Bank or Debtor.  If a
Default should occur or upon demand of Bank,

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Debtor will, upon receipt of all checks,  drafts,  cash and other remittances in
payment on  Collateral,  deposit the same in a special bank  account  maintained
with Bank, over which Bank also has the power of withdrawal.

If a Default should occur, no discount, credit, or allowance shall be granted by
Debtor tc any account debtor and no return of  merchandise  shall be accepted by
Debtor  without  Bank's  consent.  Bank  may,  after  Default,  settle or adjust
disputes and claims  directly  with  account  debtors for amounts and upon terms
that  Bank  considers  advisable,  and  in  such  cases  Bank  will  credit  the
Obligations  with the net amounts  received by Bank,  after deducting all of the
expenses  incurred by Bank.  Debtor agrees to indemnify and defend Bank and hold
it harmless  with respect to any claim or  proceeding  arising out of any matter
related to collection of Collateral.

GOVERNMENT  CONTRACTS.  If any Collateral covered hereby arises from obligations
due  to  Debtor  from  any  governmental  unit  or  organization,  Debtor  shall
immediately  notify  Bank in writing  and  execute  all  documents  and take all
actions deemed necessary by Bank to ensure recognition by such governmental unit
or organization of the rights of Bank in the Collateral.

INVENTORY.  So long as no Default has  occurred,  Debtor shall have the right in
the regular  course of business,  to process and sell Debtor's  inventory.  If a
Default  should occur or upon demand of Bank,  Debtor will,  upon receipt of all
checks,  drafts,  cash and other  remittances,  in payment of  Collateral  sold,
deposit the same in a special bank account maintained with Bank, over which Bank
also has the power of  withdrawal.  Debtor agrees to notify Bank  immediately in
the event that any inventory purchased by or delivered to Debtor is evidenced by
a bill of  lading,  dock  warrant,  dock  receipt,  warehouse  receipt  or other
document of title and to deliver such document to Bank upon request.

INSTRUMENTS,  CHATTEL PAPER, DOCUMENTS.  Any Collateral that is, or is evidenced
by, instruments, chattel paper or negotiable documents will be properly assigned
to and the originals of any such  Collateral in tangible form deposited with and
held by Bank,  unless  Bank  shall  hereafter  otherwise  direct or  consent  in
writing.  Bank may, without notice, before or after maturity of the Obligations,
exercise  any or all rights of  collection,  conversion,  or exchange  and other
similar rights, privileges and options pertaining to such Collateral,  but shall
have no duty to do so.

COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform
with respect to Collateral  pledged  except as set forth  herein;  and by way of
explanation and not by way of limitation,  Bank shall incur no liability for any
of the following:  (i) loss or depreciation of Collateral  (unless caused by its
willful misconduct or gross  negligence),  (ii) failure to present any paper for
payment or protest, to protest or give notice of nonpayment, or any other notice
with respect to any paper or  Collateral,  (iii)  failure to  ascertain,  notify
Debtor  of,  or take  any  action  in  connection  with  any  conversion,  call,
redemption,  retirement or any other event relating to any of the Collateral, or
failure  to notify any party  hereto  that  Collateral  should be  presented  or
surrendered  for  any  such  reason.  Debtor  acknowledges  that  Bank is not an
investment  advisor or insurer with respect to the  Collateral;  and Bank has no
duty to advise Debtor of any actual or  anticipated  changes in the value of the
Collateral.

TRANSFER OF  COLLATERAL.  Bank may assign its rights in  Collateral  or any part
thereof to any assignee who shall  thereupon  become  vested with all the powers
and rights herein given to Bank with respect to the property so transferred  and
delivered,  and Bank shall  thereafter be forever  relieved and fully discharged
from any  liability  with  respect to such  property  so  transferred,  but with
respect to any  property  not so  transferred,  Bank shall retain all rights and
powers hereby given.

INSPECTION,  BOOKS AND  RECORDS.  Debtor  will at all times  keep  accurate  and
complete  records  covering  each item of  Collateral,  including  the  proceeds
therefrom.  Bank, or any of its agents, shall have the right, at intervals to be
determined  by Bank and without  hindrance  or delay,  at Debtor's  expense,  to
inspect,  audit,  and examine the  Collateral and to make copies of and extracts
from the books, records,  journals,  orders, receipts,  correspondence and other
data relating to Collateral,  Debtor's business or any other transaction between
the parties hereto. Debtor will at its expense furnish Bank copies thereof upon

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request.  For the further  security  of Bank,  it is agreed that Bank has and is
hereby granted a security interest in all books and records of Debtor pertaining
to the Collateral.

COMPLIANCE WITH LAW.  Debtor will comply with all federal,  state and local laws
and regulations,  applicable to it, including without limitation,  environmental
and labor laws and regulations, in the creation, use, operation, manufacture and
storage of the Collateral and the conduct of its business.

CROSS COLLATERALIZATION  LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor,  within the meaning of the Federal Consumer
Credit  Protection  Act, Bank  expressly  waives any security  interest  granted
herein in  Collateral  that Debtor uses as a principal  dwelling  and  household
goods.

ATTORNEYS'  FEES AND OTHER COSTS OF  COLLECTION.  Debtor shall pay all of Bank's
reasonable  expenses  incurred  in  enforcing  this  Security  Agreement  and in
preserving and liquidating Collateral,  including but not limited to, reasonable
arbitration,  paralegals',  attorneys'  and experts' fees and expenses,  whether
incurred with or without the  commencement  of a suit,  trial,  arbitration,  or
administrative proceeding, or in any appellate or bankruptcy proceeding.

DEFAULT.  If any of the  following  occurs,  a default  ("Default")  under  this
Security  Agreement shall exist: LOAN DOCUMENT DEFAULT. A default under any Loan
Document.  COLLATERAL LOSS OR DESTRUCTION.  Any loss, theft, substantial damage,
or  destruction  of Collateral  not fully  covered by insurance,  or as to which
insurance  proceeds  are not  remitted  to  Bank  within  30  days of the  loss.
COLLATERAL  SALE, LEASE OR ENCUMBRANCE.  Any sale,  lease, or encumbrance of any
Collateral not  specifically  permitted  herein without prior written consent of
Bank.  LEVY,  SEIZURE  OR  ATTACHMENT.  The  making  of any  levy,  seizure,  or
attachment on or of Collateral which is not removed within 10 days. UNAUTHORIZED
COLLECTION OF COLLATERAL.  Any attempt to collect,  cash in or otherwise recover
deposits that are  Collateral.  THIRD PARTY  BREACH.  Any default or breach by a
Third Party of any  provision  contained  in any Control  Agreement  executed in
connection with any of the Collateral.  UNAUTHORIZED TERMINATION. Any attempt to
terminate,  revoke,  rescind,  modify,  or  violate  the terms of this  Security
Agreement or any Control Agreement without the prior written consent of Bank.

REMEDIES ON DEFAULT  (INCLUDING POWER OF SALE). If a Default occurs,  all of the
Obligations  shall be immediately due and payable,  without  notice,  other than
Obligations  under any swap  agreements  (as defined in 11 U.S.C.  ss. 101) with
Bank, which shall be governed by the default and termination  provisions of said
swap  agreements,  and Bank shall have all the rights and  remedies of a secured
party under the Uniform Commercial Code. Without limitation thereto,  Bank shall
have the following  rights and  remedies:  (i) to take  immediate  possession of
Collateral,  without notice or resort to legal process, and for such purpose, to
enter upon any premises on which  Collateral or any part thereof may be situated
and to remove  the same  therefrom,  or,  at its  option,  to render  Collateral
unusable or dispose of said  Collateral  on Debtor's  premises;  (ii) to require
Debtor to assemble the Collateral and make it available to Bank at a place to be
designated  by Bank;  (iii) to exercise  its right of set-off or bank lien as to
any monies of Debtor  deposited in accounts of any nature  maintained  by Debtor
with Bank or affiliates of Bank,  without advance notice,  regardless of whether
such accounts are general or special;  (iv) to dispose of Collateral,  as a unit
or in parcels,  separately or with any real property interests also securing the
Obligations, in any county or place to be selected by Bank, at either private or
public  sale (at which  public sale Bank may be the  purchaser)  with or without
having  the  Collateral  physically  present at said sale.  In  addition  to the
foregoing,  Bank  shall be  authorized  to:  notify  Third  Party  to  terminate
immediately any trading,  other rights or entitlements of Debtor with respect to
the Collateral and any  distributions  to Debtor from the  Collateral;  transfer
into Bank's name or the name of its nominee,  all or any part of the Collateral;
receive all interest,  dividends,  and other proceeds of the Collateral;  notify
any person obligated on any Collateral of the security  interest of Bank therein
and require  such person to make  payment  directly  to Bank;  demand,  sue for,
collect or receive the  Collateral  and any  proceeds  thereof,  and/or make any
settlement or compromise as Bank deems desirable with respect to any Collateral;
and exercise any voting, conversion,  registration,  purchase or other rights of
an owner,  holder or entitlement  holder of the  Collateral.  Debtor agrees that
Bank may exercise its rights under this Security Agreement without regard

                                     Page 6

<PAGE>

for the actual or potential  tax  consequences  to Debtor under federal or state
law and without regard to any instructions or directives given Bank by Debtor,

Any notice of sale, disposition or other action by Bank required by law and sent
to Debtor at Debtor's address shown above, or at such other address of Debtor as
may from time to time be shown on the records of Bank,  at least 5 days prlor to
such  action,  shall  constitute  reasonable  notice to Debtor.  Notice shall be
deemed given or sent when mailed postage prepaid to Debtor's address as provided
herein.  Bank  shall be  entitled  to apply  the  proceeds  of any sale or other
disposition of the Collateral, and the payments received by Bank with respect to
any of the  Collateral,  to  Obligations  in such  order and  manner as Bank may
determine.  Collateral  that is  subject  to  rapid  declines  in  value  and is
customarily  sold  in  recognized  markets  may  be  disposed  of by  Bank  in a
recognized  market for such collateral  without providing notice of sale. Debtor
waives any and all requirements that the Bank sell or dispose of all or any part
of the  Collateral at any  particular  time,  regardless  of whether  Debtor has
requested such sale or disposition.

REMEDIES  ARE  CUMULATIVE.  No failure on the part of Bank to  exercise,  and no
delay in exercising,  any right,  power or remedy  hereunder  shall operate as a
waiver thereof,  nor shall any single or partial  exercise by Bank or any right,
power or remedy hereunder  preclude any other or further exercise thereof or the
exercise  of any right,  power or  remedy.  The  remedies  herein  provided  are
cumulative and are not exclusive of any remedies  provided by law, in equity, or
in other Loan Documents.

INDEMNIFICATION. Debtor shall protect, indemnify and save harmless Bank from and
against all losses, liabilities, obligations, claims, damages, penalties, causes
of  action,  costs  and  expenses  (including,  without  limitation,  reasonable
attorneys' fees and expenses)  (collectively,  "Damages") imposed upon, incurred
by or asserted  against Bank on account of (i) the Loan Documents or any failure
or alleged failure of Debtor to comply with any of the terms or  representations
of this  Agreement;  (ii) any claim of loss or damage to the  Collateral  or any
injury or claim of injury to, or death of, any  person or  property  that may be
occasioned  by any cause  whatsoever  pertaining  to the  Collateral or the use,
occupancy or operation  thereof,  (iii) any failure or alleged failure of Debtor
to comply with any law, rule or regulation  applicable to the  Collateral or the
use, occupancy or operation of the Collateral  (including,  without  limitation,
the  failure  to pay any  taxes,  fees  or  other  charges),  (iv)  any  Damages
whatsoever by reason of any alleged  action,  obligation or  undertaking of Bank
relating in any way to or any matter contemplated by the Loan Documents,  or (v)
any  claim  for  brokerage  fees  or  such  other  commissions  relating  to the
Collateral  or any other  Obligations;  provided  that such  indemnity  shall be
effective  only to the extent of any Damages  that may be  sustained  by Bank in
excess of any net proceeds  received by it from any  insurance of Debtor  (other
than  self-insurance)  with respect to such Damages.  Nothing  contained  herein
shall require  Debtor to indemnify  Bank for any Damages  resulting  from Bank's
gross negligence or its willful  misconduct.  The indemnity  provided for herein
shall  survive  payment of the  Obligations  and shall  extend to the  officers,
directors,  employees  and duly  authorized  agents of Bank.  In the event  Bank
incurs any  Damages  arising out of or in any way  relating  to the  transaction
contemplated by the Loan Documents  (including any of the matters referred to in
this  section),  the amounts of such Damages shall be added to the  Obligations,
shall bear interest,  to the extent permitted by law, at the interest rate borne
by the  Obligations  from the date  incurred  until paid and shall be payable on
demand.

MISCELLANEOUS.  (i) AMENDMENTS AND WAIVERS. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Bank.  No waiver by Bank of any Default shall
operate  as a waiver of any other  Default  or of the same  Default  on a future
occasion.  (ii) ASSIGNMENT.  All rights of Bank hereunder are freely assignable,
in whole or in part,  and shall  inure to the benefit of and be  enforceable  by
Bank, its successors, assigns and affiliates. Debtor shall not assign its rights
and  interest  hereunder  without  the prior  written  consent of Bank,  and any
attempt by Debtor to assign  without  Bank's prior  written  consent is null and
void.  Any  assignment  shall not  release  Debtor  from the  Obligations.  This
Security  Agreement  shall be  binding  upon  Debtor,  and the  heirs,  personal
representatives,  successors,  and  assigns of  Debtor.  (iii)  APPLICABLE  LAW;
CONFLICT  BETWEEN  DOCUMENTS.  This Security  Agreement shall be governed by and
construed  under the law of the  jurisdiction  named in the  address of the Bank
shown on the first page hereof (the "Jurisdiction")

                                     Page 7

<PAGE>

without regard to that Jurisdiction's conflict of laws principles, except to the
extent  that  the  UCC  requires  the  application  of the  law  of a  different
jurisdiction. If any terms of this Security Agreement conflict with the terms of
any  commitment  letter or loan proposal,  the terms of this Security  Agreement
shall control.  (iv)  JURISDICTION.  Debtor  irrevocably agrees to non-exclusive
personal  jurisdiction in the state  identified as the  Jurisdiction  above. (v)
SEVERABILITY. If any provision of this Security Agreement shall be prohibited by
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 the remaining  provisions of this Security Agreement.  (vi)
NOTICES.  Any notices to Debtor shall be  sufficiently  given, if in writing and
mailed or delivered  to the address of Debtor 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 Debtor changes Debtor's mailing address at any time prior to the date
the Obligations are paid in full,  Debtor agrees to promptly give written notice
of said  change of address by  registered  or  certified  mail,  return  receipt
requested,  all charges prepaid.  (vii) CAPTIONS.  The captions contained herein
are  inserted  for  convenience  only  and  shall  not  affect  the  meaning  or
interpretation of this Security  Agreement or any provision  hereof.  The use of
the plural  shall  also mean the  singular,  and vice  versa.  (viii)  JOINT AND
SEVERAL  LIABILITY.  If more than one party has signed this Security  Agreement,
such  parties  are jointly  and  severally  obligated  hereunder.  (ix)  BINDING
CONTRACT. Debtor by execution and Bank by acceptance of this Security Agreement,
agree  that each  party is bound by all terms and  provisions  of this  Security
Agreement.

DEFINITIONS.  LOAN DOCUMENTS. The term "Loan Documents" refers to all documents,
including  this  Agreement,  whether  now or  hereafter  existing,  executed  in
connection  with  or  related  to the  Obligations,  and  may  include,  without
limitation  and whether  executed by Debtor or others,  commitment  letters that
survive closing, loan agreements, promissory notes, guaranty agreements, deposit
or other similar agreements,  other security  agreements,  letters of credit and
applications for letters of credit, 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). THIRD PARTY. The term "Third Party" means each and every Broker,
Collateral Agent or Securities  Intermediary  maintaining a securities  account,
and  acting in such  capacity,  for  Debtor  with  respect to some or all of the
Collateral.  UCC.  "UCC"  means the Uniform  Commercial  Code as  presently  and
hereafter enacted in the  Jurisdiction.  TERMS DEFINED IN THE UCC. Any term used
in this Agreement and in any financing  statement  filed in connection  herewith
which is defined in the UCC and not otherwise  defined in this  Agreement or any
other Loan Document has the meaning given to the term in the UCC.

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

                         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 8Exhibit 4.7

                                 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 May 4, 2005, by and between Bank
and Borrower.

This  Agreement  amends and restates in its entirety that certain Loan Agreement
dated  May  23,  2002  and  applies  to the  loan  or  loans  (individually  and
collectively, the "Loan") evidenced by one or more promissory notes of even date
herewith 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, as in effect from
time to time.  COMPLIANCE  WITH LAWS.  Borrower is in compliance in all respects
with all federal, state and local laws, rules and

<PAGE>

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.) 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.

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  annually  within 120 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 annually  within 120 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, as in effect
from time to time. 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  replacements,  additions and
improvements  thereto  necessary for the proper conduct of its business,  unless
prohibited  by the Loan  Documents.  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 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

                                     Page 2

<PAGE>

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 hereof 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; or (iii) 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.

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.  LIMITATION  ON DEBT.  Borrower  shall not,  directly or  indirectly,
create, incur, assume or become liable for any additional indebtedness,  whether
contingent or direct,  if, giving effect to such  additional debt on a pro forma
basis causes the aggregate amount of Borrower's debt,  including  obligations to
Bank.  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.

                                     Page 3

<PAGE>

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, Chief Financial Officer

                         Wachovia Bank, National Association

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

Tracking #: 67194 PHL 20/4226578522/18
CAT - Deal # 502363 Facility ID 352242

                                     Page 4

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