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EXHIBIT 10.40
 FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
 FIRST AMENDMENT
 Recitals
 A.
 B.
 C.
 D.
 Agreement
 Now, THEREFORE
 1. Definitions.
 2. Amendments to Loan Agreement.
 2.1 Section 2.1.1 (Revolving Advances).




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2.2 Section 2.1.2 (Letter of Credit Sublimit).
  2.3 Section 2.1.3 (Cash Management Services Sublimit).
  2.4 Section 2.2 (Overadvances).
  2.5 Section 2.3 (Interest Rate, Payments).




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2.6 Section 2.4 (Fees).
   2.7 Section 2.4 (Fees).
  2.8 Section 6.2 (Financial Statements, Reports, Certificates).
  2.9 Section 6.7 (Financial Covenants).
  Quick Ratio (Adjusted).




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2.10 Section 13 (Definitions). Section 13.1
 Borrowing Base provided however
 Cash Management Services Sublimit
 Committed Revolving Line
 Sub-letter (d) Eligible Accounts
  Eligible Inventory
 Letters of Credit
 Revolving Maturity Date
 3. Limitation of Amendments.
 3.1 Section 2




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3.2
 4. Representations and Warranties.
 4.1
 4.2
 4.3
 4.4
 4.5
 4.6
 4.7




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5. Counterparts.
 6. Effectiveness.
 In
Witness Whereof,
 BANK
    
    
    
    
    
    BORROWERSilicon Valley Bank
    
    
    
    Xata CorporationBy:
    
    
    
    
    
    By:Name:
    
    
    
    
    
    Name:Title:
    
    
    
    
    
    Title:




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EXHIBIT D
COMPLIANCE CERTIFICATE
 TO:
    
    SILICON VALLEY BANKFROM:
    
    XATA CORPORATION
 
 Please indicate compliance status by circling Yes/No under Complies column.
 Reporting Covenant
    
    Required
    
    CompliesMonthly financial statements + CC
    
    Monthly within 30 days
    
    Yes
    
    NoAnnual (Audited)
    
    FYE within 120 days
    
    Yes
    
    NoA/R & A/P Agings
    
    Monthly within 30 days
    
    Yes
    
    NoBorrowing Base Certificate
    
    Monthly within 30 days
    
    Yes
    
    NoBoard Approval Projections
    
    Prior to fiscal year end
    
    Yes
    
    No
 Financial Covenant
    
    Required
    
    Actual
    
    CompliesMaintain on a monthly basis:Minimum Quick Ratio (Adjusted)
    
    1.00:1.00*
    
    :1.00
    
    Yes
    
    No
 
 *
    
    A ratio of Borrowers unrestricted cash and cash equivalents held at Bank plus Accounts to
Current Liabilities minus Deferred Revenue of at least 1.00 to 1.00.




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Comments
Regarding Exceptions:See Attached.Sincerely,Xata Corporationsignaturetitledate
 BANK
USE ONLYReceived By:AUTHORIZED SIGNERDate:Verified:AUTHORIZED SIGNERDate:Compliance
Status:
    
    
    Yes
    No




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EXHIBIT C
BORROWING BASE CERTIFICATE 
COLLATERAL SCHEDULE
 Borrower:
    
    Xata Corporation
    
    Bank:
    
    Silicon Valley Bank151 E. Cliff Road, Suite 10
    
    
    
    3003 Tasman DriveBurnsville, MN 55337
    
    
    
    Santa Clara, CA 95054
 Commitment Amount: $5,000,000ACCOUNTS RECEIVABLE1.
    
    Accounts Receivable Book Value as of
    
    
    
    $2.
    
    Additions (please explain on reverse)
    
    
    
    $3.
    
    TOTAL ACCOUNTS RECEIVABLE
    
    
    
    $ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)4.
    
    Amounts over 90 days due5.
    
    Balance of 50% over 90 day accounts
    
    $6.
    
    Credit Balances over 90 days
    
    $7.
    
    Excess 25% Concentration Limit*
    
    $8.
    
    Foreign Accounts
    
    $9.
    
    Governmental Accounts
    
    $10.
    
    Contra Accounts
    
    $11.
    
    Promotion or Demo Accounts
    
    $12.
    
    Intercompany/Employee Accounts
    
    $13.
    
    Other (please explain on reverse)
    
    $14.
    
    TOTAL ACCOUNTS RECEIVABLE DEDUCTION
    
    
    
    $15.
    
    Eligible Accounts (#3 minus # 14)
    
    
    
    $16.
    
    LOAN VALUE OF ACCOUNTS (75% of #15 + 50% of unrestricted cash)
    
    $*60% on a case by case basisINVENTORY17.
    
    Inventory Value as of
    
    $INVENTORY DEDUCTIONS18.
    
    Obsolete Inventory
    
    $19.
    
    Any Demo Inventory
    
    $20.
    
    Inventory sold on consignment
    
    $21.
    
    Inventory with offsetting claims
    
    $22.
    
    Work in process
    
    $23.
    
    Other (please explain on reverse)
    
    $24.
    
    TOTAL INVENTORY DEDUCTIONS
    
    
    
    $25.
    
    Eligible Inventory (# 17 minus #24)
    
    
    
    $26.
    
    LOAN VALUE OF INVENTORY (lesser of 25% of #25 or $750,000,
not to exceed 25% of #15)
    
    $BALANCES27.
    
    Maximum Loan Amount
    
    
    
    $28.
    
    Total Funds Available Lesser of #27 or [#16 plus 26]
    
    $29.
    
    Present balance owing on Line of Credit
    
    $30.
    
    Outstanding under Sublimits (LC)
    
    $31.
    
    RESERVE POSITION (#28 minus #29 and #30)
    
    
    
    $




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By:Authorized Singer
 BANK USE ONLYRecd By:Auth. SingerDate:Verified:Auth. SingerDate: