SENIOR SUBORDINATED CONVERTIBLE PROMISSORY NOTE DUE 2009

Exhibit 4.1

$308,921.06		January 31, 2008

THIS SENIOR SUBORDINATED CONVERTIBLE PROMISSORY NOTE DUE 2009 (“NOTE”) AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR OTHER SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, OR ASSIGNED EXCEPT (i) PURSUANT TO REGISTRATIONS THEREOF UNDER SUCH LAWS, OR (ii) IF, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO XATA CORPORATION THE PROPOSED TRANSFER MAY BE EFFECTED IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS WITHOUT SUCH REGISTRATIONS.

THIS NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT IN FAVOR OF SILICON VALLEY BANK, DATED AS OF JANUARY 31, 2008 (THE “ SVB SUBORDINATION AGREEMENT ”).

THIS NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT IN FAVOR OF PARTNERS FOR GROWTH II, L.P., DATED AS OF JANUARY 31, 2008 (THE “ PFG SUBORDINATION AGREEMENT ,” AND, TOGETHER WITH THE SVB SUBORDINATION AGREEMENT, THE “ SUBORDINATION AGREEMENTS ”).

SENIOR SUBORDINATED CONVERTIBLE PROMISSORY NOTE DUE 2009

     XATA Corporation, a Minnesota corporation (the “ Maker ”), for value received, promises to pay to Platinum Equity Capital Partners, L.P. (the “ Holder ”) the principal sum of three hundred and eight thousand nine hundred twenty-one and 06/100 dollars ($308,921.06) on January 31, 2009 or, if earlier, upon the occurrence of a Change in Control (as defined in Exhibit A hereto) (the “ Maturity Date ”) as provided herein. The Maker also promises to pay interest from the date of this Note until payment in full on the unpaid principal balance as set forth in Section 1 below.

     1.  Payments .

          (a) The interest rate payable hereunder shall be 11% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. In addition, all accrued and unpaid interest on this Note will be due and payable on the day that all principal is due and payable, whether on the Maturity Date, by acceleration or otherwise. Upon the occurrence of an Event of Default, interest payable hereunder shall be 14.5% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days, compounded annually.

          (b) Payment shall be made in lawful tender of the United States in immediately available funds, and shall be credited first to accrued interest then due and payable with the remainder applied to principal. Prepayment of the principal, in whole or in part together with accrued interest, may be made at any time without penalty or premium.

     2.  Subordination; Ranking .

          (a) This Note and all principal, interest and other amounts, if any, payable hereunder shall be subject to the Subordination Agreements and is subordinated in right of payment to the extent and in the manner provided in the Subordination Agreements. No indebtedness which does not constitute Senior Debt shall be senior in any respect to this Note. For purposes of this Note, “ Senior Debt ” shall mean the “Senior Debt” as defined in the Subordination Agreements.

          (b) This Note and all principal, interest and other amounts, if any, payable hereunder shall in all respects rank pari passu in right of payment with any indebtedness of the Maker that is not Senior Debt.

     3.  Conversion .

          (a) At the option of the Holder, if this Note is not paid in full on the Maturity Date or upon acceleration, it shall be convertible at any time thereafter into a number of shares of common stock, $0.01 par value per share, of the Maker (“ Common Stock ”), calculated by dividing the principal amount of this Note by $3.3080 (the “ Conversion Price ”), as such Conversion Price is subject to adjustment as set forth in subsections (d) and (e) below.

          (b) In connection with any conversion of this Note, all interest accrued and compounded pursuant to Section 1(a) of this Note shall, at the option of the Holder, (1) be convertible into Common Stock based upon the terms of this Section 3 or (2) be paid in cash.

          (c) As soon as practicable after the conversion of this Note, the Maker at its expense will cause to be issued in the name of and delivered to the Holder, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled on such conversion. No fractional shares will be issued on conversion of the Note. If on conversion of the Note a fraction of a share results, the Company will pay the cash value of that fractional share based on the Conversion Price then in effect. Such conversion shall be deemed to have been made immediately prior to the close of business on the date notice of conversion is given in accordance with this Note, and the person or persons entitled to receive the shares of stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such shares of stock on such date.

          (d) In the event the outstanding shares of Common Stock shall, after date hereof, be further subdivided (split), or combined (reverse split), by reclassification or otherwise, or in the event of any dividend or other distribution payable on the Common Stock in shares of Common Stock, the Conversion Price in effect immediately prior to such subdivision, combination, dividend or other distribution shall, concurrently with the effectiveness of such subdivision, combination or dividend or other distribution, be proportionately adjusted.

          (e) In the event of any reclassification, reorganization or exchange of the Maker’s securities, or any consolidation or merger of the Maker, or in the event the Maker at any time or from time to time after the date of this Note makes or declares a dividend or other distribution payable in cash, securities or property (other than Common Stock), then and in each such event provision shall be made so that the Holder shall receive, upon conversion of this Note, in addition to the amount of securities receivable thereupon, the amount of cash, securities or other property which the Holder would have received had this Note been converted on the date of such event and had the

Holder thereafter, during the period from the date of such event to and including the conversion date, retained such cash, securities or other property receivable during such period.

          (f) Upon the occurrence of each adjustment or readjustment of a Conversion Price, the Maker at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.

          (g) The Maker shall reserve and keep available out of its authorized but unissued Common Stock such number of shares of Common Stock and other securities as shall from time to time be sufficient to effect conversion of this Note. The Maker will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, dividend or other distribution of cash or property, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Maker, but will at all times in good faith assist in the carrying out of all the provisions hereof, and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder as set forth herein against impairment.

     4.  Events of Default . If any of the following events (each, an “ Event of Default ”) shall occur:

          (a) the Maker shall fail to make any payment hereunder when due and payable, and such failure shall continue unremedied for a period of five (5) days after notice thereof from the Holder to the Maker; or

          (b) the Maker shall fail to make any payment under any indebtedness of the Maker that is outstanding in an aggregate principal amount of at least $2,000,000, including, without limitation, indebtedness of the Maker under the Credit Agreement, when the same becomes due and payable, and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing such indebtedness, either (i)