Exhibit 3.1
 XATA CORPORATION
 ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
 Corporation
 Second Restated Articles of Incorporation




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CERTIFICATE OF DESIGNATION
OF PREFERENCES OF SERIES B PREFERRED STOCK
OF
XATA CORPORATION,
a Minnesota Corporation
 1.
    
    Designation. The series of Preferred Stock of the Corporation shall be designated as
Series Preferred Stock.
 2.
    
    Authorized Number. The number of shares constituting the Series B Preferred Stock
shall be Two Million Two Hundred Fifty Thousand (2,250,000) shares. The Board of Directors is
authorized to decrease the number of shares of any series of preferred stock prior or
subsequent to the issue of that series, but not below the number of shares of such series then
outstanding. In case the number of shares of any series shall be so decreased, the shares
constituting such decrease shall resume the status which they had prior to the adoption of the
resolution originally fixing the number of shares of such series.
 3.
    
    Dividend Rights. The holders of the Series B Preferred Stock, in preference to the
holders of any other capital stock of the Corporation, shall be entitled to receive, out of
any assets of the Corporation legally available therefor, cumulative dividends at the rate of
four percent (4%) of the Original Issue Price (as defined below) per annum on each outstanding
share of Series B Preferred Stock (the Preferred Dividend). Such Preferred Dividend shall
be paid semi-annually on the last business day of May and November of each year in cash or, at
the election of holders of at least sixty percent (60%) of the Series B Preferred Stock then
outstanding as of twenty (20) business days prior to the date of payment, in shares of Series
B Preferred Stock. The aggregate number of shares of Series B Preferred Stock so payable to
any holder upon such election to receive dividends in kind shall be equal to the aggregate
amount of such Preferred Dividend payable to such holder divided by the Conversion Price (as
defined below), with any fractions of a share to be issued rounded to the nearest whole share.
The Board of Directors shall not pay any dividend to the holders of any other capital stock
of the Corporation unless and until it has paid the Preferred Dividend on the shares of Series
B




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4.
    
    Liquidation Preference.
 (A)
    
    In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary (a Liquidation
Event), the holders of the Series B Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets
or surplus funds of the Corporation to the holders of any other capital
stock of the Corporation, an amount per share equal to the Original Issue
Price of the Series B Preferred Stock (as adjusted for any stock dividends,
combinations or splits with respect to such shares) plus all accrued or
declared but unpaid dividends on each share of Series B Preferred Stock
then held by such holder. If upon the occurrence of such Liquidation
Event, the assets and funds of the Corporation available for distribution
among the holders Series B Preferred Stock shall be insufficient to permit
the payment to such holders of the full preferential amounts to which they
are entitled under this Certificate of Designation, then the entire assets
and funds of the Corporation legally available for distribution shall be
distributed among such holders in proportion to the full preferential
amount each such holder is otherwise entitled to receive.(B)
    
    Upon the completion of the distribution required by
this Section 4(A), the entire remaining assets and funds of the Corporation
legally available for distribution, if any, shall be distributed pro rata
among the holders of Common Stock in proportion to the shares of Common
Stock held by them.(C)
    
    Notwithstanding subparagraph (A) above, solely for
purposes of determining the amount each holder of shares of Series B
Preferred Stock is entitled to receive with respect to a Liquidation Event,
the holder of shares of Series B Preferred Stock shall be treated as if
such holder had converted such holders shares of Series B Preferred Stock
into shares of Common Stock immediately prior to the closing of the
Liquidation Event if it is determined that, as a result of an actual
conversion of such Series B Preferred Stock (including taking into account
the operation of this subparagraph (C)), each holder of Series B Preferred
Stock would receive (with respect to the shares Series B Preferred Stock),
in the aggregate, an amount greater than the amount that would be
distributed to holders of Series B Preferred Stock (with respect to the
shares of Series B Preferred Stock) if such holders had not converted such
Series B Preferred Stock into shares of Common Stock. If holders of any
Series B Preferred Stock are treated as if they had converted shares of
Series B Preferred Stock into Common Stock pursuant to this paragraph, then
such holders shall not be entitled to receive any distribution pursuant to
Section 4(A) that would otherwise be made to such holders.(D)
    
    For purposes of this Section 4, unless waived in
writing by holders of sixty percent (60%) of the outstanding shares of
Series B Preferred Stock, a Change of Control shall be deemed to be a
Liquidation Event and shall entitle the holders of




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Series B Preferred Stock to receive proceeds from such Liquidation Event
(including payments at closing, and at each date after the closing on which
additional amounts are paid to stockholders of the Corporation as a result
of the Liquidation Event) in cash, securities or other property (valued as
provided in Section 4(E) below) in the amount specified in this Section 4.
A Change of Control shall mean (i) any acquisition of the Corporation by
means of merger or other form of corporate reorganization in which
outstanding shares of the Corporation are exchanged for securities or other
consideration issued, or caused to be issued, by an acquiring corporation
or its subsidiary (other than a mere reincorporation transaction) or person
or group in which in excess of forty percent (40%) of the voting power of
the Corporations outstanding Common Stock is transferred; (ii) a sale of
all or substantially all of the assets of the Corporation; or (iii) the
beneficial acquisition from the Corporation by any person or group in a
transaction or series of related transactions in which such person or group
holds in excess of forty percent (40%) of the voting power of the
Corporations outstanding Common Stock following such transaction.(E)
    
    Whenever the distribution provided for in this
Section 4 shall be payable in securities or property other than cash, the
value of such distribution shall be as follows:
 i.
    
    Securities not subject to investment
letter or other similar restrictions on free marketability:
 (A)
    
    If traded on a securities
exchange (which shall include the Nasdaq Stock Market), the
value shall be deemed to be the average of the closing
prices of the securities on such exchange over the 30-day
period ending three (3) days prior to the closing.(B)
    
    If traded
over-the-counter, the value shall be deemed to be the
average of the closing bid or sale prices (whichever are
applicable) over the 30-day period ending three (3) days
prior to the closing; and(C)
    
    If there is no public
market, the value shall be the fair market value thereof, as
determined in good faith by the Board of Directors of the
Corporation.
 ii.
    
    The method of valuation of securities
subject to investment letter or other restrictions on free
marketability (other than restrictions arising solely by virtue of a
stockholders status as an affiliate or former affiliate) shall be
to make an appropriate discount from the market value determined as
above in (i)(A), (B) or (C) to reflect the approximate fair market
value thereof, as determined in good faith by the Board of Directors
of the Corporation.
 5.
    
    Redemption. The Series B Preferred Stock shall be redeemable by paying in cash in
exchange for each share of Series B Preferred Stock a sum equal to the Original Issue Price
(as adjusted for any stock dividends, combinations, splits, recapitalizations and the like
after the first issuance of shares of Preferred Stock), plus accrued and unpaid dividends with
respect to such share (the Redemption




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Price). The total amount to be paid for the shares of the redeemed Series B Preferred Stock is
hereinafter referred to as the Total Redemption Price.
 (A)
    
    Election to Redeem Series B Preferred Stock.
The Series B Preferred Stock may be redeemed in any of the following three
ways:
 i.
    
    Optional Redemption by the
Corporation. The Corporation shall have the right, in its sole
discretion, to redeem all (but not less than all) of the outstanding
Series B Preferred Stock at any time after the date five (5) years
after the first issuance of shares of Series B Preferred Stock (the
Maturity Date), provided that the Optional Redemption Conditions
(as defined below) shall have been met. The Corporation shall
deliver a notice of the Corporations intention to redeem the
outstanding shares of Series B Preferred Stock (the Optional
Redemption Notice) on a date, not earlier than the Maturity Date
(the Optional Redemption Date); provided, however,that such
Optional Redemption Notice shall not be given less than sixty (60)
days, nor more than ninety (90) days, prior to the Optional
Redemption Date. In addition to specifying the Optional Redemption
Date, the Optional Redemption Notice shall specify the place at
which such holders may obtain payment of their respective portions
of the Total Redemption Price (as defined below) upon surrender of
their share certificates, and shall contain a certification by the
Chief Executive Officer or Chief Financial Officer of the
Corporation stating that the Corporations Common Stock price has
traded on a securities exchange (which shall include the Nasdaq
Stock Market) with a closing price of at least three times (3x) the
then effective Conversion Price on each of the sixty (60)
consecutive trading days immediately preceding the date the Optional
Redemption Notice is delivered. The Corporation shall effect such
redemption on the Optional Redemption Date by paying the Redemption
Price in exchange for each share of Series B Preferred Stock.
Notwithstanding the foregoing, the Corporation shall only be
permitted to effect an optional redemption of the Preferred Stock
under this Section 5(A)(i) if the following conditions (the
Optional Redemption Conditions) shall have been met: (w) the
Corporations Common Stock price shall have traded on a securities
exchange (which shall include the Nasdaq Stock Market) with a
closing price of at least three times (3x) the then effective
Conversion Price on each of the sixty (60) consecutive trading days
immediately preceding the date the Optional Redemption Notice is
delivered, (x) the Corporations Common Stock price shall have
traded on a securities exchange (which shall include the Nasdaq
Stock Market) with a closing price of at least three times (3x) the
then effective Conversion Price on each of the twenty (20)
consecutive trading days immediately preceding the Optional
Redemption Date, (y) either (1) a registration statement shall then
be in effect under the Securities Act of 1933, as amended (the
Securities Act), with respect to all shares of Common Stock
issuable on conversion of the Series B Preferred Stock then
outstanding, and all such shares of Common Stock shall then be
saleable into the public market by the holders therefor pursuant to
such registration statement and without any other restriction under
applicable securities laws (other than notice requirements and
volume limitations provided under Rule




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144 of the Securities Act, if applicable due
to status as an affiliate of the Corporation) or (2) all shares of
outstanding Series B Preferred Stock (and shares of Common Stock
issued or issuable upon conversion of such Series B Preferred Stock)
can be sold without compliance with the registration requirements of
the Securities Act pursuant to Rule 144(k) under the Securities Act
and an opinion of legal counsel to the Corporation delivered to such
holders of Series B Preferred Stock to such effect; and (z) the
Corporation has sufficient funds legally available to redeem all
shares to be redeemed at the Optional Redemption Date.
Notwithstanding the above, any holder of Series B Preferred Stock
may convert such shares into Common Stock pursuant to Section 6(A)
prior to the date immediately preceding the Optional Redemption
Date.ii.
    
    At the Request of the Holders:
 (A)
    
    The holders of sixty
percent (60%) of the Series B Preferred Stock may, by
written notice to the Corporation (the Election Notice),
require the Corporation to redeem the outstanding shares of
Series B Preferred Stock at any time following the first to
occur of: (a) the Maturity Date (as defined in Section
5(A)(i)), (b) the delivery of an Acceleration Event Notice
(as defined below) or (c) a Change in Control. Any such
Election Notice shall specify a date upon which such
redemption shall occur (the Redemption Date); provided,
however, that if the redemption is related to the passing of
the Maturity Date or a Change of Control, then (i) the
Election Notice shall be given not less than sixty (60) days
nor more than ninety (90) days prior to the requested
Redemption Date, and (ii) at least thirty (30) days but no
more than sixty (60) days prior to the Redemption Date the
Corporation shall send a notice (a Redemption Notice) to
all holders of Series B Preferred Stock setting forth (A)
the Redemption Date, (B) the Redemption Price for the shares
of Series B Preferred Stock to be redeemed, and (C) the
place at which such holders may obtain payment of their
respective portions of the Total Redemption Price upon
surrender of their share certificates. If redemption is
being sought in connection with an Acceleration Event, the
Corporation shall set the Redemption Date on a date as soon
as practicable following the occurrence of the Acceleration
Event, and shall send the Redemption Notice to all holders
of Series B Preferred Stock as far as practicable in advance
of the Redemption Date. The Corporation shall effect such
redemption on the Redemption Date by paying the Redemption
Price in exchange for each share of Series B Preferred
Stock.(B)
    
    Notwithstanding the
foregoing, the Corporation may decline to redeem any or all
of the Series B Preferred Stock (provided that any
redemption in part shall be pro rata across holders) and in
such case, the Preferred Dividend described in Section 3
shall increase from four percent (4%) per annum to ten
percent (10%)




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per annum and shall be
compounded semi-annually from the date of the Election
Notice.(C)
    
    Notwithstanding the
above, any holder of Series B Preferred Stock may convert
such shares into Common Stock pursuant to Section 6(A) prior
to the date immediately preceding the Redemption Date.(D)
    
    For purposes of this
Section 5(A)(ii), an Acceleration Event shall consist of (i)
any judgment against the Corporation in excess of
$10,000,000 unless such judgment is stayed within sixty (60)
days of the date of such judgment; (ii) any event of default
under any indebtedness of the Corporation that causes
$10,000,000 or more of such indebtedness to accelerate; or
(iii) an event of bankruptcy, an assignment for the benefit
of creditors or similar event. The Corporation shall, on the
date an Acceleration Event (as defined below) occurs, or as
soon as reasonably practicable thereafter (but in no event
later than five (5) days following the date of an
Acceleration Event), provide a written notice to all holders
of Series B Preferred Stock with a description of the facts
giving rise to the Acceleration Event (the Acceleration
Event Notice).
 (B)
    
    Method of Redemption.
 i.
    
    On or prior to the Redemption Date, the
Corporation shall deposit the Total Redemption Price of the shares
to be redeemed with a bank or trust company having aggregate capital
and surplus in excess of $100,000,000, as a trust fund (an Eligible
Institution), with irrevocable instructions and authority to the
Eligible Institution to pay, on and after the Redemption Date, the
Redemption Price of the shares to their respective holders upon the
surrender of their share certificates. Any money deposited by the
Corporation pursuant to this Section 5(B) for the redemption of
shares thereafter converted into shares of Common Stock pursuant to
Section 4 hereof prior to the Redemption Date shall be returned to
the Corporation forthwith upon such conversion, The balance of any
funds deposited by the Corporation pursuant to this Section 5(B)
remaining unclaimed at the expiration of one (1) year following the
Redemption Date shall be returned to the Corporation promptly upon
its written request, and each holder of Preferred Stock shall
thereafter look only to the Corporation for payment of the
Redemption Price.ii.
    
    Each holder of shares of Series B
Preferred Stock to be redeemed shall surrender such holders
certificates representing such shares to the Corporation in the
manner and at the place designated in the Redemption Notice, and
thereupon the Redemption Price of such shares shall be payable to
the holder of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate
shall be canceled. From and after the Redemption Date, unless there
shall have been a default in payment of the Redemption Price or the
Corporation is unable to pay the Total Redemption Price, all rights
of the




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holder of such shares as holder of Series B Preferred Stock (except the
right to receive the Redemption Price per share without interest
upon surrender of their certificates), shall cease and terminate
with respect to such shares; providedthat in the event that any
shares of Series B Preferred Stock are not redeemed due to a default
in payment by the Corporation, due to the election by the
Corporation not to effect the redemption, pursuant to Section
5(A)(ii)(B), or because the Corporation does not have sufficient
legally available funds, such shares of Series B Preferred Stock
shall remain outstanding and shall be entitled to all of the rights
and preferences provided herein until redeemed.
 6.
    
    Conversion. The holders of Series B Preferred Stock shall have conversion rights as
follows (the Conversion Rights).
 (A)
    
    Right to Convert. Each share of Series B
Preferred Stock shall be convertible into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the
Original Issue Price of such Series B Preferred Stock by the Conversion
Price at the time in effect for shares of Series B Preferred Stock. The
Original Issue Price per share of Series B Preferred Stock is $2.54. The
Conversion Price per share of Series B Preferred Stock initially shall be
$2.54, subject to adjustment from time to time as provided below.(B)
    
    Mechanics of Conversion. Before any holder of
Series B Preferred Stock shall be entitled to convert the same into shares
of Common Stock, the holder shall surrender the certificate or certificates
therefor, duly endorsed, at the office of this Corporation or of any
transfer agent for the Series B Preferred Stock, and shall give written
notice by confirmed facsimile or by mail, postage prepaid, to this
Corporation at its principal corporate office, of the election to convert
the same and shall state therein the name or names in which the certificate
or certificates for shares of Common Stock are to be issued. This
Corporation shall, as soon as practicable thereafter, issue and deliver to
the address of record of such holder of Series B Preferred Stock (or such
other address as the holder shall designate in writing in the notice to the
Corporation of the election to convert), or to the nominee or nominees of
such holder, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid. Such
conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the Series B Preferred Stock
to be converted, and the person or persons entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock as
of such date.(C)
    
    Adjustments to Conversion Ratio for Stock Dividends
and for Combinations or Subdivisions of Common Stock. In the event
that this Corporation at any time or from time to time after the initial
issue date of the Series B Preferred Stock shall declare or pay, without
consideration, any dividend on the Common Stock payable in Common Stock or
in any right to acquire Common Stock for no consideration, or shall effect
a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Common Stock or in any right to
acquire Common Stock), or in the event the outstanding shares of




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Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, then the
Conversion Price per share of Series B Preferred Stock then in effect shall
be proportionately decreased or increased, as appropriate; provided that
the Corporation shall take no such action with respect to the Common Stock
unless the Corporation shall simultaneously reserve out of authorized,
unissued and unreserved shares of Common Stock a sufficient number of
 shares of Common Stock to be available for full conversion of the Series B
Preferred Stock at the new Conversion Price. In the event that this
Corporation shall declare or pay, without consideration, any dividend on
the Common Stock payable in any right to acquire Common Stock for no
consideration then the Corporation shall be deemed to have made a dividend
payable in Common Stock in an amount of shares equal to the maximum number
of shares issuable upon exercise of such rights to acquire Common Stock.(D)
    
    Adjustments for Reclassification and
Reorganization. If the Common Stock issuable upon conversion of the
Series B Preferred Stock shall be changed into the same or a different
number of shares of any other class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a subdivision or
combination of shares provided for in Section 6(C) above or a merger or
other reorganization referred to in Section 4(D)(i) above), the number of
shares of such other class or classes of stock into which the Series B
Preferred Stock shall be convertible shall, concurrently with the
effectiveness of such reorganization or reclassification, be
proportionately adjusted so that the Series B Preferred Stock shall be
convertible into, in lieu of the number of shares of Common Stock which the
holders would otherwise have been entitled to receive, a number of shares
of such other class or classes of stock equivalent to the number of shares
of Common Stock that would have been subject to receipt by the holders upon
conversion of the Series B Preferred Stock immediately before that change;
provided that the Corporation shall take no such action with respect to the
Common Stock unless the Corporation shall simultaneously reserve out of
authorized, unissued and unreserved shares of Common Stock a sufficient
number of shares of Common Stock to be available for full conversion of the
Series B Preferred Stock at the new Conversion Price.(E)
    
    Rights Offerings. In the event the Corporation
shall grant or shall have granted as of the date of the filing of this
Certificate of Designation any rights to subscribe for, or any rights or
options to purchase, Common Stock or any stock or other securities
convertible into or exchangeable for Common Stock (such convertible or
exchangeable stock or securities being herein called Convertible
Securities), whether or not such rights or options or the right to convert
or exchange any such Convertible Securities are immediately exercisable,
which rights or options do not result in any adjustment to the number of
shares of Common Stock or other classes of stock into which the Series B
Preferred Stock can be converted under either Section 6(C) or Section 6(D)
above, then the Corporation shall distribute such rights or options to the
holders of Series B Preferred Stock as though they were holders, at the
time of such distribution, of that number of shares of Common Stock into
which the shares of Series B Preferred Stock held by each holder could then
be converted.




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(F)
    
    No Impairment. This Corporation will not, by
amendment of its certificate or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by this Corporation, but will at all times in good
faith assist in the carrying out of all the provisions of this Section 6
and in the taking of all such action as may be necessary or appropriate in
order to protect the conversion rights of the holders of the Series B
Preferred Stock against impairment.(G)
    
    No Fractional Shares and Certificate as to
Adjustments.
 i.
    
    No fractional shares shall be issued upon
conversion of the Series B Preferred Stock, and the number of shares
of Common Stock to be issued shall be rounded to the nearest whole
share. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of
shares of Series B Preferred Stock the holder is at the time
converting into Common Stock and the number of shares of Common
Stock issuable upon such aggregate conversion.ii.
    
    Upon the occurrence of each adjustment or
readjustment of the number of shares of Common Stock into which the
Series B Preferred Stock can be converted pursuant to this
Section 6, this Corporation, at its expense, shall promptly compute
such adjustment or readjustment in accordance with the terms hereof
and prepare and furnish to each holder of Series B Preferred Stock a
certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or
readjustment is based. This Corporation shall, upon the written
request at any time of any holder of Series B Preferred Stock,
furnish or cause to be furnished to such holder a like certificate
setting forth (A) such adjustment and readjustment, (B) the
Conversion Price per share of Series B Preferred Stock at the time
in effect, and (C) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be
received upon the conversion of the Series B Preferred Stock.
 (H)
    
    Notice of Record Date. In the event of any
taking by this Corporation of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are
entitled to receive any dividend (other than a cash dividend) or other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to
receive any other right, this Corporation shall mail to each holder of
Series B Preferred Stock, at least twenty (20) days prior to the date
specified therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and
the amount and character of such dividend, distribution or right.(I)
    
    Reservation of Stock Issuable upon Conversion.
This Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock (or other security into
which the Common Stock shall have been changed) solely for the purpose of
effecting the conversion of the Series B




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Preferred Stock such number of its shares of Common Stock (or other security) as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series B Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock (or other
security) shall not be sufficient to effect the conversion of all the then
outstanding Series B Preferred Stock, in addition to such other remedies as
shall be available to the holder of such Series B Preferred Stock, this
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock (or other security) to such number of shares as shall be
sufficient for such purposes.(J)
    
    Notices. Any notice required by the provisions
of this Section 6 to be given to the holders of Series B Preferred Stock
shall be deemed given if deposited in the United States mail, postage
prepaid, and addressed to each holder of record at the holders address
appearing on the books of this Corporation.
 7.
    
    Voting Rights. Except as otherwise provided herein or by law, each holder of shares
of Series B Preferred Stock shall be entitled to vote with the holders of Common Stock on an
as-converted basis as a single class with such shares of Common Stock and such other shares of
capital stock that vote with shares of Common Stock on all matters presented for stockholder
vote and shall be entitled to notice of any stockholders meeting in accordance with the
Bylaws of the Corporation. Fractional votes shall not, however, be permitted and any
fractional voting rights resulting from the conversion of Series B Preferred Stock into Common
Stock (in the case of each holder, after aggregating all fractional shares held by such holder
into the maximum number of whole shares) shall be rounded to the nearest whole number (with
one-half being rounded upward).
 8.
    
    Right to Nominate and Elect Directors. Notwithstanding anything to the contrary in
the foregoing provisions, for so long as at least 325,000 shares of Series B Preferred Stock
remain outstanding (subject to adjustment for any stock split, reverse stock split or similar
event affecting the Series B Preferred Stock after the filing date hereof) the holders of
Series B Preferred, voting as a separate class, shall be entitled to nominate and elect two
(2) members of the Board of Directors of the Corporation at each meeting or pursuant to each
consent of the Corporations stockholders for the election of directors, and to remove from
office such directors and to fill any vacancy caused by the resignation, death or removal of
such directors. In the event that the Board of Directors of the Company consists of seven (7)
or fewer members, then one of the two nominees of the holders must be a person not affiliated
with the holders who is acceptable (in the exercise of reasonable discretion) to the members
of the Board.
 9.
    
    Status of Converted or Redeemed Stock. In the event any Series B Preferred Stock
shall be converted pursuant to Section 6 hereof, or redeemed pursuant to Section 5 hereof, the
shares so converted or redeemed shall be promptly cancelled after the conversion or redemption
thereof. All such shares shall upon their cancellation or redemption become authorized but
unissued shares of Preferred Stock and may be released as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.




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CERTIFICATE OF DESIGNATION
OF PREFERENCES OF SERIES C PREFERRED STOCK
OF
XATA CORPORATION,
a Minnesota Corporation
 Designation
 Authorized Number
 Dividend Rights
 Liquidation Preference




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Redemption
 Election to Redeem Series B Preferred Stock
 Optional Redemption




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At the Request of the Holders
 provided, however,




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Method of Redemption




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provided
  Conversion
 Right to Convert
 Mechanics of Conversion
 Adjustments to Conversion Ratio for Stock Dividends and for Combinations or
Subdivisions of Common Stock




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Adjustments for Reclassification and Reorganization
 Rights Offerings
 No Impairment




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No Fractional Shares and Certificate as to Adjustments
   Notice of Record Date
 Reservation of Stock Issuable upon Conversion
 Notices
 Voting Rights




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Protective Provision
 Status of Converted or Redeemed Stock
 CERTIFICATE OF DESIGNATION
OF PREFERENCES OF SERIES D PREFERRED STOCK
OF
XATA CORPORATION,
a Minnesota Corporation
 Designation
 Authorized Number
 Dividend Rights
 Liquidation Preference




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Redemption




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Election to Redeem Series D Preferred Stock
 Optional Redemption
 At the Request of the Holders




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provided, however,
    Method of Redemption




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provided
 Conversion
 Right to Convert
 Mechanics of Conversion




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Adjustments to Conversion Ratio for Stock Dividends and for Combinations or
Subdivisions of Common Stock
 Adjustments for Reclassification and Reorganization
 Rights Offerings
 No Impairment




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No Fractional Shares and Certificate as to Adjustments
   Notice of Record Date
 Reservation of Stock Issuable upon Conversion
 Notices
 Voting Rights




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Protective Provision
 Status of Converted or Redeemed Stock