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                        SECURITY AGREEMENT


     
      1.   DATA NATIONAL CORPORATION (hereinafter called "Debtor"), whose 
address is 11415 West I-70 Frontage Road North, Wheat Ridge, Colorado 80033, 
for value received, hereby grants to Norwest Business Credit, Inc., a 
Minnesota corporation (hereinafter called "Secured Party"), whose address is 
1740 Broadway, Denver, Colorado 80274-8625, a security interest in the
"Collateral" (as hereinafter defined) to secure all obligations of the Debtor
under a guaranty (hereinafter called the "Guaranty") entered into by Debtor 
in favor of Secured Party to guarantee any and all obligations of Service 
Business Systems, Inc., a Colorado corporation and subsidiary of Debtor 
("SBS") to Secured Party, all obligations of Debtor hereunder, and in the 
protection, maintenance and liquidation of the security interests hereby 
granted, with interest at the maximum legal rate on such costs, expenses, 
advances and liabilities, and all other obligations of Debtor to the Secured 
Party however created, arising or evidenced, whether direct or indirect, 
absolute or contingent, now or hereafter existing, due or to become due.  
The Guaranty, the SBS Note and all other obligations secured hereby are 
herein collectively called the "Liabilities".

      2.   The property (herein called the "Collateral") in which the 
security interests are granted is all of the Debtor's property described 
below, together with all proceeds and products therefrom:

      (a)  All inventory, raw materials, work in process and supplies now 
           owned or hereafter acquired; and

      (b)  All equipment and machinery whether now owned or hereafter 
           acquired;

      (c)  All accounts, and each and every right of Debtor to the payment 
           of money, whether such right to payment now exists or hereafter 

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           arises, whether such right to payment arises out of a sale, lease 
           or other disposition of goods or other property, out of a 
           rendering of services, out of a loan, out of the overpayment of 
           taxes or other liabilities, or otherwise arises under any contract
           or agreement, whether such right to payment is created, generated 
           or earned by Debtor or by some other person who subsequently 
           transfers such person's interest to Debtor, whether such right to
           payment is or is not already earned by performance and howsoever 
           such right to payment may be evidenced, together with all other 
           rights and interests (including all liens and security interests)
           which Debtor may at any time have by law or against any property 
           of such account debtor or other obligor; all including but not 
           limited to all present and future accounts, contract rights, 
           loans and obligations receivable, chattel papers, bonds, notes 
           and other debt instruments, tax refunds and rights to payment in 
           the nature of general intangibles; and 

      (d)  All general intangibles of Debtor whether now owned or hereafter 
           acquired, including (without limitation) all present and future 
           patents, patent applications, copyrights, trademarks, trade names, 
           trade secrets, customer or supplier lists and contracts, manuals, 
           operating instructions, permits, franchises, the right to use 
           Debtor's name, and the goodwill of Debtor's business.

      3.   Debtor represents and warrants to, and covenants and agrees with, 
the Secured Party as follows:

      (a)   The Collateral will be kept at the address of Debtor set forth 
            above unless the Secured Party shall otherwise consent in 
            writing.

      (b)   Debtor shall not conduct business under any name other than that 
            given above, nor change or reorganize the type of business entity
            under which it does business without the prior written consent of
            the Secured Party.

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      (c)   Debtor has full title to the Collateral and will at all times keep 
            the Collateral free of all liens and claims whatsoever, other than 
            the security interest granted hereunder and a second priority 
            security interest granted pursuant to that certain Amended and 
            Restated Promissory Note dated January 3, 1997 by Debtor in favor
            of Ray E. Dillon, Jr. and Ray E. Dillon, III in the original 
            principal amount of $551,400.

      (d)   Debtor will not sell, transfer, lease or otherwise dispose of 
            any of the Collateral or any interest thereon, without the prior 
            written approval of the Secured Party, except that Debtor may 
            sell the inventory listed in the ordinary course of business on
            customary terms and at usual prices, until advised otherwise by 
            Secured Party.

      (e)   No financing statement covering any of the Collateral is on file 
            in any public office and Debtor will, from time to time on 
            request of the Secured Party, execute such financing statement 
            and other documents (and pay the costs of filing or recording the
            same in all public offices deemed necessary by the Secured Party)
            and do such other acts and things, and pay the cost thereof, as 
            the Secured Party may request, to establish, maintain,
            perfect, extend, modify or terminate the security interests 
            granted hereunder, including, without limitation, depositing with
            the Secured Party any certificate of title issuable with respect 
            to any of the Collateral and noting the security interest granted
            hereunder thereon.

      (f)   Debtor shall at all times keep the Collateral in first class 
            order and repair, pay promptly all taxes, judgments or charges of
            any kind levied or assessed thereon, and keep current all rent 
            due on the premises where the Collateral is located.

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      (g)   Debtor shall, at all times, maintain insurance on all Collateral 
            against such hazards and in such amounts and with such companies 
            as the Secured Party may demand, all such insurance policies to 
            be in the possession of the Secured Party and to contain a
            lender's loss payable clause naming the Secured Party in an 
            amount satisfactory to the Secured Party.  Debtor hereby assigns 
            to the Secured Party any proceeds of such policies and all 
            unearned premiums thereon and authorizes and empowers the Secured
            Party to collect such sums and to execute and endorse in Debtor's
            name all proofs of loss, drafts, checks and any other documents 
            necessary to accomplish such collections, and any persons or 
            entities making payments to the Secured Party under the terms of 
            this paragraph are hereby relieved absolutely from any obligation
            to see to the application of any sums so paid.

      (h)   The Collateral, whether fixed to realty or not, shall remain 
            personal property.

      (i)   The Secured Party may examine and inspect the Collateral or any 
            portion thereof, wherever located, at any reasonable time or 
            times.

      4.      The Secured Party may, from time to time, at its option, 
perform any agreement of Debtor hereunder which Debtor shall fail to perform 
and take any other action which the Secured Party deems necessary for the 
maintenance or preservation of any of the Collateral or its interest
therein, and Debtor agrees to forthwith reimburse the Secured Party for all 
expenses of the Secured Party in connection with the foregoing, together with
interest thereon at the maximum legal rate from the date incurred until 
reimbursed by Debtor.

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      5.   If the Collateral, or any part thereof, is repossessed by the 
Secured Party, Debtor agrees to send notice by registered or certified mail 
to the Secured Party within 24 hours thereafter if Debtor claims that any 
article not constituting a part of the Collateral was contained therein at 
the time of repossession, and agrees that failure to do so shall be a waiver 
of, and a bar to, any subsequent claim therefor.

      6.   The occurrence of any of the following events shall constitute a 
default (herein called a "Default") hereunder:

      (a)  Nonpayment when due of any amount payable on any of the 
           Liabilities or failure to perform any agreement of Debtor 
           contained herein or in the Guaranty;

      (b)  Any statement, representation or warranty of Debtor herein or any 
           other writing at any time furnished by Debtor to the Secured Party
           is untrue in any material respect as of the date made;

      (c)  The Debtor shall become insolvent or unable to pay debts as they 
           mature or makes an assignment for the benefit of creditors, or any
           proceedings are instituted by or against any obligor alleging that
           such obligor is insolvent or unable to pay debts as they mature;

      (d)  Entry of any judgments against the Debtor in an amount in excess 
           of $35,000;

      (e)  Dissolution, merger or consolidation or transfer of a substantial 
           part of the property of the Debtor;

      (f)  Appointment of a receiver for the Collateral or any property in 
           which Debtor has an interest; and

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      (g)  Seizure of the Collateral.
     When a Default shall have occurred, all obligations of the Debtor under 
the Guaranty and all other Liabilities (notwithstanding any provision 
thereof) shall, at the option of the Secured Party, and without demand or 
notice of any kind, become immediately due and payable and the Secured Party 
may exercise from time to time any rights and remedies available to it under 
applicable law.  Debtor agrees, in the case of a Default, to assemble and 
make available at its expense all of the Collateral at a convenient place 
acceptable to the Secured Party and to pay all costs of the Secured
Party of collection of the Guaranty and all other Liabilities, enforcement 
of rights hereunder, including reasonable attorney's fees and legal expenses,
and expenses of any repairs to any realty or other property to which any of 
the Collateral may be affixed or be a part.  If any notification of any 
intended disposition of any of the Collateral is required by law, such 
notification, if mailed, shall be deemed reasonably and properly given if 
mailed at least five days before such disposition, postage prepaid, addressed
to Debtor either at the address shown hereinabove, or at any other address of
Debtor appearing on the records of the Secured Party and in reference to a 
private sale, need only state that the Secured Party intends to negotiate 
such a sale.  Disposition of Collateral shall be deemed commercially 
reasonable if made pursuant to a public offering advertised at least twice in
a newspaper of general circulation in the community where the Collateral is 
located or by a private sale for a sum equal to or in excess of the 
liquidation value of the Collateral as determined by the Secured Party.  Any 
proceeds of the disposition of the Collateral may be applied by the Secured 
Party to the payment of expenses in connection with the Collateral, including
reasonable attorney's fees and legal expenses, and any balance of such 
proceeds may be applied by the Secured Party toward the payment of such of 

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the Liabilities, and in such order of application, as the Secured Party may 
from time to time elect.

      7.  (a)  Time is of the essence of this Agreement.

          (b)  This Agreement shall be governed by and construed in accordance
               with the laws of the State of Colorado.

          (c)  No waiver of any breach of any covenant, agreement or 
               undertaking contained herein shall operate as a waiver of any 
               subsequent breach of the same covenant, agreement or 
               undertaking or as a waiver of any breach of any other 
               covenant, agreement or undertaking.  In the case of a breach 
               by any party of any covenant, agreement or undertaking,
               the nonbreaching party may nevertheless accept from the other,
               any payment or performance without waiving its right to 
               exercise any right or remedy provided herein or otherwise, 
               with respect to any such breach which was in existence at the 
               time such payment or performance were accepted by it.  No 
               failure of any party to exercise any power given herein or to 
               insist upon strict compliance with any covenant, agreement or 
               undertaking contained herein, and no custom or practice which 
               varies from the terms hereof, shall constitute a waiver of 
               such party's right to demand exact compliance with the terms 
               hereof.  The waiver by any party of a breach of any covenant, 
               agreement or undertaking contained herein shall be made only 
               by a written waiver in each case, and no such waiver shall 
               operate or be construed as a waiver of any prior or subsequent
               breach.

          (d)  If any provision of this Agreement shall, to any extent, be 
               held invalid, illegal or unenforceable, in whole or in part, 
               the validity, legality, and enforceability of the remaining 

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               part of such provision, and the validity, legality and 
               enforceability of the other provisions hereof, shall not be 
               affected thereby.  Any provision of this Agreement which is
               held invalid, illegal or unenforceable in any jurisdiction 
               shall not be deemed invalid, illegal or unenforceable in any 
               other jurisdiction.

          (e)  This Agreement may not be amended, changed, modified, altered 
               or terminated except in writing executed by all parties with 
               the same formality as this Agreement is executed.

          (f)  Except as otherwise expressly provided herein, all rights, 
               powers and privileges conferred hereunder upon any party shall
               be cumulative and not restrictive of those given by law.  No 
               remedy herein conferred is exclusive of any other available 
               remedy, but each and every such remedy shall be cumulative and
               shall be in addition to every other remedy given by agreement 
               or now or hereafter existing at law or in equity or by statute.

          (g)  This Agreement shall be binding upon, shall inure to the 
               benefit of, and shall be enforceable by and against all the 
               parties and their respective heirs, legal representatives,
               successors and assigns.  Nothing in this Agreement, expressed 
               or implied, is intended to or shall confer upon any person 
               other than the parties, and their respective heirs, legal
               representatives, successors and assigns, any rights, remedies,
               obligations or liabilities.

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          (h)  Use of the terms "herein", "hereby", "hereunder", "hereof', 
               "hereinbefore", "hereinafter", and other equivalent words 
               refer to this Agreement in its entirety and not solely to the 
               particular portion of the Agreement in which such word is 
               used.  Reference to "this Article", "this Section", or a 
               similar reference to a specific part of this Agreement shall
               refer to the particular Article, Section or specific part in 
               which such reference appears.   Wherever used herein, any 
               pronoun shall be deemed to include both singular and plural 
               and all genders.

          (i)  Debtor will execute, deliver, acknowledge and supply such 
               further documents, instruments and assurances as shall be 
               reasonably necessary or appropriate to carry out the full 
               intent and purposes of this Agreement.

     IN WITNESS WHEREOF, the Debtor has executed this Security Agreement as 
of the 3rd day of January, 1997.

(Registrant)                               DATA NATIONAL CORPORATION
BY(Signature)                              /s/Donald V. Warriner
(Name and Title)                           Donald V. Warriner,
                                           President and CEO





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