FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT

THIS FIRST AMENDMENT (the "Amendment"), is dated as of February 28, 2008 (but is
effective retroactively to December 31, 2007), and is entered into by and
between DELPHAX TECHNOLOGIES INC., a Minnesota corporation (the "Borrower"), and
WELLS FARGO BANK, NATIONAL ASSOCIATION (the "Lender"), acting through its Wells
Fargo Business Credit operating division.

RECITALS

The Borrower and the Lender are parties to a Credit and Security Agreement dated
September 10, 2007 (as amended from time to time, the "Credit Agreement").
Capitalized terms used in these recitals have the meanings given to them in the
Credit Agreement unless otherwise specified.

The Borrower and the Lender wish to amend the Agreement to accommodate certain
treasury management products being offered by the Lender to the Borrower,
including the Lender's Loan Manager service and Ready Remit SM service.

The Borrower has requested that certain other 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:

"Floating Rate" means an annual interest rate equal to the sum of the Prime Rate
plus one percent (1.00%), which interest rate shall change when and as the Prime
Rate changes.

"Security Documents" means this Agreement, the Wholesale Lockbox and Collection
Account Agreement, the Guaranty and the Guarantor Security Agreement and any
other document delivered to the Lender from time to time to secure the
Indebtedness.

"CR Unit Sale" means a sale by the Borrower of a unit of its CR model printer,
so long as such sale is a bona fide sale to a third party purchaser made
pursuant to the Borrower's normal trade terms and constitutes a sale in
accordance with GAAP.

"Guaranty" means the Guaranty dated as of the date of the First Amendment hereto
given by Delphax Canada in favor of the Lender.

"Guarantor Security Agreement" means the Security Agreement dated as of the date
of the First Amendment hereto given by Delphax Canada in favor of the Lender.

"Ledger Balance" means the balance in the Borrower's Operating Account at the
end of each Business Day after all debits and credits for that Business Day have
been posted.

"Operating Account" means deposit account number 412569214 maintained by the
Borrower with the Lender, or any other deposit account which the parties agree
shall be the Operating Account.

"Target Ledger Balance" means $100,000, or such other dollar amount which the
parties agree shall be the Target Ledger Balance that is to remain in the
Operating Account as of the end of each Business Day.

The Lender may (but will not be required to) reject an incoming wire transfer:
(i) that does not contain the Wells Fargo Payment Identification Code; (ii) if
the Lender believes that the Borrower is not entitled to the wire transfer;
(iii) if at the time the Lender received the wire transfer, the Revolving
Advance facility has been terminated for any reason by the Lender of by the
Borrower, or the Borrower has terminated its use of Ready Remit; or (iv) if at
the time the Lender receives the wire transfer, the Lender is not permitted by
law to accept wire transfers or other credits sent to the Borrower. The Lender
shall undertake reasonable efforts to promptly notify the Borrower of any
rejected incoming wire transfer.

If the Lender uses Ready Remit, then payments received by wire transfer directly
into the lender's general account shall be applied to Indebtedness advanced on
the Revolving Note as provided herein, but the amount of principal paid shall
continue to accrue interest through the end of the first Business Day following
the Business Day that the payment was applied to the Revolving Note.

    Minimum Net Income
    . The Borrower will achieve, for each period from the first day of the
    Borrower's fiscal year containing the following indicated months to the last
    day of such month, Net Income of not less than the amount set forth opposite
    such month set forth in the table below (numbers appearing between "(   )"
    are negative):

    Fiscal Year-to-Date Period Ending the Last Day of
    
    Minimum Net Income
    
    October 2007
    
    ($1,260,000)
    
    November 2007
    
    ($1,860,000)
    
    December 2007
    
    ($2,200,000)
    
    January 2008
    
    ($2,515,000)
    
    February 2008
    
    ($2,890,000)
    
    March 2008
    
    ($3,400,000)
    
    April 2008
    
    ($3,755,000)
    
    May 2008
    
    ($4,075,000)
    
    June, 2008
    
    ($4,250,000)
    
    July, 2008
    
    ($4,560,000)
    
    August, 2008
    
    ($4,910,000)
    
    September, 2008
    
    ($5,100,000)

    Minimum CR Unit Sales
    . The Borrower will achieve, for each period from the first day of the
    fiscal year containing the following indicated fiscal quarters to the last
    day of such fiscal quarter, CR Unit Sales of not less than amount set forth
    opposite such fiscal quarter:

    Fiscal Year-to-Date Period Ending
    the Last Day of
    
    Minimum CR Unit Sales
    
    December 2007
    
    0
    
    March 2008
    
    0
    
    June 2008
    
    3
    
    September 2008
    
    5

    Capital Expenditures
    . The Borrower will not incur or contract to incur Capital Expenditures of
    more than $1,250,000 in the aggregate (of which amount not more than
    $350,000 shall be unfinanced Capital Expenditures) during its fiscal year
    ending September 30, 2008.
    Availability
    . The Borrower will not permit the sum of Availability, plus the Canadian
    Availability and the European Availability (as those terms are defined in
    the Canadian Credit Agreement), to be less than $2,000,000 at any time.

    (d) the Guaranty.

 a. The Guarantor Security Agreement and the Guaranty, duly executed by Delphax
    Canada, together with (a) such lien searches and Canadian personal property
    security interests registrations sufficient to perfect the security
    interests granted by the Guarantor Security Agreement and (b) such
    certificates and other evidence deemed appropriate by Lender to evidence the
    authorization by Delphax Canada of the execution, delivery and performance
    of the Guarantor Security Agreement and the Guaranty and (c) such opinions
    of counsel as may be deemed necessary by the Lender.
 b. One or more amendments to the Canadian Credit Agreement and other documents
    related thereto to conform such documents to the amendments set forth in
    this Agreement.
 c. If necessary, one or more amendments to the loan documents evidencing the
    Borrowers and the Canadian Borrower's obligations to Whitebox to conform
    such documents to the amendments set forth in this Agreement.
 d. The Acknowledgement and Agreement of Subordinated Creditor, in the form
    attached hereto, duly executed by Whitebox.
 e. Payment of the fee described in Paragraph 13.
 f. Such other matters as the Lender may require.
 g. The Borrower has all requisite power and authority to execute this Amendment
    and any other agreements or instruments required hereunder and to perform
    all of its obligations hereunder, and this Amendment and all such other
    agreements and instruments has been duly executed and delivered by the
    Borrower and constitute the legal, valid and binding obligation of the
    Borrower, enforceable in accordance with its terms.
 h. The execution, delivery and performance by the Borrower of this Amendment
    and any other agreements or instruments required hereunder 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.
 i. 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.

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

WELLS FARGO BANK, NATIONAL ASSOCIATION

DELPHAX TECHNOLOGIES INC.

   

By /s/ Warren Lindman

By /s/ Gregory S. Furness

Warren Lindman

Gregory S. Furness

Its Vice President

Its CFO

ACKNOWLEDGMENT AND AGREEMENT OF SUBORDINATED CREDITOR

The undersigned, a subordinated creditor of Delphax Technologies Inc. (the
"Borrower") to Wells Fargo Bank, National Association (the "Lender"), acting
through its Wells Fargo Business Credit operating division, pursuant to a
Subordination Agreement dated as of September 10, 2007 (the "Subordination
Agreement"), hereby (i) acknowledges receipt of the foregoing Amendment;
(ii) consents to the terms and execution thereof; (iii) reaffirms all
obligations to the Lender pursuant to the terms of the Subordination Agreement;
and (iv) acknowledges that the Lender may amend, restate, extend, renew or
otherwise modify the Loan Documents and any indebtedness or agreement of the
Borrower, or enter into any agreement or extend additional or other credit
accommodations, without notifying or obtaining the consent of the undersigned
and without impairing the obligations of the undersigned under the Subordination
Agreement.

 

WHITEBOX DELPHAX LTD.

     

By:

 

Its

EXHIBIT A TO FIRST AMENDMENT
TO CREDIT AND SECURITY AGREEMENT

Exhibit B to Credit and Security Agreement

COMPLIANCE CERTIFICATE

To: Wells Fargo Bank, National Association

Date: [___________________, 200____]

Subject: Financial Statements

In accordance with our Credit and Security Agreement dated September 10, 2007
(as amended from time to time, the "Credit Agreement"), attached are the
financial statements of Delphax Technologies Inc. (the "Borrower") dated
[_________________, 200__ _](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.

A. Preparation and Accuracy of Financial Statements

. 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 Reporting Date.

B. Name of Borrower; Merger and Consolidation Related Issues

. I certify that:

(Check one)

The Borrower has not, since the date of the Credit Agreement, changed its name
or jurisdiction of organization, nor has it consolidated or merged with another
Person.

The Borrower has, since the date of the Credit Agreement, either changed its
name or jurisdiction of organization, or both, or has consolidated or merged
with another Person, which change, consolidation or merger: 0 was consented to
in advance by Lender in writing, and/or 0 is more fully described in the
statement of facts attached to this Certificate.

C. Events of Default

. I certify that:

(Check one)

I have no knowledge of the occurrence of a Default or an Event of Default under
the Credit Agreement, except as previously reported to the Lender in writing.

I have knowledge of a Default or an Event of Default under the Credit Agreement
not previously reported to the Lender in writing, as more fully described in the
statement of facts attached to this Certificate, and further, I acknowledge that
the Lender may under the terms of the Credit Agreement impose the Default Rate
at any time during the resulting Default Period.

D. Litigation Matters

. I certify that:

(Check one)

I have no knowledge of any material adverse change to the litigation exposure of
the Borrower or any of its Affiliates or of any Guarantor.

I have knowledge of material adverse changes to the litigation exposure of the
Borrower or any of its Affiliates or of any Guarantor not previously disclosed
in Schedule 5.7, as more fully described in the statement of facts attached to
this Certificate.

E. Financial Covenants

. I further certify that:

(Check and complete each of the following)

1. Minimum Net Income. Pursuant to Section 6.2(a) of the Credit Agreement, as of
the Reporting Date, the Borrower's Net Income was [$______ _], which satisfies
does not satisfy the requirement that Net Income, for the period from the first
day of the fiscal year containing the following indicated months to the last day
of such month, be not less than the amount set forth opposite such month set
forth in the table below (numbers appearing between "< >" are negative):

Fiscal Year-to-Date Period
Ending the Last Day of

Minimum Net Income

October 2007

($1,260,000)

November 2007

($1,860,000)

December 2007

($2,200,000)

January 2008

($2,515,000)

February 2008

($2,890,000)

March 2008

($3,400,000)

April 2008

($3,755,000)

May 2008

($4,075,000)

June, 2008

($4,250,000)

July, 2008

($4,560,000)

August, 2008

($4,910,000)

September, 2008

($5,100,000)

2. Minimum CR Unit Sales. Pursuant to Section 6.2(b) of the Credit Agreement, as
of the Reporting Date, the Borrower's CR Unit Sales was [______ _], which
satisfies does not satisfy the requirement that Borrower will achieve, achieve,
for each period from the first day of the fiscal year containing the following
indicated fiscal quarters to the last day of such fiscal quarter, CR Unit Sales
of not less than amount set forth opposite such fiscal quarter:

Fiscal Year-to-Date Period Ending

the Last Day of

Minimum CR Unit Sales

December 2007

0

March 2008

0

June 2008

3

September 2008

5

3. Capital Expenditures. Pursuant to Section 6.2(g) 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 [_fiscal_] year ended [_______________,
200___,_] for Capital Expenditures, [_$___________________] in the aggregate (of
which amount ___________ was unfinanced Capital Expenditures), which satisfies
does not satisfy the requirement that such expenditures not exceed $1,250,000
(of which amount not more than $350,000 shall be unfinanced Capital
Expenditures) during its fiscal year ending September 30, 2008.

4. Salaries. The Borrower has not paid excessive or unreasonable salaries,
bonuses, commissions, consultant fees or other compensation, or increased the
salary, bonus, commissions, consultant fees or other compensation of any
Director, Officer or consultant, or any member of their families, by more than
ten percent (10%) as of the Reporting Date over the amount paid in the
Borrower's previous fiscal year, either individually or for all such persons in
the aggregate, other than in accordance with and subject to the conditions and
limitations of the written Management Incentive Plan in effect on the date of
the Credit Agreement, that has been delivered to Lender and which has not been
revised or altered without Lender's prior written consent. As a consequence
Borrower is is not in compliance with Section 6.8 of the Credit Agreement.

Attached are statements of all relevant facts and computations in reasonable
detail sufficient to evidence Borrower's compliance with the financial covenants
referred to above, which computations were made in accordance with GAAP.

 

DELPHAX TECHNOLOGIES INC.

     

By:

 

Name:

 

Its Chief Financial Officer