EXHIBIT 10.9

                                TABLE OF CONTENTS

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ARTICLE I  DEFINITIONS............................................................................1

     SECTION 1.1 DEFINITIONS......................................................................1

ARTICLE II  AMOUNT AND TERMS OF THE CREDIT FACILITY...............................................6

     SECTION 2.1 REVOLVING ADVANCES...............................................................6
     SECTION 2.2 INTEREST; MINIMUM INTEREST CHARGE; DEFAULT INTEREST..............................7
     SECTION 2.3 FEES.............................................................................7
     SECTION 2.4 COMPUTATION OF INTEREST AND FEES; WHEN INTEREST DUE AND PAYABLE..................7
     SECTION 2.5 DISCRETIONARY NATURE OF CREDIT FACILITY; AUTOMATIC RENEWAL.......................7
     SECTION 2.6 VOLUNTARY PREPAYMENT; TERMINATION OF THE CREDIT FACILITY BY THE BORROWER.........8
     SECTION 2.7 TERMINATION PREPAYMENT FEES; WAIVER OF TERMINATION FEES..........................8
     SECTION 2.8 MANDATORY PREPAYMENT.............................................................8
     SECTION 2.9 ADVANCES WITHOUT REQUEST.........................................................8

ARTICLE III  SECURITY INTEREST....................................................................9

     SECTION 3.1 GRANT OF SECURITY INTEREST.......................................................9
     SECTION 3.2 NOTIFICATION OF ACCOUNT DEBTORS AND OTHER OBLIGORS..............................10
     SECTION 3.3 ASSIGNMENT OF INSURANCE.........................................................10
     SECTION 3.4 OCCUPANCY.......................................................................10
     SECTION 3.5 LICENSE.........................................................................11
     SECTION 3.6 FILING A COPY...................................................................11

ARTICLE IV  CONDITIONS OF LENDING................................................................11

     SECTION 4.1 CONDITIONS PRECEDENT TO THE LENDER'S WILLINGNESS TO CONSIDER MAKING ADVANCES....11
     SECTION 4.2 CONDITIONS PRECEDENT TO ALL ADVANCES............................................12

ARTICLE V  REPRESENTATIONS AND WARRANTIES........................................................13

     SECTION 5.1 NAME; LOCATIONS; TAX ID NO.; SUBSIDIARIES.......................................13
     SECTION 5.2 FINANCIAL CONDITION; NO ADVERSE CHANGE..........................................13

ARTICLE VI  COVENANTS OF THE BORROWER............................................................13

     SECTION 6.1 REPORTING REQUIREMENTS..........................................................13
     SECTION 6.2 INSPECTION......................................................................15
     SECTION 6.3 ACCOUNT VERIFICATION............................................................15
     SECTION 6.4 NO OTHER LIENS..................................................................16
     SECTION 6.5 INSURANCE.......................................................................16
     SECTION 6.6 PERFORMANCE BY THE LENDER.......................................................16
     SECTION 6.7 MINIMUM BOOK NET WORTH..........................................................16
     SECTION 6.8 NEW COVENANTS...................................................................17
     SECTION 6.9 CAPITAL EXPENDITURES............................................................17
     SECTION 6.10 NO SALE OR TRANSFER OF COLLATERAL AND OTHER ASSETS.............................17
     SECTION 6.11 PLACE OF BUSINESS; NAME........................................................17

ARTICLE VII  EVENTS OF DEFAULT, RIGHTS AND REMEDIES..............................................18

     SECTION 7.1 EVENTS OF DEFAULT...............................................................18
     SECTION 7.2 RIGHTS AND REMEDIES.............................................................18
     SECTION 7.3 CERTAIN NOTICES.................................................................18

ARTICLE VIII  MISCELLANEOUS......................................................................19
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     SECTION 8.1 NO WAIVER; CUMULATIVE REMEDIES..................................................19
     SECTION 8.2 AMENDMENTS, ETC.................................................................19
     SECTION 8.3 ADDRESSES FOR NOTICES, ETC......................................................19
     SECTION 8.4 COSTS AND EXPENSES..............................................................19
     SECTION 8.5 INDEMNITY.......................................................................19
     SECTION 8.6 BINDING EFFECT; ASSIGNMENT; COUNTERPARTS; EXCHANGING INFORMATION................20
     SECTION 8.7 FURTHER DOCUMENTS...............................................................21
     SECTION 8.8 GOVERNING LAW; JURISDICTION, VENUE; WAIVER OF JURY TRIAL........................21

         EXHIBIT A TO CREDIT AND SECURITY AGREEMENT REVOLVING NOTE................................1

         EXHIBIT B TO CREDIT AND SECURITY AGREEMENT COMPLIANCE CERTIFICATE........................1
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                          CREDIT AND SECURITY AGREEMENT

                          Dated as of October 23, 1998

            XATA CORPORATION, a Minnesota corporation (the "Borrower"), and
NORWEST BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender"), hereby
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

            Section 1.1 Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

            "Accounts" means the aggregate unpaid obligations of customers and
      other account debtors to the Borrower arising out of the sale or lease of
      goods or rendition of services by the Borrower on an open account or
      deferred payment basis, whether now existing or hereafter arising.

            "Advance" means a Revolving Advance.

            "Affiliate" means any Person controlled by, controlling or under
      common control with the Borrower, including (without limitation) any
      Subsidiary of the Borrower. For purposes of this definition, "control,"
      when used with respect to any specified Person, means the power to direct
      the management and policies of such Person, directly or indirectly,
      whether through the ownership of voting securities, by contract or
      otherwise.

            "Agreement" means this Credit and Security Agreement, as amended,
      supplemented and restated from time to time.

            "Base Rate" means the rate of interest publicly announced from time
      to time by Norwest Bank Minnesota, National Association as its "base rate"
      or, if such bank ceases to announce a rate so designated, any similar
      successor rate designated by the Lender.

            "Book Net Worth" means the aggregate of the common and preferred
      stockholders' equity in the Borrower, determined in accordance with GAAP,
      provided that Debt subordinated to the Obligations that is converted to
      equity shall be excluded when determining the Borrower's compliance with
      any financial covenant using this definition.

            "Borrowing Base" means, at any time and subject to change from time
      to time in the Lender's sole discretion, the lesser of:

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                  (a)   the Maximum Line; or

                  (b)   the sum of:

                        (i)   the lesser of (A) 80% of Eligible Accounts, plus

                        (ii)  the lesser of (A) 50% of Eligible Inventory or
                              (B) $25,000.

            "Capital Expenditures" for a period means any expenditure of money
      for the lease; purchase or other acquisition of any capitalized asset,
      except capital software, or for the lease of any other asset whether
      payable currently or in the future.

            "Collateral" has the meaning given in Section 3.1.

            "Collateral Account" has the meaning given in the Collateral Account
      Agreement.

            "Collateral Account Agreement" means the Collateral Account
      Agreement of even date herewith by and among the Borrower, Norwest Bank
      Minnesota, National Association and the Lender.

            "Credit Facility" means the discretionary credit facility made
      available to the Borrower pursuant to Article II.

            "Debt" of any Person means all items of indebtedness or liability
      which in accordance with GAAP would be included in determining total
      liabilities as shown on the liabilities side of a balance sheet of that
      Person as at the date as of which Debt is to be determined. For purposes
      of determining a Person's aggregate Debt at any time, "Debt" shall also
      include the aggregate payments required to be made by such Person at any
      time under any lease that is considered a capitalized lease under GAAP.

            "Default" means an event that, with giving of notice or passage of
      time or both, would constitute an Event of Default.

            "Default Period" means any period of time beginning on the first day
      of any month during which a Default or Event of Default has occurred and
      ending on the date the Lender notifies the Borrower in writing that such
      Default or Event of Default has been cured or waived.

            "Default Rate" means an annual rate equal to three percent (3.00%)
      over the Floating Rate, which rate shall change when and as the Floating
      Rate changes.

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            "Eligible Accounts" means all unpaid Accounts, net of any credits,
      except the following shall not in any event be deemed Eligible Accounts:

                  (i) That portion of Accounts, other than Accounts owed by
            Ryder, over 90 days past invoice date or, if the Lender in its
            discretion has determined that a particular dated Account of 120
            days or less from invoice date may be eligible, that portion of such
            Account which is more than 30 days past the stated due date;

                  (ii) That portion of Accounts owed by Ryder over 120 days past
            invoice date;

                  (iii) That portion of Accounts that are disputed or subject to
            a claim of offset or a contra account;

                  (iv) That portion of Accounts not yet earned by the final
            delivery of goods or rendition of services, as applicable, by the
            Borrower to the customer;

                  (v) Accounts owed by any unit of government, whether foreign
            or domestic (provided, however, that there shall be included in
            Eligible Accounts that portion of Accounts owed by such units of
            government for which the Borrower has provided evidence satisfactory
            to the Lender that (A) the Lender has a first priority perfected
            security interest and (B) such Accounts may be enforced by the
            Lender directly against such unit of government under all applicable
            laws);

                  (vi) Accounts owed by an account debtor located outside the
            United States which are not backed by a bank letter of credit
            assigned to the Lender, in the possession of the Lender and
            acceptable to the Lender in all respects, in its sole discretion;

                  (vii) Accounts owed by an account debtor that is the subject
            of bankruptcy proceedings or has gone out of business;

                  (viii) Accounts owed by a shareholder, subsidiary, affiliate,
            officer or employee of the Borrower;

                  (ix) Accounts not subject to a duly perfected security
            interest in favor of the Lender or which are subject to any lien,
            security interest or claim in favor of any Person other than the
            Lender including without limitation any payment or performance bond;

                  (x) That portion of Accounts that have been restructured,
            extended, amended or modified;

                  (xi) That portion of Accounts that constitutes finance
            charges, service charges or sales or excise taxes;

                  (xii) Accounts owed by an account debtor, regardless of
            whether otherwise eligible, if 10% or more of the total amount due
            under Accounts from such debtor is ineligible under clauses (i),
            (ii), (iii) or (x) above; and


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                  (xiii) Accounts, or portions thereof, otherwise deemed
            ineligible by the Lender in its sole discretion.

            "Eligible Inventory" means all Inventory of the Borrower, at the
      lower of cost or market value as determined in accordance with GAAP;
      provided, however, that the following shall not in any event be deemed
      Eligible Inventory:

                  (i) Inventory that is: in-transit; located at any warehouse,
            job site or other premises not approved by the Lender in writing;
            located outside of the states, or localities, as applicable, in
            which the Lender has filed financing statements to perfect a first
            priority security interest in such Inventory; covered by any
            negotiable or non-negotiable warehouse receipt, bill of lading or
            other document of title; on consignment from any Person; on
            consignment to any Person or subject to any bailment unless such
            consignee or bailee has executed an agreement with the Lender;

                  (ii) Supplies, packaging or parts Inventory;

                  (iii) Work-in-process Inventory;

                  (iv) Inventory that is damaged, slow moving, obsolete or not
            currently saleable in the normal course of the Borrower's
            operations;

                  (v) Inventory that is perishable or live;

                  (vi) Inventory manufactured by the Borrower pursuant to a
            license unless the applicable licensor has agreed in writing to
            permit the Lender to exercise its rights and remedies against such
            Inventory;

                  (vii) Inventory that the Borrower has returned, has attempted
            to return, is in the process of returning or intends to return to
            the vendor thereof;

                  (viii) Inventory that is subject to a security interest in
            favor of any Person other than the Lender;

                  (ix) Sample Inventory;

                  (x) Inventory at a particular location if the value of the
            same is less than 10% of total Inventory; and

                  (xi) Inventory otherwise deemed ineligible by the Lender in
            its sole discretion.

            "Event of Default" has the meaning specified in Section 7.1.

            "Floating Rate" means an annual rate equal to the sum of the Base
      Rate plus two percent (2.00%), which annual rate shall change when and as
      the Base Rate changes.

            "GAAP" means generally accepted accounting principles, applied on a
      basis consistent with the accounting practices applied in the financial
      statements described in Section 5.2.


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            "Inventory" means all of the Borrower's inventory, as such term is
      defined in the UCC, whether now owned or hereafter acquired.

            "Loan Documents" means this Agreement, the Note, the Security
      Documents, the Support Agreement and the Disclosure by the Borrower in
      favor of the Lender of even date herewith.

            "Lockbox" has the meaning given in the Lockbox Agreement.

            "Lockbox Agreement" means the Lockbox Agreement by and among the
      Borrower, Norwest Bank Minnesota, National Association and, the Lender, of
      even date herewith.

            "Maturity Date" has the meaning given in Section 2.5.

            "Maximum Line" means $1,500,000.

            "Minimum Interest Charge" has the meaning given in Section 2.2(b).

            "Offset Waiver Agreement" means the Agreement to Waive Setoff Rights
      of even date herewith by and between Ryder and the Lender.

            "Note" means the Revolving Note.

            "Obligations" means each and every debt, liability and obligation of
      every type and description which the Borrower may now or at any time
      hereafter owe to the Lender, including all indebtedness arising under this
      Agreement, the Note or any other loan or credit agreement or guaranty
      between the Borrower and the Lender, whether now in effect or hereafter
      entered into.

            "Offset Waiver Agreement" means the Agreement to Waive Setoff Rights
      of even date herewith by and between Ryder and the Lender.

            "Original Maturity Date" means the one year anniversary of the date
      of this Agreement.

            "Permitted Lien" means mortgages, deeds of trust, pledges, liens,
      security interests, adverse claims, assignments or transfers of interests
      in the Collateral acceptable to the Lender in its sole discretion.

            "Person" means any individual, corporation, partnership, joint
      venture, limited liability company, association, joint-stock company,
      trust, unincorporated organization or government or any agency or
      political subdivision thereof.

            "Premises" means all premises where the Borrower conducts its
      business and has any rights of possession.


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            "Revolving Advance" has the meaning given in Section 2.1.

            "Revolving Note" means the Borrower's revolving promissory note,
      payable to the order of the Lender in substantially the form of Exhibit A
      hereto and any note or notes issued in substitution therefor, as the same
      may hereafter be amended, supplemented or restated from time to time.

            "Ryder" means Ryder Dedicated Logistics, Inc., a ____________
      corporation.

            "Security Documents" means this Agreement, the Collateral Account
      Agreement and the Lockbox Agreement.

            "Security Interest" has the meaning given in Section 3.1.

            "Support Agreement" means the Support Agreement of even date
      herewith by and between the Lender and Dennis R. Johnson.

            "Termination Date" means the Maturity Date or the date the Lender
      demands payment pursuant to Section 2.5 or Section 7.2, or the Borrower
      terminates the Credit Facility pursuant to Section 2.6, as the case may
      be.

            "UCC" means the Uniform Commercial Code as in effect from time to
      time in the State of Minnesota.

                                   ARTICLE II

                     AMOUNT AND TERMS OF THE CREDIT FACILITY

            Section 2.1 Revolving Advances. The Lender may, in its sole
discretion, make advances to the Borrower from time to time from the date this
Agreement is signed and delivered to the Termination Date, on the terms and
subject to the conditions herein set forth (each a "Revolving Advance"). The
Lender shall not consider any request for a Revolving Advance if, after giving
effect to such requested Revolving Advance, the sum of the outstanding and
unpaid Revolving Advances would exceed the Borrowing Base. The Borrower's
obligation to pay the Revolving Advances shall be evidenced by the Revolving
Note and shall be secured by the Collateral. Within the limits set forth in this
Section 2.1, the Borrower may request Revolving Advances, prepay, and request
additional Revolving Advances. The Borrower shall make each request for a
Revolving Advance to the Lender before 11:00 a.m. (Minneapolis time) of the day
of the requested Revolving Advance. Requests may be made in writing or by
telephone.


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            Section 2.2 Interest; Minimum Interest Charge; Default Interest. All
interest shall be payable monthly in arrears on the first day of the month and
on demand.

            (a) REVOLVING NOTE. Except as set forth in subsections (c) and (d),
      the outstanding principal balance of the Revolving Note shall bear
      interest at the Floating Rate.

            (b) MINIMUM INTEREST CHARGE. Notwithstanding the interest payable
      pursuant to subsection (a), the Borrower shall pay to the Lender interest
      of not less than $72,000 per calendar year (the "Minimum Interest Charge")
      during the term of this Agreement, and the Borrower shall pay any
      deficiency between the Minimum Interest Charge and the amount of interest
      otherwise calculated under subsection (a) on the date and in the manner
      provided in Section 2.4.

            (c) DEFAULT INTEREST RATE. At any time during any Default Period, in
      the Lender's sole discretion and without waiving any of its other rights
      and remedies, the principal of the Advances outstanding from time to time
      shall bear interest at the Default Rate, effective for any periods
      designated by the Lender from time to time during that Default Period.

            (d) USURY. In any event no rate change shall be put into effect
      which would result in a rate greater than the highest rate permitted by
      law.

            Section 2.3 Fees.

            (a) ORIGINATION FEE. The Borrower hereby agrees to pay the Lender a
      fully earned and non-refundable origination fee of $15,000, due and
      payable upon the execution of this Agreement. The Lender acknowledges
      receipt of $5,000.00 toward payment of this fee and the fees, costs and
      expenses described in Sections 2.3(b) and 8.4.

            (b) AUDIT FEES. The Borrower hereby agrees to pay the Lender, on
      demand, audit fees in connection with any audits or inspections conducted
      by the Lender of any Collateral or the Borrower's operations or business
      at the rates established from time to time by the Lender as its audit fees
      (which fees are currently $62.50 per hour per auditor), together with all
      actual out-of-pocket costs and expenses incurred in conducting any such
      audit or inspection.

            Section 2.4 Computation of Interest and Fees; When Interest Due and
Payable. Interest accruing on the outstanding principal balance of the Advances
and fees hereunder outstanding from time to time shall be computed on the basis
of actual number of days elapsed in a year of 360 days. Interest shall be
payable in arrears on the first day of each month and on the Termination Date.

            Section 2.5 Discretionary Nature of Credit Facility; Automatic 
Renewal. THE LENDER MAY AT ANY TIME AND FOR ANY REASON REFUSE TO MAKE AN


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ADVANCE AND/OR DEMAND PAYMENT OF THE ADVANCES AND TERMINATE THIS AGREEMENT
WHETHER BORROWER IS OR IS NOT IN COMPLIANCE WITH THIS AGREEMENT. The Lender need
not show that an adverse change has occurred in the Borrower's condition,
financial or otherwise, in order to refuse to make any requested Advance or to
demand payment of the Advances. Unless terminated by the Lender at any time or
by the Borrower pursuant to Section 2.6, this Agreement shall remain in effect
until the Original Maturity Date and, thereafter, shall automatically renew for
successive one year periods. Each such anniversary date is herein referred to as
a "Maturity Date".

            Section 2.6 Voluntary Prepayment; Termination of the Credit Facility
by the Borrower. Except as otherwise provided herein, the Borrower may prepay
the Revolving Advances in whole at any time or from time to time in part. The
Borrower may terminate the Credit Facility at any time if it (i) gives the
Lender at least 30 days' prior written notice and (ii) pays the Lender the
termination fees in accordance with Section 2.7. If the Borrower terminates the
revolving Credit Facility, all Obligations shall be immediately due and payable.
Upon termination of the Credit Facility and payment and performance of all
Obligations, the Lender shall release or terminate the Security Interest and the
Security Documents to which the Borrower is entitled by law.

            Section 2.7 Termination Prepayment Fees; Waiver of Termination Fees.

            (a) TERMINATION FEES. If the Credit Facility is terminated for any
      reason as of a date other than the Maturity Date the Borrower shall pay
      the Lender a fee in an amount equal to the greater of (i) three percent
      (3%) of the Maximum Line, or (ii) the minimum interest charge payable
      pursuant to Section 2.2(b) less the amount of interest actually paid by
      the Borrower (i) if there has been no automatic renewal pursuant to
      Section 2.5, from the date hereof to such termination; or (ii) if there
      has been automatic renewal pursuant to Section 2.5, from the last Maturity
      Date to such termination.

            (b) WAIVER OF TERMINATION FEES. The Borrower will not be required to
      pay the termination fees otherwise due under this Section 2.7 if such
      termination is made because of refinancing by an affiliate of the Lender.

            Section 2.8 Mandatory Prepayment. Without notice or demand, if the
outstanding principal balance of the Revolving Advances shall at any time exceed
the Borrowing Base, the Borrower shall immediately prepay the Revolving Advances
to the extent necessary to eliminate such excess.

            Section 2.9 Advances Without Request. The Borrower hereby authorizes
the Lender, in its discretion, at any time or from time to time without the
Borrower's request, to make Revolving Advances to pay accrued interest, fees,
uncollected items that have been applied to the Obligations, and other
Obligations due and payable from time to time.


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                                   ARTICLE III

                                SECURITY INTEREST

            Section 3.1 Grant of Security Interest. The Borrower hereby grants
to the Lender a security interest (the "Security Interest") in the following
collateral (the "Collateral"), as security for the payment and performance of
the Obligations:

      INVENTORY: All inventory of Borrower, as such term is defined in the UCC,
      whether now owned or hereafter acquired, whether consisting of whole
      goods, spare parts or components, supplies or materials, whether acquired,
      held or furnished for sale, for lease or under service contracts or for
      manufacture or processing, and wherever located;

      ACCOUNTS AND OTHER RIGHTS TO PAYMENT: Each and every right of Borrower to
      the payment of money, whether such right to payment now exists or
      hereafter 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 Borrower or by
      some other Person who subsequently transfers such Person's interest to
      Borrower, 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 Borrower may at any time have by law or
      agreement against any account debtor or other obligor obligated to make
      any such payment or against any property of such account debtor or other
      obligor; all including all of Borrower's rights to payment in the form of
      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;

      GENERAL INTANGIBLES: All of Borrower's general intangibles, as such term
      is defined in the UCC, whether now owned or hereafter acquired, including
      all present and future contract rights, patents, patent applications,
      copyrights, trademarks, trade names, trade secrets, customer or supplier
      lists and contracts, manuals, operating instructions, permits, franchises,
      the right to use Borrower's name, and the goodwill of Borrower's business;
      and

      INVESTMENT PROPERTY: All of Borrower's investment property, as such term
      is defined in the UCC, whether now owned or hereafter acquired, including
      but not limited to all securities, security entitlements, securities
      accounts, commodity contracts, commodity accounts, stocks, bonds, mutual
      fund shares, money market shares and U.S. Government securities;

      together with (i) all other collateral described in any Security Document,
      (ii) all substitutions and replacements for and products of any of the
      foregoing property,


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      (iii) in the case of all tangible property, together with (A) all
      accessions, accessories, attachments, parts, equipment and repairs now or
      hereafter attached or affixed to or used in connection with any such
      goods, and (B) all warehouse receipts, bills of lading and other documents
      of title now or hereafter covering such goods, and (iv) all proceeds of
      any and all of the foregoing property.

            Section 3.2 Notification of Account Debtors and Other Obligors. The
Lender may at any time (either before or after the occurrence of an Event of
Default) notify any account debtor or other Person obligated to pay the amount
due that such right to payment has been assigned or transferred to the Lender
for security and shall be paid directly to the Lender. The Borrower will join in
giving such notice if the Lender so requests. At any time after the Borrower or
the Lender gives such notice to an account debtor or other obligor, the Lender
may, but need not, as the Borrower's agent and attorney-in-fact, notify the
United States Postal Service to change the address for delivery of the
Borrower's mail to any address designated by the Lender, otherwise intercept the
Borrower's mail, and receive, open and dispose of the Borrower's mail, applying
all Collateral as permitted under this Agreement and holding all other mail for
the Borrower's account or forwarding such mail to the Borrower's last known
address.

            Section 3.3 Assignment of Insurance. As additional security for the 
payment and performance of the Obligations, the Borrower hereby assigns to the
Lender any and all monies (including, without limitation, proceeds of insurance
and refunds of unearned premiums) due or to become due under, and all other
rights of the Borrower with respect to, any and all policies of insurance now or
at any time hereafter covering the Collateral or any evidence thereof or any
business records or valuable papers pertaining thereto, and the Borrower hereby
directs the issuer of any such policy to pay all such monies directly to the
Lender. At any time, whether or not a Default Period then exists, the Lender may
(but need not), in the Lender's name or in the Borrower's name, execute and
deliver proof of claim, receive all such monies, endorse checks and other
instruments representing payment of such monies, and adjust, litigate,
compromise or release any claim against the issuer of any such policy.

            Section 3.4 Occupancy.

            (a) The Borrower hereby irrevocably grants to the Lender the right
      to take exclusive possession of the Premises at any time during any
      Default Period.

            (b) The Lender may use the Premises only to hold, process,
      manufacture, sell, use, store, liquidate, realize upon or otherwise
      dispose of goods that are Collateral and for other purposes that the
      Lender in good faith considers related.

            (c) The Lender's right to hold the Premises shall terminate upon the
      earlier of payment in full of all Obligations, or final sale or
      disposition of all goods constituting Collateral and delivery of all such
      goods to purchasers.


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            (d) The Lender shall not be obligated to pay or account for any rent
      or other compensation for the possession or use of any of the Premises;
      provided, however, that if the Lender does pay or account for any rent or
      other compensation for the possession or use of any of the Premises, the
      Borrower shall reimburse the Lender promptly for the full amount thereof
      and for, all taxes, fees, duties, imposts, charges and expenses at any
      time incurred by or imposed upon the Lender in connection the possession
      or use of any of the Premises.

            Section 3.5 License. The Borrower hereby grants to the Lender a 
non-exclusive, worldwide and royalty-free license to use or otherwise exploit
all trademarks, franchises, trade names, copyrights and patents of the Borrower
for the purpose of selling, leasing or otherwise disposing of any or all
Collateral following an Event of Default.

            Section 3.6 Filing a Copy. A carbon, photographic, or other 
reproduction of this Agreement or of a financing statement signed by Borrower is
sufficient as a financing statement.

                                   ARTICLE IV

                              CONDITIONS OF LENDING

            Section 4.1 Conditions Precedent to the Lender's Willingness to
Consider Making Advances. The Lender's willingness to consider making an initial
Advance hereunder shall be subject to the condition precedent that the Lender
shall have received all of the following, each in form and substance
satisfactory to the Lender:

            (a) This Agreement, properly executed by the Borrower.

            (b) The Note, properly executed by the Borrower.

            (c) A true and correct copy of any and all leases pursuant to which
      the Borrower is leasing the Premises, together with a landlord's
      disclaimer and consent with respect to each such lease.

            (d) The Collateral Account Agreement, properly executed by the
      Borrower and Norwest Bank Minnesota, National Association.

            (e) The Lockbox Agreement, properly executed by the Borrower and
      Norwest Bank Minnesota, National Association.

            (f) Current searches of appropriate filing offices showing that (i)
      no state or federal tax liens have been filed and remain in effect against
      the Borrower, (ii) no financing statements have been filed and remain in
      effect against the Borrower except those financing statements relating to
      Permitted Liens or to liens held by Persons who have agreed in writing
      that upon receipt of proceeds of the Advances, they will deliver UCC
      releases and/or terminations satisfactory to the Lender, and (iii) the


                                      -11-

<PAGE>


      Lender has duly filed all financing statements necessary to perfect the
      Security Interest, to the extent the Security Interest is capable of being
      perfected by filing.

            (g) A certificate of the Borrower's secretary or assistant secretary
      certifying as to (i) the resolutions of the Borrower's directors and if
      required, shareholders, authorizing the execution, delivery and
      performance of the Loan Documents, (ii) the Borrower's articles of
      incorporation and bylaws, and (iii) the signatures of the Borrower's
      officers or agents authorized to execute and deliver the Loan Documents
      and other instruments, agreements and certificates, including Advance
      requests, on the Borrower's behalf.

            (h) A current certificate issued by the Secretary of State of
      Minnesota, certifying that the Borrower is in compliance with all
      applicable organizational requirements of the State of Minnesota.

            (i) Evidence that the Borrower is duly licensed or qualified to
      transact business in all jurisdictions where the character of the property
      owned or leased or the nature of the business transacted by it makes such
      licensing or qualification necessary.

            (j) A certificate of one of the Borrower's officers confirming, in
      his personal capacity, the representations and warranties set forth in
      Article V and in the Disclosure.

            (k) The Support Agreement in favor of the Lender, properly executed
      by the Borrower's president in his personal capacity.

            (l) An opinion of counsel to the Borrower, addressed to the Lender.

            (m) Certificates of the insurance required hereunder, with all
      hazard insurance containing a lender's loss payable endorsement in the
      Lender's favor and with all liability insurance naming the Lender as an
      additional insured.

            (n) Payment of the fees and commissions due through the date of the
      initial Advance and expenses incurred by the Lender through such date and
      required to be paid by the Borrower under Section 8.4, including all legal
      expenses incurred through the date of this Agreement.

            (o) Such other documents as the Lender in its sole discretion may
      require.

            Section 4.2 Conditions Precedent to All Advances. The Lender will
not consider any request for an Advance unless on such date:

            (a) the representations and warranties contained in Article V and
      the Disclosure are correct on and as of the date of such Advance as though
      made on and


                                      -12-

<PAGE>


      as of such date, except to the extent that such representations and
      warranties relate solely to an earlier date; and

            (b) no event has occurred and is continuing, or would result from
      such Advance which constitutes a Default or an Event of Default.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

            The Borrower represents and warrants to the Lender as follows:

            Section 5.1 Name; Locations; Tax ID No.; Subsidiaries. During its
existence, the Borrower has done business solely under its corporate name as set
forth herein and under such trade names and such other corporate names as
disclosed to Lender in writing before this Agreement is signed and delivered.
The address of Borrower's chief executive office and principal place of business
and its federal tax identification number are set forth below its signature to
this Agreement. All Inventory is located at that location or at one of the other
locations disclosed to Lender in writing before this Agreement is signed and
delivered. The Borrower has no subsidiaries except as disclosed to Lender in
writing before this Agreement is signed and delivered.

            Section 5.2 Financial Condition; No Adverse Change. Before this
Agreement was signed and delivered, the Borrower furnished the Lender certain of
its unaudited financial statements certified by the Borrower. Those statements
fairly present the Borrower's financial condition as of the dates indicated
therein and the results of its operations for the periods then ended and were
prepared in accordance with generally accepted accounting principles. Since the
date of the most recent financial statements, there has been no material adverse
change in the business, properties or condition (financial or otherwise) of the
Borrower.

                                   ARTICLE VI

                            COVENANTS OF THE BORROWER

            So long as the Advances or any amount owing to Lender hereunder
shall remain unpaid, the Borrower will comply with the requirements in this
Article, unless the Lender shall otherwise consent in writing.

            Section 6.1 Reporting Requirements. The Borrower will deliver to the
Lender each of the following in form and detail acceptable to the Lender:

            (a) as soon as available, and in any event within 90 days after the
      end of each fiscal year of the Borrower, the Borrower's audited financial
      statements prepared in accordance with GAAP by a firm chosen by the
      Borrower and acceptable to the Lender in its sole discretion; together
      with (i) copies of all management letters


                                      -13-

<PAGE>


      prepared by such accountants; (ii) a report signed by such accountants
      stating that in making the investigations necessary for said opinion they
      obtained no knowledge, except as specifically stated, of any Default or
      Event of Default hereunder and all relevant facts in reasonable detail to
      evidence, and the computations as to, whether or not the Borrower is in
      compliance with the requirements set forth in Sections 6.7, and 6.9; (iii)
      a certificate of the Borrower's chief financial officer stating that such
      financial statements have been prepared in accordance with GAAP, that they
      fairly present the Borrower's financial condition and the results of its
      operations, and whether or not such officer has knowledge of the
      occurrence of any Default or Event of Default hereunder and, if so,
      stating in reasonable detail the facts with respect thereto;

            (b) as soon as available and in any event within 20 days after the
      end of each month, an unaudited/internal balance sheet and statement of
      income and retained earnings of the Borrower as at the end of and for such
      month and for the year to date period then ended, prepared in accordance
      with GAAP, subject to year-end audit adjustments; and accompanied by a
      certificate of the Borrower's chief financial officer, substantially in
      the form of Exhibit B hereto stating (i) that such financial statements
      have been prepared in accordance with GAAP, subject to year-end audit
      adjustments and fairly represent the Borrower's financial condition and
      the results of its operations, (ii) whether or not such officer has
      knowledge of the occurrence of any Default or Event of Default hereunder
      not theretofore reported and remedied and, if so, stating in reasonable
      detail the facts with respect thereto, and (iii) all relevant facts in
      reasonable detail to evidence, and the computations as to, whether or not
      the Borrower is in compliance with the requirements set forth in Sections
      6.7, and 6.9;

            (c) within 15 days after the end of each month or more frequently if
      the Lender so requires, agings of the Borrower's accounts receivable and
      its accounts payable, an inventory certification report and perpetual
      listing, and a calculation of the Borrower's Accounts, Eligible Accounts,
      Inventory and Eligible Inventory as at the end of such month or shorter
      time period;

            (d) as soon as available, a copy of the checking account statement
      of the Borrower as of the last day of each month from each bank with which
      Borrower maintains a checking account, such statements to be provided to
      the Lender directly by each such bank or by the Borrower with respect to a
      bank that is unwilling to send them to the Lender;

            (e) at least 30 days before the beginning of each fiscal year of the
      Borrower, the projected balance sheets and income statements for each
      month of such year, each in reasonable detail, representing the Borrower's
      good faith projections and certified by the Borrower's chief financial
      officer as being the most accurate projections available and identical to
      the projections used by the Borrower for internal planning purposes,
      together with such supporting schedules and information as the Lender may
      in its discretion require;


                                      -14-

<PAGE>


            (f) as soon as available and in any event within 3 days after they
      are due, copies of tax payments due and paid and written notice of any and
      all taxes due but not paid;

            (g) immediately after the commencement thereof, notice in writing of
      all litigation and of all proceedings before any governmental or
      regulatory agency affecting the Borrower concerning any environmental
      issue or which seek a monetary recovery against the Borrower in excess of
      $10,000;

            (h) as promptly as practicable (but in any event not later than five
      business days) after an officer of the Borrower obtains knowledge of the
      occurrence of any breach, default or event of default under any Security
      Document or any event which constitutes a Default or Event of Default
      hereunder, notice of such occurrence, together with a detailed statement
      by a responsible officer of the Borrower of the steps being taken by the
      Borrower to cure the effect of such breach, default or event;

            (i) as promptly as practicable, notice of any change in the persons
      constituting the Borrower's officers and directors;

            (j) from time to time, with reasonable promptness, any and all
      receivables schedules, collection reports, deposit records, equipment
      schedules, copies of invoices to account debtors, shipment documents and
      delivery receipts for goods sold, and such other material, reports,
      records or information as the Lender may request;

            (k) promptly upon knowledge thereof, notice of any loss of or
      material damage to any Collateral or other collateral covered by the
      Security Documents or of any substantial adverse change in any Collateral
      or such other collateral or the prospect of payment thereof;

            (l) promptly upon their distribution, copies of all financial
      statements, reports and proxy statements which the Borrower shall have
      sent to its stockholders; and

            (m) promptly after the sending or filing thereof, copies of all
      regular and periodic reports which the Borrower shall file with the
      Securities and Exchange Commission or any national securities exchange.

            Section 6.2 Inspection. Upon the Lender's request, the Borrower will
permit any officer, employee, attorney, agent or accountant for the Lender to
audit, review, make extracts from or copy any and all records of the Borrower
and to inspect the Collateral at all times during ordinary business hours.

            Section 6.3 Account Verification. The Lender may at any time and
from time to time send, or request the Borrower to send, requests for
verification of Accounts or notices of assignment to account debtors and other
obligors. The Borrower authorizes the Lender to


                                      -15-

<PAGE>


verify Accounts as frequently as daily and the Borrower understands the Lender
intends to do so by telephone and/or in writing.

            Section 6.4 No Other Liens. The Borrower will keep all Collateral
free and clear of all security interests, liens and encumbrances except the
Security Interest, purchase money security interests in equipment, and other
security interests approved by the Lender in writing.

            Section 6.5 Insurance. The Borrower will at all times keep all
tangible Collateral insured against risks of fire (including so-called extended
coverage), theft, collision (for Collateral consisting of motor vehicles) and
such other risks and in such amounts as the Lender may reasonably request, with
a lender's loss payable clause in favor of Lender to the extent of its interest.

            Section 6.6 Performance by the Lender. If the Borrower at any time
fails to perform or observe any of the foregoing covenants contained in this
Article VI or elsewhere herein, and if such failure shall continue for a period
of five calendar days after the Lender gives the Borrower written notice
thereof, the Lender may, but need not, perform or observe such covenant on
behalf and in the name, place and stead of the Borrower (or, at the Lender's
option, in the Lender's name) and may take any and all other actions which the
Lender may reasonably deem necessary to cure or correct such failure and the
Borrower shall thereupon pay to the Lender on demand the amount of all monies
expended and all costs and expenses (including reasonable attorneys' fees and
legal expenses) incurred by the Lender in connection therewith, together with
interest thereon from the date expended or incurred at the Default Rate. To
facilitate the Lender's performance or observance of such covenants of the
Borrower, the Borrower hereby irrevocably appoints the Lender, or the Lender's
delegate, acting alone, as the Borrower's attorney in fact (which appointment is
coupled with an interest) with the right (but not the duty) from time to time to
create, prepare, complete, execute, deliver, endorse or file in the name and on
behalf of the Borrower any and all instruments, documents, assignments, security
agreements, financing statements, applications for insurance and other
agreements and writings required to be obtained, executed, delivered or endorsed
by the Borrower under this Section 6.6.

            Section 6.7 Minimum Book Net Worth. The Borrower will maintain, as
of each month end described below, its Book Net Worth at an amount not less than
the amount set forth opposite such month end:


                                      -16-

<PAGE>


            ---------------------------- -------------------------------

                    Month Ending              Minimum Book Net Worth
            ---------------------------- -------------------------------
                  October 31, 1998                 $3,225,000
            ---------------------------- -------------------------------
                  November 30, 1998                $2,925,000
            ---------------------------- -------------------------------
                  December 31, 1998                $2,925,000
            ---------------------------- -------------------------------
                  January 31, 1999                 $2,650,000
            ---------------------------- -------------------------------
                  February 28, 1999                $2,575,000
            ---------------------------- -------------------------------
                   March 31, 1999                  $2,925,000
            ---------------------------- -------------------------------
                   April 30, 1999                  $2,625,000
            ---------------------------- -------------------------------
                    May 31, 1999                   $2,625,000
            ---------------------------- -------------------------------
                    June 30, 1999                  $2,975,000
            ---------------------------- -------------------------------
                    July 31, 1999                  $2,750,000
            ---------------------------- -------------------------------
                   August 31, 1999                 $2,875,000
            ---------------------------- -------------------------------
                 September 30, 1999                $3,375,000
            ---------------------------- -------------------------------

            Section 6.8 New Covenants. On or before August 31, 1999, the
Borrower and the Lender shall agree on new covenant levels for Section 6.7 for
periods after such date. The new covenant levels will be based on the Borrower's
projections for such periods and shall be no less stringent than the present
levels.

            Section 6.9 Capital Expenditures. The Borrower will not incur or
contract to incur Capital Expenditures of more than $3,000,000 in the aggregate
during any fiscal year.

            Section 6.10 No Sale or Transfer of Collateral and Other Assets. The
Borrower will not sell, lease, assign, transfer or otherwise dispose of (i) the
stock of any subsidiary, (ii) all or a substantial part of its assets, or (iii)
any Collateral or any interest therein (whether in one transaction or in a
series of transactions) to anyone other than the sale of Inventory in the
ordinary course of business.

            Section 6.11 Place of Business; Name. The Borrower will not change
the location of its chief executive office or principal place of business from
that disclosed pursuant to Section 5.1. The Borrower will not permit any
tangible Collateral to be located in any state or area in which, in the event of
such location, a financing statement covering such Collateral would be required
to be, but has not in fact been, filed in order to perfect the Security
Interest. The Borrower will not change its name.


                                      -17-

<PAGE>


                                   ARTICLE VII

                     EVENTS OF DEFAULT, RIGHTS AND REMEDIES

            Section 7.1 Events of Default. An "Event of Default" as used herein
shall mean any of the following:

            (a) Failure to pay the Note when demanded, and in this connection
      Borrower hereby waives presentment, notice of dishonor and protest;

            (b) A petition shall be filed by or against the Borrower under the
      United States Bankruptcy Code naming the Borrower as debtor;

            (c) A default under any bond, debenture, note or other evidence of
      indebtedness of the Borrower owed to any Person other than the Lender, or
      under any indenture or other instrument under which any such evidence of
      indebtedness has been issued or by which it is governed, or under any
      lease of any of the Premises, and the expiration of the applicable period
      of grace, if any, specified in such evidence of indebtedness, indenture,
      other instrument or lease;

            (d) Default in the performance, or breach, of any covenant or
      agreement of the Borrower contained in any Loan Document.

            Section 7.2 Rights and Remedies. As provided in Section 2.5, the
Lender may, at any time and for any reason, refuse to make any requested Advance
or demand payment of the Obligations. In addition, upon the occurrence of an
Event of Default or at any time thereafter, the Lender may exercise any or all
of the following rights and remedies:

            (a) The Lender may exercise and enforce any and all rights and
      remedies available upon default to a secured party under the UCC,
      including the right to take possession of Collateral, or any evidence
      thereof, proceeding without judicial process or by judicial process
      (without a prior hearing or notice thereof, which the Borrower hereby
      expressly waives) and the right to sell, lease or otherwise dispose of any
      or all of the Collateral, and in connection therewith, the Borrower will
      on demand assemble the Collateral and make it available to the Lender at a
      place to be designated by the Lender which is reasonably convenient to
      both parties;

            (b) The Lender may exercise any other rights and remedies available
      to it by law or agreement.

The remedies provided hereunder are cumulative.

            Section 7.3 Certain Notices. If notice to the Borrower of any
intended disposition of Collateral or any other intended action is required by
law in a particular instance, such notice shall be deemed commercially
reasonable if given (in the manner


                                      -18-

<PAGE>


specified in Section 8.3) at least 10 calendar days before the date of intended
disposition or other action.

                                  ARTICLE VIII

                                  MISCELLANEOUS

            Section 8.1 No Waiver; Cumulative Remedies. No failure or delay by
the Lender in exercising any right, power or remedy under the Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy under the Loan Documents.
The remedies provided in the Loan Documents are cumulative and not exclusive of
any remedies provided by law.

            Section 8.2 Amendments, Etc. No amendment, modification, termination
or waiver of any provision of any Loan Document or consent to any departure by
the Borrower therefrom or any release of a Security Interest shall be effective
unless the same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.

            Section 8.3 Addresses for Notices, Etc. Except as otherwise
expressly provided herein, all notices, requests, demands and other
communications provided for hereunder shall be in writing and shall be (i)
personally delivered, or (ii) sent by first class United States mail, or (iii)
sent by overnight courier of national reputation, or (iv) transmitted by
telecopy, in each case addressed or telecopied to the party to whom notice is
being given at its address or telecopy number as set forth below its signature
to this Agreement.

            Section 8.4 Costs and Expenses. The Borrower agrees to pay on demand
all costs and expenses (including reasonable legal fees) incurred by the Lender
in connection with the Loan Documents and any other document or agreement
related thereto, and the transactions contemplated hereby, including wire
transfer and ACH charges, the cost of credit reports, overadvance fees, and fees
and expenses in amending and enforcing this Agreement.

            Section 8.5 Indemnity. In addition to the payment of expenses
pursuant to Section 8.4, the Borrower agrees to indemnify, defend and hold
harmless the Lender, and any of its participants, parent corporations,
subsidiary corporations, affiliated corporations, successor corporations, and
all present and future officers, directors, employees, attorneys and agents of
the foregoing (the "Indemnitees") from and against any of the following
(collectively, "Indemnified Liabilities"):

            (i) any and all transfer taxes, documentary taxes, assessments or
      charges made by any governmental authority by reason of the execution and


                                      -19-

<PAGE>


      delivery of this Agreement and the other Loan Documents or the making of
      the Advances;

            (ii) any and all liabilities, losses, damages, penalties, judgments,
      suits, claims, costs and expenses of any kind or nature whatsoever
      (including, without limitation, the reasonable fees and disbursements of
      counsel) in connection with any investigative, administrative or judicial
      proceedings, whether or not such Indemnitee shall be designated a party
      thereto, which may be imposed on, incurred by or asserted against any such
      Indemnitee, in any manner related to or arising out of or in connection
      with the making of the Advances, this Agreement and the other Loan
      Documents or the use or intended use of the proceeds of the Advances; and

            (iii) any claim, loss or damage to which any Indemnitee may be
      subjected as a result of any violation of any federal, state, local or
      other governmental statute, regulation, law, or ordinance dealing with the
      protection of human health and the environment.

If any investigative, judicial or administrative proceeding arising from any of
the foregoing is brought against any Indemnitee, then the Borrower or counsel
designated by the Borrower and satisfactory to the Indemnitee, will resist and
defend such action, suit or proceeding to the extent and in the manner directed
by the Indemnitee. Each Indemnitee will use its best efforts to cooperate in the
defense of any such action, suit or proceeding. If the foregoing undertaking to
indemnify, defend and hold harmless may be held to be unenforceable because it
violates any law or public policy, the Borrower shall nevertheless make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Borrower's obligation
under this Section 8.5 shall survive the termination of this Agreement and the
discharge of the Borrower's other obligations hereunder.

            Section 8.6 Binding Effect; Assignment; Counterparts; Exchanging
Information. The Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights
thereunder or any interest therein without the prior written consent of the
Lender. This Agreement and other Loan Documents may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts, taken together, shall constitute but
one and the same instrument. Without limiting the Lender's right to share
information regarding the Borrower and its Affiliates with the Lender's
participants, accountants, lawyers and other advisors, the Lender, Norwest
Corporation, and all direct and indirect subsidiaries of Norwest Corporation,
may exchange any and all information they may have in their possession regarding
the Borrower and its Affiliates, and the Borrower waives any right of
confidentiality it may have with respect to such exchange of such information.


                                      -20-

<PAGE>


            Section 8.7 Further Documents. The Borrower will from time to time
execute and deliver or endorse any and all instruments, documents, conveyances,
assignments, security agreements, financing statements and other agreements and
writings that the Lender may reasonably request in order to secure, protect,
perfect or enforce the Security Interest or the Lender's rights under the Loan
Documents (but any failure to request or assure that the Borrower executes,
delivers or endorses any such item shall not affect or impair the validity,
sufficiency or enforceability of the Loan Documents and the Security Interest,
regardless of whether any such item was or was not executed, delivered or
endorsed in a similar context or on a prior occasion).

            Section 8.8 Governing Law; Jurisdiction, Venue; Waiver of Jury
Trial. This Agreement and the Note shall be governed by and construed in
accordance with the laws (other than conflict laws) of the State of Minnesota.
Each party consents to the personal jurisdiction of the state and federal courts
located in the State of v in connection with any controversy related to this
Agreement, waives any argument that venue in any such forum is not convenient
and agrees that any litigation initiated by any of them in connection with this
Agreement shall be venued in either the District Court of Hennepin County,
Minnesota, or the United States District Court, District of Minnesota, Fourth
Division. THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT.

            IN WITNESS WHEREOF, the parties hereto have signed this Agreement as
of the date first above written.

NORWEST BUSINESS CREDIT, INC.            XATA CORPORATION


By /s/ Roger Pfiffner                    By /s/ Dennis R. Johnson
  ----------------------------------        ------------------------------------
  Roger Pfiffner                            Dennis R. Johnson
  Its Vice President                        Its President and Chief Executive
                                                Officer

Address:                                 Address:

Roanoke Building, Suite 400              151 East Cliff Road, Ste 10
Seventh Street and Marquette Avenue      Burnsville, Minnesota 55337
Minneapolis, Minnesota 55479-0152        Telecopy No. 612-894-2463  
Telecopy No. 612-341-2472

Federal Tax ID No. 41-1237652            Federal Tax I.D. No. 41-1641815


                                      -21-

<PAGE>


                                      Exhibit A to Credit and Security Agreement

                                 REVOLVING NOTE

$1,500,000                                                Minneapolis, Minnesota
                                                                October 23, 1998

            For value received, the undersigned, XATA CORPORATION, a Minnesota
corporation (the "Borrower"), hereby promises to pay ON DEMAND to the order of
NORWEST BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender"), at its
main office in Minneapolis, Minnesota, or at any other place designated at any
time by the holder hereof, in lawful money of the United States of America and
in immediately available funds, the principal sum of One Million Five Hundred
Thousand Dollars and No Cents ($1,500,000) or, if less, the aggregate unpaid
principal amount of all Advances made by the Lender to the Borrower under the
Credit and Security Agreement of even date herewith by and between the Lender
and the Borrower (as the same may hereafter be amended, supplemented or restated
from time to time, the "Credit Agreement") together with interest on the
principal amount hereunder remaining unpaid from time to time (computed on the
basis of actual days elapsed in a 360-day year) from the date of the initial
Advance until this Note is fully paid at the rate from time to time in effect
under the Credit Agreement.

            This Note is the Revolving Note as defined in the Credit Agreement
and is subject to the Credit Agreement.

                                    XATA CORPORATION



                                    By 
                                       -----------------------------------------
                                       Dennis R. Johnson
                                       Its President and Chief Executive Officer


                                      A-1

<PAGE>


                                      Exhibit B to Credit and Security Agreement

                             COMPLIANCE CERTIFICATE

To:         Michael Guillou
            Norwest Business Credit, Inc.

Date:       __________________, 199___

Subject:    XATA Corporation

            Financial Statements

            In accordance with our Credit and Security Agreement dated as of
October 23, 1998 (the "Credit Agreement"), attached are the financial statements
of XATA Corporation (the "Borrower") as of and for ________________, 19___ (the
"Reporting Date") and the year-to-date period then ended (the "Current
Financials"). All terms used in this certificate have the meanings given in the
Credit Agreement.

            I certify that the Current Financials have been prepared in
accordance with GAAP, subject to year-end audit adjustments, and fairly present
the Borrower's financial condition as of the date thereof.

            Events of Default. (Check one):

      |_|   The undersigned does not have knowledge of the occurrence of a
            Default or Event of Default under the Credit Agreement.

      |_|   The undersigned has knowledge of the occurrence of a Default or
            Event of Default under the Credit Agreement and attached hereto is a
            statement of the facts with respect to thereto.

            Financial Covenants. I further hereby certify as follows:

            1. Minimum Book Net Worth. Pursuant to Section 6.7 of the Credit
      Agreement, as of the Reporting Date, the Borrower's Book Net Worth was
      $____________ which |_| satisfies |_| does not satisfy the requirement
      that such amount be not less than $_____________ on the Reporting Date as
      set forth in the table below:

<PAGE>


            ---------------------------- -------------------------------

                    Month Ending              Minimum Book Net Worth
            ---------------------------- -------------------------------
                  October 31, 1998                 $3,225,000
            ---------------------------- -------------------------------
                  November 30, 1998                $2,925,000
            ---------------------------- -------------------------------
                  December 31, 1998                $2,925,000
            ---------------------------- -------------------------------
                  January 31, 1999                 $2,650,000
            ---------------------------- -------------------------------
                  February 28, 1999                $2,575,000
            ---------------------------- -------------------------------
                   March 31, 1999                  $2,925,000
            ---------------------------- -------------------------------
                   April 30, 1999                  $2,625,000
            ---------------------------- -------------------------------
                    May 31, 1999                   $2,625,000
            ---------------------------- -------------------------------
                    June 30, 1999                  $2,975,000
            ---------------------------- -------------------------------
                    July 31, 1999                  $2,750,000
            ---------------------------- -------------------------------
                   August 31, 1999                 $2,875,000
            ---------------------------- -------------------------------
                 September 30, 1999                $3,375,000
            ---------------------------- -------------------------------

            2. Capital Expenditures. Pursuant to Section 6.9 of the Credit
      Agreement, for the year-to-date period ending on the Reporting Date, the
      Borrower has expended or contracted to expend during the _____________
      year ended ______________, 199___, for Capital Expenditures,
      $__________________ in the aggregate, which |_| satisfies |_| does not
      satisfy the requirement that such expenditures not exceed $3,000,000 in
      the aggregate during such year.

            Attached hereto are all relevant facts in reasonable detail to
evidence, and the computations of the financial covenants referred to above.
These computations were made in accordance with GAAP.

                                       XATA CORPORATION



                                       By 
                                          --------------------------------------

                                         Its Chief Financial Officer


                                      B-2


                FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT


                  This Amendment, dated as of November 30, 1998, is made by and
between XATA CORPORATION, a Minnesota corporation ("the Borrower") and NORWEST
BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender").

                                    Recitals

                  The Borrower and the Lender have entered into a Credit and
Security Agreement dated as of October 23, 1998 (the "Credit Agreement").
Capitalized terms used in these recitals have the meanings given to them in the
Credit Agreement unless otherwise specified.

                  The Borrower has requested that the Lender increase the
Maximum Line to $2,000,000. The Lender is willing to grant the Borrower's
requests pursuant to the terms and conditions set forth herein.

                  NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, it is agreed as follows:

                  1. Defined Terms. Capitalized terms used in this Amendment
which are defined in the Credit Agreement shall have the same meanings as
defined therein, unless otherwise defined herein. In addition, Section 1.1 of
the Credit Agreement is amended by adding or amending, as the case may be, the
following definitions:

                  "First Amendment" means the First Amendment to Credit and
         Security Agreement by and between the Borrower and the Lender, dated as
         of November 30, 1998."

                  "Maximum Line" means $2,000,000."

                  "Revolving Note" means the Borrower's revolving promissory
         note, payable to the order of the Lender in substantially the form of
         Exhibit A to the First Amendment and any note or notes issued in
         substitution therefor, as the same may hereafter be amended,
         supplemented or restated from time to time."

                  2. No Other Changes. Except as explicitly amended by this
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter of credit
thereunder.

                  3. Conditions Precedent. This Amendment shall be effective
when the Lender shall have received an executed original hereof, together with
each of the following, each in substance and form acceptable to the Lender in
its sole discretion:

<PAGE>

                  (a) The Note, substantially in the form of Exhibit A hereto,
         duly executed on behalf of the Borrower (the "Replacement Note").

                  (b) A Certificate of the Secretary of the Borrower certifying
         as to (i) the resolutions of the board of directors of the Borrower
         approving the execution and delivery of this Amendment, (ii) the fact
         that the articles of incorporation and bylaws of the Borrower, which
         were certified and delivered to the Lender pursuant to its Certificate
         of Authority dated as of October 23, 1998 continue in full force and
         effect and have not been amended or otherwise modified except as set
         forth in the Certificate to be delivered, and (iii) certifying that the
         officers and agents of the Borrower who have been certified to the
         Lender, pursuant to the Certificate of Authority dated as of October
         23, 1998, as being authorized to sign and to act on behalf of the
         Borrower continue to be so authorized or setting forth the sample
         signatures of each of the officers and agents of the Borrower
         authorized to execute and deliver this Amendment and all other
         documents, agreements and certificates on behalf of the Borrower.

                  (c) Such other matters as the Lender may require.

                  4. Representations and Warranties. The Borrower hereby
represents and warrants to the Lender as follows:

                  (a) The Borrower has all requisite power and authority to
         execute this Amendment and the Replacement Note and to perform all of
         its obligations hereunder, and this Amendment and the Replacement Note
         have been duly executed and delivered by the Borrower and constitute
         the legal, valid and binding obligation of the Borrower, enforceable in
         accordance with their terms.

                  (b) The execution, delivery and performance by the Borrower of
         this Amendment and the Replacement Note have been duly authorized by
         all necessary corporate action and do not (i) require any
         authorization, consent or approval by any governmental department,
         commission, board, bureau, agency or instrumentality, domestic or
         foreign, (ii) violate any provision of any law, rule or regulation or
         of any order, writ, injunction or decree presently in effect, having
         applicability to the Borrower, or the articles of incorporation or
         by-laws of the Borrower, or (iii) result in a breach of or constitute a
         default under any indenture or loan or credit agreement or any other
         agreement, lease or instrument to which the Borrower is a party or by
         which it or its properties may be bound or affected.

                  (c) All of the representations and warranties contained in
         Article V of the Credit Agreement are correct on and as of the date
         hereof as though made on and as of such date, except to the extent that
         such representations and warranties relate solely to an earlier date.

5. References. All references in the Credit Agreement to "this Agreement" shall
be deemed to refer to the Credit Agreement as amended hereby; and any and all
references in the Security Documents to the Credit Agreement shall be deemed to

<PAGE>

refer to the Credit Agreement as amended hereby.

                  6. No Waiver. The execution of this Amendment and the
Replacement Note and acceptance of any documents related hereto shall not be
deemed to be a waiver of any Default or Event of Default under the Credit
Agreement or breach, default or event of default under any Security Document or
other document held by the Lender, whether or not known to the Lender and
whether or not existing on the date of this Amendment.

                  7. Release. The Borrower hereby absolutely and unconditionally
releases and forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower has had, now has or
has made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Amendment, whether such claims, demands and
causes of action are matured or unmatured or known or unknown.

                  8. Costs and Expenses. The Borrower hereby reaffirms its
agreement under the Credit Agreement to pay or reimburse the Lender on demand
for all costs and expenses incurred by the Lender in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make an Advance
under the Credit Agreement, or apply the proceeds of any Advance, for the
purpose of paying any such fees, disbursements, costs and expenses.

<PAGE>

                  9. Miscellaneous. This Amendment may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.


NORWEST BUSINESS CREDIT, INC.               XATA CORPORATION



By__________________________________        By _______________________________
     Roger Pfiffner                              Dennis R. Johnson
     Its Vice President                          Its President and Chief 
                                                  Executive Officer


<PAGE>


                                                    Exhibit A to First Amendment
                                                to Credit and Security Agreement

                                 REVOLVING NOTE
$2,000,000                                                Minneapolis, Minnesota
                                                               November 30, 1998

                  For value received, the undersigned, XATA CORPORATION, a
Minnesota corporation (the "Borrower"), hereby promises to pay ON DEMAND to the
order of NORWEST BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender"),
at its main office in Minneapolis, Minnesota, or at any other place designated
at any time by the holder hereof, in lawful money of the United States of
America and in immediately available funds, the principal sum of Two Million
Dollars and No Cents ($2,000,000) or, if less, the aggregate unpaid principal
amount of all Advances made by the Lender to the Borrower under the Credit and
Security Agreement dated as of October 23, 1998 by and between the Lender and
the Borrower as amended by a First Amendment to Credit and Security Agreement
dated as of November 30, 1998 (as the same may hereafter be amended,
supplemented or restated from time to time, the "Credit Agreement") together
with interest on the principal amount hereunder remaining unpaid from time to
time (computed on the basis of actual days elapsed in a 360-day year) from the
date of the initial Advance until this Note is fully paid at the rate from time
to time in effect under the Credit Agreement.

                  To the extent this Note evidences the Borrower's obligation to
pay existing Revolving Advances, this Note is issued in substitution for and
replacement of but not in payment of the Borrower's promissory note dated as of
October 23,1 998.

                  This Note is the Revolving Note as defined in the Credit
Agreement and is subject to the Credit Agreement.



                         XATA CORPORATION



                         By _______________________________
                              Dennis R. Johnson
                              Its President and Chief Executive Officer


<PAGE>

                SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT

                  This Amendment, dated as of January 8, is made by and between
XATA CORPORATION, a Minnesota corporation (the "Borrower"), and NORWEST BUSINESS
CREDIT, INC., a Minnesota corporation (the "Lender").

                                    Recitals

                  The Borrower and the Lender have entered into a Credit and
Security Agreement dated as of October 23, 1998, as amended by a First Amendment
to Credit and Security Agreement dated as of November 30, 1998 (as so amended,
the "Credit Agreement"). Capitalized terms used in these recitals have the
meanings given to them in the Credit Agreement unless otherwise specified.

                  The Borrower has requested that certain amendments be made to
the Credit Agreement, which the Lender is willing to make pursuant to the terms
and conditions set forth herein.

                  NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, it is agreed as follows:

                  1. Defined Terms. Capitalized terms used in this Amendment
which are defined in the Credit Agreement shall have the same meanings as
defined therein, unless otherwise defined herein. In addition, Section 1.1 of
the Credit Agreement is amended by amending the following definition:

                  Clause (vi) of the definition of "Eligible Accounts" is hereby
amended to read:

                                    "(vi) Accounts owed by an account debtor
                           located outside the United States which are not
                           backed by a bank letter of credit assigned to the
                           Lender, in the possession of the Lender and
                           acceptable to the Lender in all respects, in its sole
                           discretion; provided however, that Accounts owed by
                           Canadian account debtors can be Eligible Accounts if
                           not otherwise ineligible;"

                  2. Minimum Book Net Worth. Section 6.7 of the Credit Agreement
is hereby amended to read as follows:

                  "Section 6.7 Minimum Book Net Worth. The Borrower will
         maintain, as of each month end described below, its Book Net Worth at
         an amount not less than the amount set forth opposite such month end:

<PAGE>

---------------------------------------- -------------------------------------

             Month Ending                       Minimum Book Net Worth
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
           October 31, 1998                           $2,325,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
           November 30, 1998                          $2,025,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
           December 31, 1998                          $2,025,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
           January 31, 1999                           $1,750,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
           February 28, 1999                          $1,650,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
            March 31, 1999                            $2,025,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
            April 30, 1999                            $1,725,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
             May 31, 1999                             $1,725,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
             June 30, 1999                            $2,075,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
             July 31, 1999                            $1,850,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
            August 31, 1999                           $1,975,000
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------
          September 30, 1999                          $2,475,000
---------------------------------------- -------------------------------------

                  3. No Other Changes. Except as explicitly amended by this
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter of credit
thereunder.

                  4. Conditions Precedent. This Amendment shall be effective
when the Lender shall have received an executed original hereof.

                  5. Representations and Warranties. The Borrower hereby
represents and warrants to the Lender as follows:

                  (a) The Borrower has all requisite power and authority to
         execute this Amendment and to perform all of its obligations hereunder,
         and this Amendment has been duly executed and delivered by the Borrower
         and constitutes the legal, valid and binding obligation of the
         Borrower, enforceable in accordance with its terms.

                  (b) The execution, delivery and performance by the Borrower of
         this Amendment have been duly authorized by all necessary corporate
         action and do not (i) require any authorization, consent or approval by
         any governmental department, commission, board, bureau, agency or
         instrumentality, domestic or foreign, (ii) violate any provision of any
         law, rule or regulation or of any order, writ, injunction or decree
         presently in effect, having applicability to the Borrower, or the
         articles of incorporation or by-laws of the Borrower, or (iii) result
         in a breach of or constitute a default under any indenture or loan or
         credit agreement or any other 

                                      -2-

<PAGE>

         agreement, lease or instrument to which the Borrower is a party or by
         which it or its properties may be bound or affected.

                  (c) All of the representations and warranties contained in
         Article V of the Credit Agreement are correct on and as of the date
         hereof as though made on and as of such date, except to the extent that
         such representations and warranties relate solely to an earlier date.

                  6. References. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Security Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.

                  7. No Waiver. The execution of this Amendment and acceptance
of any documents related hereto shall not be deemed to be a waiver of any
Default or Event of Default under the Credit Agreement or breach, default or
event of default under any Security Document or other document held by the
Lender, whether or not known to the Lender and whether or not existing on the
date of this Amendment.

                  8. Release. The Borrower hereby absolutely and unconditionally
releases and forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower has had, now has or
has made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Amendment, whether such claims, demands and
causes of action are matured or unmatured or known or unknown.

                  9. Costs and Expenses. The Borrower hereby reaffirms its
agreement under the Credit Agreement to pay or reimburse the Lender on demand
for all costs and expenses incurred by the Lender in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.


                                      -3-
<PAGE>

                  10. Miscellaneous. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.

NORWEST BUSINESS CREDIT, INC.            XATA CORPORATION

                                         By _______________________________
                                              Dennis R. Johnson
By _________________________________          Its President and Chief 
     Roger Pfiffner                               Executive Officer
     Its Vice President