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PARTNERS FOR GROWTH, LLC
 (415) 912-5899
Facsimile: (415) 781-0510




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Very truly yours,Partners for Growth II, L.P./s/ Andrew Kahn

Andrew Kahn
    
    
    
    /s/ Jason Georgatos

Jason GeorgatosManager
    
    
    
    Manager
 
 XATA CorporationBy
    /s/ Mark E. TiesIts Chief Financial Officer




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PARTNERS FOR GROWTH, LLC
 (415) 912-5899
Facsimile: (415) 781-0510
 Via Electronic Mail
  
  $8,000,000
 Subordinate Acquisition Term Loan:
 Security:
    
    Term LoanCommitment 
Amount:
    
    $8,000,000, funded upon the close of the acquisition
to purchase the target company identified to PfG by
the Borrower.Maturity:
    
    48 months.Repayment:
    
    Interest only monthly for the first 36 months;
quarterly principal payments of $1,000,000 in year
four with the balance due at maturity.Amortization Trigger:
    
    If Borrower falls below the Liquidity Ratio (defined
below), PfG has the right but not the obligation to
amortize the loan as if it were a three year loan
with equal monthly principal payments of $222,222.
For example, if the Company fell below the Liquidity
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Ratio 3 months after the close of the deal, and we chose to exercise
the amortization, then the Company would owe us $666,666 with the
balance of the loan due in equal monthly principal payments, plus
interest, over the following 33 months. Any payments under the
Amortization Trigger must either be paid to PfG or to reduce the
senior SVB debt (at the discretion of the senior lender).Liquidity Ratio: Borrower to maintain a minimum Adjusted Quick Ratio
of 0.75 : 1.00, defined as (Cash at SVB + Eligibal A/R) divided by
(SVB Debt + PfG Debt). This ratio will increase to 1.00: 1.00 as of
6/30/09.Interest Rate:
    
    14.5% fixed.Interest Rate Reset:
    
    If Borrower achieves 105% of its revenue and EBITDA
forecast (based on the new forecast provided to SVB
and PfG on November 9th) for the quarters ending
March 31, 2008, June 30, 2008 and September 30, 2008
then the interest rate would be reduced from 14.5% to
11% fixed.Commitment Fee:
    
    2.0% of the Commitment Amount payable upon the
funding of the deal.Warrants:
    
    See Warrant Term Sheet.Prepayment Penalty:
    
    None.Security:
    
    Blanket security interest in all the assets of the
Company subject only to a senior security interest by
Silicon Valley Bank (SVB) in the amount of
$10,000,000. SVB and PfG have a standard,
pre-negotiated subordination agreement that would be
entered into at closing.Financial Reporting:
    
    Monthly financial statements and compliance
certificates, within 30 days.Monthly A/R and A/P Agings, within 30 daysMonthly deferred revenue schedules, within 30 daysAudited financial statements, within 120 daysAnnual board approved plan, as soon as availableUpon PfGs request, copies of all reporting provided to SVB.For the first two quarters after closing, all monthly reporting would
be due within 15 days of month end.
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Financial Covenants:Tangible Net Worth Ratio(TNW), defined as net worth less
intangible assets. At all times, and measured monthly, starting with
3/31/08, the borrowers Tangible Net Worth must be higher than
$1,000,000 below borrowers TNW as of the close of borrowers
acquisition of Geologic Solutions, Inc., with such minimum TNW
requirement increasing by $1,500,000 beginning with the month ending
9/30/08. In addition, beginning with the month ending 3/31/09, the
minimum TNW requirement shall increase by 50% of quarterly Net Income
for the quarter ending 3/31/09 and for each quarter ending
thereafter, with the minimum TNW requirement being adjusted
quarterly.Modified EBITDA: borrowers EBITDA  Taxes  Distributions 
Unfinanced Capex (MEBITDA) for January 2008, January through
February 2008, and January through March 2008, must not be less than
($1,000,000).FCCRCovenant: defined as (MEBITDA / Interest + Mandatory Principal
Pmts) of not less than 1.25:1.00 on a trailing twelve month basis,
starting 12/31/08, monitored quarterly thereafter.Documentation:
    
    PfGs customary documentation.Conditions of Funding:
    
    Borrower closes the acquisition of the identified
target company within 60 days of closing of the PfG
facility. If the acquisition is not consummated,
then our financing commitment will terminate and
the warrant will be returned to the Company. The
Company will only be responsible for our out of
pocket expenses including primarily legal fees
associated with the preparation and negotiation of
the documents.Expenses:
    
    Borrower would pay all of PfGs out-of-pocket fees,
charges, costs and expenses in connection with the
loan.Confidential:
    
    This letter is delivered to you with the
understanding that neither it nor its substance
shall be disclosed publicly or privately to any
third person. Exceptions to this confidentiality
agreement are those who are in a confidential
relationship to you, such as legal counsel, senior
management and members of the Borrowers Board of
Directors, or where disclosure is required by law
and then only on a basis that it not be further
disclosed.
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Partners for Growth II, L.P.
 /s/ Andrew Kahn
    
    /s/ Jason GeorgatosAndrew Kahn
    
    Jason GeorgatosManager
    
    Manager
  XATA CorporationBy:
    /s/ Mark E. TiesName:
    Mark E. Ties Page 4 of 4




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WARRANT TERM SHEET
 Type of Security and
Consideration:
    
    Partners for Growth II L.P. (PfG or Holder) shall
purchase for $8,382 a warrant (the Warrant) to
purchase 457,144shares of Common Stock (the Warrant
Shares) of XATA Corporation (the Company). The
Warrant may be exercised in whole or in part.Exercise Price:
    
    The lower of $3.50per share or the average closing
price in the 5 trading days prior to the close of the
deal.Term of Warrant:
    
    5 years from the close of the deal.Adjustment of Number and Kind
of Shares and Price Protection:(1)
    
    Split, Subdivision,
Combination, or Stock
Dividend:
    
    In the event of a split, subdivision, stock dividend or combination with respect to
Common Stock, the Exercise Price and the number of shares issuable upon exercise of the
Warrant shall be proportionately adjusted.(2)
    
    Treatment of Warrant
At Acquisition:
    
    In the event of any reclassification of capital stock, or any reorganization,
consolidation or merger of the company, as a condition to the completion of such
transaction the Company shall procure the issue of a new warrant to Holder for the number
and kind of securities receivable upon such reclassification, reorganization, consolidation
or merger by a holder of Company stock. The Company shall give Holder sufficient notice to
exercise rights under its Warrant. If the Company is not able to procure a new Warrant
then the Warrant may be purchased by the Company for fair value, which shall be determined
using a Black-Scholes Option-Pricing Model.Assignment:
    
    PfG may assign / transfer the Warrant subject to
compliance with applicable securities laws.Exchange of Warrant
For Common Stock:
    
    The Holder shall be entitled to require the Company to
accept an exchange of such Holders Warrant for that
number of shares of the Companys Common Stock
obtained by dividing (x) the value of the Warrant
(determined by subtracting the aggregate Exercise
Price of the Warrant from the aggregate highest fair
market value of
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the shares in the three months prior to the exchange of the number of shares of
Common Stock issuable upon exercise of the Warrant), by (y) the highest fair
market value of one share in the three months prior to the exchange of Common
Stock immediately prior to the exchange.Optional Exercise of
Warrant for Cash:
    
    Holder may, at its option, exercise the
Warrant by tendering cash to pay the Exercise
Price.Automatic Exercise of
the Warrant:
    
    The Warrant shall be automatically
exchanged for common stock immediately before it
expires, if not previously exchanged or
exercised, and if the fair market value of one
share of the Companys Common Stock is greater
than the Warrant Exercise Price. This would be
done through a cashless exchange as described in
the Exchange of Warrant for Common Stock section
above.Protective Provision:
    
    If the Company issues additional capital
stock (including preferred and common stock,
warrants, other securities convertible into such
stock or any combinations of the foregoing)
(Additional Stock) to holders of preferred
stock outstanding on the date the Warrant is
issued in an amount greater than 5% of the
existing outstanding preferred shares (on an as
if converted basis) and upon terms providing a
discount to fair market value of 30% or greater
(calculated on an as if converted to common
basis), then PfG would receive a Proportional
Increase in the Warrant Shares, up to an increase
of 100% of Warrant Shares. The following will be
excluded from this provision: (i) existing
preferred stock (but not cash) dividends, and
(ii) structural anti dilution events (for which
an adjustment is in fact made under the Warrant).
Proportional Increase means an amount equal to
the percentage increase of shares held by such
holders of preferred stock (calculated on an as
if converted to common basis) following the
issuance of Additional Stock. Fair market value
shall be the lesser of (i) the closing price of
the companys common stock on the Nasdaq stock
market (or such other exchange or listing service
on which the companys common stock is quoted),
and (ii) any trailing average of the closing
price of the companys common stock up to 20
trading days.Registration Rights:
    
    None.
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Warrant Purchase Agreement:
    
    The Company and each Holder shall execute, in PfGs
discretion, either a Warrant Purchase Agreement and Warrant, or an
all-inclusive Warrant. In either case, the Warrant documentation shall
contain, among other things, customary representations and warranties by the
Company, covenants of the Company (including without limitation, the giving of
notices and the duty to make fair adjustments) reflecting the provisions set
forth herein, securities compliance representations by PfG and appropriate
conditions to closing.Opinion of Counsel:
    
    If the Warrant/Warrant Purchase Agreement
are to be governed other than by the laws of the
State of California or Delaware, the Warrant
Purchase Agreement/Warrant shall provide for
delivery to PfG of a legal opinion of Company
counsel dated as of the date of the Closing, in a
form and substance acceptable to PfG, concerning
due authorization and execution of the Warrant
Purchase Agreement and the Warrant and valid
reservation of the shares of Common Stock
issuable upon exercise of the Warrant.Costs:
    
    The Company shall pay all costs and
expenses incurred in connection with the
exercise, exchange, transfer or replacement of
the Warrant, including, without limitation, the
costs of preparation, execution and delivery of a
new warrant and of stock certificates
representing all Warrant stock.Fees and Expenses:
    
    The Company will bear its own legal
expenses with respect to the issuance of the
warrants, and will reimburse PfG for its
expenses.ACKNOWLEDGED ANDAGREED TO:
 XATA CorporationBY:
    /s/ Mark E. TiesNAME:
    Mark E. TiesTITLE:
    Chief Financial OfficerDATE:
    December 19, 2007 Partners for Growth II, L.P.
 /s/ Andrew Kahn

Andrew Kahn
    
    /s/ Jason Georgatos

Jason GeorgatosManager
    
    Manager
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