Exhibit 10.1

SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT

THIS SECOND AMENDMENT (the "Amendment"), is dated as of June 30, 2008, 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 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:

"Borrowing Base" means at any time the lesser of:

(a) The Maximum Line Amount; less The Daily Gross Wage Reserve; or

(b) Subject to change from time to time in the Lender's sole discretion, the sum
of:

(i) The product of the Accounts Advance Rate times Eligible Accounts, plus

(ii) During the Foreign Accounts Eligibility Period, the lesser of (A) the
product of the Accounts Advance Rate times Eligible Foreign Accounts or
(B) $500,000, plus

(iii) The lesser of:

(A) $1,700,000, or

(B) The sum of

(I) The lesser of (A) the product of the Inventory Advance Rate times the cost
of Eligible Inventory located at locations owned or leased by the Borrower, or
(B) or seventy-five percent (75%) of the Net Orderly Liquidation Value of such
Eligible Inventory, plus

(II) The lesser of (A) the lesser of (i) the product of the Inventory Advance
Rate times the cost of Eligible Inventory not located on a location owned and
leased by the Borrower or (ii) seventy-five percent (75%) of the Net Orderly
Liquidation Value of such Eligible Inventory or (B) $1,250,000,

In both Paragraph (I) and Paragraph (II) above, the 75% rate shall decrease by
2% per month on the last business day of the first week of each month, beginning
July 3, 2008.

less

(iv) The Borrowing Base Reserve, less

(v) The Daily Gross Wage Reserve, less

(vi) Indebtedness that the Borrower owes to the Lender that has not yet been
advanced on the Revolving Note, and an amount that the Lender in its reasonable
discretion finds on the date of determination to be equal to the Lender's net
credit exposure with respect to any swap, derivative, foreign exchange, hedge,
deposit, treasury management or other similar transaction or arrangement
extended to the Borrower by the Lender that is not described in Article II of
this Agreement.

"Daily Gross Wage Reserve" shall mean a reserve equal to the amount each day
sufficient to pay wages that day, both for the employees of Delphax
Technologies, Inc. and the employees of Delphax Technologies Canada, Ltd., which
amount shall accrue and be cumulative through each wage period. This reserve
shall be reduced by the amount of wages paid at the end of the pay period, and
after those wages are paid, shall begin to build up again for the following wage
period, on a daily basis.

"Floating Rate" means, effective as of May 1, 2008, an annual interest rate
equal to the sum of the Prime Rate plus two and one-half percent (2.50%), which
interest rate shall change when and as the Prime Rate changes.

"Inventory Days on Hand" means (a) (i) the Borrower's three-month rolling
average cost of Inventory, divided by (ii) the Borrower's three-month rolling
average cost of goods sold, multiplied by (b) 30.

     a. On or before September 1, 2008, the Borrower's projected balance sheets,
        income statements, statements of cash flow and projected Availability
        for each month of the succeeding fiscal year, each in reasonable detail
        prepared as a consolidated basis for the Borrower and the Subsidiaries.
        Such items will be certified by the Officer who is 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 and be delivered with a statement of underlying assumptions and
        such supporting schedules and information as the Lender may in its
        discretion require. Based upon the projections received, Lender shall
        reset the financial covenants contained in the Credit Agreement by
        September 15, 2008.
        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
    
    May 2008
    
    ($4,700,000)
    
    June, 2008
    
    ($7,200,000)
    
    July, 2008
    
    ($7,400,000)
    
    August, 2008
    
    ($7,350,000)
    
    September, 2008
    
    ($7,150,000)

     

    (b) Maximum Inventory Days on Hand. The Borrower will achieve, from the
    first day of each of the following fiscal quarters of the Borrower to the
    last day of such fiscal quarter, Inventory Days on Hand of not more than
    number of days set forth opposite such fiscal quarter:

    Fiscal Quarter Ending
    the Last Day of
    
    Inventory Days on Hand
    
    June 2008
    
    130
    
    September 2008
    
    130

 d. The Lender may, no more than once every six months, obtain at the Borrower's
    expense, whether there is an existing default or not, an appraisal of the
    Inventory by an appraiser acceptable to the Lender in its sole discretion.
 e. Payment of the fee described in Paragraph 8 of this Amendment.
 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 thereunder, and this Amendment and all
    such other agreements and instruments have 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.

[The remainder of this page intentionally left blank.]

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/ Tom Hedberg

By /s/ Gregory S. Furness

Tom Hedberg

Gregory S. Furness

Its Vice President

Its Chief Financial Officer

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: was consented to in
advance by Lender in writing, and/or 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

May 2008

($4,700,000)

June, 2008

($7,200,000)

July, 2008

($7,400,000)

August, 2008

($7,350,000)

September, 2008

($7,150,000)

2. Maximum Inventory Days on Hand. Pursuant to Section 6.2(b) of the Credit
Agreement, as of the Reporting Date, the Borrower's Inventory Days on Hand was
[__________],which satisfies does not satisfy the requirement that Borrower will
achieve, from the first day of the following fiscal quarter of the Borrower to
the last day of such fiscal quarter, Inventory Days on Hand of not more than
number of days set forth opposite such fiscal quarter:

Fiscal Quarter Ending
the Last Day of

Inventory Days on Hand

June 2008

130

September 2008

130

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 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 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