**Exhibit 10.16****THIRD AMENDMENT TO LEASE**     THIS THIRD AMENDMENT is made as of this 6 day of August, 2005,by and between Whitewater Properties I, LLC, a Minnesotalimited liability company (“Lessor”) and DelphaxTechnologies Inc., formerly known as Check TechnologyCorporation, a Minnesota corporation (“Lessee”).Preliminary Statement of Facts     On October 14, 1994, Lessor and Lessee executed a LeaseAgreement, which Lease Agreement was amended by the FirstAmendment thereto dated April 17, 1995, and the SecondAmendment thereto dated April 1, 1996 (collectively, the“Lease”).     The parties desire to amend the Lease to confirm theCommencement Date of the Lease and to provide for Lessee’searly termination of the Lease.     NOW, THEREFORE, in consideration of One Dollar ($1.00)and other good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged by Lessor and infurther consideration of the terms and conditions of this ThirdAmendment, the parties hereto hereby agree as follows:     1. *Defined Terms and Ratification.* All of thedefined terms used herein shall have the meanings assigned tosuch defined terms in the Lease, unless specifically providedfor to the contrary herein. Except as modified herein, all ofthe terms and conditions of the Lease remain unchanged and infull force and effect are hereby ratified by the parties heretoas of the date hereof.     2. *Commencement Date.* Article V of the Lease isamended to confirm that the Commencement Date of the Lease wasSeptember 30, 1995.     3. *Notice of Termination.* Lessor acknowledges thatLessee timely delivered its notice of election to terminate theLease (the “Termination Notice”) in the mannerrequired by Article VII(A) of the Lease.     4. *Extension of Lease Term.* Notwithstanding thedelivery of the Termination Notice, Lessor and Lessee agree toextend the Term of the Lease from October 1, 2005, throughand including February 28, 2006 (the “ExtensionTerm”). In addition to the foregoing, (i) Lessee may,by written notice delivered to Lessor on or beforeDecember 1, 2005, elect to extend the Extension Termthrough and including March 31, 2006 (the “FirstAdditional Period”) and (ii) if Lessee has timelyelected the First Additional Period and is not as of the date ofits written notice in default beyond any applicable cure period,Lessee may, by written notice delivered to Lessor on or beforeJanuary 1, 2006, elect to extend the Extension Term throughand including April 30, 2006 (the “Second AdditionalPeriod”). All of the terms and conditions of this Lease(including provisions regarding Additional Rent) shall governthe Extension Term and the Additional Periods (if elected byLessee) except that Base Rent for each month of the ExtensionTerm and the First Additional Period (if elected by Lessee)shall be $27,887.50, and Base Rent for the Second AdditionalPeriod (if elected by Lessee) shall be $27,187.50.

 
     5. *Lease Termination Payment Deleted.*Article VII(B) is deleted in its entirety.     6. *Lease Extension Fee.* In consideration of theExtension Term and Lessee’s right to elect the AdditionalPeriod, Lessee shall pay to Lessor a lease extension fee (the“Lease Extension Fee”) in the amount of $100,000.00payable in four equal installments of $25,000.00 each, payableon the first day of October, November, and December, 2005 andJanuary, 2006. Failure to make payment of any installment whendue shall constitute a default under this Lease, entitlingLessor to exercise any and all rights and remedies available toit thereunder or under applicable law.     7. *Counterparts.* This instrument may be executed inmultiple counterparts which, when taken together, shallconstitute a single instrument.     IN WITNESS WHEREOF, the parties hereto have executed this ThirdAmendment as of the date first shown above.[THE REMAINDER OF THIS PAGE IS BLANK, SIGNATURE PAGES TO FOLLOW]

 
[Signature Page of Lessor]     WHITEWATER PROPERTIES I, LLC By:     /s/ Jerome A. Miller   Its:     Chief Manager  

 
[Signature Page of Lessee]     DELPHAX TECHNOLOGIES INC. By:     /s/ Jeffrey S. Mathiesen   Its:     Vice President and CFO