Document:

Credit and Security Agreement between Delphax and Wells Fargo Bank

 EXHIBIT 4.1 
  

 CREDIT AND SECURITY AGREEMENT

 BY AND BETWEEN 
 DELPHAX TECHNOLOGIES INC. 
 AND 
 WELLS FARGO BANK, NATIONAL ASSOCIATION 
 Acting through its Wells Fargo Business Credit operating
division 
 September 10, 2007 
  

 TABLE OF CONTENTS 
  

					
	ARTICLE I DEFINITIONS	  	1
			
	 Section 1.1
	  	Definitions	  	1
	 Section 1.2
	  	Other Definitional Terms; Rules of Interpretation	  	15
		
	ARTICLE II AMOUNT AND TERMS OF THE CREDIT FACILITY	  	16
			
	 Section 2.1
	  	Revolving Advances	  	16
	 Section 2.2
	  	Procedures for Requesting Advances	  	16
	 Section 2.3
	  	[Reserved]	  	17
	 Section 2.4
	  	Letters of Credit	  	17
	 Section 2.5
	  	Special Account	  	17
	 Section 2.6
	  	Interest; Margins; Minimum Interest Charge; Default Interest Rate; Application of Payments; Participations; Usury	  	18
	 Section 2.7
	  	Fees	  	19
	 Section 2.8
	  	Time for Interest Payments; Payment on Non-Business Days; Computation of Interest and Fees	  	20
	 Section 2.9
	  	Lockbox and Collateral Account; Sweep of Funds	  	21
	 Section 2.10
	  	Voluntary Prepayment; Reduction of the Maximum Line Amount; Termination of the Credit Facility by the Borrower	  	21
	 Section 2.11
	  	Mandatory Prepayment	  	22
	 Section 2.12
	  	Revolving Advances to Pay Indebtedness	  	22
	 Section 2.13
	  	Use of Proceeds	  	22
	 Section 2.14
	  	Liability Records	  	22
	 Section 2.15
	  	Taxes	  	22
		
	ARTICLE III SECURITY INTEREST; OCCUPANCY; SETOFF	  	23
			
	 Section 3.1
	  	Grant of Security Interest	  	23
	 Section 3.2
	  	Notification of Account Debtors and Other Obligors	  	23
	 Section 3.3
	  	Assignment of Insurance	  	24
	 Section 3.4
	  	Occupancy	  	24
	 Section 3.5
	  	License	  	24
	 Section 3.6
	  	Financing Statement	  	25
	 Section 3.7
	  	Setoff	  	25
	 Section 3.8
	  	Collateral	  	25
	 Section 3.9
	  	Voting Rights; Dividends; Etc	  	26
		
	ARTICLE IV CONDITIONS OF LENDING	  	26
			
	 Section 4.1
	  	Conditions Precedent to the Initial Advances and Letter of Credit	  	26
	 Section 4.2
	  	Conditions Precedent to All Advances and Letters of Credit	  	28
		
	ARTICLE V REPRESENTATIONS AND WARRANTIES	  	29

  

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	 Section 5.1
	  	Existence and Power; Name; Chief Executive Office; Inventory and Equipment Locations; Federal Employer Identification Number and Organizational Identification Number	  	29
	 Section 5.2
	  	Capitalization	  	29
	 Section 5.3
	  	Authorization of Borrowing; No Conflict as to Law or Agreements	  	29
	 Section 5.4
	  	Legal Agreements	  	30
	 Section 5.5
	  	Subsidiaries	  	30
	 Section 5.6
	  	Financial Condition; No Adverse Change	  	30
	 Section 5.7
	  	Litigation	  	30
	 Section 5.8
	  	Regulation U	  	30
	 Section 5.9
	  	Taxes	  	30
	 Section 5.10
	  	Titles and Liens	  	31
	 Section 5.11
	  	Intellectual Property Rights	  	31
	 Section 5.12
	  	Plans	  	32
	 Section 5.13
	  	Default	  	32
	 Section 5.14
	  	Environmental Matters	  	32
	 Section 5.15
	  	Submissions to Lender	  	33
	 Section 5.16
	  	Financing Statements	  	33
	 Section 5.17
	  	Rights to Payment	  	33
	 Section 5.18
	  	Financial Solvency	  	34
		
	ARTICLE VI COVENANTS	  	34
			
	 Section 6.1
	  	Reporting Requirements	  	34
	 Section 6.2
	  	Financial Covenants	  	37
	 Section 6.3
	  	Permitted Liens; Financing Statements	  	38
	 Section 6.4
	  	Indebtedness	  	38
	 Section 6.5
	  	Guaranties	  	39
	 Section 6.6
	  	Investments and Subsidiaries	  	39
	 Section 6.7
	  	Dividends and Distributions	  	39
	 Section 6.8
	  	Salaries	  	40
	 Section 6.9
	  	[Reserved]	  	40
	 Section 6.10
	  	Books and Records; Collateral Examination, Inspection and Appraisals	  	40
	 Section 6.11
	  	Account Verification	  	40
	 Section 6.12
	  	Compliance with Laws	  	41
	 Section 6.13
	  	Payment of Taxes and Other Claims	  	41
	 Section 6.14
	  	Maintenance of Properties	  	42
	 Section 6.15
	  	Insurance	  	42
	 Section 6.16
	  	Preservation of Existence	  	42
	 Section 6.17
	  	Delivery of Instruments, etc	  	42
	 Section 6.18
	  	Sale or Transfer of Assets; Suspension of Business Operations	  	42
	 Section 6.19
	  	Consolidation and Merger; Asset Acquisitions	  	43
	 Section 6.20
	  	Sale and Leaseback	  	43
	 Section 6.21
	  	Restrictions on Nature of Business	  	43
	 Section 6.22
	  	Accounting	  	43
	 Section 6.23
	  	Discounts, etc	  	43

  

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	 Section 6.24
	  	Plans	  	43
	 Section 6.25
	  	Place of Business; Name	  	44
	 Section 6.26
	  	Constituent Documents; S Corporation Status	  	44
	 Section 6.27
	  	Performance by the Lender	  	44
		
	ARTICLE VII EVENTS OF DEFAULT, RIGHTS AND REMEDIES	  	44
			
	 Section 7.1
	  	Events of Default	  	44
	 Section 7.2
	  	Rights and Remedies	  	47
	 Section 7.3
	  	Certain Notices	  	48
		
	ARTICLE VIII MISCELLANEOUS	  	48
			
	 Section 8.1
	  	No Waiver; Cumulative Remedies; Compliance with Laws	  	48
	 Section 8.2
	  	Amendments, Etc	  	48
	 Section 8.3
	  	Notices; Communication of Confidential Information; Requests for Accounting	  	48
	 Section 8.4
	  	Further Documents	  	49
	 Section 8.5
	  	Costs and Expenses	  	49
	 Section 8.6
	  	Indemnity	  	49
	 Section 8.7
	  	Participants	  	50
	 Section 8.8
	  	Execution in Counterparts; Telefacsimile Execution	  	50
	 Section 8.9
	  	Retention of Borrower’s Records	  	50
	 Section 8.10
	  	Binding Effect; Assignment; Complete Agreement; Sharing Information	  	51
	 Section 8.11
	  	Severability of Provisions	  	51
	 Section 8.12
	  	Headings	  	51
	 Section 8.13
	  	Governing Law; Jurisdiction, Venue; Waiver of Jury Trial	  	51
	 Section 8.14
	  	Judgment Currency	  	51

  

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 CREDIT AND SECURITY AGREEMENT 
 Dated September 10, 2007 
 DELPHAX TECHNOLOGIES INC., a Minnesota corporation (the
“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (as more fully defined in Article I herein, the “Lender”) acting through its Wells Fargo Business Credit operating division, hereby agree as follows: 
 ARTICLE I 
 DEFINITIONS 

 Section 1.1 Definitions. Except as otherwise expressly provided in this Agreement, the following terms shall have the meanings
given them in this Section: 
 “Accounts” shall have the meaning given it under the UCC. 
 “Accounts Advance Rate” means up to eighty-five percent (85%), or such lesser rate as the Lender in its sole discretion may deem appropriate
from time to time; provided that, as of any date of determination, the Accounts Advance Rate shall be reduced by one (1) percentage point for each percentage by which Dilution is in excess of four percent (4.0%). 
 “Advance” means a Revolving Advance. 
 “Affiliate” or “Affiliates” means any Person controlled by, controlling or under common control with the Borrower, including any Subsidiary of the Borrower. For purposes of this definition, “control,” when used
with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. 
 “Aggregate Face Amount” means the aggregate amount that may then be drawn under each outstanding Letter of Credit, assuming compliance with all
conditions for drawing. 
 “Aggregate Borrowings” means, as of any date of determination, the sum of (a) the aggregate
outstanding principal balance of the Advances and the “Advances” under and or defined in the Canadian Credit Agreement plus (b) the LC Amount. 
 “Aggregate Borrowing Limit” means $13,000,000. 
 “Aggregate Borrowing Excess” means the
amount, if any, by the Aggregate Borrowings exceeds the Aggregate Borrowing Limit. 
 “Agreement” means this Credit and Security
Agreement. 
 “Approved Buyer” means an account debtor domiciled in a country not listed as ineligible in any policy or policies of
trade credit insurance acceptable to the Lender and of which the Lender is the beneficiary or loss payee, as said policy or policies may be amended by the Lender from time to time. 

 “Availability” means the amount, if any, by which the Borrowing Base exceeds the sum of
(i) the outstanding principal balance of the Revolving Note and (ii) the L/C Amount. 
 “Borrowing Base” means at any
time the lesser of: 
  

	 	(a)	The Maximum Line Amount; 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)	$3,500,000, 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 eighty-five percent (85%) 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) eighty-five percent (85%) of the Net Orderly Liquidation Value of such Eligible Inventory or (B) $1,250,000, 
  

	 	less	     

 (iv) The
Borrowing Base Reserve, less 
 (v) 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. 
 “Borrowing Base Reserve” means, as of any date of determination, such amounts (expressed as either a specified amount or as a percentage of a specified category or item) as the Lender may from time to time
establish and adjust in reducing Availability (a) to reflect events, 

  

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conditions, contingencies or risks which, as determined by the Lender, do or may affect (i) the Collateral or its value, (ii) the assets, business
or prospects of the Borrower, or (iii) the security interests and other rights of the Lender in the Collateral (including the enforceability, perfection and priority thereof), or (b) to reflect the Lender’s judgment that any
collateral report or financial information furnished by or on behalf of the Borrower to the Lender is or may have been incomplete, inaccurate or misleading in any material respect, or (c) in respect of a Default or an Event of Default.

 “Business Day” means a day on which the Federal Reserve Bank of New York is open for business. 
 “Canadian Credit Agreement” means that certain Credit and Security Agreement dated concurrently herewith between Delphax Canada and the
Canadian Lender, as the same may be amended, restated or otherwise modified from time to time. 
 “Canadian Lender” means Wells
Fargo Financial Corporation Canada, in its capacity as the lender under the Canadian Credit Agreement. 
 “Canadian Loan Documents”
means the “Loan Documents” as defined in the Canadian Credit Agreement. 
 “Capital Expenditures” means, for any period,
the sum of all amounts that would, in accordance with GAAP, be included as additions to property, plant and equipment on the consolidated statement of cash flows of the Borrower during such period, in respect of (a) the acquisition,
construction, improvement, replacement or betterment of land, buildings, machinery, equipment or of any other fixed assets or leaseholds, (b) to the extent related to and not included in (a) above, materials, contract labor (excluding
expenditures properly chargeable to repairs or maintenance in accordance with GAAP), and (c) other capital expenditures and other uses recorded as capital expenditures or similar terms having substantially the same effect (including
expenditures for nonrecurrent tangible assets such as software). 
 “Change of Control” means the occurrence of any of the
following events: 
 (a) Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934) (other than Annette J. Brenner or Fred H. Brenner or their respective heirs, beneficiaries, or legatees) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that
a Person will be deemed to have “beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than
twenty-five percent (25%) of the voting power of all classes of voting stock of the Borrower; 
 (b) Whitebox, individually or
collectively, are or become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a Person will be deemed to have “beneficial ownership” of all securities that such
Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 25 percent of the voting power of all classes of voting stock of Borrower; or 
  

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 (c) During any consecutive two-year period, individuals who at the beginning of such period constituted
the board of Directors of the Borrower (together with any new Directors whose election to such board of Directors, or whose nomination for election by the Owners of the Borrower, was approved by a vote of a majority of the Directors then still in
office who were either Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of Directors of Borrower then in office. 

“Collateral” means all of the Borrower’s Accounts, chattel paper and electronic chattel paper, deposit accounts, documents, Equipment,
General Intangibles, goods, instruments, Inventory, Investment Property, letter-of-credit rights, letters of credit, all sums on deposit in any Collateral Account, any items in any Lockbox and all Pledged Stock Collateral; together with (i) all
substitutions and replacements for and products of any of the foregoing; (ii) in the case of all goods, all accessions; (iii) all accessories, attachments, parts, equipment and repairs now or hereafter attached or affixed to or used in
connection with any goods; (iv) all warehouse receipts, bills of lading and other documents of title now or hereafter covering such goods; (v) all collateral subject to the Lien of any Security Document; (vi) any money, or other
assets of the Borrower that now or hereafter come into the possession, custody, or control of the Lender; (vii) all sums on deposit in the Special Account; (viii) proceeds of any and all of the foregoing; (ix) books and records of the
Borrower, including all mail or electronic mail addressed to the Borrower; and (x) all of the foregoing, whether now owned or existing or hereafter acquired or arising or in which the Borrower now has or hereafter acquires any rights.

 “Collateral Account” means the “Lender Account” as defined in the Wholesale Lockbox and Collection Account Agreement.

 “Collection Account Agreement” means the Collection Account Agreement by and between the Borrower and the Lender. 
 “Commercial Letter of Credit Agreement” means an agreement governing the issuance of documentary letters of credit by the Lender, entered into
between the Borrower as applicant and the Lender as issuer. 
 “Commitment” means the Lender’s commitment to make Advances
to, and to issue Letters of Credit for the account of, the Borrower. 
 “Constituent Documents” means with respect to any
Person, as applicable, such Person’s certificate of incorporation, articles of incorporation, by-laws, certificate of formation, articles of organization, limited liability company agreement, management agreement, operating agreement,
shareholder agreement, partnership agreement or similar document or agreement governing such Person’s existence, organization or management or concerning disposition of ownership interests of such Person or voting rights among such
Person’s owners. 
 “Credit Facility” means the credit facility under which Revolving Advances and Letters of Credit may be
made available to the Borrower by the Lender under Article II. 
  

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 “Current Maturities of Long Term Debt” means during a period beginning and ending on designated
dates, the amount of the Borrower’s and its Subsidiaries’ consolidated long-term debt and capitalized leases that become or became due during that period. 
 “Cut-off Time” means 11:59 a.m. Central Time (or, on the last Business Day of each month, 11:00 a.m. Central Time). 
 “Debt” means of a Person as of a given date, all items of indebtedness or liability which in accordance with GAAP would be included in determining total liabilities as shown on the liabilities side of a
balance sheet for such Person and shall also include the aggregate payments required to be made by such Person at any time under any lease that is a capitalized lease under GAAP. 
 “Debt Service Coverage Ratio” means (i) the sum of (A) Funds from Operations, (B) Interest Expense and (C) the net cash
proceeds of additional subordinated indebtedness received by the Borrower that is acceptable to Lender in its sole discretion (and specifically excluding any subordinated indebtedness that refinances or repays any existing subordinated indebtedness
of the Borrower) and cash equity investments in the Borrower received by the Borrower during the relevant period of determination minus (D) cash dividends, distributions and purchase price paid on any class of the Borrower’s stock
during the relevant period of determination minus (E) unfinanced Capital Expenditures divided by (ii) the sum of (A) Current Maturities of Long Term Debt and (B) cash Interest Expense. 
 “Default” means an event that, with giving of notice or passage of time or both, would constitute an Event of Default. 
 “Default Period” means any period of time beginning on the day a Default or Event of Default occurs and ending on the date identified by the
Lender in writing as the date that such Default or Event of Default has been cured or waived. 
 “Default Rate” means an annual
interest rate in effect during a Default Period or following the Termination Date, which interest rate shall be equal to three percent (3%) over the applicable Floating Rate, as such rate may change from time to time. 
 “Delphax Canada” means Delphax Technologies Canada Limited, an Ontario corporation. 
 “Delphax France” means Delphax Technologies S.A.S., a French company. 
 “Delphax UK” means Delphax Technologies Limited, an English company. 
 “Dilution” means, as of any date of determination, a percentage, based upon the experience of the trailing six (6) month period ending on
the date of determination, which is the result of dividing (a) actual bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to the Accounts as determined by Lender in its sole discretion during
such period, by (b) the Borrower’s gross sales during such period (excluding extraordinary items) plus the amount of clause (a). 
  

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 “Director” means a member of the Borrower’s board of directors. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. 
 “ERISA Affiliate” means any trade or business (whether or not incorporated) that is a member of a group which includes the Borrower and which
is treated as a single employer under Section 414 of the IRC. 
 “Eligible Accounts” means all unpaid Accounts of the Borrower
arising from the sale or lease of goods or the performance of services, net of any credits, but excluding any such Accounts having any of the following characteristics: 
 (i) That portion of Accounts unpaid 90 days or more after the invoice date; 
 (ii) That portion of Accounts related to goods or services with respect to which the Borrower has received notice of a claim or dispute,
which are subject to a claim of offset or a contra account, or which reflect a reasonable reserve for warranty claims or returns; 
 (iii) That portion of Accounts not yet earned by the final delivery of goods or that portion of Accounts not yet earned by the final rendition of services by the Borrower to the account debtor, including with respect to both goods and
services, progress billings, and that portion of Accounts for which an invoice has not been sent to the applicable account debtor; 
 (iv) Accounts constituting (i) royalties or license fees of copyrightable material unless such copyrightable material shall have been registered with the United States Copyright Office, or (ii) royalties or license fees of
patentable inventions unless such patentable inventions have been registered with the United States Patent and Trademark Office; 
 (v) Accounts owed by any unit of government, whether foreign or domestic (except that there shall be included in Eligible Accounts that portion of Accounts owed by such units of government for which the Borrower has provided evidence
satisfactory to the Lender that (A) the Lender has a first priority perfected security interest and (B) such Accounts may be enforced by the Lender directly against such unit of government under all applicable laws); 
 (vi) Accounts denominated in any currency other than United States dollars; 
 (vii) Accounts owed by an account debtor located outside the United States or Canada which are not (A) backed by a bank letter of
credit naming the Lender as beneficiary or assigned to the Lender, in the Lender’s possession or control, and with respect to which a control agreement concerning the letter-of-credit rights is in effect, and acceptable to the Lender in all
respects, in its sole discretion, or (B) covered by a foreign receivables insurance policy acceptable to the Lender in its sole discretion; 
  

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 (viii) Accounts owed by an account debtor that is insolvent, the subject of bankruptcy
proceedings or has gone out of business; 
 (ix) Accounts owed by an Owner of more than 5% of the common stock in the
Borrower, Subsidiary, Affiliate, Officer or employee of the Borrower; 
 (x) Accounts not subject to a duly perfected security
interest in the Lender’s favor or which are subject to any Lien in favor of any Person other than the Lender and the holder of any Permitted Lien; 
 (xi) That portion of Accounts that has been restructured, extended, amended or modified; 
 (xii) That portion of Accounts that constitutes advertising, finance charges, service charges, or excise taxes; 
 (xiii) Accounts owed by an account debtor, regardless of whether otherwise eligible, to the extent that the aggregate balance of such Accounts exceeds twenty-five percent (25%) (or as to Accounts owed by Harland Clarke Holdings Corp.,
John H. Harland Company, or Clarke American Corp, fifty percent (50%)) of the aggregate amount of all Accounts, excluding Borrowers’ Affiliates’ Accounts; 
 (xiv) Accounts owed by an account debtor, regardless of whether otherwise eligible, if twenty-five percent (25%) or more of the total
amount of Accounts due from such debtor is ineligible under clauses (i), (ii), or (xi) above; and 
 (xv) Accounts,
or portions thereof, otherwise deemed ineligible by the Lender in its sole discretion. 
 “Eligible Foreign Accounts” means
Accounts of the Borrower due and owing by an account debtor located outside the United States; but excluding any Accounts having any of the following characteristics: 
 (i) That portion of Accounts unpaid 120 days or more after the invoice date; 
 (ii) That portion of Accounts related to goods or services with respect to which the Borrower has received notice of a claim or dispute,
which are subject to a claim of offset or a contra account, or which reflect a reasonable reserve for warranty claims or returns; 
 (iii) That portion of Accounts not yet earned by the final delivery of goods by the Borrower to the account debtor, or that portion of Accounts not yet earned by the final rendition of services by the Borrower to the account debtor;

 (iv) That portion of Accounts for which an invoice has not been sent to the applicable account debtor; 
 (v) Accounts owed by any unit of government; 
  

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 (vi) Accounts owed by an account debtor that is insolvent, the subject of bankruptcy
proceedings or has gone out of business; 
 (vii) Accounts owed by an Owner of more than 5% of the common stock in the
Borrower, Subsidiary, Affiliate, Officer or employee of the Borrower; 
 (viii) Accounts not subject to a duly perfected
security interest in the Lender’s favor or which are subject to any Lien in favor of any Person other than the Lender; 
 (ix) That portion of Accounts that has been restructured, extended, amended or modified; 
 (x) That portion of
Accounts that constitutes advertising, finance charges, service charges, or excise taxes; 
 (xi) That portion of Accounts
owed by any one account debtor that would permit Revolving Advances supported by such account debtor’s Accounts to exceed (A) $500,000 if such account debtor is an Approved Buyer which is rated BBB-minus or better by Standard &
Poor’s Ratings Services, or is controlled by entities rated BBB-minus or better by Standard & Poor’s Ratings Services, and (B) $300,000 for all other approved buyers (as determined by the Lender in its sole discretion);

 (xii) Accounts denominated in any currency other than United States dollars, Canadian dollars, Swiss francs, Japanese yen,
United Kingdom pounds sterling or European Union euros; 
 (xiii) Accounts with respect to which the Borrower has not
instructed the account debtor to pay the Account to the Collateral Account; 
 (xiv) Accounts owed by debtors located in
countries not acceptable to the Lender in its sole discretion; 
 (xv) Accounts owed by an account debtor, regardless of
whether otherwise eligible, if twenty-five percent (25%) or more of the total amount due under Accounts from such account debtor is ineligible under clauses (i), (ii) or (ix) above; and 
 (xvi) Accounts otherwise deemed unacceptable to the Lender in its sole discretion. 
 “Eligible Inventory” means all Inventory of the Borrower; but excluding any Inventory having any of the following characteristics: 

(i) Inventory that is: in-transit; located at any warehouse, job site or other premises not approved by the Lender in writing; not
subject to a duly perfected first priority security interest in the Lender’s favor; subject to any lien or encumbrance that is subordinate to the Lender’s first priority security interest in a manner acceptable to the Lender; covered by
any negotiable or non-negotiable warehouse receipt, bill of lading or other document of title; on consignment from any Person; on consignment to any Person or subject to any bailment unless such consignee or bailee has executed an agreement with the
Lender in the form prescribed by the Lender; 
  

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 (ii) Supplies, packaging, or sample Inventory, or customer supplied parts or Inventory;

 (iii) Work-in-process Inventory (provided, however, that Eligible Inventory does include subassembly parts, excluding
burden and labor); 
 (iv) Inventory that is damaged, defective, obsolete, slow moving or not currently saleable in the normal
course of the Borrower’s operations, or the amount of such Inventory that has been reduced by shrinkage; 
 (v) Inventory
that the Borrower has returned, has attempted to return, is in the process of returning or intends to return to the vendor thereof; 
 (vi) Inventory that is perishable or live; 
 (vii) Inventory manufactured by the Borrower pursuant to a license
unless the applicable licensor has agreed in writing to permit the Lender to exercise its rights and remedies against such Inventory; 
 (viii) Inventory that is subject to a Lien (except for Permitted Liens) in favor of any Person other than the Lender; 
 (ix) Inventory held by customers who hold an average of less than $50,000 in aggregate value of the Borrower’s Inventory is stored; and 
 (x) Inventory otherwise deemed ineligible by the Lender in its sole discretion. 
 “Environmental Law” means any federal, state, local or other governmental statute, regulation, law or ordinance dealing with the protection of
human health and the environment. 
 “Event of Default” is defined in Section 7.1. 
 “Financial Covenants” means the covenants set forth in Section 6.2. 
 “Floating Rate” means an annual interest rate equal to the sum of the Prime Rate plus one-half of one percent (.50%), which interest rate
shall change when and as the Prime Rate changes. 
 “Floating Rate Advance” means an Advance bearing interest at the Floating Rate.

 “Foreign Accounts Eligibility Period” means the period beginning on the Funding Date and ending on the Termination Date.

 “Foreign Subsidiary” means any corporation that is a foreign corporation, as defined in Section 7701(a)(5) of the Internal
Revenue Code of 1986, more than 50 percent of (i) the total combined voting power of all classes of stock of such corporation entitled to vote, or (ii) the total value of the stock of such corporation, is directly or indirectly owned by
the Borrower. 
  

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 “Funding Date” is defined in Section 2.1. 
 “Funds from Operations” means for a given period, for the Borrower and Subsidiaries on a consolidated basis, the sum of (i) Net Income,
(ii) depreciation and amortization, (iii) any increase (or decrease) in deferred income taxes, (iv) any increase (or decrease) in lifo reserves, and (v) other non-cash items, each as determined for such period in accordance with
GAAP. 
 “GAAP” means generally accepted accounting principles in the United States, applied on a basis consistent with the
accounting practices applied in the consolidated financial statements described in Section 5.6. 
 “General Intangibles” shall
have the meaning given it under the UCC. 
 “Hazardous Substances” means pollutants, contaminants, hazardous substances, hazardous
wastes, petroleum and fractions thereof, and all other chemicals, wastes, substances and materials listed in, regulated by or identified in any Environmental Law. 
 “Indebtedness” is used herein in its most comprehensive sense and means any and all advances, debts, obligations and liabilities of the Borrower to the Lender, heretofore, now or hereafter made, incurred or
created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, including under any swap, derivative, foreign exchange, hedge, deposit, treasury
management or other similar transaction or arrangement at any time entered into by the Borrower with the Lender or with the Canadian Lender or any Affiliate thereof, and whether the Borrower may be liable individually or jointly with others, or
whether recovery upon such Indebtedness may be or hereafter becomes unenforceable. 
 “Indemnified Liabilities” is defined in
Section 8.6 
 “Indemnitees” is defined in Section 8.6. 
 “Initial Pledged Shares” means the shares of stock described in Schedule 1.1 hereto. 
 “IRC” means the Internal Revenue Code of 1986, as amended from time to time. 
 “Infringement” or “Infringing” when used with respect to Intellectual Property Rights means any infringement or other violation of
Intellectual Property Rights. 
 “Intellectual Property Rights” means all actual or prospective rights arising in connection with
any intellectual property or other proprietary rights, including all rights arising in connection with copyrights, patents, service marks, trade dress, trade secrets, trademarks, trade names or mask works. 
 “Interest Expense” means for a fiscal year-to-date period, the Borrower’s consolidated total gross cash interest expense during such
period (excluding interest income), and shall in any event include the portion of any capitalized lease obligation allocable to cash interest expense that is in accordance with GAAP. 
  

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 “Interest Payment Date” is defined in Section 2.8(a). 
 “Inventory” shall have the meaning given it under the UCC. 
 “Inventory Advance Rate” means up to 60% (or, for purposes of determining the amount to be included in the Borrowing Base as of the Funding Date with respect to Inventory located at locations owned or leased
by the Borrower, 40%), or such lesser rate as the Lender in its sole discretion may deem appropriate from time to time. 
 “Investment
Property” shall have the meaning given it under the UCC. 
 “L/C Amount” means the sum of (i) the Aggregate Face Amount
of any outstanding Letters of Credit, plus (ii) the amount of each Obligation of Reimbursement that either remains unreimbursed or has not been paid through a Revolving Advance on the Credit Facility. 
 “L/C Application” means an application for the issuance of standby or documentary letters of credit pursuant to the terms of a Standby Letter
of Credit Agreement or a Commercial Letter of Credit Agreement, in form acceptable to the Lender. 
 “Lender” means Wells Fargo
Bank, National Association in its broadest and most comprehensive sense as a legal entity, and is not limited in its meaning to Lender’s Wells Fargo Business Credit operating division, or to any other operating division of Lender. 

“Letter of Credit” is defined in Section 2.4(a). 
 “Licensed Intellectual Property” is defined in Section 5.11(c). 
 “Lien” means any
security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance, title retention agreement or analogous instrument or device, including the interest of each lessor under any capitalized lease and the interest of any bondsman under any
payment or performance bond, in, of or on any assets or properties of a Person, whether now owned or subsequently acquired and whether arising by agreement or operation of law. 
 “Loan Documents” means this Agreement, the Revolving Note, each Subordination Agreement, each L/C Application, each Standby Letter of Credit
Agreement, each Commercial Letter of Credit Agreement and the Security Documents, together with every other agreement, note, document, contract or instrument to which the Borrower now or in the future may be a party and which is required by the
Lender. 
 “Loan Year” is defined in Section 2.6(c). 
 “Lockbox” means “Lockbox” as defined in the Wholesale Lockbox and Collection Account Agreement. 
 “Material Adverse Effect” means any of the following: 
 (i) A material adverse effect on the business, operations, results of operations, prospects, assets, liabilities or financial condition of
the Borrower and its Subsidiaries, taken as a whole; 
  

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 (ii) A material adverse effect on the ability of the Borrower and its Subsidiaries, taken
as a whole, to perform their obligations under the Loan Documents or the Canadian Loan Documents to which it is a party; 
 (iii) A material adverse effect on the business, operations, results of operations, prospects, assets, liabilities or financial condition of the Borrower or Delphax Canada, on an individual basis; 
 (iv) A material adverse effect on the ability of the Borrower or Delphax Canada, on an individual basis, to perform its obligations under
the Loan Documents or the Canadian Loan Documents to which it is a party; 
 (v) A material adverse effect on the business,
operations, results of operations, prospects, assets, liabilities or financial condition of Delphax France or Delphax UK, but only if a European Revolving Advance (as defined in the Canadian Credit Agreement) is outstanding; 
 (vi) A material adverse effect on the ability of Delphax France or Delphax UK to perform its obligations under the Canadian Loan Documents
to which it is a party, but only if a European Revolving Advance (as defined in the Canadian Credit Agreement) has been made; or 
 (vii) A material adverse effect on the ability of the Lender to enforce the Indebtedness or to realize the intended benefits of the Security Documents, including a material adverse effect on the validity or enforceability of any Loan
Document or of any rights against any Guarantor, or on the status, existence, perfection, priority (subject to Permitted Liens) or enforceability of any Lien securing payment or performance of the Indebtedness. 
 “Maturity Date” means September 10, 2011. 
 “Maximum Line Amount” means $8,000,000 unless this amount is reduced pursuant to Section 2.10, in which event it means such lower amount. 
 “Minimum Interest Charge” is defined in Section 2.6(c). 
 “Multiemployer Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which the Borrower or any ERISA Affiliate contributes or is obligated to contribute. 
 “Net Cash Proceeds” means in connection with any asset sale, the cash proceeds (including any cash payments received by way of deferred payment
whether pursuant to a note, installment receivable or otherwise, but only as and when actually received) from such asset sale, net of (i) attorneys’ fees, accountants’ fees, investment banking fees, brokerage commissions and amounts
required to be applied to the repayment of any portion of the Debt secured by a Lien not prohibited hereunder on the asset which is the subject of such sale, and (ii) taxes paid or reasonably estimated to be payable as a result of such asset
sale. 
  

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 “Net Income” means fiscal year-to-date after-tax net income from continuing operations,
including extraordinary losses and including extraordinary gains, all as determined on a consolidated basis for the Borrower and Subsidiaries and in accordance with GAAP. 
 “Net Orderly Liquidation Value” means a professional opinion of the estimated most probable Net Cash Proceeds which could typically be realized at a properly advertised and professionally managed liquidation
sale, conducted under orderly sale conditions for an extended period of time (usually six to nine months), under the economic trends existing at the time of the appraisal. 
 “Obligation of Reimbursement” means the obligation of the Borrower to reimburse the Lender pursuant to the terms of the Standby Letter of
Credit Agreement and the Commercial Letter of Credit Agreement and any applicable L/C Application. 
 “Officer” means an officer of
the Borrower. 
 “OFAC” is defined in Section 6.12(c). 
 “Overadvance” means the amount, if any, by which the outstanding principal balance of the Revolving Note, plus the L/C Amount, is in excess of
the then-existing Borrowing Base. 
 “Owned Intellectual Property” is defined in Section 5.11(a). 
 “Owner” means with respect to the Borrower, each Person having legal or beneficial title to an ownership interest in the Borrower or a right to
acquire such an interest. 
 “Patent and Trademark Security Agreement” means each Patent and Trademark Security Agreement now or
hereafter executed by the Borrower in favor of the Lender. 
 “Pension Plan” means a pension plan (as defined in Section 3(2)
of ERISA) maintained for employees of the Borrower or any ERISA Affiliate and covered by Title IV of ERISA. 
 “Permitted Lien” and
“Permitted Liens” are defined in Section 6.3(a). 
 “Person” means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 
 “Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) maintained for employees of the Borrower or any ERISA Affiliate. 
 “Pledged Stock Collateral” means collectively (a) the Initial Pledged Shares and the certificates and instruments representing such
shares, and all dividends, interest, principal, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Initial Pledged Shares, and (b) all
additional shares 

  

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of stock in any issuer of the Initial Pledged Shares from time to time acquired by the Borrower in any manner, and the certificates and instruments
representing such additional shares, and all dividends, interest, principal, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares.
Notwithstanding anything herein to the contrary, in no event shall the terms “Collateral” or “Pledged Stock Collateral” be deemed to include any of the outstanding stock or other equity interests in a Foreign
Subsidiary in excess of 65% of the voting power of all classes of stock or other equity interests in such Foreign Subsidiary entitled to vote in the election of directors or other similar body of such Foreign Subsidiary. 
 “Premises” means all locations where the Borrower conducts its business or has any rights of possession, including the locations legally
described in Exhibit C attached hereto. 
 “Prime Rate” means at any time the rate of interest most recently announced by the
Lender at its principal office as its Prime Rate, with the understanding that the Prime Rate is one of the Lender’s base rates, and serves as the basis upon which effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof in such internal publication or publications as the Lender may designate. Each change in the rate of interest shall become effective on the date each Prime Rate change is announced by the Lender.

 “Reportable Event” means a reportable event (as defined in Section 4043 of ERISA), other than an event for which the 30-day
notice requirement under ERISA has been waived in regulations issued by the Pension Benefit Guaranty Corporation. 
 “Revolving
Advance” is defined in Section 2.1. 
 “Revolving Note” means the Borrower’s revolving promissory note, payable to
the order of the Lender in substantially the form of Exhibit A hereto, as same may be renewed and amended from time to time, and all replacements thereto. 
 “Security Documents” means this Agreement, the Wholesale Lockbox and Collection Account Agreement, and any other document delivered to the Lender from time to time to secure the Indebtedness. 
 “Security Interest” is defined in Section 3.1. 
 “Servicing Agent” is defined in Section 8.14. 
 “Special Account” means a specified
cash collateral account maintained with Lender or another financial institution acceptable to the Lender in connection with Letters of Credit, as contemplated by Section 2.5. 
 “Standby Letter of Credit Agreement” means an agreement governing the issuance of standby letters of credit by Lender entered into between the
Borrower as applicant and Lender as issuer. 
  

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 “Subordinated Creditors” means Whitebox and every other Person now or in the future who agrees
to subordinate indebtedness of the Borrower held by that Person to the payment of the Indebtedness. 
 “Subordination Agreement”
means a subordination agreement executed by a Subordinated Creditor in favor of the Lender and acknowledged by the Borrower. 
 “Subsidiary” means the entities listed on Schedule 5.5 hereto and any other Person of which more than fifty percent (50%) of the outstanding ownership interests having general voting power under ordinary circumstances to
elect a majority of the board of directors or the equivalent of such Person, regardless of whether or not at the time ownership interests of any other class or classes shall have or might have voting power by reason of the happening of any
contingency, is at the time directly or indirectly owned by the Borrower, by the Borrower and one or more other Subsidiaries, or by one or more other Subsidiaries. 
 “Termination Date” means the earliest of (i) the Maturity Date, (ii) the date the Borrower terminates the Credit Facility, or (iii) the date the Lender demands payment of the Indebtedness,
following an Event of Default, pursuant to Section 7.2. 
 “UCC” means the Uniform Commercial Code in effect in the state
designated in this Agreement as the state whose laws shall govern this Agreement, or in any other state whose laws are held to govern this Agreement or any portion of this Agreement. 
 “Unused Amount” is defined in Section 2.7(b). 
 “Whitebox” means Whitebox Delphax, Ltd. 
 “Wholesale Lockbox and Collection Account
Agreement” means the Wholesale Lockbox and Collection Account Agreement by and between the Borrower and the Lender. 
 Section 1.2
Other Definitional Terms; Rules of Interpretation. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP. All terms defined in the UCC and not otherwise defined herein have the meanings assigned to them in
the UCC. References to Articles, Sections, subsections, Exhibits, Schedules and the like, are to Articles, Sections and subsections of, or Exhibits or Schedules attached to, this Agreement unless otherwise expressly provided. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Unless the context in which used herein otherwise clearly requires, “or” has the inclusive
meaning represented by the phrase “and/or”. Defined terms include in the singular number the plural and in the plural number the singular. Reference to any agreement (including the Loan Documents), document or instrument means such
agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof (and, if applicable, in accordance with the terms hereof and the other Loan Documents), except where otherwise explicitly
provided, and reference to any promissory note includes any promissory note which is an extension or renewal thereof or a substitute or replacement therefor. Reference to any law, rule, regulation, order, decree, requirement, policy, guideline,
directive or interpretation means as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect on the determination date, including rules and regulations promulgated thereunder. 
  

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 ARTICLE II 
 AMOUNT AND TERMS OF THE CREDIT FACILITY 
 Section 2.1 Revolving Advances. The
Lender agrees, subject to the terms and conditions of this Agreement, to make advances (“Revolving Advances”) to the Borrower from time to time from the date that all of the conditions set forth in Section 4.1 are satisfied (the
“Funding Date”) to and until (but not including) the Termination Date in an amount not in excess of the Maximum Line Amount. The Lender shall have no obligation to make a Revolving Advance to the extent that (a) there remains any
Canadian Availability with respect to the Canadian Revolving Facility (as those terms are defined in the Canadian Credit Agreement), (b) the amount of the requested Revolving Advance exceeds Availability, or (c) the amount of the requested
Revolving Advance would cause the Aggregate Borrowings to exceed the Aggregate Borrowing Limit. The Borrower’s obligation to pay the Revolving Advances shall be evidenced by the Revolving Note and shall be secured by the Collateral. Within the
limits set forth in this Section 2.1, the Borrower may borrow, prepay pursuant to Section 2.10, and reborrow. 
 Section 2.2
Procedures for Requesting Advances. The Borrower shall comply with the following procedures in requesting Revolving Advances: 
 (a)
Time for Requests. The Borrower shall request each Advance so that Lender receives it not later than the Cut-off Time on the Business Day on which the Advance is to be made. Each request that conforms to the terms of this Agreement
shall be effective upon receipt by the Lender, shall be in writing or by telephone or telecopy transmission, and shall be confirmed in writing by the Borrower if so requested by the Lender, by (i) an Officer of the Borrower; or
(ii) a Person designated as the Borrower’s agent by an Officer of the Borrower in a writing delivered to the Lender; or (iii) a Person whom the Lender reasonably believes to be an Officer of the Borrower or such a designated agent.
The Borrower shall repay all Advances even if the Lender does not receive such confirmation and even if the Person requesting an Advance was not in fact authorized to do so. Any request for an Advance, whether written or telephonic, shall be deemed
to be a representation by the Borrower that the conditions set forth in Section 4.2 have been satisfied as of the time of the request. 
 (b) Disbursement. Upon fulfillment of the applicable conditions set forth in Article IV, the Lender shall disburse the proceeds of the requested Advance (i) to the initial Advances, by transmitting proceeds thereof to
LaSalle Business Credit, LLC in payment in full of all of the Borrower’s existing loan obligations to that entity and (ii) otherwise by crediting the Borrower’s operating account maintained with the Lender unless the Lender and the
Borrower shall agree to another manner of disbursement. The Lender may also initiate an Advance and disburse the proceeds to any third Person in such amounts as the Lender, in its sole discretion, deems necessary to protect its Security Interest in
any Collateral or to exercise any other rights granted to it by the Borrower under Section 6.27. 
  

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 Section 2.3 [Reserved] 
 Section 2.4 Letters of Credit. 
 (a)
The Lender agrees, subject to the terms and conditions of this Agreement, to issue, at any time after the Funding Date and prior to the Termination Date, one or more irrevocable standby, or documentary letters of credit (each, a “Letter of
Credit”) for the Borrower’s account. The Lender will not issue any Letter of Credit if the face amount of the Letter of Credit to be issued would exceed the lesser of: 
 (i) $1,000,000 less the L/C Amount, or 
 (ii) Availability. 
 Each Letter of Credit, if any, shall be issued pursuant to a separate L/C Application made by the
Borrower. The terms and conditions set forth in each such L/C Application shall supplement the terms and conditions of the Standby Letter of Credit Agreement or the Commercial Letter of Credit Agreement, as applicable. 
 (b) No Letter of Credit shall be issued with an expiry date later than one (1) year from the date of issuance or the Maturity Date in effect as of
the date of issuance, whichever is earlier. 
 (c) Any request for issuance of a Letter of Credit shall be deemed to be a representation by
the Borrower that the conditions set forth in Section 4.2 have been satisfied as of the date of the request. 
 (d) If a draft is
submitted under a Letter of Credit when the Borrower is unable, because a Default Period exists or for any other reason, to obtain a Revolving Advance to pay the Obligation of Reimbursement, the Borrower shall pay to the Lender on demand and in
immediately available funds, the amount of the Obligation of Reimbursement together with interest, accrued from the date of the draft until payment in full at the Default Rate. Notwithstanding the Borrower’s inability to obtain a Revolving
Advance for any reason, the Lender may, in its sole discretion, make a Revolving Advance in an amount sufficient to discharge any outstanding Obligation of Reimbursement and any accrued but unpaid interest and fees payable with respect to the same.

 (e) The Borrower shall use each Letter of Credit to support its general business purposes. 
 Section 2.5 Special Account. If the Credit Facility is terminated for any reason while any Letter of Credit is outstanding, the Borrower
shall thereupon pay the Lender in immediately available funds for deposit in the Special Account an amount equal to the L/C Amount plus any anticipated fees and costs. If the Borrower fails to promptly make any such payment in the amount required
hereunder, then the Lender may make a Revolving Advance against the Credit Facility in an amount sufficient to fulfill this obligation and deposit the proceeds to the Special Account. The Special Account shall be an interest bearing account either
maintained with the Lender or with a financial institution acceptable to the Lender. Any interest earned on amounts deposited in the Special Account shall be credited to the Special Account. The Lender may apply amounts on deposit in the Special
Account at any time or from time to time to the Indebtedness in the Lender’s sole discretion. The Borrower may not withdraw any amounts on deposit in the Special Account as long as the Lender maintains a security interest therein. The Lender
agrees to transfer any balance in the Special Account to the Borrower when the Lender is required to release its security interest in the Special Account under applicable law. 
  

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 Section 2.6 Interest; Margins; Minimum Interest Charge; Default Interest Rate; Application
of Payments; Participations; Usury Interest. Except as provided in Section 2.6(d) and Section 2.6(g), the principal amount of each Advance shall bear interest at the Floating Rate. 
 (b) [Reserved] Minimum Interest Charge. Notwithstanding any other terms of this Agreement to the contrary, the Borrower shall pay to the Lender
and the Canadian Lender interest and unused line fees under this Agreement and under the Canadian Credit Agreement of not less than that aggregate amount of $150,000 per Loan Year (the “Minimum Interest Charge”) during the term of this
Agreement and the Canadian Credit Agreement, and, to the extent that such Minimum Interest Charge is not paid by Delphax Canada, the Borrower shall pay the Lender any deficiency between the Minimum Interest Charge and the amount of interest
otherwise calculated under Section 2.6(a) and Section 2.6(a) of the Canadian Credit Agreement on same following each anniversary of the Funding Date and on the Termination Date (including any Termination Date that occurs due to any
refinancing by an Affiliate of the Lender). When calculating this deficiency, the Default Rate and the “Default Rate” under the Canadian Credit Agreement, if applicable, shall be disregarded. As used in this subsection (c), “Loan
Year” means each one-year period ending on an anniversary of the Funding Date. 
 (d) Default Interest Rate. At any time during a
Default Period arising from an Event of Default or following the Termination Date, in the Lender’s sole discretion and without waiving any of its other rights or remedies, the principal of the Revolving Note shall bear interest at the
Default Rate or such lesser rate as the Lender may determine, effective as of the first day of the month in which such Default Period begins through the last day of such Default Period, or any shorter time period that the Lender may determine. The
decision of the Lender to impose a rate that is less than the Default Rate or to not impose the Default Rate for the entire duration of such Default Period shall be made by the Lender in its sole discretion and shall not be a waiver of any of its
other rights and remedies, including its right to retroactively impose the full Default Rate for the entirety of any such Default Period or following the Termination Date. 
 (e) Application of Payments. Payments shall be applied to the Indebtedness on the Business Day of receipt by the Lender in the Lender’s
general account, but the amount of principal paid shall continue to accrue interest at the interest rate applicable under the terms of this Agreement from the calendar day the Lender receives the payment, and continuing through the end of the first
Business Day following receipt of the payment. 
 (f) Participations. If any Person shall acquire a participation in the Advances or
the Obligation of Reimbursement, the Borrower shall be obligated to the Lender to pay the full amount of all interest calculated under this Section 2.6, along with all other fees, charges and other amounts due under this Agreement, regardless
if such Person elects to accept interest with respect to its participation at a lower rate than that calculated under this Section 2.6, or otherwise elects to accept less than its prorata share of such fees, charges and other amounts due under
this Agreement. 
 (g) Usury. In any event no rate change shall be put into effect that would result in a rate greater than the
highest rate permitted by law. Notwithstanding anything to the contrary contained in any Loan Document, all agreements which either now are or which shall become agreements between the Borrower and the Lender are hereby limited so that in no
contingency or 

  

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event whatsoever shall the total liability for payments in the nature of interest, additional interest and other charges exceed the applicable limits imposed
by any applicable usury laws. If any payments in the nature of interest, additional interest and other charges made under any Loan Document are held to be in excess of the limits imposed by any applicable usury laws, it is agreed that any such
amount held to be in excess shall be considered payment of principal hereunder, and the indebtedness evidenced hereby shall be reduced by such amount so that the total liability for payments in the nature of interest, additional interest and other
charges shall not exceed the applicable limits imposed by any applicable usury laws, in compliance with the desires of the Borrower and the Lender. This provision shall never be superseded or waived and shall control every other provision of the
Loan Documents and all agreements between the Borrower and the Lender, or their successors and assigns. 
 Section 2.7
Fees. Origination Fee. The Borrower shall pay the Lender a fully earned and non-refundable origination fee of $25,000, due and payable upon the execution of this Agreement. 
 (b) Unused Line Fee. For the purposes of this Section 2.7(b), “Unused Amount” means the Maximum Line Amount reduced by
outstanding Revolving Advances and the L/C Amount. The Borrower agrees to pay to the Lender an unused line fee at the rate of one-quarter of one percent (0.25%) per annum on the average daily Unused Amount from the date of this Agreement to and
including the Termination Date, due and payable monthly in arrears on the first day of the month and on the Termination Date. 
 (c) FREP
Fee. The Borrower agrees to pay to the Lender a foreign receivables eligibility fee in the amount of $7,500 on the first day of the Foreign Receivables Eligibility Period and on each anniversary thereafter. 
 (d) Collateral Exam Fees. The Borrower shall pay the Lender fees in connection with any collateral exams, audits or inspections conducted by or on
behalf of the Lender of any Collateral or of the Borrower’s operations or business at the rates established from time to time by the Lender (which fees are currently $850 per day per collateral examiner, together with any related out-of-pocket
costs and expenses incurred by the Lender. 
 (e) [Reserved]. 
 (f) Letter of Credit Fees. The Borrower shall pay to the Lender a fee with respect to each Letter of Credit that has been issued which shall be calculated on a per diem basis at an annual rate equal to two
percent (2.0%) of the Aggregate Face Amount, from and including the date of issuance of the Letter of Credit until the date that the Letter of Credit terminates or is returned to the Lender, which fee shall be due and payable monthly in arrears
on the first day of each month and on the date that the Letter of Credit terminates or is returned to the Lender; provided, however, effective as of the first day of month in which any Default Period arising from an Event of Default
begins through the last day of such Default Period, or any shorter time period that the Lender may determine, in the Lender’s sole discretion and without waiving any of its other rights and remedies, such fee shall increase to five percent
(5.0%) of the Aggregate Face Amount. The foregoing fee shall be in addition to any other fees, commissions and charges imposed by Lender with respect to such Letter of Credit. 
  

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 (g) Letter of Credit Administrative Fees. The Borrower shall pay all administrative fees charged
by Lender in connection with the honoring of drafts under any Letter of Credit, amendments thereto, transfers thereof and all other activity with respect to the Letters of Credit at the then – current rates published by Lender for such services
rendered on behalf of customers of Lender generally. 
 (h) Termination and Line Reduction Fees. If (i) the Lender terminates the
Credit Facility during a Default Period arising from an Event of Default, or if (ii) the Borrower terminates or reduces the Credit Facility on a date after the Funding Date and prior to the Maturity Date, then the Borrower shall pay the Lender
as liquidated damages and not as a penalty a termination fee in an amount equal to a percentage of the sum of Maximum Line Amount calculated as follows: (A) three percent (3%) if the termination or reduction occurs on or before the first
anniversary of the Funding Date; (B) two percent (2%) if the termination or reduction occurs after the first anniversary of the Funding Date, but on or before the second anniversary of the Funding Date; and (C) one percent
(1%) if the termination or reduction occurs after the second anniversary of the Funding Date, but prior to the fourth anniversary of the Funding Date. 
 (i) [Reserved]. 
 (j) Termination and Prepayment Fees Following Transfer Between Wells Fargo Operating
Divisions. If this Agreement and the Loan Documents, following the Borrower’s request and upon the consent of the Lender’s Wells Fargo Business Credit operating division are, more than 18 months after the Funding Date, transferred to
an operating division of the Lender other than Wells Fargo Business Credit, such transfer shall not be deemed a termination or prepayment requiring the payment of termination and/or prepayment fees, provided that the Borrower agrees, at the time of
transfer, to the continued payment of comparable termination and/or prepayment fees in an amount no less than the amount set forth in this Agreement in the event that any facilities subject to this Agreement at the time of transfer are subsequently
terminated early or prepaid. 
 (k) [Reserved]. 
 (l) Other Fees and Charges. The Lender may from time to time impose additional fees and charges as consideration for Advances made in excess of Availability or for other events that constitute an Event of
Default or a Default hereunder, including fees and charges for the administration of Collateral by the Lender, and fees and charges for the late delivery of reports, which may be assessed in the Lender’s sole discretion on either an hourly,
periodic, or flat fee basis, and in lieu of or in addition to imposing interest at the Default Rate. 
 Section 2.8 Time for Interest
Payments; Payment on Non-Business Days; Computation of Interest and Fees. Time For Interest Payments. Accrued and unpaid interest shall be due and payable on the first day of each month and on the Termination Date (each an
“Interest Payment Date”), or if any such day is not a Business Day, on the next succeeding Business Day. Interest will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of
advance to the Interest Payment Date. If an Interest Payment Date is not a Business Day, payment shall be made on the next succeeding Business Day. 
  

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 (b) Payment on Non-Business Days. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest on the Advances or the fees hereunder, as the case may
be. 
 (c) Computation of Interest and Fees. Interest accruing on the outstanding principal balance of the Advances and fees hereunder
outstanding from time to time shall be computed on the basis of actual number of days elapsed in a year of 360 days. 
 Section 2.9
Lockbox and Collateral Account; Sweep of Funds. Lockbox and Collateral Account. 
 (i) The Borrower shall
instruct all account debtors to pay all Accounts directly to the Lockbox. If, notwithstanding such instructions, the Borrower receives any payments on Accounts, the Borrower shall deposit such payments into the Collateral Account. The Borrower shall
also deposit all other cash proceeds of Collateral regardless of source or nature directly into the Collateral Account. Until so deposited, the Borrower shall hold all such payments and cash proceeds in trust for and as the property of the Lender
and shall not commingle such property with any of its other funds or property. All deposits in the Collateral Account shall constitute proceeds of Collateral and shall not constitute payment of the Indebtedness. 
 (ii) All items deposited in the Collateral Account shall be subject to final payment. If any such item is returned uncollected, the
Borrower will immediately pay the Lender, or, for items deposited in the Collateral Account, the bank maintaining such account, the amount of that item, or such bank at its discretion may charge any uncollected item to the Borrower’s commercial
account or other account. The Borrower shall be liable as an endorser on all items deposited in the Collateral Account, whether or not in fact endorsed by the Borrower. 
 (b) Sweep of Funds. The Lender shall from time to time, in accordance with the Wholesale Lockbox and Collection Account Agreement, cause funds in the Collateral Account to be transferred to the Lender’s
general account for payment of the Indebtedness. Amounts deposited in the Collateral Account shall not be subject to withdrawal by the Borrower, except after payment in full and discharge of all Indebtedness. 
 Section 2.10 Voluntary Prepayment; Reduction of the Maximum Line Amount; Termination of the Credit Facility by the Borrower. Except as
otherwise provided herein, the Borrower may prepay the Advances in whole at any time or from time to time in part. The Borrower may terminate the Credit Facility or reduce the Maximum Line Amount at any time if it (i) gives the Lender at least
60 days advance written notice prior to the proposed Termination Date, and (ii) pays the Lender applicable termination and Maximum Line Amount reduction fees in accordance with the terms of this Agreement. Any reduction in the Maximum Line
Amount shall be in multiples of $100,000, and with a minimum reduction of at least $500,000. If the Borrower terminates the Credit Facility or reduces the Maximum Line Amount to zero, all Indebtedness shall be immediately due and payable, and
if the Borrower gives the Lender less than the required 60 days advance written notice, then the interest rate applicable to borrowings 

  

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evidenced by Revolving Note shall be the Default Rate for the period of time commencing 60 days prior to the proposed Termination Date through the date that
the Lender actually receives such written notice. If the Borrower does not wish the Lender to consider renewal of the Credit Facility on the next Maturity Date, then the Borrower shall give the Lender at least 60 days written notice prior to the
Maturity Date that it will not be requesting renewal. If the Borrower fails to give the Lender such timely notice, then the interest rate applicable to borrowings evidenced by the Revolving Note shall be the Default Rate for the period of time
commencing 60 days prior to the Maturity Date through the date that the Lender actually receives such written notice. 
 Section 2.11
Mandatory Prepayment. Without notice or demand, unless the Lender shall otherwise consent in a written agreement that sets forth the terms and conditions which the Lender in its discretion may deem appropriate, including without limitation
the payment of an Overadvance fee, if an Overadvance shall at any time exist with respect to the Credit Facility or if an Aggregate Borrowing Excess shall exist, then the Borrower shall (i) first, within one Business Day, prepay the Revolving
Advances to the extent necessary to eliminate such excess; and (ii) if prepayment in full of the Revolving Advances is insufficient to eliminate such excess (due, for example, to the L/C Amount), pay to the Lender in immediately available funds
for deposit in the Special Account an amount equal to the remaining excess. Any voluntary or mandatory prepayment received by the Lender may be applied to the Indebtedness, in such order and in such amounts as the Lender in its sole discretion may
determine from time to time. 
 Section 2.12 Revolving Advances to Pay Indebtedness. Notwithstanding the terms of
Section 2.1, the Lender may, in its discretion at any time or from time to time, without the Borrower’s request and even if the conditions set forth in Section 4.2 would not be satisfied, make a Revolving Advance in an amount equal to
the portion of the Indebtedness from time to time due and payable. 
 Section 2.13 Use of Proceeds. The Borrower shall use
the proceeds of Advances (a) as to the initial Advances to pay in full its existing loan obligation to LaSalle Business Credit, LLC and (b) otherwise for ordinary working capital purposes. 
 Section 2.14 Liability Records. The Lender may maintain from time to time, at its discretion, records as to the Indebtedness. All entries
made on any such record shall be presumed correct until the Borrower establishes the contrary. Upon the Lender’s demand, the Borrower will admit and certify in writing the exact principal balance of the Indebtedness that the Borrower then
asserts to be outstanding. Any billing statement or accounting rendered by the Lender shall be conclusive and fully binding on the Borrower unless the Borrower gives the Lender specific written notice of exception within 30 days after receipt.

 Section 2.15 Taxes. Any and all payments by the Borrower hereunder or under other Loan Documents shall be made free and clear
of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges of withholdings, and all liabilities with respect thereto, excluding, in the case of the Lender, taxes imposed on its overall net income and
franchise taxes imposed on it in lieu of net income taxes (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under the other Loan Documents being hereinafter referred
to as “Taxes”). 
  

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 (b) The Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any payment made hereunder or under the other Loan Documents or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement or the other
Loan Documents (hereinafter referred to as “Other Taxes”). 
 (c) The Borrower shall indemnify the Lender for the full amount of
Taxes or Other Taxes imposed on or paid by the Lender and any penalties, interest and expenses with respect thereto. Payments on this indemnification shall be made within 10 days from the date the Lender makes written demand therefor. 
 (d) Within 30 days after the date of any payment of Taxes, the Borrower shall furnish to the Lender a certified copy of a receipt evidencing payment
thereof. In the case of any payment hereunder or under the other Loan Documents by or on behalf of the Borrower through an account or branch outside the United States or by or on behalf of the Borrower by a payor that is not a United States person,
if the Borrower determines that no Taxes are payable in respect thereof, the Borrower shall furnish or shall cause such payor to furnish, to the Lender an opinion of counsel acceptable to the Lender stating that such payment is exempt from Taxes.
For purposes of this subsection (d), the terms “United States” and “United States person” shall have the meanings specified in Section 7701 of the Internal Revenue Code. 
 ARTICLE III 
 SECURITY INTEREST;
OCCUPANCY; SETOFF 
 Section 3.1 Grant of Security Interest. The Borrower hereby pledges, assigns and grants to the
Lender, a lien and security interest (collectively referred to as the “Security Interest”) in the Collateral, as security for the payment and performance of: (a) all present and future Indebtedness of the Borrower to the Lender;
(b) all obligations of the Borrower and rights of the Lender under this Agreement; and (c) all present and future obligations of the Borrower to the Lender of other kinds. Upon request by the Lender, the Borrower will grant to the Lender a
security interest in all commercial tort claims that the Borrower may have against any Person. 
 Section 3.2 Notification of Account
Debtors and Other Obligors. The Lender may at any time during a Default Period notify any account debtor or other Person obligated to pay the amount due that such right to payment has been assigned or transferred to the Lender for security and
shall be paid directly to the Lender. The Borrower will join in giving such notice if the Lender so requests. At any time after the Borrower or the Lender gives such notice to an account debtor or other obligor, the Lender may, but need not, in the
Lender’s name or in the Borrower’s name, demand, sue for, collect or receive any money or property at any time payable or receivable on account of, or securing, any such right to payment, or grant any extension to, make any compromise or
settlement with or otherwise agree to waive, modify, amend or change the obligations (including collateral obligations) of any such account debtor or other obligor. The Lender may, in the Lender’s name or in the Borrower’s name, as the
Borrower’s agent and attorney-in-fact, notify the United States Postal Service to change the address for delivery of the Borrower’s mail to any address designated by the Lender, otherwise intercept the Borrower’s mail, and receive,
open and dispose of the Borrower’s mail, applying all Collateral as permitted under this Agreement and holding all other mail for the Borrower’s account or forwarding such mail to the Borrower’s last known address. 
  

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 Section 3.3 Assignment of Insurance. As additional security for the payment and performance
of the Indebtedness, the Borrower hereby assigns to the Lender any and all monies (including proceeds of insurance and refunds of unearned premiums) due or to become due under, and all other rights of the Borrower with respect to, any and all
policies of insurance now or at any time hereafter covering the Collateral or any evidence thereof or any business records or valuable papers pertaining thereto, and the Borrower hereby directs the issuer of any such policy to pay all such monies
directly to the Lender. At any time during a Default Period arising from an Event of Default, the Lender may (but need not), in the Lender’s name or in the Borrower’s name, execute and deliver proof of claim, receive all such monies,
endorse checks and other instruments representing payment of such monies, and adjust, litigate, compromise or release any claim against the issuer of any such policy. Any monies received as payment for any loss under any insurance policy mentioned
above (other than liability insurance policies) or as payment of any award or compensation for condemnation or taking by eminent domain, shall be paid over to the Lender to be applied, at the option of the Lender, either to the prepayment of the
Indebtedness or shall be disbursed to the Borrower under staged payment terms reasonably satisfactory to the Lender for application to the cost of repairs, replacements, or restorations. Any such repairs, replacements, or restorations shall be
effected with reasonable promptness and shall be of a value at least equal to the value of the items or property destroyed prior to such damage or destruction. 
 Section 3.4 Occupancy. The Borrower hereby irrevocably grants to the Lender the right to take exclusive possession of the Premises at any time during a Default Period arising from an Event of Default
without notice or consent. 
 (b) The Lender may use the Premises only to hold, process, manufacture, sell, use, store, liquidate, realize
upon or otherwise dispose of items that are Collateral and for other purposes that the Lender may in good faith deem to be related or incidental purposes. 
 (c) The Lender’s right to hold the Premises shall cease and terminate upon the earlier of (i) payment in full and discharge of all Indebtedness and termination of the Credit Facility, and (ii) final
sale or disposition of all items constituting Collateral and delivery of all such items to purchasers. 
 (d) The Lender shall not be
obligated to pay or account for any rent or other compensation for the possession, occupancy or use of any of the Premises; provided, however, that if the Lender does pay or account for any rent or other compensation for the
possession, occupancy or use of any of the Premises, the Borrower shall reimburse the Lender promptly for the full amount thereof. In addition, the Borrower will pay, or reimburse the Lender for, all taxes, fees, duties, imposts, charges and
expenses at any time incurred by or imposed upon the Lender by reason of the execution, delivery, existence, recordation, performance or enforcement of this Agreement or the provisions of this Section 3.4. 
 Section 3.5 License. Without limiting the generality of any other Security Document, the Borrower hereby grants to the Lender a
non-exclusive, worldwide and royalty-free license to use 

  

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or otherwise exploit all Intellectual Property Rights of the Borrower for the purpose of: (a) completing the manufacture of any in-process materials
during any Default Period so that such materials become saleable Inventory, all in accordance with the same quality standards previously adopted by the Borrower for its own manufacturing and subject to the Borrower’s reasonable exercise of
quality control; and (b) selling, leasing or otherwise disposing of any or all Collateral during any Default Period arising from an Event of Default. 
 Section 3.6 Financing Statement. The Borrower authorizes the Lender to file from time to time, such financing statements against collateral described as “all personal property” or “all
assets” or describing specific items of collateral including commercial tort claims as the Lender deems necessary or useful to perfect the Security Interest. All financing statements filed before the date hereof to perfect the Security Interest
were authorized by the Borrower and are hereby re-authorized. A carbon, photographic or other reproduction of this Agreement or of any financing statements signed by the Borrower is sufficient as a financing statement and may be filed as a financing
statement in any state to perfect the security interests granted hereby. For this purpose, the Borrower represents and warrants that the following information is true and correct: 
 Name and address of Debtor: 
 Delphax Technologies Inc. 
 6100 West 110th Street 
 Bloomington, Minnesota 55438 
 Federal Employer Identification No. 41-1392000 
 Organizational Identification
No. 3U 811 
 Section 3.7 Setoff. The Lender may at any time or from time to time, at its sole discretion and without demand
and without notice to anyone, setoff any liability owed to the Borrower by the Lender, whether or not due, against any Obligation, whether or not due. In addition, each other Person holding a participating interest in any Indebtedness shall have the
right to appropriate or setoff any deposit or other liability then owed by such Person to the Borrower, whether or not due, and apply the same to the payment of said participating interest, as fully as if such Person had lent directly to the
Borrower the amount of such participating interest. 
 Section 3.8 Collateral. This Agreement does not contemplate a sale of
accounts, contract rights or chattel paper, and, as provided by law, the Borrower is entitled to any surplus and shall remain liable for any deficiency. The Lender’s duty of care with respect to Collateral in its possession (as imposed by law)
shall be deemed fulfilled if it exercises reasonable care in physically keeping such Collateral, or in the case of Collateral in the custody or possession of a bailee or other third Person, exercises reasonable care in the selection of the bailee or
other third Person, and the Lender need not otherwise preserve, protect, insure or care for any Collateral. The Lender shall not be obligated to preserve any rights the Borrower may have against prior parties, to realize on the Collateral at all or
in any particular manner or order or to apply any cash proceeds of the Collateral in any particular order of application. The Lender has no obligation to clean-up or otherwise prepare the Collateral for sale. The Borrower waives any right it may
have to require the Lender to pursue any third Person for any of the Indebtedness. 
  

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 Section 3.9 Voting Rights; Dividends; Etc. 
 (a) Subject to paragraph (c) of this Section 3.9, the Borrower shall be entitled to exercise or refrain from exercising any and all voting and
other consensual rights pertaining to the Pledged Stock Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement. 
 (b) Subject to paragraph (e) of this Section 3.9, the Borrower shall be entitled to receive, retain, and use in any manner not prohibited by this Agreement any and all interest and dividends paid in respect
of the Pledged Stock Collateral; provided, however, that any and all dividends paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Stock Collateral, shall be, and shall be forthwith delivered to the Lender to hold as, Collateral. 
 (c) Upon the
occurrence and during the continuance of any Event of Default, the Lender shall have the right in its sole discretion, and the Borrower shall execute and deliver all such proxies and other instruments as may be necessary or appropriate to give
effect to such right, to terminate all rights of the Borrower to exercise or refrain from exercising the voting and other consensual rights it would otherwise be entitled to exercise pursuant to Section 3.9(a) hereof, and all such rights shall
thereupon become vested in the Lender who shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights; provided, however, that the Lender shall not be deemed to possess or have control over any
voting rights with respect to any Collateral unless and until the Lender has given written notice to the Borrower that any further exercise of such voting rights by the Borrower is prohibited and that the Lender and/or its assigns will henceforth
exercise such voting rights. 
 (d) Upon the occurrence and during the continuance of any Event of Default all rights of the Borrower to
receive the dividends that it would otherwise be authorized to receive and retain pursuant to Section 3.9(a) hereof shall cease, and all such rights shall thereupon become vested in the Lender who shall thereupon have the sole right to receive
and hold such dividends as Collateral. 
 ARTICLE IV 
 CONDITIONS OF LENDING 
 Section 4.1 Conditions Precedent to the Initial Advances and
Letter of Credit. The Lender’s obligation to make the initial Advances or to cause any Letters of Credit to be issued shall be subject to the condition precedent that the Lender shall have received all of the following, each properly
executed by the appropriate party and in form and substance satisfactory to the Lender: 
 (a) This Agreement. 
 (b) The Revolving Note. 
 (c) A Standby
Letter of Credit Agreement and a Commercial Letter of Credit Agreement, and L/C Application for each Letter of Credit that the Borrower wishes to have issued thereunder. 
  

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 (d) All of the conditions to the effectiveness of the Canadian Credit Agreement shall have been satisfied
and the initial transaction thereunder shall have been consummated. 
 (e) [Reserved]. 
 (f) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Premises, together with a landlord’s disclaimer and
consent with respect to each such lease. 
 (g) An acknowledgment and waiver of Liens for each customer or other third party location (other
than a warehouse) at which the Borrower is storing Inventory that it intends is to be considered as Eligible Inventory. 
 (h) An
acknowledgment and waiver of Liens from each warehouse in which the Borrower is storing Inventory. 
 (i) The Wholesale Lockbox and
Collection Account Agreement. 
 (j) A Patent and Trademark Security Agreement. 
 (k) A Subordination Agreement, duly executed by Whitebox. 
 (l) Current searches of appropriate filing offices showing that (i) no Liens have been filed and remain in effect against the Borrower except Permitted Liens or Liens held by Persons who have agreed in writing
that upon receipt of proceeds of the initial Advances, they will satisfy, release or terminate such Liens in a manner satisfactory to the Lender, and (ii) the Lender has duly filed all financing statements necessary to perfect the Security
Interest, to the extent the Security Interest is capable of being perfected by filing. 
 (m) A certificate of the Borrower’s Secretary
or Assistant Secretary certifying that attached to such certificate are (i) the resolutions of the Borrower’s Directors and, if required, Owners, authorizing the execution, delivery and performance of the Loan Documents, (ii) true,
correct and complete copies of the Borrower’s Constituent Documents, (iii) true and accurate copies of all of the Borrower’s loan documents and agreements (each as amended in connection with this Agreement) with Whitebox, and
(iii) examples of the signatures of the Borrower’s Officers or agents authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates, including Advance requests, on the Borrower’s behalf.

 (n) A current certificate issued by the Secretary of State of Minnesota, certifying that the Borrower is in compliance with all applicable
organizational requirements of the State of Minnesota. 
 (o) Evidence that the Borrower is duly licensed or qualified to transact business
in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary. 
 (p) A certificate of an Officer of the Borrower confirming the representations and warranties set forth in Article V. 
  

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 (q) Certificates of the insurance required hereunder, with all hazard insurance containing a
lender’s loss payable endorsement in the Lender’s favor and with all liability insurance naming the Lender as an additional insured. 
 (r) An opinion of counsel of to the Borrower, addressed to the Lender. 
 (s) Payment of all fees due under the terms of this
Agreement through the date of the initial Advance or the issuance of any Letter of Credit hereunder, and payment of all expenses incurred by the Lender through such date and that are required to be paid by the Borrower under this Agreement.

 (t) Evidence that after making the initial Revolving Advance, satisfying all obligations owed to the Borrower’s prior lender,
satisfying all trade payables older than 60 days from invoice date, book overdrafts and closing costs, the sum of (a) Availability, (b) “Availability” under and as defined in the Canadian Credit Agreement, plus (c) all
cash proceeds of the initial advance by Whitebox on the Funding Date to the Borrower remaining after the refinancing of certain of the Borrower’s and Delphax Canada’s existing subordinated debt obligations to Whitebox, plus
(d) consolidated cash on hand shall be not less than $4,500,000. 
 (u) A Customer Identification Information form and such other forms
and verification as the Lender may need to comply with the U.S.A. Patriot Act. 
 (v) A payoff letter or agreement, duly executed by the
Borrower and LaSalle Business Credit. 
 (w) Evidence that the Borrower has received the proceeds of additional subordinated indebtedness
extended to the Borrower by Whitebox in an amount not less than $6,100,000 and that a portion of such subordinated indebtedness shall have been used to repay all of the Borrower’s existing subordinated indebtedness obligations to Whitebox
Convertible Arbitrage Partners and Pandora Select Partners, L.P. 
 (x) Such other documents as the Lender in its sole discretion may
require. 
 Section 4.2 Conditions Precedent to All Advances and Letters of Credit. The Lender’s obligation to make each
Advance or to cause the issuance of a Letter of Credit shall be subject to the further conditions precedent that: 
 (a) the representations
and warranties contained in Article V are correct on and as of the date of such Advance or issuance of a Letter of Credit as though made on and as of such date, except to the extent that such representations and warranties relate solely to an
earlier date; and 
 (b) no event has occurred and is continuing, or would result from such Advance or issuance of a Letter of Credit that
constitutes a Default or an Event of Default. 
  

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 ARTICLE V 
 REPRESENTATIONS AND WARRANTIES 
 The Borrower represents and warrants to the Lender as
follows: 
 Section 5.1 Existence and Power; Name; Chief Executive Office; Inventory and Equipment Locations; Federal Employer
Identification Number and Organizational Identification Number. The Borrower is (a) a corporation, duly organized, validly existing and in good standing under the laws of the State of Minnesota; and (b) duly licensed or qualified to
transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary and and the failure to be so licensed or qualified
could reasonably be expected to have a Material Adverse Effect. Each Subsidiary (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and (b) is duly licensed and qualified to
transact business in all jurisdictions where the character of property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary and the failure to be so licensed or qualified could reasonably be
expected to have a Material Adverse Effect. The Borrower and each Subsidiary has all requisite power and authority to conduct its business, to own its properties and to execute and deliver, and to perform all of its obligations under, the Loan
Documents. During its existence, the Borrower and each Subsidiary has done business solely under the names set forth in Schedule 5.1. The Borrower’s and each Subsidiary’s chief executive office and principal place of business is located at
the address set forth in Schedule 5.1, and all of the Borrower’s records relating to its business or the Collateral are kept at its location so listed. All Inventory and Equipment is located at the locations listed in Schedule 5.1. The
Borrower’s federal employer identification number and organization identification number are correctly set forth in Section 3.6. 
 Section 5.2 Capitalization. Schedule 5.2 constitutes a correct and complete list of all Persons who are known to the Borrower to hold, or whose filings with the Securities and Exchange Commission report that the Person holds,
ownership interests and rights to acquire ownership interests which if fully exercised would cause such Person to hold more than five percent (5%) of all ownership interests of the Borrower on a fully diluted basis, and an organizational chart
showing the ownership structure of all Subsidiaries of the Borrower. 
 Section 5.3 Authorization of Borrowing; No Conflict as to Law
or Agreements. The execution, delivery and performance by the Borrower of the Loan Documents and the borrowings from time to time hereunder have been duly authorized by all necessary corporate action and do not and will not (i) require any
consent or approval of the Borrower’s Owners; (ii) require any authorization, consent or approval by, or registration, declaration or filing with, or notice to, any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any third party, except such authorization, consent, approval, registration, declaration, filing or notice as has been obtained, accomplished or given prior to the date hereof; (iii) violate any
provision of any law, rule or regulation (including Regulation X of the Board of Governors of the Federal Reserve System) or of any order, writ, injunction or decree presently in effect having applicability to the Borrower or of the
Borrower’s Constituent Documents; (iv) result in a breach of or constitute a default under any indenture or 

  

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loan or credit agreement or any other material agreement, lease or instrument to which the Borrower or any Subsidiary is a party or by which it or its
properties may be bound or affected; or (v) result in, or require, the creation or imposition of any Lien (other than the Security Interest) upon or with respect to any of the properties now owned or hereafter acquired by the Borrower.

 Section 5.4 Legal Agreements. This Agreement constitutes and, upon due execution by the Borrower, the other Loan Documents
will constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms. 
 Section 5.5 Subsidiaries. Except as set forth in Schedule 5.5 hereto, the Borrower has no Subsidiaries. 
 Section 5.6 Financial Condition; No Adverse Change. The Borrower has furnished to the Lender its audited consolidated financial statements for its fiscal year ended September 30, 2006, and unaudited consolidated and
consolidating financial statements for the fiscal-year-to-date period ended June 30, 2007 and those statements fairly present the Borrower’s and its Subsidiaries’ consolidated and consolidating financial condition on the dates thereof
and the results of its operations and cash flows for the periods then ended and were prepared in accordance with GAAP, except for the absence of footnotes. Since the date of the most recent financial statements, except as identified on Schedule 5.6,
there has been no change in the Borrower’s or its Subsidiaries’ business, properties or condition (financial or otherwise) that has had a Material Adverse Effect. 
 Section 5.7 Litigation. Except as set forth on Schedule 5.7, there are no actions, suits or proceedings pending or, to the Borrower’s
knowledge, threatened against or affecting the Borrower or any of its Subsidiaries or the properties of the Borrower or any of its Subsidiaries before any court or governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which, if determined adversely to the Borrower or any of its Subsidiaries, would have a Material Adverse Effect on the financial condition, properties or operations of the Borrower or any of its Subsidiaries. 
 Section 5.8 Regulation U. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock. 
 Section 5.9 Taxes. The Borrower and its Subsidiaries have paid or caused to be paid
to the proper authorities when due all federal, state and local taxes required to be withheld by each of them. The Borrower and its Subsidiaries have filed all federal, state and local tax returns which to the knowledge of the Officers of the
Borrower or any Subsidiary, as the case may be, are required to be filed, and the Borrower and its Subsidiaries have paid or caused to be paid to the respective taxing authorities all taxes as shown on said returns or on any assessment received by
any of them to the extent such taxes have become due. 
  

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 Section 5.10 Titles and Liens. The Borrower has good and marketable title to all Collateral
free and clear of all Liens other than Permitted Liens. No financing statement naming the Borrower as debtor is on file in any office except to perfect only Permitted Liens. 
 Section 5.11 Intellectual Property Rights. Owned Intellectual Property. Schedule 5.11 is a complete list of all patents,
applications for patents, registered trademarks, applications to register trademarks, registered service marks, applications to register service marks, mask works, and registered copyrights for which the Borrower or any Subsidiary is the owner of
record (the “Owned Intellectual Property”). Except as disclosed on Schedule 5.11, (i) the Borrower or the relevant Subsidiary listed on Schedule 5.11 owns the Owned Intellectual Property free and clear of all restrictions (including
covenants not to sue a third party), court orders, injunctions, decrees, writs or Liens, whether by written agreement or otherwise, (ii) no Person other than the Borrower owns or has been granted any right in the Owned Intellectual Property,
(iii) all Owned Intellectual Property is valid, subsisting and enforceable, (iv) the Borrower and each Subsidiary has taken all commercially reasonable action necessary to maintain and protect the Owned Intellectual Property, and
(v) the Borrower and each Subsidiary has registered with the applicable federal registration office all patents, trademarks, service marks, mask works, and copyrights for which the absence of registration could reasonably be expected to have a
Material Adverse Effect. 
 (b) Agreements with Employees and Contractors. The Borrower and each Subsidiary has entered into a legally
enforceable agreement with each of its employees and subcontractors who are engaged in research and development activities obligating each such Person to assign to the Borrower or such Subsidiary, without any additional compensation, any
Intellectual Property Rights created, discovered or invented by such Person in the course of such Person’s employment or engagement with the Borrower or such Subsidiary (except to the extent prohibited by law), and further requiring such Person
to cooperate with the Borrower or such Subsidiary, without any additional compensation, in connection with securing and enforcing any Intellectual Property Rights therein; provided, however, that the foregoing shall not apply with
respect to employees and subcontractors whose job descriptions are of the type such that no such assignments are reasonably foreseeable. 
 (c) Intellectual Property Rights Licensed from Others. Schedule 5.11 is a complete list of all agreements under which the Borrower or any Subsidiary has licensed Intellectual Property Rights from another Person (“Licensed
Intellectual Property”) other than readily available, licenses of computer software and other intellectual property used solely for performing accounting, word processing and similar administrative tasks (“Off-the-shelf Software”) or
which are customarily incorporated into the software that is included in the Company’s products, and a summary of any ongoing payments the Borrower is obligated to make with respect thereto. Except as disclosed on Schedule 5.11 and in written
agreements, copies of which have been given to the Lender, the Borrower’s and each Subsidiary’s licenses to use the Licensed Intellectual Property are free and clear of all restrictions, Liens, court orders, injunctions, decrees, or writs,
whether by written agreement or otherwise. Except as disclosed on Schedule 5.11, neither the Borrower nor any Subsidiary is obligated or under any liability whatsoever to make any payments of a material nature by way of royalties, fees or
otherwise to any owner of, licensor of, or other claimant to, any Intellectual Property Rights. 
  

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 (d) Other Intellectual Property Needed for Business. Except for Off-the-shelf Software and as
disclosed on Schedule 5.11, the Owned Intellectual Property and the Licensed Intellectual Property constitute all Intellectual Property Rights used or necessary to conduct the Borrower’s or any Subsidiary’s business as it is presently
conducted or as the Borrower reasonably foresees conducting it. 
 (e) Infringement. Except as disclosed on Schedule 5.11, neither
Borrower nor any Subsidiary has knowledge of, and has not received any written claim or notice alleging, any Infringement of another Person’s Intellectual Property Rights (including any written claim that the Borrower or any Subsidiary must
license or refrain from using the Intellectual Property Rights of any third party) nor, to the Borrower’s or any Subsidiary’s knowledge, is there any threatened claim or any reasonable basis for any such claim. 
 Section 5.12 Plans. Except as disclosed to the Lender in writing prior to the date hereof, neither the Borrower nor any ERISA Affiliate
(a) maintains or has maintained any Pension Plan, (b) contributes or has contributed to any Multiemployer Plan or (c) provides or has provided post-retirement medical or insurance benefits with respect to employees or former employees
(other than benefits required under Section 601 of ERISA, Section 4980B of the IRC or applicable state law). Neither the Borrower nor any ERISA Affiliate has received any notice or has any knowledge to the effect that it is not in full
compliance with any of the requirements of ERISA, the IRC or applicable state law with respect to any Plan. No Reportable Event exists in connection with any Pension Plan. Each Plan which is intended to qualify under the IRC is so qualified, and no
fact or circumstance exists which may have an adverse effect on the Plan’s tax-qualified status. Neither the Borrower nor any ERISA Affiliate has (i) any accumulated funding deficiency (as defined in Section 302 of ERISA and
Section 412 of the IRC) under any Plan, whether or not waived, (ii) any liability under Section 4201 or 4243 of ERISA for any withdrawal, partial withdrawal, reorganization or other event under any Multiemployer Plan or (iii) any
liability or knowledge of any facts or circumstances which could result in any liability to the Pension Benefit Guaranty Corporation, the Internal Revenue Service, the Department of Labor or any participant in connection with any Plan (other than
routine claims for benefits under the Plan). 
 Section 5.13 Default. The Borrower and each Subsidiary is in compliance with all
provisions of all agreements, instruments, decrees and orders to which it is a party or by which it or its property is bound or affected, the breach or default of which could reasonably be expected to have a Material Adverse Effect. 
 Section 5.14 Environmental Matters. Except as disclosed on Schedule 5.14, there are not present in, on or under the Premises any Hazardous
Substances in such form or quantity as to create any material liability or obligation for the Borrower, any Subsidiary or the Lender under the common law of any jurisdiction or under any Environmental Law, and no Hazardous Substances have ever been
stored, buried, spilled, leaked, discharged, emitted or released in, on or under the Premises in such a way as to create any such material liability. 
 (b) Except as disclosed on Schedule 5.14, neither Borrower nor any Subsidiary has disposed of Hazardous Substances in such a manner as to create any material liability under any Environmental Law. 
  

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 (c) Except as disclosed on Schedule 5.14, there have not existed in the past, nor are there any
threatened or impending requests, claims, notices, investigations, demands, administrative proceedings, hearings or litigation relating in any way to the Premises, the Borrower or any Subsidiary, alleging material liability under, violation of, or
noncompliance with any Environmental Law or any license, permit or other authorization issued pursuant thereto. 
 (d) Except as disclosed on
Schedule 5.14, the Borrower’s and each Subsidiary’s businesses are and have in the past always been conducted in accordance in all material respects with all Environmental Laws and all licenses, permits and other authorizations required
pursuant to any Environmental Law and necessary for the lawful and efficient operation of such businesses are in the Borrower’s possession and are in full force and effect, nor has the Borrower nor any Subsidiary been denied insurance on
grounds related to potential environmental liability. No permit required under any Environmental Law is scheduled to expire within 12 months and there is no threat that any such permit will be withdrawn, terminated, limited or materially changed.

 (e) Except as disclosed on Schedule 5.14, the Premises are not and never have been listed on the National Priorities List, the
Comprehensive Environmental Response, Compensation and Liability Information System or any similar federal, state or local list, schedule, log, inventory or database. 
 (f) The Borrower has delivered to the Lender all environmental assessments, audits, reports, permits, licenses and other documents describing or relating in any way to the Premises or the Borrower’s or any
Subsidiary’s businesses. 
 Section 5.15 Submissions to Lender. All financial and other information, other than projections,
valuations or proforma financial statements, provided to the Lender by or on behalf of the Borrower or any Subsidiary in connection with the Borrower’s request for the credit facilities contemplated hereby (i) is true and correct in all
material respects, and (ii) does not omit any material fact necessary to make such information not misleading. All projections, valuations or proforma financial statements provided to the Lender by or on behalf of the Borrower or any Subsidiary
in connection with the Borrower’s request for the credit facilities contemplated hereby present a good faith opinion as to such projections, valuations and proforma financial statements. 
 Section 5.16 Financing Statements. The Borrower has authorized the filing of financing statements sufficient when filed to perfect the
Security Interest and the other security interests created by the Security Documents. When such financing statements are filed in the offices noted therein, the Lender will have a valid and perfected security interest in all Collateral that is
capable of being perfected by filing financing statements. None of the Collateral is or will become a fixture on real estate, unless a sufficient fixture filing is in effect with respect thereto. 
 Section 5.17 Rights to Payment. Each right to payment and each instrument, document, chattel paper and other agreement constituting or
evidencing Collateral is (or, in the case of all future Collateral, will be when arising or issued) the valid, genuine and legally enforceable obligation, subject to no valid defense, setoff or counterclaim, of the account debtor or other obligor
named therein, or in the Borrower’s records pertaining thereto as being obligated to pay such obligation. 
  

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 Section 5.18 Financial Solvency. Both before and after giving effect to the transactions
contemplated in the Loan Documents, none of the Borrower or its Subsidiaries: 
 (a) Was or will be “insolvent”, as that term is
used and defined in Section 101(32) of the United States Bankruptcy Code and Section 2 of the Uniform Fraudulent Transfer Act; 
 (b) Has unreasonably small capital or is engaged or about to engage in a business or a transaction for which any remaining assets of the Borrower or such Subsidiary are unreasonably small; 
 (c) By executing, delivering or performing its obligations under the Loan Documents or other documents to which it is a party or by taking any action
with respect thereto, intends to, nor believes that it will, incur debts beyond its ability to pay them as they mature; 
 (d) By executing,
delivering or performing its obligations under the Loan Documents or other documents to which it is a party or by taking any action with respect thereto, intends to hinder, delay or defraud either its present or future creditors; and 
 (e) At this time contemplates filing a petition in bankruptcy or for an arrangement or reorganization or similar proceeding under any law of any
jurisdiction, nor, to the best knowledge of the Borrower, is the subject of any actual, pending or threatened bankruptcy, insolvency or similar proceedings under any law of any jurisdiction. 
 ARTICLE VI 
 COVENANTS 
 So long as the Indebtedness shall remain unpaid, or the Credit Facility shall remain outstanding, the Borrower will comply with the following
requirements, unless the Lender shall otherwise consent in writing: 
 Section 6.1 Reporting Requirements. The Borrower will
deliver, or cause to be delivered, to the Lender each of the following, which shall be in form and detail acceptable to the Lender: 
 (a)
Annual Financial Statements. As soon as available, and in any event within 90 days (except as to management letters referred to in clause (i) below) after the end of each fiscal year of the Borrower, the Borrower’s audited
consolidated financial statements with the unqualified opinion of independent certified public accountants selected by the Borrower and acceptable to the Lender, which annual consolidated financial statements shall include the Borrower’s
balance sheet as at the end of such fiscal year and the related statements of the Borrower’s income, retained earnings and cash flows for the fiscal year then ended, prepared in reasonable detail and in accordance with GAAP, together with
(i) copies of all management letters prepared by such accountants (which shall be delivered to the Lender promptly after they are received by the Borrower); and (ii) a certificate of the Borrower’s chief financial officer stating that
such financial statements have been prepared in accordance with GAAP, fairly 

  

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represent the Borrower’s and the Subsidiaries’ financial position and the results of its operations, and whether or not such Officer has knowledge
of the occurrence of any Default or Event of Default and, if so, stating in reasonable detail the facts with respect thereto. 
 (b)
Monthly Financial Statements. As soon as available and in any event within 30 days (or, with respect to the third month of each of the first three fiscal quarters, 45 days) after the end of each of the first eleven months of each fiscal year,
the consolidated, unaudited/internal balance sheet and consolidated statements of income and retained earnings of the Borrower as at the end of and for such month and for the year to date period then ended, prepared to include the Subsidiaries, in
reasonable detail and stating in comparative form the figures for the corresponding date and periods in the previous year, all prepared in accordance with GAAP, except for the absence of footnotes and subject to year-end audit adjustments and which
fairly represent the Borrower’s and the Subsidiaries’ financial position and the results of its operations; and accompanied by a certificate of the Borrower’s chief financial officer, substantially in the form of Exhibit B hereto
stating (i) that such financial statements have been prepared in accordance with GAAP, except for the absence of footnotes and subject to year-end audit adjustments, and fairly represent the Borrower’s and the Subsidiaries’ financial
position and the results of its operations, (ii) whether or not such Officer has knowledge of the occurrence of any Default or Event of Default not theretofore reported and remedied and, if so, stating in reasonable detail the facts with
respect thereto, and (iii) all relevant facts in reasonable detail to evidence, and the computations as to, whether or not the Borrower is in compliance with the Financial Covenants. 
 (c) Collateral Reports. Within 15 days after the end of each month (or more frequently during any Default Period if the Lender so requires), the
Borrower’s accounts receivable and its accounts payable, a detailed inventory report, an inventory certification report, and a calculation of the Borrower’s Accounts, Eligible Accounts, Inventory and Eligible Inventory as at the end of
such month or shorter time period, in each case in form and substance acceptable to the Lender. 
 (d) Projections. No later than 30
days after the last day of each fiscal year, 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. 
 (e) Supplemental Reports. Weekly, or more frequently if the Lender so requires, the Borrower’s “daily collateral reports”,
receivables schedules and collection reports, each in form and substance acceptable to the Lender. 
 (f) Litigation. Immediately
after the commencement thereof, notice in writing of all litigation and of all proceedings before any governmental or regulatory agency affecting the Borrower or any Subsidiary (i) of the type described in Section 5.14(c) or
(ii) which seek a monetary recovery against the Borrower or any Subsidiary in excess of $50,000. 
  

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 (g) Defaults. When any Officer of the Borrower becomes aware of the probable occurrence of any
Default or Event of Default, and no later than 3 days after such Officer becomes aware of such Default or Event of Default, notice of such occurrence, together with a detailed statement by a responsible Officer of the Borrower of the steps being
taken by the Borrower to cure the effect thereof. 
 (h) Plans. As soon as possible, and in any event within 30 days after the
Borrower knows that any Reportable Event with respect to any Pension Plan has occurred, a statement signed by the Officer who is the Borrower’s chief financial officer setting forth details as to such Reportable Event and the action which the
Borrower proposes to take with respect thereto, together with a copy of the notice of such Reportable Event to the Pension Benefit Guaranty Corporation. As soon as possible, and in any event within 10 days after the Borrower fails to make any
quarterly contribution required with respect to any Pension Plan under Section 412(m) of the IRC, the Borrower will deliver to the Lender a statement signed by the Officer who is the Borrower’s chief financial officer setting forth details
as to such failure and the action which the Borrower proposes to take with respect thereto, together with a copy of any notice of such failure required to be provided to the Pension Benefit Guaranty Corporation. As soon as possible, and in any event
within ten days after the Borrower knows that it has or is reasonably expected to have any liability under Sections 4201 or 4243 of ERISA for any withdrawal, partial withdrawal, reorganization or other event under any Multiemployer Plan, the
Borrower will deliver to the Lender a statement of the Borrower’s chief financial officer setting forth details as to such liability and the action which the Borrower proposes to take with respect thereto. 
 (i) Disputes. Promptly upon knowledge thereof, notice of (i) any disputes or claims by the Borrower’s customers exceeding $50,000
individually or $100,000 in the aggregate during any fiscal year; (ii) credit memos; and (iii) any goods returned to or recovered by the Borrower. 
 (j) Officers and Directors. Promptly upon knowledge thereof, notice of any change in the persons constituting the Borrower’s Officers and Directors. 
 (k) Collateral. Promptly upon knowledge thereof, notice of any loss of or material damage to any Collateral or of any substantial adverse change
in any Collateral or the prospect of payment thereof. 
 (l) Commercial Tort Claims. Promptly upon knowledge thereof, notice of any
commercial tort claims it may bring against any Person, including the name and address of each defendant, a summary of the facts, an estimate of the Borrower’s damages, copies of any complaint or demand letter submitted by the Borrower, and
such other information as the Lender may request. 
 (m) Intellectual Property. 
 (i) 30 days prior written notice of Borrower’s or any Subsidiary’s intent to acquire material Intellectual Property Rights;
except for transfers permitted under Section 6.18, the Borrower will give the Lender 30 days prior written notice of its intent to dispose of material Intellectual Property Rights and upon request shall provide the Lender with copies of all
proposed documents and agreements concerning such rights. 
  

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 (ii) Promptly upon knowledge thereof, notice of (A) any Infringement of its
Intellectual Property Rights by others, (B) claims that the Borrower or any Subsidiary is Infringing another Person’s Intellectual Property Rights and (C) any threatened cancellation, termination or material limitation of its
Intellectual Property Rights. 
 (iii) Promptly upon receipt, copies of all registrations and filings with respect to its
Intellectual Property Rights. 
 (n) Reports to Owners. Promptly upon their distribution, copies of all financial statements, reports
and proxy statements which the Borrower shall have sent to its Owners. 
 (o) SEC Filings. Promptly after the sending or filing
thereof, copies of all regular and periodic reports which the Borrower shall file with the Securities and Exchange Commission or any national securities exchange. 
 (p) Violations of Law. Promptly upon knowledge thereof, notice of the Borrower’s violation of any law, rule or regulation, the non-compliance with which could have a Material Adverse Effect. 
 (q) Other Reports. From time to time, with reasonable promptness, any and all receivables schedules, inventory reports, collection reports,
deposit records, equipment schedules, copies of invoices to account debtors, shipment documents and delivery receipts for goods sold, and such other material, reports, records or information as the Lender may request. 
 Section 6.2 Financial Covenants. Minimum Net Income. The Borrower will achieve, for each period from the first day of the 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): 
  

					
	 Year-to-Date Period Ending the Last Day of
	  	Minimum Net Income	 
	 June 2007
	  	$	(1,000,000	)
	 July 2007
	  	$	(1,250,000	)
	 August 2007
	  	$	(1,500,000	)
	 September 2007
	  	$	(1,500,000	)

 (b) Minimum Debt Service Coverage Ratio. The Borrower will maintain, for each period from
the first day of the fiscal year containing the following indicated months to the last day of such month, a Debt Service Coverage Ratio, of not less than the ratio set forth opposite such month in the table below: 
  

			
	 Year-to-Date Period Ending the Last Day of

	  	 Minimum Debt Service Coverage Ratio

	 June, 2007
	  	1.45 to 1.00
	 September, 2007
	  	3.50 to 1.00

 (c) Capital Expenditures. The Borrower will not incur or contract to incur Capital
Expenditures of more than $300,000 in the aggregate during any fiscal year. 
  

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 (d) 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. 
 Section 6.3 Permitted Liens; Financing Statement. The Borrower will not, and will not permit any Subsidiary to, create, incur or suffer to exist any Lien upon or of any of its assets, now owned or hereafter acquired, to secure
any indebtedness; excluding, however, from the operation of the foregoing, the following (each a “Permitted Lien”; collectively, “Permitted Liens”): 
 (i) Real estate restrictive covenants, restrictions, rights, easements and minor irregularities in title which do not materially interfere
with the Borrower’s or any Subsidiary’s business or operations as presently conducted; 
 (ii) Liens in existence on
the date hereof and listed in Schedule 6.3 hereto (or replacements or refinancings thereof covering no more than the same property), securing indebtedness for borrowed money permitted under this Agreement; 
 (iii) The Security Interest and Liens created by the Security Documents; 
 (iv) Liens created by the “Security Documents” under and as defined in the Canadian Credit Agreement; and 
 (v) Purchase money Liens relating to the acquisition of machinery and equipment of the Borrower or any Subsidiary not exceeding the lesser
of cost or fair market value thereof, not exceeding $250,000 for any one purchase or $500,000 in the aggregate during any fiscal year, and so long as no Default Period is then in existence and none would exist immediately after such
acquisition. 
 (b) The Borrower will not amend any financing statements in favor of the Lender except as permitted by law. 
 Section 6.4 Indebtedness. The Borrower will not, and will not permit any Subsidiary to, incur, create, assume or permit to exist any
indebtedness or liability on account of deposits or advances or any indebtedness for borrowed money or letters of credit issued on the Borrower’s behalf, or any other indebtedness or liability evidenced by notes, bonds, debentures or similar
obligations, except: 
 (a) Any existing or future Indebtedness or any other obligations of the Borrower to the Lender; 
 (b) Any indebtedness of the Borrower in existence on the date hereof and listed in Schedule 6.4 hereto (and any replacements or refinancings thereof that
do not increase the aggregate amount thereof); 
 (c) Any indebtedness relating to Permitted Liens; and 
 (d) Intercompany indebtedness of the type specified in Section 6.6(e). 
  

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 Section 6.5 Guaranties. The Borrower will not, and will not permit any Subsidiary to, assume,
guarantee, endorse or otherwise become directly or contingently liable in connection with any obligations of any other Person, except: 
 (a)
The endorsement of negotiable instruments by the Borrower for deposit or collection or similar transactions in the ordinary course of business; 
 (b) Guaranties, endorsements and other direct or contingent liabilities in connection with the obligations of other Persons, in existence on the date hereof and listed in Schedule 6.4 hereto (or replacements thereof); and 
 (c) Guaranties in favor of the Canadian Lender to secure the “Indebtedness” under and as defined in the Canadian Credit Agreement. 

Section 6.6 Investments and Subsidiaries. The Borrower will not make or permit to exist any loans or advances to, or make any investment
or acquire any interest whatsoever in, any other Person or Affiliate, including any partnership or joint venture, nor purchase or hold beneficially any stock or other securities or evidence of indebtedness of any other Person or Affiliate, except:

 (a) Investments in direct obligations of the United States of America or any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America having a maturity of one year or less, commercial paper issued by U.S. corporations rated “A-1” or “A-2” by Standard & Poor’s Ratings Services or
“P-1” or “P-2” by Moody’s Investors Service or certificates of deposit or bankers’ acceptances having a maturity of one year or less issued by members of the Federal Reserve System having deposits in excess of
$100,000,000 (which certificates of deposit or bankers’ acceptances are fully insured by the Federal Deposit Insurance Corporation); 
 (b) Travel advances or loans to the Borrower’s Officers and employees not exceeding at any one time an aggregate of $50,000. 
 (c) Prepaid rent not exceeding one month or security deposits; 
 (d) Current investments in the Subsidiaries in existence on the
date hereof and listed in Schedule 5.5 hereto; and 
 (e) Unsecured loans by Delphax Canada to the Borrower and unsecured loans by the
Borrower to Delphax Canada, in each case in the ordinary course of business. 
 Section 6.7 Dividends and Distributions. The
Borrower will not declare or pay any dividends (other than dividends payable solely in stock of the Borrower) on any class of its stock, or make any payment on account of the purchase, redemption or other retirement of any shares of such stock, or
other securities or evidence of its indebtedness or make any distribution in respect thereof, either directly or indirectly. The Borrower will not, and will not permit any Subsidiary to, place or allow any restriction, directly or indirectly, on the
ability of any Subsidiary to (a) pay dividends or any distributions on or with respect to such Subsidiary’s stock or equity interests to the Borrower or (b) to make other cash payments to Borrower, in each case except for existing
limitations under the Borrower and Delphax Canada’s existing agreement with Whitebox. 
  

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 Section 6.8 Salaries. The Borrower will not, and will not permit any Subsidiary to, pay
excessive or unreasonable salaries, bonuses, commissions, consultant fees or other compensation; or increase the salary, bonus, commissions, consultant fees for any current or former Director or Officer or other compensation of any Director,
Officer, or consultant who is or ever was a Director or Officer, or any member of their families, by more than ten percent (10%) in any one year, either individually or for all such persons in the aggregate; provided, however, that the Borrower
and Subsidiaries may pay bonuses in accordance with and subject to the conditions and limitations of the written Management Incentive Plan in effect on the date hereof that has been delivered to the Lender (and which is not to be revised or altered
without the Lender’s prior consent). 
 Section 6.9 [Reserved]. 
 Section 6.10 Books and Records; Collateral Examination, Inspection and Appraisals. The Borrower will, and will cause such Subsidiary to, keep
accurate books of record and account for itself pertaining (as to the Borrower) to the Collateral and pertaining to the Borrower’s or each Subsidiary’s business and financial condition and such other matters as the Lender may from time to
time request in which true and complete entries will be made in accordance with GAAP and, upon the Lender’s request, will permit any officer, employee, attorney, accountant or other agent of the Lender to audit, review, make extracts from or
copy any and all company and financial books and records of the Borrower or each Subsidiary at all times during ordinary business hours, to send and discuss with account debtors and other obligors requests for verification of amounts owed to the
Borrower, and to discuss the Borrower’s or each Subsidiary’s affairs with any of its Directors, Officers, employees or agents. 
 (b) The Borrower hereby irrevocably authorizes all accountants and third parties to disclose and deliver to the Lender or its designated agent, at the Borrower’s expense, all financial information, books and records, work papers,
management reports and other information in their possession regarding the Borrower or any Subsidiary. 
 (c) The Borrower will permit the
Lender or its employees, accountants, attorneys or agents, to examine and inspect any Collateral or any other property of the Borrower at any time during ordinary business hours. 
 (d) The Lender may also, from time to time, no more than one time each calendar year unless an Event of Default is continuing, obtain at the
Borrower’s expense an appraisal of the Inventory by an appraiser acceptable to the Lender in its sole discretion. 
 Section 6.11
Account Verification. The Lender or its agent may at any time and from time to time send or require the Borrower to send requests for verification of accounts or notices of assignment to account debtors and other obligors. The Lender or its
agent may also at any time and from time to time telephone account debtors and other obligors to verify accounts. 
 (b) The Borrower shall
pay when due each account payable due to a Person holding a Permitted Lien (as a result of such payable) on any Collateral. 
  

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 Section 6.12 Compliance with Laws. The Borrower shall (i) comply, and cause each
Subsidiary to comply, with the requirements of applicable laws and regulations, the non-compliance with which would materially and adversely affect its business or its financial condition and (ii) use and keep the Collateral, and require
that others use and keep the Collateral, only for lawful purposes, without material violation of any federal, state or local law, statute or ordinance. 
 (b) Without limiting the foregoing undertakings, the Borrower specifically agrees that it will comply, and cause each Subsidiary to comply, with all applicable Environmental Laws and obtain and comply with all
permits, licenses and similar approvals required by any Environmental Laws, and will not generate, use, transport, treat, store or dispose of any Hazardous Substances in such a manner as to create any material liability or obligation under the
common law of any jurisdiction or any Environmental Law. 
 (c) The Borrower shall (i) ensure that no Director or Officer of the
Borrower shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Asset Control (“OFAC”), the Department of the Treasury or included in any Executive Orders,
(ii) not use or permit the use of the proceeds of the Credit Facility or any other financial accommodation from the Lender to violate any of the foreign asset control regulations of OFAC or other applicable law, (iii) comply, and cause
each Subsidiary to comply, with all applicable Bank Secrecy Act laws and regulations, as amended from time to time, and (iv) otherwise comply with the USA Patriot Act as required by federal law and the Lender’s policies and practices.

 Section 6.13 Payment of Taxes and Other Claims. The Borrower will, and will cause each Subsidiary to, pay or discharge, when
due, (a) all taxes, assessments and governmental charges levied or imposed upon it or upon its income or profits, upon any properties belonging to it (including, as to the Borrower, the Collateral) or upon or against the creation, perfection or
continuance of the Security Interest, prior to the date on which penalties attach thereto, (b) all federal, state and local taxes required to be withheld by it, and (c) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a Lien upon any properties of the Borrower or any Subsidiary; provided, that neither Borrower nor any Subsidiary shall be required to pay any such tax, assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which proper reserves have been made. 
  

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 Section 6.14 Maintenance of Properties. The Borrower will, and will cause each Subsidiary to,
keep and maintain (as to the Borrower) the Collateral and all of its other properties necessary or useful in its business in good condition, repair and working order (normal wear and tear excepted) and will from time to time replace or repair any
worn, defective or broken parts; provided, however, that nothing in this covenant shall prevent the Borrower or any Subsidiary from discontinuing the operation and maintenance of any of its properties if such discontinuance is, in the
Borrower’s judgment, desirable in the conduct of the Borrower’s or any Subsidiary’s business and not disadvantageous in any material respect to the Lender. The Borrower will, and will cause each Subsidiary to, take all commercially
reasonable steps necessary to protect and maintain its Intellectual Property Rights. 
 (b) The Borrower will defend the Collateral against
all Liens, claims or demands of all Persons (other than the Lender) claiming the Collateral or any interest therein. The Borrower will keep all Collateral free and clear of all Liens except Permitted Liens. The Borrower will take all commercially
reasonable steps necessary to prosecute any Person Infringing its Intellectual Property Rights and to defend itself against any Person accusing it of Infringing any Person’s Intellectual Property Rights. 
 Section 6.15 Insurance. The Borrower will, and will cause each Subsidiary to, obtain and at all times maintain insurance with insurers
acceptable to the Lender, in such amounts, on such terms (including any deductibles) and against such risks as may from time to time be required by the Lender, but in all events in such amounts and against such risks as is usually carried by
companies engaged in similar business and owning similar properties in the same general areas in which the Borrower operates. Without limiting the generality of the foregoing, the Borrower will at all times maintain business interruption insurance
including coverage for force majeure and keep all tangible Collateral insured against risks of fire (including so-called extended coverage), theft, collision (for Collateral consisting of motor vehicles) and such other risks and in such amounts as
the Lender may reasonably request, with any loss payable to the Lender to the extent of its interest, and all policies of such insurance shall contain a lender’s loss payable endorsement for the Lender’s benefit. 
 Section 6.16 Preservation of Existence. The Borrower will, and will cause each Subsidiary to, preserve and maintain its existence and all of
its rights, privileges and franchises necessary or desirable in the normal conduct of its business and shall conduct its business in an orderly, efficient and regular manner. 
 Section 6.17 Delivery of Instruments, etc. Upon request by the Lender, the Borrower will promptly deliver to the Lender in pledge all
instruments, documents and chattel paper constituting Collateral, duly endorsed or assigned by the Borrower. 
 Section 6.18 Sale or
Transfer of Assets; Suspension of Business Operations. The Borrower will not, and will not permit any Subsidiary to, sell, lease, assign, transfer or otherwise dispose of (a) the stock of any Subsidiary, or (b) any Collateral (as to
the Borrower) or any other assets or any interest therein (whether in one transaction or in a series of transactions) to any other Person other than (i) the sale of Inventory in the ordinary course of business or (ii) the disposal of
obsolete or unneeded equipment the aggregate value of which does not exceed $100,000 during any 12-month period. The Borrower will not, and will not permit any 

  

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Subsidiary to, liquidate, dissolve or suspend business operations. The Borrower will not, and will not permit any Subsidiary to, transfer any part of its
ownership interest in any Intellectual Property Rights and will not permit any agreement under which it has Licensed Intellectual Property to lapse, except that the Borrower or any Subsidiary may transfer such rights or permit such agreements to
lapse if it shall have reasonably determined that the applicable Intellectual Property Rights are no longer useful in its business. If the Borrower transfers any Intellectual Property Rights for value, the Borrower will pay over the proceeds to the
Lender for application to the Indebtedness. The Borrower will not, and will not permit any Subsidiary to, license any other Person to use any of the Borrower’s or such Subsidiary’s Intellectual Property Rights, except that the Borrower may
grant licenses in the ordinary course of its business in connection with sales of Inventory or provision of services to its customers. 
 Section 6.19 Consolidation and Merger; Asset Acquisitions. The Borrower will not, and will not permit any Subsidiary to, consolidate with or merge into any Person, or permit any other Person to merge into it, or acquire (in a
transaction analogous in purpose or effect to a consolidation or merger) all or substantially all the assets of any other Person. 
 Section 6.20 Sale and Leaseback. The Borrower will not, and will not permit any Subsidiary to, enter into any arrangement, directly or indirectly, with any other Person whereby the Borrower or each Subsidiary shall sell or
transfer any real or personal property, whether now owned or hereafter acquired, and then or thereafter rent or lease as lessee such property or any part thereof or any other property which the Borrower or each Subsidiary intends to use for
substantially the same purpose or purposes as the property being sold or transferred. 
 Section 6.21 Restrictions on Nature of
Business. The Borrower will not, and will not permit any Subsidiary to, engage in any line of business materially different from that presently engaged in by the Borrower and will not, and will not permit any Subsidiary to, purchase, lease or
otherwise acquire assets not related to its business. 
 Section 6.22 Accounting. The Borrower will not, and will not permit any
Subsidiary to, adopt any material change in accounting principles other than as required by GAAP. The Borrower will not, and will not permit any Subsidiary to, adopt, permit or consent to any change in its fiscal year. 
 Section 6.23 Discounts, etc. The Borrower will not grant any discount, credit or allowance to any customer of the Borrower or accept any
return of goods sold after notice from the Lender during a Default Period, or, in any case, outside the ordinary course of business. The Borrower will not modify, amend, subordinate, cancel or terminate any account debtor or other obligor of the
Borrower after notice from the Lender during a Default Period, or, in any case, outside the ordinary course of business. 
 Section 6.24
Plans. Except as disclosed to the Lender in writing prior to the date hereof, neither the Borrower nor any ERISA Affiliate will (i) adopt, create, assume or become a party to any Pension Plan, (ii) incur any obligation to contribute
to any Multiemployer Plan, (iii) incur any obligation to provide post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required by law) or (iv) amend any Plan in a manner that
would materially increase its funding obligations. 
  

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 Section 6.25 Place of Business; Name. The Borrower will not, and will not permit any
Subsidiary to (a) transfer its chief executive office or principal place of business, or (b) except upon no less than 30 days prior written notice to the Lender, move, relocate, close or sell any business location of the Borrower or any
Subsidiary. The Borrower will not permit any tangible Collateral or any records pertaining to the Collateral to be located in any state or area in which, in the event of such location, a financing statement covering such Collateral would be required
to be, but has not in fact been, filed in order to perfect the Security Interest. The Borrower will not, and will not permit any Subsidiary to, change its name or jurisdiction of organization. 
 Section 6.26 Constituent Documents; S Corporation Status. The Borrower will not, and will not permit any Subsidiary to, amend its Constituent
Documents. The Borrower will not become an S Corporation. 
 Section 6.27 Performance by the Lender. If the Borrower at any
time fails to perform or observe any of the foregoing covenants contained in this Article VI or elsewhere herein, and if such failure shall continue for a period of 15 calendar days after the Lender gives the Borrower written notice thereof (or
in the case of the agreements contained in Section 6.13 and Section 6.15, immediately upon the occurrence of such failure, without notice or lapse of time), the Lender may, but need not, perform or observe such covenant on behalf and in
the name, place and stead of the Borrower (or, at the Lender’s option, in the Lender’s name) and may, but need not, take any and all other actions which the Lender may reasonably deem necessary to cure or correct such failure (including
the payment of taxes, the satisfaction of Liens, the performance of obligations owed to account debtors or other obligors, the procurement and maintenance of insurance, the execution of assignments, security agreements and financing statements, and
the endorsement of instruments); and the Borrower shall thereupon pay to the Lender on demand the amount of all monies expended and all costs and expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Lender in
connection with or as a result of the performance or observance of such agreements or the taking of such action by the Lender, together with interest thereon from the date expended or incurred at the Default Rate. To facilitate the Lender’s
performance or observance of such covenants of the Borrower, the Borrower hereby irrevocably appoints, effective during any Default Period, the Lender, or the Lender’s delegate, acting alone, as the Borrower’s attorney in fact (which
appointment is coupled with an interest) with the right (but not the duty) from time to time to create, prepare, complete, execute, deliver, endorse or file in the name and on behalf of the Borrower any and all instruments, documents, assignments,
security agreements, financing statements, applications for insurance and other agreements required to be obtained, executed, delivered or endorsed by the Borrower hereunder. 
 ARTICLE VII 
 EVENTS OF DEFAULT, RIGHTS AND REMEDIES 
 Section 7.1 Events of Default. “Event of Default”, wherever used herein, means any one of the following events: 
 (a) Default in the payment of the Revolving Note, any Obligation of Reimbursement, or any default with respect to any other Indebtedness due from Borrower
to Lender as such Indebtedness becomes due and payable; 
  

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 (b) Default in the performance, or breach, of any covenant or agreement of the Borrower contained in this
Agreement (other than those described in other Sections of this Section 7.1) and, except in the case of any such default or breach under Sections 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.13, 6.15, 6.16, 6.18, 6.19 or 6.25 of this Agreement or that
is not reasonably susceptible of cure, such default or breach shall continue for 15 calendar days after whichever of the following dates is the earliest: (i) the date the Borrower gives notice of such breach or default to the Lender,
(ii) the date the Borrower should have given notice of such breach or default to the Lender pursuant to Section 6.1 of above, or (iii) the date the Lender gives notice of such breach or default to the Borrower (or, in the case of a
breach of the covenant set forth in Section 6.2(d), such breach shall continue for a period of five days following such breach). 
 (c)
A Change of Control shall occur; 
 (d) The failure of the Lender and the Borrower to, by November 30 each calendar year, to come to an
agreement to amend the Financial Covenant set forth in Section 6.2(a) and (b) to cover periods after September 30 of such year. 
 (e) Except as described in Section 7.1(d), any Financial Covenant shall become inapplicable due to the lapse of time and the failure of the Lender and the Borrower to come to any agreement to amend any such covenant to cover future
periods that is acceptable to the Lender in the Lender’s sole discretion. 
 (f) The Borrower or any Subsidiary shall be or become
insolvent, or admit in writing its or his inability to pay its or his debts as they mature, or make an assignment for the benefit of creditors; or the Borrower or any Subsidiary shall apply for or consent to the appointment of any receiver, trustee,
or similar officer for it or for all or any substantial part of its property; or such receiver, trustee or similar officer shall be appointed without the application or consent of the Borrower or such Subsidiary, as the case may be; or the Borrower
or any Subsidiary shall institute (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding relating to it under the laws of
any jurisdiction; or any such proceeding shall be instituted (by petition, application or otherwise) against the Borrower or any such Subsidiary ; or any judgment, writ, warrant of attachment or execution or similar process shall be issued or levied
against a substantial part of the property of the Borrower or any Subsidiary; 
 (g) A petition shall be filed by or against the Borrower or
any Subsidiary under the United States Bankruptcy Code or the laws of any other jurisdiction naming the Borrower or such Subsidiary as debtor; 
 (h) Any “Event of Default” shall occur under the Canadian Credit Agreement; 
 (i) Any representation or warranty made by
the Borrower in this Agreement, by any Guarantor in any Guaranty delivered to the Lender, or by the Borrower (or any of its Officers) or any Guarantor in any agreement, certificate, instrument or financial statement or other statement contemplated
by or made or delivered pursuant to or in connection with this Agreement or any such Guaranty shall be incorrect in any material respect; 
  

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 (j) The rendering against the Borrower of an arbitration award, a final judgment, decree or order for the
payment of money in excess of $50,000 and the continuance of such arbitration award, judgment, decree or order unsatisfied and in effect for any period of 30 consecutive days without a stay of execution; 
 (k) A default under any bond, debenture, note or other evidence of material indebtedness of the Borrower or any Subsidiary, which bond, debenture, note
or indebtedness is in an amount in excess of $50,000, owed to any Person other than the Lender, or under any indenture or other instrument under which any such evidence of indebtedness has been issued or by which it is governed, or under any lease
requiring payments by the Borrower in an amount in excess of $50,000 in any fiscal year, and the expiration of the applicable period of grace, if any, specified in such evidence of indebtedness, indenture, other instrument, lease or contract;

 (l) Any Reportable Event, which the Lender determines in good faith might constitute grounds for the termination of any Pension Plan or
for the appointment by the appropriate United States District Court of a trustee to administer any Pension Plan, shall have occurred and be continuing 30 days after written notice to such effect shall have been given to the Borrower by the
Lender; or a trustee shall have been appointed by an appropriate United States District Court to administer any Pension Plan; or the Pension Benefit Guaranty Corporation shall have instituted proceedings to terminate any Pension Plan or to appoint a
trustee to administer any Pension Plan; or the Borrower or any ERISA Affiliate shall have filed for a distress termination of any Pension Plan under Title IV of ERISA; or the Borrower or any ERISA Affiliate shall have failed to make any quarterly
contribution required with respect to any Pension Plan under Section 412(m) of the IRC, which the Lender determines in good faith may by itself, or in combination with any such failures that the Lender may determine are likely to occur in the
future, result in the imposition of a Lien on the Borrower’s assets in favor of the Pension Plan; or any withdrawal, partial withdrawal, reorganization or other event occurs with respect to a Multiemployer Plan which results or could reasonably
be expected to result in a material liability of the Borrower to the Multiemployer Plan under Title IV of ERISA; 
 (m) An event of default
shall occur under any Security Document shall continue beyond any grace period applicable thereto; 
 (n) Default in the payment of any
amount owed by the Borrower or any Subsidiary to the Lender other than any Indebtedness arising hereunder beyond any grace period applicable thereto; 
 (o) The Borrower shall take or participate in any action which would be prohibited under the provisions of any Subordination Agreement or make any payment with respect to, or purchase or redeem, indebtedness that has
been subordinated pursuant to any Subordination Agreement; 
 (p) There has occurred any breach, default or event of default that shall
continue beyond any grace period applicable thereto, if any, by or attributable to, any Affiliate under any agreement between the Affiliate and the Lender; or 
  

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 (q) The indictment of any Director, Officer, Guarantor, or any Owner of at least twenty (20%) of the
issued and outstanding common stock of the Borrower for a felony offence related to the Borrower, any Subsidiaries, or their business, under state or federal law; or the conviction of any Director, Officer, Guarantor, or any Owner of at least twenty
(20%) of the issued and outstanding common stock of the Borrower for any other felony offence under state or federal law. 
 Section 7.2 Rights and Remedies. During any Default Period arising from an Event of Default, the Lender may exercise any or all of the following rights and remedies: 
 (a) The Lender may, by notice to the Borrower, declare the Commitment to be terminated, whereupon the same shall forthwith terminate; 
 (b) The Lender may, by notice to the Borrower, declare the Indebtedness to be forthwith due and payable, whereupon all Indebtedness shall become and be
forthwith due and payable, without presentment, notice of dishonor, protest or further notice of any kind, all of which the Borrower hereby expressly waives; 
 (c) The Lender may, without notice to the Borrower and without further action, apply any and all money owing by the Lender to the Borrower to the payment of the Indebtedness; 
 (d) The Lender may exercise and enforce any and all rights and remedies available upon default to a secured party under the UCC, including the right to
take possession of Collateral, or any evidence thereof, proceeding without judicial process or by judicial process (without a prior hearing or notice thereof, which the Borrower hereby expressly waives) and the right to sell, lease or otherwise
dispose of any or all of the Collateral (with or without giving any warranties as to the Collateral, title to the Collateral or similar warranties), and, in connection therewith, the Borrower will on demand assemble the Collateral and make it
available to the Lender at a place to be designated by the Lender which is reasonably convenient to both parties; 
 (e) The Lender may make
demand upon the Borrower and, forthwith upon such demand, the Borrower will pay to the Lender in immediately available funds for deposit in the Special Account pursuant to Section 2.5 an amount equal to the aggregate maximum amount available to
be drawn under all Letters of Credit then outstanding, assuming compliance with all conditions for drawing thereunder; 
 (f) The Lender may
exercise and enforce its rights and remedies under the Loan Documents; 
 (g) The Lender may apply for the appointment of a receiver of the
Collateral whether or not foreclosure proceedings have been commenced under the Security Documents and whether or not a foreclosure sale has occurred; and 
 (h) The Lender may exercise any other rights and remedies available to it by law or agreement. 
 Notwithstanding the
foregoing, upon the occurrence of an Event of Default described in Section 7.1(f) or (g), the Indebtedness shall be immediately due and payable automatically without 

  

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presentment, demand, protest or notice of any kind. If the Lender sells any of the Collateral on credit, the Indebtedness will be reduced only to the extent
of payments actually received. If the purchaser fails to pay for the Collateral, the Lender may resell the Collateral and shall apply any proceeds actually received to the Indebtedness. 
 Section 7.3 Certain Notices. If notice to the Borrower of any intended disposition of Collateral or any other intended action is required by
law in a particular instance, such notice shall be deemed commercially reasonable if given (in the manner specified in Section 8.3) at least ten calendar days before the date of intended disposition or other action. 
 ARTICLE VIII 
 MISCELLANEOUS

 Section 8.1 No Waiver; Cumulative Remedies; Compliance with Laws. No failure or delay by the Lender in exercising any
right, power or remedy under the Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power
or remedy under the Loan Documents. The remedies provided in the Loan Documents are cumulative and not exclusive of any remedies provided by law. The Lender may comply with any applicable state or federal law requirements in connection with a
disposition of the Collateral and such compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. 
 Section 8.2 Amendments, Etc. No amendment, modification, termination or waiver of any provision of any Loan Document or consent to any departure by the Borrower therefrom or any release of a Security
Interest shall be effective unless the same shall be in writing and signed by the Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. 
 Section 8.3 Notices; Communication of Confidential Information; Requests for Accounting. Except as otherwise expressly provided herein, all notices, requests, demands and other communications provided for under the Loan
Documents shall be in writing and shall be (a) personally delivered, (b) sent by first class United States mail, (c) sent by overnight courier of national reputation, (d) transmitted by telecopy, or (e) sent as electronic
mail, in each case delivered or sent to the party to whom notice is being given to the business address, telecopier number, or e mail address set forth below next to its signature or, as to each party, at such other business address, telecopier
number, or e mail address as it may hereafter designate in writing to the other party pursuant to the terms of this Section. All such notices, requests, demands and other communications shall be deemed to be an authenticated record communicated or
given on (a) the date received if personally delivered, (b) when deposited in the mail if delivered by mail, (c) the date delivered to the courier if delivered by overnight courier, or (d) the date of transmission if sent by
telecopy or by e mail, except that notices or requests delivered to the Lender pursuant to any of the provisions of Article II shall not be effective until received by the Lender. All notices, financial information, or other business records
sent by either party to this 

  

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Agreement may be transmitted, sent, or otherwise communicated via such medium as the sending party may deem appropriate and commercially reasonable;
provided, however, that the risk that the confidentiality or privacy of such notices, financial information, or other business records sent by either party may be compromised shall be borne exclusively by the Borrower. All requests for an accounting
under Section 9-210 of the UCC (i) shall be made in a writing signed by a Person authorized under Section 2.2(b), (ii) shall be personally delivered, sent by registered or certified mail, return receipt requested, or by overnight
courier of national reputation, (iii) shall be deemed to be sent when received by the Lender and (iv) shall otherwise comply with the requirements of Section 9-210 of the UCC. The Borrower requests that the Lender respond to all such
requests that on their face appear to come from an authorized individual and releases the Lender from any liability for so responding. The Borrower shall pay the Lender the maximum amount allowed by law for responding to such requests. 

Section 8.4 Further Documents. The Borrower will from time to time execute, deliver, endorse and authorize the filing of any and all
instruments, documents, conveyances, assignments, security agreements, financing statements, control agreements and other agreements and writings that the Lender may reasonably request in order to secure, protect, perfect or enforce the Security
Interest or the Lender’s rights under the Loan Documents (but any failure to request or assure that the Borrower executes, delivers, endorses or authorizes the filing of any such item shall not affect or impair the validity, sufficiency or
enforceability of the Loan Documents and the Security Interest, regardless of whether any such item was or was not executed, delivered or endorsed in a similar context or on a prior occasion). 
 Section 8.5 Costs and Expenses. The Borrower shall pay on demand all costs and expenses, including reasonable attorneys’ fees, incurred
by the Lender in connection with the Indebtedness, this Agreement, the Loan Documents, any Letter of Credit and any other document or agreement related hereto or thereto, and the transactions contemplated hereby, including all such costs, expenses
and fees incurred in connection with the negotiation, preparation, execution, amendment, administration, performance, collection and enforcement of the Indebtedness and all such documents and agreements and the creation, perfection, protection,
satisfaction, foreclosure or enforcement of the Security Interest. 
 Section 8.6 Indemnity. In addition to the payment of
expenses pursuant to Section 8.5, the Borrower shall indemnify, defend and hold harmless the Lender, and any of its participants, parent corporations, subsidiary corporations, affiliated corporations, successor corporations, and all present and
future officers, directors, employees, attorneys and agents of the foregoing (the “Indemnitees”) from and against any of the following (collectively, “Indemnified Liabilities”): 
 (i) Any and all transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution
and delivery of the Loan Documents or the making of the Advances; 
 (ii) Any claims, loss or damage to which any Indemnitee
may be subjected if any representation or warranty contained in Section 5.14 proves to be incorrect in any respect or as a result of any violation of the covenant contained in Section 6.12(b); and 
  

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 (iii) Any and all other liabilities, losses, damages, penalties, judgments, suits,
claims, costs and expenses of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel) in connection with the foregoing and any other investigative, administrative or judicial proceedings, whether or not such
Indemnitee shall be designated a party thereto, which may be imposed on, incurred by or asserted against any such Indemnitee, in any manner related to or arising out of or in connection with the making of the Advances and the Loan Documents or the
use or intended use of the proceeds of the Advances. Notwithstanding the foregoing, the Borrower shall not be obligated to indemnify any Indemnitee for any Indemnified Liability caused by the gross negligence or willful misconduct of such
Indemnitee. 
 If any investigative, judicial or administrative proceeding arising from any of the foregoing is brought against any Indemnitee, upon such
Indemnitee’s request, the Borrower, or counsel designated by the Borrower and satisfactory to the Indemnitee, will resist and defend such action, suit or proceeding to the extent and in the manner directed by the Indemnitee, at the
Borrower’s sole costs and expense. Each Indemnitee will use its best efforts to cooperate in the defense of any such action, suit or proceeding. If the foregoing undertaking to indemnify, defend and hold harmless may be held to be unenforceable
because it violates any law or public policy, the Borrower shall nevertheless make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The Borrower’s
obligations under this Section 8.6 shall survive the termination of this Agreement and the discharge of the Borrower’s other obligations hereunder. 
 Section 8.7 Participants. The Lender and its participants, if any, are not partners or joint venturers, and the Lender shall not have any liability or responsibility for any obligation, act or omission of
any of its participants. All rights and powers (but not obligations) specifically conferred upon the Lender may be transferred or delegated to any of the Lender’s participants, successors or assigns. 
 Section 8.8 Execution in Counterparts; Telefacsimile Execution. This Agreement and other Loan Documents may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. Delivery of an executed counterpart of this Agreement or
any other Loan Document by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Agreement or such other Loan Document. Any party delivering an executed counterpart of this Agreement or any other Loan
Document by telefacsimile also shall deliver an original executed counterpart of this Agreement or such other Loan Document but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect
of this Agreement or such other Loan Document. 
 Section 8.9 Retention of Borrower’s Records. The Lender shall have no
obligation to maintain any electronic records or any documents, schedules, invoices, agings, or other papers delivered to the Lender by the Borrower or in connection with the Loan Documents for more than 30 days after receipt by the Lender. If there
is a special need to retain specific records, the Borrower must inform the Lender of its need to retain those records with particularity, which must be delivered in accordance with the notice provisions of Section 8.3 within 30 days of the
Lender taking control of same. 
  

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 Section 8.10 Binding Effect; Assignment; Complete Agreement; Sharing Information. The Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights thereunder or any interest therein without
the Lender’s prior written consent. To the extent permitted by law, the Borrower waives and will not assert against any assignee any claims, defenses or set-offs which the Borrower could assert against the Lender. This Agreement shall also bind
all Persons who become a party to this Agreement as a borrower. This Agreement, together with the Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and supersedes all prior agreements,
written or oral, on the subject matter hereof. To the extent that any provision of this Agreement contradicts other provisions of the Loan Documents, this Agreement shall control. Without limiting the Lender’s right to share information
regarding the Borrower and its Affiliates with the Lender’s participants, accountants, lawyers and other advisors, the Lender and Wells Fargo Bank may share any and all information they may have in their possession regarding the Borrower and
its Affiliates, and the Borrower waives any right of confidentiality it may have with respect to such sharing of information. 
 Section 8.11 Severability of Provisions. Any provision of this Agreement that is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof. 
 Section 8.12 Headings. Article, Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 
 Section 8.13 Governing Law;
Jurisdiction, Venue; Waiver of Jury Trial. The Loan Documents shall be governed by and construed in accordance with the substantive laws (other than conflict laws) of the State of Minnesota. The parties hereto hereby (i) consent to the
personal jurisdiction of the state and federal courts located in the State of Minnesota in connection with any controversy related to this Agreement; (ii) waive any argument that venue in any such forum is not convenient; (iii) agree that
any litigation initiated by the Lender or the Borrower in connection with this Agreement or the other Loan Documents may be venued in either the state or federal courts located in Hennepin County, Minnesota; and (iv) agree that a final
judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 
 Section 8.14 Judgment Currency. If, for the purposes of obtaining judgment in any court in any jurisdiction with respect to this Agreement or
any other Loan Document, it becomes necessary to convert into the currency of such jurisdiction (the “Judgment Currency”) any amount due under this Agreement or under any other Loan Document in any currency other than the Judgment Currency
(the “Currency Due”), then conversion shall be made at the rate of exchange prevailing on the Business Day before the day on which judgment is given. For this purpose, “rate of exchange” means the rate at which the Lender is
able, on the relevant date, to purchase the Currency Due with the Judgment Currency in accordance with its normal practice at its office in Minneapolis, Minnesota. In the event that there is a change in the rate of exchange prevailing between the
Business Day before the day on which the judgment is given and the date of receipt by the Lender of the amount due, the Borrower will, on the date of receipt by the 

  

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Lender, pay such additional amounts, if any, or be entitled to receive reimbursement of such amount, if any, as may be necessary to ensure that the amount
received by the Lender on such date is the amount in the Judgment Currency which when converted at the rate of exchange prevailing on the date of receipt by the Lender is the amount then due under this Agreement or such other Loan Document in the
Currency Due. If the amount of the Currency Due that the Lender is so able to purchase is less than the amount of the Currency Due originally due to it, the Borrower shall indemnify and save the Lender and the relevant Banks harmless from and
against all loss or damage arising as a result of such deficiency. This indemnity shall constitute an obligation separate and independent from the other obligations contained in this Agreement and the other Loan Documents, shall give rise to a
separate and independent cause of action, shall apply irrespective of any indulgence granted by the Lender or any Bank from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in
respect of an amount due under this Agreement or any other Loan Document or under any judgment or order. 
 [The remainder of this page has
been left blank intentionally.] 
  

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 THE BORROWER AND THE LENDER WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW OR IN EQUITY OR IN ANY OTHER
PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. 
 IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers thereunto duly authorized as of the date set forth in the initial caption of this Agreement. 
  

									
	Delphax Technologies Inc.	 		 	DELPHAX TECHNOLOGIES INC.
	6100 West 110th Street	 		 		 	
	Bloomington, MN 55438	 		 	By:	 	 /s/ Gregory S. Furness

	Attention:	 	Chief Financial Officer	 		 	Name:	 	Gregory S. Furness
	Facsimile:	 	(952) 426-6816	 		 	Its:	 	Chief Financial Officer
	e-mail:	 	gfurness@delphax.com	 		 	

  

									
	Wells Fargo Bank, National Association	 		 	WELLS FARGO BANK,
	Wells Fargo Business Credit	 		 	    NATIONAL ASSOCIATION
	MAC-N 9312-040	 		 		 	
	Sixth and Marquette	 		 	By:	 	 /s/ Rebecca A. Koehler

	Minneapolis, MN 55479	 		 	Name:	 	Rebecca A. Koehler
	Attention:	 	Becky Koehler	 		 	Its:	 	Vice President
	Facsimile:	 	  
	 		 	
	e-mail:	 	Becky.A.Koehler@wellsfargo.com	 		 	

  

 S-1 

 Table of Exhibits and Schedules 
  

			
	Exhibit A	 	Form of Revolving Note
		
	Exhibit B	 	Compliance Certificate
		
	Exhibit C	 	Premises
		
	Schedule 1.1	 	Initial Pledged Shares
		
	Schedule 5.1	 	Trade Names, Chief Executive Office, Principal Place of Business, and Locations of Collateral
		
	Schedule 5.2	 	Capitalization and Organizational Chart
		
	Schedule 5.5	 	Subsidiaries
		
	Schedule 5.6	 	Change in Business, Properties or Condition
		
	Schedule 5.7	 	Litigation Matters
		
	Schedule 5.11	 	Intellectual Property Disclosures
		
	Schedule 5.14	 	Environmental Matters
		
	Schedule 6.3	 	Permitted Liens
		
	Schedule 6.4	 	Permitted Indebtedness and Guaranties

 Exhibit A to Credit and Security Agreement 
 REVOLVING NOTE 
  

			
	$8,000,000	  	            , 2007

 For value received, the undersigned, DELPHAX TECHNOLOGIES INC., a Minnesota corporation (the
“Borrower”), hereby promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), acting through its Wells Fargo Business Credit operating division, on the Termination Date referenced in the Credit and
Security Agreement dated the same date as this Revolving Note that was entered into by the Lender and the Borrower (as amended from time to time, the “Credit Agreement”), at Lender’s office located at Minneapolis, Minnesota, or at any
other place designated at any time by the holder hereof, in lawful money of the United States of America and in immediately available funds, the principal sum of Eight Million Dollars ($8,000,000.00) or the aggregate unpaid principal amount of all
Revolving Advances made by the Lender to the Borrower under the Credit Agreement, together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of the actual number of days elapsed and a 360-day
year, from the date hereof until this Revolving Note is fully paid at the rate from time to time in effect under the Credit Agreement. 
 This Revolving Note is the Revolving Note referenced in the Credit Agreement, and is subject to the terms of the Credit Agreement, which provides, among other things, for acceleration hereof. Principal and interest due hereunder shall be
payable as provided in the Credit Agreement, and this Revolving Note may be prepaid only in accordance with the terms of the Credit Agreement. This Revolving Note is secured, among other things, pursuant to the Credit Agreement and the Security
Documents as therein defined, and may now or hereafter be secured by one or more other security agreements, mortgages, deeds of trust, assignments or other instruments or agreements. 
 The Borrower shall pay all costs of collection, including reasonable attorneys’ fees and legal expenses if this Revolving Note is not paid when due,
whether or not legal proceedings are commenced. 
 Presentment or other demand for payment, notice of dishonor and protest are expressly
waived. 
  

			
	 DELPHAX TECHNOLOGIES INC.

		
	 By:
	 	  

	 Name:
	 	  

	 Its:
	 	  

  

 A-1 

 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
[            ](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. 
  

 B-1 

 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): 
  

					
	 Year-to-Date Period Ending the Last Day of
	  	Minimum Net Income	 
	 June, 2007
	  	$	(1,000,000	)
	 July, 2007
	  	$	(1,250,000	)
	 August, 2007
	  	$	(1,500,000	)
	 September, 2007
	  	$	(1,500,000	)

 4. Minimum Debt Service Coverage Ratio. Pursuant to Section 6.2(b) of the Credit
Agreement, as of the Reporting Date, the Borrower’s Debt Service Coverage Ratio was [               ] to 1.00, which  ̈ satisfies  ̈ does not satisfy the requirement that, for
the period from the first day of the fiscal year containing the following indicated months to the last day of such month, such ratio was not less than the ratio set forth opposite such month in the table below: 
  

			
	 Year-to-Date Period Ending the Last Day of
	  	 Minimum Debt Service Coverage Ratio

	 June, 2007
	  	1.45 to 1.00
	 September, 2007
	  	3.50 to 1.00

 5. 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, which  ̈ satisfies
 ̈ does not satisfy the requirement that such expenditures not exceed $3,000,000. 
  

 B-2 

 6. 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

  

 B-3 

 Exhibit C to Credit and Security Agreement 
 PREMISES 
 The Premises referred to in the Credit and Security Agreement are legally
described as follows: 
 Delphax Technologies Inc. 
 6100 West 110th
Street 
 Bloomington, MN 55438 
 Lot 2, Block 1, Nesbitt Industrial Park 2nd Addition, according to the recorded plat thereof, and situate in Hennepin County, Minnesota 
 Delphax Technologies Canada Ltd. 
 5030 - 5040 Timberlea Boulevard 
 Mississauga, Ontario 
 L4W 2S5 
 ALL AND SINGULAR that certain parcel or tract of land and premises situate, lying and being in the City of Mississauga, in the Regional Municipality of
Peel, and being composed of part of Block H, according to a Plan filed in the Land Registry Office for the Land Titles Division of Peel as Number M-219, designated as Parts 3 and 7 on a Plan of Survey of Record registered in the said Land Registry
Office as Number 43R-6987. 
 RESERVING the rights set out as set out I Instrument No. 234803; 
 SUBJECT to and easement over that part of Block H, designated as Part 7 on Reference Plan 43R-6987, as set out in Instrument No. 207133. 

Being the whole of Parcel H-12 in the register for Section M-219. 
 Note: A portion of this location (22,921 square feet) that is leased by Delphax Technologies Canada Ltd. has been subleased to Access Metal Services Inc. 
 Delphax Technologies Canada Ltd. 
 5060 Tomken Road 
 Mississauga, Ontario 
 ALL AND SINGULAR that certain parcel or tract of land and premises situate, lying and
being in the city of Mississauga in the Regional Municipality of Peel and Province of Ontario and being composed of: 
 Block D, Plan M-267
and Parts 1, 2 and 3 of Plan 43R-8425 being that part of the original allowance for road between Lot 1 in the Second Concession East of Hurontario Street and Lot 1 in the Third Concession East of Hurontario Street (known as Second Line East).

  

 S-6.4-1 

 Delphax Technologies Limited 
 Unit 3 Satellite Business Village 
 Fleming Way, Crawley 
 West Sussex RH10 9NE 
 United Kingdom 
 All that land edged red on the Plan together with the building accessways paved areas car parking spaces fire escape and bin store erected or laid out thereon known as Unit 3 The Satellite Business Village Fleming Way Crawley West Sussex.

 Delphax Technologies Limited 
 Unit 4 Satellite Business
Village 
 Fleming Way, Crawley 
 West Sussex RH10 9NE 

United Kingdom 
 All that land edged red on the Plan
together with the building accessways paved areas car parking spaces fire escape and bin store erected or laid out thereon known as Unit 4 The Satellite Business Village Fleming Way Crawley West Sussex. 
  

			
	Note:	 	This location, leased by Delphax Technologies Limited, has been subleased to:
		 	Afriso Eurogauge Limited
		 	Imberhorne Lane
		 	East Grinstead
		 	West Sussex RH19 1RF

 Delphax Technologies S.A.S. 
 8 – 10 rue du bois Sauvage 
 91055, Evry cedex 
 France 
 Block J, stand alone building, 2 floors and 500 square meters. 
  

 S-6.4-2Credit and Security Agreement between Delphax Technologies Canada Limited and...

 EXHIBIT 4.2 
  

 CREDIT AND SECURITY AGREEMENT

 BY AND BETWEEN 
 DELPHAX TECHNOLOGIES CANADA LIMITED 
 AND 
 WELLS FARGO FINANCIAL CORPORATION CANADA 
 SEPTEMBER 10, 2007 

 

					
		  		  	

 TABLE OF CONTENTS 
  

					
	Article I DEFINITIONS	  	1
	 Section 1.1
	  	Definitions.	  	1
	 Section 1.2
	  	Other Definitional Terms; Rules of Interpretation.	  	21
		
	Article II AMOUNT AND TERMS OF THE CREDIT FACILITY	  	22
	 Section 2.1
	  	Canadian Revolving Advances.	  	22
	 Section 2.2
	  	Equipment Term Advance.	  	22
	 Section 2.3
	  	European Revolving Advances.	  	23
	 Section 2.4
	  	Payment of Equipment Term Note.	  	23
	 Section 2.5
	  	Procedures for Requesting Advances.	  	24
	 Section 2.6
	  	Interest; Default Interest; Application of Payments; Participations; Usury.	  	25
	 Section 2.7
	  	Interest Act.	  	26
	 Section 2.8
	  	Limitations on Rate of Interest.	  	26
	 Section 2.9
	  	Fees.	  	27
	 Section 2.10
	  	Time for Interest Payments; Payment on Non-Business Days; Computation of Interest and Fees.	  	28
	 Section 2.11
	  	Lockbox and Blocked Account and Control Agreement.	  	28
	 Section 2.12
	  	Voluntary Prepayment; Reduction of the Maximum Line Amount; Termination of the Credit Facility by the Borrower.	  	29
	 Section 2.13
	  	Mandatory Prepayment.	  	30
	 Section 2.14
	  	Revolving Advances to Pay Indebtedness.	  	30
	 Section 2.15
	  	Use of Proceeds.	  	30
	 Section 2.16
	  	Liability Records.	  	30
	 Section 2.17
	  	Taxes.	  	30
		
	Article III SECURITY INTEREST; OCCUPANCY; SETOFF	  	31
	 Section 3.1
	  	Grant of Security Interest.	  	31
	 Section 3.2
	  	Excluded Collateral.	  	32
	 Section 3.3
	  	Unlimited Liability Companies.	  	32
	 Section 3.4
	  	Notification of Account Debtors and Other Obligors.	  	33
	 Section 3.5
	  	Assignment of Insurance.	  	33
	 Section 3.6
	  	Occupancy.	  	34
	 Section 3.7
	  	License.	  	34
	 Section 3.8
	  	Financing Statement.	  	34
	 Section 3.9
	  	Setoff.	  	35
	 Section 3.10
	  	Collateral.	  	35
	 Section 3.11
	  	Continuing Liability under Collateral.	  	35
	 Section 3.12
	  	Continuing Liability.	  	35
	 Section 3.13
	  	Amalgamation.	  	36
	 Section 3.14
	  	Copy of Agreement; Verification Statement.	  	36
		
	Article IV CONDITIONS OF LENDING	  	36
	 Section 4.1
	  	Conditions Precedent to the Initial Advances.	  	36
	 Section 4.2
	  	Conditions Precedent to Advances.	  	39

  

					
		  	(i)	  	

					
	Article V REPRESENTATIONS AND WARRANTIES	  	39
	 Section 5.1
	  	Existence and Power; Name; Chief Executive Office; Inventory and Equipment Locations; Federal Employer Identification Number and Organizational Identification Number.	  	39
	 Section 5.2
	  	Capitalization.	  	40
	 Section 5.3
	  	Authorization of Borrowing; No Conflict as to Law or Agreements.	  	40
	 Section 5.4
	  	Legal Agreements.	  	40
	 Section 5.5
	  	Subsidiaries.	  	40
	 Section 5.6
	  	Financial Condition; No Adverse Change.	  	41
	 Section 5.7
	  	Litigation.	  	41
	 Section 5.8
	  	Taxes.	  	41
	 Section 5.9
	  	Titles and Liens.	  	41
	 Section 5.10
	  	Intellectual Property Rights.	  	41
	 Section 5.11
	  	Pension and Benefit Plans.	  	43
	 Section 5.12
	  	Default.	  	43
	 Section 5.13
	  	Environmental Matters.	  	43
	 Section 5.14
	  	Pledged Equity Interests; Pledged Debt.	  	44
	 Section 5.15
	  	Submissions to Lender.	  	44
	 Section 5.16
	  	Financing Statements.	  	45
	 Section 5.17
	  	Rights to Payment.	  	45
	 Section 5.18
	  	Bank Accounts.	  	45
	 Section 5.19
	  	Financial Solvency.	  	45
		
	Article VI COVENANTS	  	46
	 Section 6.1
	  	Reporting Requirements.	  	46
	 Section 6.2
	  	Permitted Liens; Financing Statements.	  	49
	 Section 6.3
	  	Indebtedness.	  	50
	 Section 6.4
	  	Guarantees.	  	51
	 Section 6.5
	  	Investments and Subsidiaries.	  	51
	 Section 6.6
	  	Dividends and Distributions.	  	52
	 Section 6.7
	  	Salaries.	  	52
	 Section 6.8
	  	Books and Records; Collateral Examination, Inspection and Appraisals.	  	52
	 Section 6.9
	  	Account Verification.	  	53
	 Section 6.10
	  	Compliance with Laws.	  	53
	 Section 6.11
	  	Payment of Taxes and Other Claims.	  	53
	 Section 6.12
	  	Maintenance of Properties.	  	54
	 Section 6.13
	  	Insurance.	  	54
	 Section 6.14
	  	Preservation of Existence.	  	54
	 Section 6.15
	  	Delivery of Instruments, etc.	  	54
	 Section 6.16
	  	Sale or Transfer of Assets; Suspension of Business Operations.	  	55
	 Section 6.17
	  	Amalgamation, Consolidation and Merger; Asset Acquisitions.	  	55
	 Section 6.18
	  	Sale and Leaseback.	  	55
	 Section 6.19
	  	Restrictions on Nature of Business.	  	55
	 Section 6.20
	  	Accounting.	  	55
	 Section 6.21
	  	Discounts, etc.	  	56

  

					
		  	(ii)	  	

					
	 Section 6.22
	  	Plans.	  	56
	 Section 6.23
	  	Place of Business; Name.	  	56
	 Section 6.24
	  	Constituent Documents.	  	56
	 Section 6.25
	  	Cash Management.	  	56
	 Section 6.26
	  	Performance by the Lender.	  	57
		
	 Article VII EVENTS OF DEFAULT, RIGHTS AND REMEDIES
	  	57
	 Section 7.1
	  	Events of Default.	  	57
	 Section 7.2
	  	Rights and Remedies.	  	59
	 Section 7.3
	  	Certain Notices.	  	61
		
	 Article VIII MISCELLANEOUS
	  	61
	 Section 8.1
	  	No Waiver; Cumulative Remedies; Compliance with Laws.	  	61
	 Section 8.2
	  	Amendments, Etc.	  	61
	 Section 8.3
	  	Currency.	  	61
	 Section 8.4
	  	Notices; Communication of Confidential Information; Requests for Accounting.	  	62
	 Section 8.5
	  	Further Documents.	  	62
	 Section 8.6
	  	Costs and Expenses.	  	62
	 Section 8.7
	  	Indemnity.	  	63
	 Section 8.8
	  	Participants.	  	64
	 Section 8.9
	  	Execution in Counterparts; Telefacsimile Execution.	  	64
	 Section 8.10
	  	Binding Effect; Assignment; Complete Agreement; Sharing Information.	  	64
	 Section 8.11
	  	Severability of Provisions.	  	65
	 Section 8.12
	  	Headings.	  	65
	 Section 8.13
	  	Governing Law; Jurisdiction, Venue; Waiver of Jury Trial.	  	65
	 Section 8.14
	  	Judgment Currency.	  	65

  

					
		  	(iii)	  	

 CREDIT AND SECURITY AGREEMENT 
 Dated as of September 10, 2007 
 DELPHAX TECHNOLOGIES CANADA LIMITED, an
Ontario corporation (the “Borrower”), and WELLS FARGO FINANCIAL CORPORATION CANADA (as more fully defined in ARTICLE I herein, the “Lender”), hereby agree as follows: 
 ARTICLE I 
 DEFINITIONS 

  

	 	Section 1.1	Definitions. 

 Except as otherwise expressly provided in this
Agreement, the following terms shall have the meanings given them in this Section: 
 “Account Bank” means Bank of Montreal.

 “Accounts” means with respect to any Person all “accounts,” as such term is defined in the PPSA, now owned or
hereafter acquired by that Person and, in any event, shall include all accounts due or accruing due and all agreements, books, accounts receivable, other receivables, book debts, claims and demand of every nature and kind and other forms of monetary
obligations (other than forms of monetary obligations evidenced by Chattel Paper, Securities or Instruments) now owned or hereafter received or acquired by or belonging or owing to that Person, whether or not yet earned by performance on the part of
that Person and all invoices, letters, documents and papers recording, evidencing or relating thereto. 
 “Advance” means a
Canadian Revolving Advance, a European Revolving Advance or an Equipment Term Advance. 
 “Affiliate” or
“Affiliates” means the Parent and any other Person controlled by, controlling or under common control with the Borrower, including any Subsidiary of the Borrower. For purposes of this definition, “control,” when used with
respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. 
 “Aggregate Maximum Line Amount” means the sum of the Canadian Maximum Line Amount and the European Maximum Line Amount. 
 “Agreement” means this Credit and Security Agreement. 
 “Applicable Law” means, in respect of any Person, property, transaction or event, all present and future laws, statutes and regulations, applicable to that Person, property, transaction or event and
all applicable treaties, judgments, decrees, official directives, consents, approvals, authorizations, guidelines, rules, orders and written policies that are publicly available (whether or not having the force of law, with respect to regulatory
guidelines issued by the Office of the 

  

					
		  	- 1 -	  	

 
Superintendent of Financial Institutions with respect to the Lender and in all other cases having the force of law)of any Governmental Authority having or
purporting to have authority over that Person, property, transaction or event. 
 “Availability” means the aggregate of the
Canadian Availability and the European Availability. 
 “Benefit Plan” means all material employee benefit plans or
arrangements maintained or contributed to by the Borrower that are not Pension Plans, including all profit sharing, savings, supplemental retirement, retiring allowance, severance, pension, deferred compensation, welfare, bonus, incentive
compensation, phantom stock, legal services, supplementary unemployment benefit plans or arrangements and all life, health, dental and disability plans and arrangements in which the employees or former employees of the Borrower participate or are
eligible to participate but excluding all stock option or stock purchase plans. 
 “Blocked Account and Control Agreement”
means a Blocked Account and Control Agreement by and between the Borrower, the Lender and the Account Bank in form and substance acceptable to the Lender, acting reasonably. 
 “Borrowing Base” means, as applicable, the Canadian Borrowing Base or the European Borrowing Base. 
 “Borrowing Base Reserve” means, as of any date of determination, such amounts (expressed as either a specified amount or as a percentage
of a specified category or item) as the Lender may from time to time establish and adjust in reducing Canadian Availability or European Availability, as the case may be, (a) to reflect events, conditions, contingencies or risks which, as
determined by the Lender, do or may affect (i) the Collateral, the Guarantor Collateral or its value, (ii) the assets, business or prospects of the Borrower or a Guarantor, as applicable, or (iii) the security interests and other
rights of the Lender in the Collateral or the Guarantor Collateral, as the case may be (including the enforceability, perfection and priority thereof), including without limitation, claims secured by a Lien created by, or arising under any statute
or regulation or arising under common law without the consent of the Borrower or a Guarantor (in contrast with Liens voluntarily granted) which rank, or are capable of ranking, prior to or pari passu with the Liens created by the Security
Documents against all or any part of the Borrower’s or Guarantor’s assets, as applicable, whether then existing or, in the Lender’s judgment, likely to arise, including claims for unremitted rents, Taxes, wages, vacation pay, employee
deductions, workers’ compensation obligations, government royalties or pension fund obligations, or (b) to reflect the Lender’s judgment that any collateral report or financial information furnished by or on behalf of the Borrower or
a Guarantor to the Lender is or may have been incomplete, inaccurate or misleading in any material respect, (c) to reflect any commitment by the Lender to pay rent in arrears to a landlord of a Premises pursuant to any agreement between the
Lender and such landlord or (d) in respect of a Default or an Event of Default. 
 “Business Day” means a day on which
chartered banks are open for over-the-counter business in Toronto, Ontario and excludes Saturday, Sunday and any other day which is a statutory holiday in Toronto. 
  

					
		  	- 2 -	  	

 “Canadian Availability” means the amount, if any, by which the Canadian Borrowing Base
exceeds the sum of the outstanding principal balance of the Canadian Revolving Note. 
 “Canadian Borrowing Base” means at
any time the lesser of: 
  

	 	(a)	The Canadian Maximum Line Amount; or 

  

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

  

	 	(i)	the lesser of (A) the product of the Canadian Inventory Advance Rate times the US Dollar Equivalent of the cost of Eligible Inventory located at locations owned or leased by
the Borrower in Canada or (B) or eighty-five percent (85%) of the appraised Net Orderly Liquidation Value of such Eligible Inventory, less 

  

	 	(ii)	the Borrowing Base Reserve applicable to the Borrower, less 

  

	 	(v)	Indebtedness that the Borrower owes to the Lender that has not yet been advanced on the Canadian Revolving Note, and the dollar amount that the Lender in its reasonable discretion
then determines to be a reasonable determination of the Borrower’s credit exposure with respect to any swap, derivative, foreign exchange, hedge, deposit, treasury management or other similar transaction or arrangement between the Borrower and
the Lender that is not described in ARTICLE II of this Agreement. 

 “Canadian Dollars” and the symbol
“CDN$” each means the lawful money of Canada. 
 “Canadian Inventory Advance Rate” means up to 60% (or, for
purposes of determining the amount to be included in the Canadian Borrowing Base as of the Funding Date with respect to Inventory located at locations owned or leased by the Borrower, 20%), or such lesser rate as the Lender in its sole discretion
may deem appropriate from time to time. 
 “Canadian Maximum Line Amount” means US$4,000,000, unless this amount is reduced
pursuant to Section 2.12, in which event it means such lower amount. 
 “Canadian Revolving Advance” is defined in
Section 2.1. 
 “Canadian Revolving Facility” means the credit facility under which Canadian Revolving Advances are
made available to the Borrower by the Lender under Section 2.1. 
 “Canadian Revolving Note” means the Borrower’s
revolving promissory note, payable to the order of the Lender in substantially the form of Exhibit A hereto, as same may be renewed and amended from time to time, and all replacements thereto. 
 “Change of Control” means the occurrence of any of the following events: 
  

	 	(a)	Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) (other than Annette J. Brenner, Fred H. Brenner or their
respective heirs, beneficiaries or legatees) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a Person will be deemed to have “beneficial ownership”
of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than twenty five percent (25%) of the voting power of all classes of
voting stock of the Parent; 

  

					
		  	- 3 -	  	

	 	(b)	Whitebox becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a Person will be deemed to have
“beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 25 percent of the voting power of
all classes of voting stock of the Parent; or 

  

	 	(c)	During any consecutive two-year period, individuals who at the beginning of such period constituted the board of Directors of the Parent (together with any new Directors whose
election to such board of Directors, or whose nomination for election by the Owners of the Parent, was approved by a vote of a majority of the Directors then still in office who were either Directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of Directors of Parent then in office; or 

  

	 	(d)	the Parent ceases to beneficially own and control, directly or indirectly, the economic and voting rights associated with all of the issued and outstanding Securities of the
Borrower or any Guarantor. 

 “Chattel Paper” (i) means all “chattel paper” as defined in the
PPSA and (ii) shall include all chattel paper in which the Borrower now or hereafter has an interest, and any part of such interest. 
 “CIPO” means the Canadian Intellectual Property Office, or any other ministry, department, agency or subdivision of the Government of Canada succeeding to the powers and responsibilities of the Canadian Intellectual
Property Office. 
 “Collateral” means all of the Borrower’s right, title and interest in, to and under all personal
property of the Borrower including, but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located: 
  

	 	(a)	all Accounts; 

  

	 	(b)	all Deposit Accounts; 

  

	 	(c)	all Goods; 

  

	 	(d)	all Chattel Paper; 

  

					
		  	- 4 -	  	

	 	(e)	all Documents of Title; 

  

	 	(f)	all Equipment; 

  

	 	(g)	all Insurance; 

  

	 	(h)	all Intangibles; 

  

	 	(i)	all Instruments; 

  

	 	(j)	all Intellectual Property Rights; 

  

	 	(k)	all Inventory; 

  

	 	(l)	all Investment Property; 

  

	 	(m)	all Money; 

  

	 	(n)	all Collateral Records; 

  

	 	(o)	to the extent not otherwise included above, Material Contracts, motor vehicles and other personal property of any kind; 

  

	 	(p)	to the extent not otherwise included above, all Proceeds, products, accessions, substitutions, attachments, rents and profits of or in respect of any of the foregoing;

  

	 	(q)	all property of the Borrower now or hereinafter held by or in the possession of the Lender, including all property of every description, in the custody of or in the transit to the
Lender for any purpose; and 

  

	 	(r)	all other personal property not otherwise described above. 

 “Collateral Records” means books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and other electronic storage
media and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon. 
 “Commitment” means the Lender’s commitment to make Advances to the Borrower upon and subject to the terms and conditions of this
Agreement. 
 “Constituent Documents” means with respect to any Person, as applicable, such Person’s certificate of
incorporation, articles of incorporation, by-laws, certificate of formation, articles of organization, limited liability company agreement, management agreement, operating agreement, shareholder agreement, partnership agreement or similar document
or agreement governing such Person’s existence, organization or management or concerning disposition of ownership interests of such Person or voting rights among such Person’s owners. 
  

					
		  	- 5 -	  	

 “Control Account” means account number 3858 4603210 maintained by the Borrower at the
Account Bank. 
 “Copyrights” means (i) all copyrights arising under the laws of Canada, whether registered or
unregistered and whether published or unpublished (including, without limitation, any registered copyrights listed in Schedule 5.10, as such schedule may be amended or supplemented from time to time in accordance with the terms of this Agreement),
all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in CIPO, (ii) all extensions, continuations, reversions and renewals thereof,
(iii) all rights corresponding thereto throughout the world, (iv) all rights to sue at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof, including, without
limitation, the right to receive all income, royalties, proceeds and damages therefore, whether now or hereafter due or payable, and (v) all payments and royalties and rights to payments and royalties arising out of the sale, lease, license,
assignment, or other disposition thereof. 
 “Credit Agreement Supplement” means a Credit Agreement Supplement
delivered by the Borrower to the Lender in the form attached as Exhibit F hereto. 
 “Credit Facility” means the
credit facility under which Advances may be made available to the Borrower by the Lender under ARTICLE II. 
 “Cut-off Time”
means 10:00 a.m Toronto, Ontario time. 
 “Debt” means of a Person as of a given date, all items of indebtedness or
liability which in accordance with GAAP would be included in determining total liabilities as shown on the liabilities side of a balance sheet for such Person and shall also include the aggregate payments required to be made by such Person at any
time under any lease that is considered a capitalized lease under GAAP. 
 “Default” means an event that, with giving of
notice or passage of time or both, would constitute an Event of Default. 
 “Default Period” means any period of time
beginning on the day a Default or Event of Default occurs and ending on the date identified by the Lender in writing as the date that such Default or Event of Default has been cured or waived. 
 “Default Rate” means an annual interest rate in effect during a Default Period or following the Termination Date, which interest rate
shall be equal to three percent (3%) over the Floating Rate, as such rate may change from time to time. 
 “Delphax
France” means Delphax Technologies S.A.S., a French company, and its successors and permitted assigns. 
 “Delphax
UK” means Delphax Technologies Limited, an English company, and its successors and permitted assigns. 
  

					
		  	- 6 -	  	

 “Deposit Account” means any demand, time, savings, passbook or like account maintained
with a depository institution. 
 “Dilution” means, as of any date of determination, a percentage, based upon the experience
of the trailing six (6) month period ending on the date of determination, which is the result of dividing (a) actual bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to the Accounts as
determined by Lender in its sole discretion during such period, by (b) the Borrower’s gross sales during such period (excluding extraordinary items) plus the amount of clause (a). 
 “Director” means a member of the Borrower’s board of directors. 
 “Documents of Title” (i) means, with respect to any Person, all “documents of title” as defined in the PPSA and
(ii) shall include all documents of title, whether negotiable or non-negotiable, including, without limitation, all warehouse receipts and bills of lading, in which that Person now or hereafter has an interest, and any part thereof. 

“Eligible Accounts” means all unpaid Accounts of the Borrower or a Guarantor, as the case may be, arising from the sale or lease of
goods or the performance of services, net of any credits, but excluding any such Accounts having any of the following characteristics: 
  

	 	(i)	That portion of Accounts unpaid 120 days or more after the invoice date; 

  

	 	(ii)	That portion of Accounts related to goods or services with respect to which the Borrower or a Guarantor, as the case may be, has received notice of a claim or dispute, which are
subject to a claim of offset or a contra account, or which reflect a reasonable reserve for warranty claims or returns; 

  

	 	(iii)	That portion of Accounts not yet earned by the final delivery of goods or that portion of Accounts not yet earned by the final rendition of services by the Borrower or a Guarantor,
as the case may be, to the customer, including, with respect to both goods and services, progress billings, and that portion of Accounts for which an invoice has not been sent to the applicable account debtor; 

  

	 	(iv)	Accounts constituting (i) royalties or license fees of copyrightable material unless such copyrightable material shall have been registered with CIPO, or (ii) royalties or
license fees of patentable inventions unless such patentable inventions have been registered with the CIPO; 

  

	 	(v)	Accounts owed by any Governmental Authority, whether foreign or domestic; 

  

	 	(vi)	Accounts denominated in any currency other than US Dollars, Canadian Dollars, Euros or Pounds; 

  

					
		  	- 7 -	  	

	 	(vii)	Accounts owed by an account debtor located outside the United States, Canada, the United Kingdom or the European Union which are not (A) backed by a bank letter of credit
naming the Lender as beneficiary or assigned to the Lender, in the Lender’s possession or control, and acceptable to the Lender in all respects, in its sole discretion, or (B) covered by a foreign receivables insurance policy acceptable to
the Lender in its sole discretion; 

  

	 	(viii)	Accounts owed by an account debtor that is insolvent, the subject of bankruptcy proceedings or has gone out of business; 

  

	 	(ix)	Accounts owed by an Owner, Subsidiary, Affiliate, Officer or employee of the Borrower or a Guarantor, as the case may be; 

  

	 	(x)	Accounts not subject to a duly perfected security interest in the Lender’s favor or which are subject to any Lien (other than a Permitted Lien) in favor of any Person other
than the Lender; 

  

	 	(xi)	That portion of Accounts that has been restructured, extended, amended or modified; 

  

	 	(xii)	That portion of Accounts that constitutes advertising, finance charges, service charges or excise taxes; 

  

	 	(xiii)	Accounts owed by an account debtor, regardless of whether otherwise eligible, to the extent that the aggregate balance of such Accounts exceeds twenty-five percent (25%) (or as
to Accounts owed by Harland Clarke Holdings Corp., John H. Harland or Clarke American Corp., a total of fifty percent (50%)) of the aggregate amount of all Accounts, excluding Borrowers’ Affiliates’ Accounts; 

 

	 	(xiv)	Accounts owed by an account debtor, regardless of whether otherwise eligible, if twenty-five percent (25%) or more of the total amount of Accounts due from such debtor is
ineligible under clauses (i), (ii), or (x) above; and 

  

	 	(xv)	Accounts, or portions thereof, otherwise deemed ineligible by the Lender in its sole discretion. 

 “Eligible Equipment” means Equipment of the Borrower designated by the Lender as eligible from time to time in its sole discretion but
excluding any Equipment having any of the following characteristics: 
  

	 	(i)	Equipment that is subject to any Lien (other than a Permitted Lien) other than in favor of the Lender; 

  

	 	(ii)	Equipment that has not been delivered to the Premises; 

  

					
		  	- 8 -	  	

	 	(iii)	Equipment in which the Lender does not hold a first priority security interest; 

  

	 	(iv)	Equipment that is obsolete or not currently saleable; 

  

	 	(v)	Equipment that is not covered by standard “all risk” insurance for an amount equal to its forced liquidation value; 

  

	 	(vi)	Equipment that requires proprietary software in order to operate in the manner in which it is intended when such software is not freely assignable to the Lender or any potential
purchaser of such Equipment; 

  

	 	(vii)	Equipment that is located at a location which is not subject to a landlord’s disclaimer and consent, in form and substance acceptable to the Lender; 

 

	 	(viii)	Equipment consisting of computer hardware, Software, tooling, or moulds; and 

  

	 	(ix)	Equipment otherwise deemed unacceptable by the Lender in its sole discretion. 

 “Eligible Inventory” means all Inventory of the Borrower or a Guarantor, but excluding any Inventory having any of the following characteristics: 
  

	 	(i)	Inventory that is: in-transit; located at any warehouse, job site or other premises not approved by the Lender in writing; not subject to a duly perfected first priority security
interest in the Lender’s favor; subject to any Lien that is subordinate to the Lender’s first priority security interest in a manner acceptable to the Lender; covered by any negotiable or non-negotiable warehouse receipt, bill of lading or
other document of title; on consignment from any Person; on consignment to any Person or subject to any bailment unless such consignee or bailee has executed an agreement with the Lender in the form prescribed by the Lender;

  

	 	(ii)	Supplies, packaging, parts or sample Inventory, or customer supplied parts or Inventory; 

  

	 	(iii)	Work-in-process Inventory (provided, however, that Eligible Inventory does not include subassembly parts, excluding burden or labor); 

  

	 	(iv)	Inventory that is damaged, defective, obsolete, slow moving or not currently saleable in the normal course of the Borrower’s operations, or the amount of such Inventory that
has been reduced by shrinkage; 

  

	 	(v)	Inventory that the Borrower has returned, has attempted to return, is in the process of returning or intends to return to the vendor thereof; 

  

					
		  	- 9 -	  	

	 	(vi)	Inventory that is perishable or live; 

  

	 	(vii)	Inventory manufactured by the Borrower pursuant to a license unless the applicable licensor has agreed in writing to permit the Lender to exercise its rights and remedies against
such Inventory; 

  

	 	(viii)	Inventory that is subject to a Lien (except for Permitted Liens) in favor of any Person other than the Lender; 

  

	 	(ix)	Inventory that is located at a location which is not subject to a landlord’s disclaimer and consent, in form and substance acceptable to the Lender; and

  

	 	(x)	Inventory otherwise deemed ineligible by the Lender in its sole discretion. 

 “Environmental Law” means any federal, provincial, state, local or other governmental statute, regulation, law or ordinance dealing with the protection of human health and the environment. 

“Equipment” means: (i) all “equipment” as defined in the PPSA, (ii) all machinery, manufacturing equipment,
extruders, die heads, tanks, vehicles, cranes, data processing equipment, computers, office equipment, furnishings, furniture, appliances, and tools (in each case, regardless of whether characterized as equipment under the PPSA), (iii) all
fixtures and (iv) all accessions or additions thereto, all parts thereof, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefor, wherever located, now or hereafter
existing. 
 “Equipment Advance Rate” means up to one hundred percent (100%) of the Net Forced Liquidation Value of
Eligible Equipment, or such lesser rate as the Lender in its sole discretion may deem appropriate from time to time. 
 “Equipment
Term Advance” is defined in Section 2.2. 
 “Equipment Term Note” means the Borrower’s promissory note,
payable to the order of the Lender in substantially the form of Exhibit B hereto, as same may be renewed and amended from time to time, and all replacements thereto. 
 “Euro” and the symbol “€” means the single currency of the participating members of the European Union. 
 “European Accounts Advance Rate” means up to eighty-five percent (85%), or such lesser rate as the Lender in its sole discretion may
deem appropriate from time to time; provided that, as of any date of determination, the European Accounts Advance Rate shall be reduced by one percentage point (1%) for each percentage by which Dilution is in excess of four percent (4.0%).

 “European Availability” means the amount, if any, by which the European Borrowing Base exceeds the sum of the outstanding
principal balance of the European Revolving Note. 
 “European Borrowing Base” means at any time the lesser of: 

 

	 	(a)	The European Maximum Line Amount; or 

  

					
		  	- 10 -	  	

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

  

	 	(i)	the lesser of 

  

	 	(1)	the sum of: 

  

	 	(I)	the product of 50% times the US Dollar Equivalent of the cost of Delphax France’s Eligible Inventory; and 

  

	 	(II)	the product of 50% times the US Dollar Equivalent of the cost of Delphax UK’s Eligible Inventory; or 

  

	 	(2)	US$1,250,000; 

  

	 	(ii)	the product of the European Accounts Advance Rate times the US Dollar Equivalent of Delphax France’s Eligible Accounts, plus 

  

	 	(iv)	the product of the European Accounts Advance Rate times the US Dollar Equivalent of Delphax UK’s Eligible Accounts, less 

  

	 	(iii)	the Borrowing Base Reserve applicable to each of Delphax France and Delphax UK, less 

  

	 	(v)	Indebtedness that the Borrower owes to the Lender that has not yet been advanced on the European Revolving Note, and the dollar amount that the Lender in its reasonable discretion
then determines to be a reasonable determination of the Borrower’s credit exposure with respect to any swap, derivative, foreign exchange, hedge, deposit, treasury management or other similar transaction or arrangement offered to Borrower by
Lender that is not described in ARTICLE II of this Agreement. 

 “European Maximum Line Amount” means
US$2,000,000, unless this amount is reduced pursuant to Section 2.12, in which event it means such lower amount. 
 “European
Revolving Advance” is defined in Section 2.3. 
 “European Revolving Facility” means the credit facility under
which European Revolving Advances are made available to the Borrower by the Lender under Section 2.3. 
 “European Revolving
Note” means the Borrower’s revolving promissory note, payable to the order of the Lender in substantially the form of Exhibit C hereto, as same may be renewed and amended from time to time, and all replacements thereto. 
 “Event of Default” is defined in Section 7.1. 
  

					
		  	- 11 -	  	

 “Floating Rate” means the annual interest rate equal to the sum of the Prime Rate plus
half a percent (0.5%) per annum, which interest rate shall change when and as the Prime Rate changes. 
 “Funding Date”
is defined in Section 2.1. 
 “GAAP” means generally accepted accounting principles in effect in the United States of
America, applied on a basis consistent with the accounting practices applied in the consolidated financial statements described in Section 5.6. 
 “Good Faith Estimate” means the Borrower’s good faith estimate of the amount of an Advance to be requested by the Borrower pursuant to Section 2.5(b). 
 “Good Faith Estimate Cut-off Time” means 2:30 p.m. Minneapolis, Minnesota time, 3:30 p.m. Toronto, Ontario time. 
 “Goods” (i) means all “goods” as defined in the PPSA, (ii) shall include, without limitation, all Inventory,
Equipment, fixtures and Software Embedded in Goods but (iii) shall exclude “consumer goods” as defined in the PPSA. 
 “Governmental Authority” means any domestic or foreign government including any federal, provincial, state, territorial or municipal government and any government agency, tribunal, commission or other authority exercising
executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government. 
 “Guarantee”
means each unconditional continuing guarantee executed by a Guarantor in favor of the Lender. 
 “Guarantor” means each of
the Parent, Delphax France and Delphax UK, and every other Person now or in the future who agrees to guaranty the Indebtedness. 
 “Guarantor Collateral” means all of the present and after-acquired personal property, assets and undertaking of each Guarantor in which such Guarantor has granted a Lien to the Lender pursuant to the Security Documents in
order to secure their obligations under their respective Guarantees. 
 “Guarantor Security Agreements” means all security
agreements, pledge agreements, debentures, hypothecs, mortgages or other agreements executed by a Guarantor in favor of the Lender in order to secure the obligations of such Guarantor to the Lender, and shall include all amendments, supplements or
replacements thereof. 
 “Hazardous Substances” means pollutants, contaminants, hazardous substances, hazardous wastes,
petroleum and fractions thereof, and all other chemicals, wastes, substances and materials listed in, regulated by or identified in any Environmental Law. 
 “Indebtedness” is used herein in its most comprehensive sense and means any and all advances, debts, obligations and liabilities of the Borrower to the Lender, heretofore, now or 

  

					
		  	- 12 -	  	

 
hereafter made, incurred or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, including under any swap, derivative, foreign exchange, hedge, deposit, treasury management or other similar transaction or arrangement at any time entered into by the Borrower with the Lender or with Wells
Fargo Bank, National Association or any Affiliate thereof, and whether the Borrower may be liable individually or jointly with others, or whether recovery upon such Indebtedness may be or hereafter becomes unenforceable. 
 “Indemnified Liabilities” is defined in Section 8.7. 
 “Indemnitees” is defined in Section 8.7. 
 “Industrial Designs” means
all industrial designs and applications including, without limitation, all industrial designs and industrial design applications identified on Schedule 5.10 attached hereto and made a part hereof, and including without limitation, (a) all
inventions and improvements described and claimed therein, (b) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, (c) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses relating to Industrial Designs entered, and damages and payments for past or future infringements thereof), and
(d) all common law rights corresponding thereto and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon, and all other rights of any kind whatsoever of a
Borrower accruing thereunder or pertaining thereto. 
 “Infringement” or “Infringing” when used with
respect to Intellectual Property Rights means any infringement or other violation of Intellectual Property Rights. 
 “Insolvency
Laws” means any laws applicable to the Borrower or any Guarantor relating to bankruptcy, insolvency, restructuring, reorganization or arrangement of a debtor’s affairs, including without limitation, the Companies’ Creditors
Arrangement Act (Canada), the Winding-up and Restructuring Act (Canada) or the Bankruptcy and Insolvency Act (Canada), as now and hereafter in effect, or any successor statutes. 
 “Instruments” (i) means all “instruments” as defined in the PPSA and (ii) shall include all letters of credit,
advices of and all other instruments in which the Borrower now or hereafter has an interest, and any part thereof. 
 “Insurance” means: (i) all insurance policies covering any or all of the Collateral (regardless of whether the Lender is the loss payee thereof) and (ii) any key man life insurance policies. 
 “Intangibles” (i) means all “intangibles” as defined in the PPSA and (ii) shall include, without limitation, all
interest rate or currency protection or hedging arrangements, all tax refunds, all rights in action, and all licenses, permits, concessions and authorizations, (in each case, regardless of whether characterized as intangibles under the PPSA).

 “Intellectual Property Rights” means all actual or prospective rights, including any license thereof, arising in
connection with any intellectual property or other proprietary rights, including all rights arising in connection with Copyrights, Patents, Industrial Designs, Trade Secrets, Software, Trademarks, service marks, trade dress, trade names or mask
works. 
  

					
		  	- 13 -	  	

 “Interest Payment Date” is defined in Section 2.10(a). 
 “Inventory” means: (i) all “inventory” as defined in the PPSA and (ii) all goods held for sale or lease or to be
furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such
inventory or otherwise used or consumed in the Borrower’s business; and all goods which are returned to or repossessed by the Borrower, and all accessions thereto and products thereof (in each case, regardless of whether characterized as
inventory under the PPSA). 
 “Investment Property” means all (i) Pledged Equity Interests and (ii) Pledged Debt.

 “Lender” means Wells Fargo Financial Corporation Canada in its broadest and most comprehensive sense as a legal entity,
and is not limited in its meaning to any other operating division of Lender. 
 “Licensed Intellectual Property” is defined
in Section 5.10(c). 
 “Lien” means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance,
title retention agreement or analogous instrument or device, including the interest of each lessor under any capitalized lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets or properties of a Person,
whether now owned or subsequently acquired and whether arising by agreement or operation of law. 
 “Loan Documents” means
this Agreement, the Canadian Revolving Note, the Equipment Term Note, the European Revolving Note, each Guarantee, each Subordination Agreement, and the Security Documents, together with every other agreement, note, document, contract or instrument
to which the Borrower now or in the future may be a party and which is required by the Lender. 
 “Material Adverse Effect”
means any of the following: 
  

	 	(i)	A material adverse effect on the business, operations, results of operations, prospects, assets, liabilities or financial condition of the Borrower and its Affiliates, taken as a
whole; 

  

	 	(ii)	A material adverse effect on the ability of the Borrower to perform its obligations under the Loan Documents to which it is a party; 

  

	 	(iii)	A material adverse effect on the business, operations, results of operations, prospects, assets, liabilities or financial condition of the Borrower or the Parent, on an individual
basis; 

  

	 	(iv)	A material adverse effect on the ability of the Borrower or the Parent, on an individual basis, to perform its obligations under the Loan Documents or the US Loan Documents to which
it is a party; 

  

					
		  	- 14 -	  	

	 	(v)	A material adverse effect on the business, operations, results of operations, prospects, assets, liabilities or financial condition of Delphax France or Delphax UK, but only if a
European Revolving Advance is outstanding; 

  

	 	(vi)	A material adverse effect on the ability of Delphax France or Delphax UK to perform its obligations under the Loan Documetns to which it is a party, but only if a European Revolving
Advance has been made; or 

  

	 	(iii)	A material adverse effect on the ability of the Lender to enforce the Indebtedness or to realize the intended benefits of the Security Documents, including a material adverse effect
on the validity or enforceability of any Loan Document or of any rights against any Guarantor, or on the status, existence, perfection, priority (subject to Permitted Liens) or enforceability of any Lien securing payment or performance of the
Indebtedness. 

 “Material Contract” means any contract or other arrangement to which the Borrower is a party
for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect. 
 “Maturity Date” means, with respect to the Credit Facility, September 10, 2011. 
 “Money”
means “money” as defined in the PPSA. 
 “Net Cash Proceeds” means in connection with any asset sale, the US
Dollar Equivalent of the cash proceeds (including any cash payments received by way of deferred payment whether pursuant to a note, installment receivable or otherwise, but only as and when actually received) from such asset sale, net of
(i) attorneys’ fees, accountants’ fees, investment banking fees, brokerage commissions and amounts required to be applied to the repayment of any portion of the Debt secured by a Lien not prohibited hereunder on the asset which is the
subject of such sale, and (ii) taxes paid or reasonably estimated to be payable as a result of such asset sale. 
 “Net Forced
Liquidation Value” means a professional opinion of the estimated most probable Net Cash Proceeds which could typically be realized at a properly advertised and conducted public auction sale without reserve, held under forced sale conditions
and under economic trends current within 60 days of the appraisal. The opinion may consider physical location, difficulty of removal, adaptability, specialization, marketability, physical condition, overall appearance and psychological appeal.

 “Net Orderly Liquidation Value” means a professional opinion of the estimated most probable Net Cash Proceeds which could
typically be realized at a properly advertised and professionally managed liquidation sale, conducted under orderly sale conditions for an extended period of time (usually six to nine months), under the economic trends existing at the time of the
appraisal. 
 “Officer” means an officer of the Borrower. 
 “Off-the-shelf Software” is defined in Section 5.10(c). 
  

					
		  	- 15 -	  	

 “Overadvance” means the amount, if any, by which the outstanding principal balance of
any Revolving Note is in excess of the then-existing Borrowing Base applicable to such Revolving Note. 
 “Owned Intellectual
Property” is defined in Section 5.10(a). 
 “Owner” means with respect to the Borrower, each Person having
legal or beneficial title to an ownership interest in the Borrower or a right to acquire such an interest. 
 “Parent” means
Delphax Technologies Inc., a Minnesota corporation. 
 “Patents” means all letters patent of Canada and foreign patents and
certificates of invention, or similar industrial property rights, now or hereafter in force, including, but not limited to each such patent referred to in Schedule 5.10 (as such schedule may be amended or supplemented from time to time in accordance
with the terms of this Agreement), and with respect to any and all of the foregoing, (i) all applications therefore including, without limitations, such patent applications referred to in Schedule 5.10 (as such schedule may be amended or
supplemented from time to time in accordance with the terms of this Agreement), (ii) all reissues, divisionals, continuations, continuations-in-part, extensions, renewals, and reexaminations of the foregoing, (iii) all rights corresponding
thereto throughout the world, (iv) all inventions and improvements described therein, (v) all rights to sue at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment
thereof, including, without limitation, the right to receive all income, royalties, proceeds and damages therefore, whether now or hereafter due or payable, and (vi) all payments and royalties and rights to payments and royalties arising out of
the sale, lease, license, assignment, or other disposition thereof. 
 “Patent and Trademark Security Agreement” means each
Patent and Trademark Security Agreement now or hereafter executed by the Borrower in favor of the Lender dated the same date as this Agreement. 
 “Pension Plan” means all plans or arrangements which are considered to be pension plans for the purposes of any applicable pension benefits standards statute or regulation in Canada established, maintained or contributed to
by the Borrower for its employees or former employees. 
 “Permitted Lien” and “Permitted Liens” are
defined in Section 6.2(a). 
 “Person” means any individual, corporation, partnership, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 
 “Pledged Alternative Equity Interests” means (i) all participation or other interests in any equity or profits of any business entity and the certificates, if any, representing such interests listed on Schedule 5.14,
(ii) all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such
interests and (iii) any 

  

					
		  	- 16 -	  	

 
other warrant, right or option to acquire any of the foregoing; provided that Pledged Alternative Equity Interests shall not include any Pledged
Stock, Pledged Partnership Interests and Pledged LLC Interests. 
 “Pledged Debt” means (i) all indebtedness for
borrowed money owed to the Borrower, whether or not evidenced by any instrument or promissory note, including, without limitation, all indebtedness described on Schedule 5.14 under the heading “Pledged Debt” (as such schedule may be
amended or supplemented from time to time in accordance with the terms of this Agreement), (ii) all monetary obligations owing to the Borrower from any of its Affiliates and the instruments evidencing any of the foregoing, and (iii) all
interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing. 
 “Pledged Equity Interests” means all Pledged Stock, Pledged ULC Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged
Alternative Equity Interests. 
 “Pledged LLC Interests” means all interests in any limited liability company including,
without limitation, all limited liability company interests listed on Schedule 5.14 under the heading “Pledged LLC Interests” (as such schedule may be amended or supplemented from time to time in accordance with the terms of this
Agreement) and the certificates, if any, representing such limited liability company interests and any interest of the Borrower on the books and records of such limited liability company or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for
any or all of such limited liability company interests and any other warrant, right or option to acquire any of the foregoing. 
 “Pledged Partnership Interests” means all interests in any general partnership, limited partnership, limited liability partnership or other partnership including, without limitation, all partnership interests listed on
Schedule 5.14 under the heading “Pledged Partnership Interests” (as such schedule may be amended or supplemented from time to time in accordance with the terms of this Agreement) and the certificates, if any, representing such partnership
interests and any interest of the Borrower on the books and records of such partnership or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such partnership interests and any other warrant, right or option to acquire any of
the foregoing. 
 “Pledged Stock” means all shares of capital stock owned by the Borrower including, without limitation, all
shares of capital stock described Schedule 5.14 under the heading “Pledged Stock” (as such schedule may be amended or supplemented from time to time in accordance with the terms of this Agreement), and the certificates, if any,
representing such shares and any interest of the Borrower in the entries on the books of the issuer of such shares or on the books of any securities intermediary pertaining to such shares, and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares and any other warrant, right or option to acquire any of the
foregoing. 
  

					
		  	- 17 -	  	

 “Pledged ULC Stock” means all Pledged Stock of a Person that is a ULC, now owned or
hereafter acquired by the Borrower, including the Pledged ULC Stock listed on Schedule 5.14. 
 “PPSA” means he Personal
Property Security Act (Ontario), including the regulations thereto, provided that, if perfection or the effect of perfection or non-perfection or the priority of any Lien created hereunder on the Collateral is governed by the personal property
security legislation or other applicable legislation with respect to personal property security as in effect in a jurisdiction other than Ontario, “PPSA” means the Personal Property Security Act or such other applicable legislation
as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority. 
 “Pound” and the symbol “£” means the lawful money of the United Kingdom. 
 “Premises” means all locations where the Borrower or any of the Guarantors conducts its business or has any rights of possession,
including the locations legally described in Exhibit E attached hereto. 
 “Prime Rate” means at any time the rate of
interest most recently announced by Wells Fargo US at its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Wells Fargo US’s base rates, and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the recording thereof in such internal publication or publications as Wells Fargo US may designate. Each change in the rate of interest shall become effective on the date each
Prime Rate change is announced by Wells Fargo US. 
 “Proceeds” (i) means all “proceeds” as defined in the
PPSA, (ii) shall include payments or distributions made with respect to any Investment Property and (iii) shall include whatever is receivable or received when Collateral or proceeds are sold, leased, licensed, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary. 
 “Revolving Advance” means, as applicable, a
Canadian Revolving Advance or a European Revolving Advance. 
 “Revolving Facility” means, collectively, the Canadian
Revolving Facility and the European Revolving Facility. 
 “Revolving Notes” means, collectively, the Canadian Revolving
Note and the European Revolving Note. 
 “Securities” (i) means “securities” as defined in the PPSA and
(ii) shall include any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing. 
  

					
		  	- 18 -	  	

 “Security Documents” means, collectively, the following: 
  

	 	(ii)	this Agreement; 

  

	 	(iii)	each Guarantee; 

  

	 	(iv)	each Guarantor Security Agreement; 

  

	 	(v)	a landlord’s disclaimer and consent in respect of each location where Eligible Inventory or Eligible Equipment is located, in form and substance acceptable to the Lender;

  

	 	(vi)	each Subordination Agreement; and 

  

	 	(vii)	any other document delivered to the Lender from time to time to secure the Indebtedness. 

 “Security Interest” is defined in Section 3.1. 
 “Software” means any
and all computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code; databases and compilations, including any and all data, databases and collections of data,
whether machine readable or otherwise; descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons
and icons; and all configurations and documentation including user manuals and other training materials related to any of the foregoing, including, without limitation, any such programs referred to Schedule 5.10 (as such schedule may be amended or
supplemented from time to time in accordance with the terms of this Agreement). 
 “Software Embedded in Goods” means, with
respect to any Goods, any computer program embedded in Goods and any supporting information or documentation provided in connection with the program if (i) the program is associated with the Goods in such a manner that it customarily is
considered part of the Goods or (ii) by becoming the owner of the Goods a person acquires a right to use the program in connection with the Goods. 
 “Subordinated Creditor” means Whitebox and every other Person now or in the future who agrees to subordinate indebtedness of the Borrower held by that Person to the payment of the Indebtedness.

 “Subordination Agreement” means a subordination agreement executed by a Subordinated Creditor in favor of the Lender and
acknowledged by the Borrower. 
 “Subsidiary” means any Person of which more than fifty percent (50%) of the
outstanding ownership interests having general voting power under ordinary circumstances to 

  

					
		  	- 19 -	  	

 
elect a majority of the board of directors or the equivalent of such Person, regardless of whether or not at the time ownership interests of any other class
or classes shall have or might have voting power by reason of the happening of any contingency, is at the time directly or indirectly owned by the Borrower, by the Borrower and one or more other Subsidiaries, or by one or more other Subsidiaries.

 “Taxes” means all present and future taxes, surtaxes, duties, levies, imposts, rates, fees,
assessments, withholdings, dues and other charges of any nature imposed by any Governmental Authority (including income, capital (including large corporations), withholding, consumption, sales, use, transfer, goods and services or other value-added,
excise, customs, anti-dumping, countervail, net worth, stamp, registration, franchise, payroll, employment, health, education, business, school, property, local improvement, development, education development and occupation taxes, surtaxes, duties,
levies, imposts, rates, fees, assessments, withholdings, dues and charges) together with all fines, interest, penalties on or in respect of, or in lieu of or for non-collection of, those taxes, surtaxes, duties, levies, imposts, rates, fees,
assessments, withholdings, dues and other charges. 
 “Termination Date” means the earliest of (i) the Maturity Date,
(ii) the date the Borrower terminates the Credit Facility, or (iii) the date the Lender demands payment of the Indebtedness, following an Event of Default, pursuant to Section 7.2. 
 “Trade Secrets” means all trade secrets and all other confidential or proprietary information and know-how, whether or not reduced to a
writing or other tangible form, now or hereafter in force, owned or used in, or contemplated at any time for use in, the business of the Borrower (all of the foregoing being collectively called a “Trade Secret”), including with respect to
any and all of the foregoing: (i) all documents and things embodying, incorporating, or referring in any way thereto, (ii) all rights to sue at law or in equity for any past, present and future infringement, misappropriation, dilution,
violation or other impairment thereof, including, without limitation, the right to receive all income, royalties, proceeds and damages therefore, whether now or hereafter due or payable, and (iii) all payments and royalties and rights to
payments and royalties arising out of the sale, lease, license, assignment, or other dispositions thereof. 
 “Trademarks”
means all federal, provincial and foreign trademarks, service marks, certification marks, collective marks, trade names, corporate names, company names, business names, fictitious business names, Internet domain names, trade styles, logos, other
source or business identifiers, designs and general intangibles of a like nature, rights of publicity and privacy pertaining to the names, likeness, signature and biographical data of natural persons, now or hereafter in force, and, with respect to
any and all of the foregoing: (i) all registrations and recordation thereof and all applications in connection therewith including, but not limited to, such registrations and applications referred to in Schedule 5.10 (as such schedule may be
amended or supplemented from time to time in accordance with the terms of this Agreement), (ii) all renewals and extensions thereof (iii) the goodwill of the business associated therewith and symbolized thereby, (iv) all rights
corresponding thereto throughout the world, (v) all rights to sue at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof, including, without limitation, the right to
receive all 

  

					
		  	- 20 -	  	

 
income, royalties, proceeds and damages therefore, whether now or hereafter due or payable, and (vi) all payments and royalties and rights to payments
and royalties arising out of the sale, lease, license assignment or other disposition thereof. 
 “UCC” means the Uniform
Commercial Code as in effect in the state of Minnesota or any other state in which the Parent has its chief executive office or in which the Parent was incorporated or continued. 
 “ULC” means any unlimited liability company. 
 “Unused Amount” is defined in Section 2.9(a). 
 “US Credit Agreement”
means the Credit and Security Agreement dated as of even date herewith between the Parent as borrower and Wells Fargo US as lender. 
 “US Dollars” and the symbols $ and “US$” each means the lawful money of the United States. 
 “US Dollar Equivalent” means, 
 (a) with respect to any amount denominated in Canadian Dollars, the amount of US
Dollars that would be required to purchase such amount of Canadian Dollars on the date of any determination based upon the Bank of Canada noon mid-point spot rate on such date (or, if such rate is not available, the spot selling rate at which Wells
Fargo Bank, National Association offers to sell Canadian Dollars for US Dollars in the foreign exchange market at approximately 11:00 a.m. New York time); 
 (b) with respect to any amount denominated in Euros, the spot selling rate at which Wells Fargo Bank, National Association offers to sell Euros for US Dollars in the foreign exchange market at approximately 11:00 a.m.
New York time; or 
 (c) with respect to any amount denominated in Pounds, the spot selling rate at which Wells Fargo Bank, National
Association offers to sell Pounds for US Dollars in the foreign exchange market at approximately 11:00 a.m. New York time. 
 “US
Loan Documents” means “Loan Documents” as defined in the US Credit Agreement. 
 “Wells Fargo US” means
Wells Fargo Bank, National Association (acting through its Wells Fargo Business Credit operating division), and its successors and permitted assigns. 
 “Whitebox” means, Whitebox Delphax, Ltd. and its successors and permitted assigns. 
  

	 	Section 1.2	Other Definitional Terms; Rules of Interpretation. 

 The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All
accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP. All terms defined in the UCC or the PPSA, as the case may be, and not otherwise defined herein, including without limitation,
“accessions”, “financing statement” and “financing change statement”, have the respective meanings assigned to them in 

  

					
		  	- 21 -	  	

 
the UCC or the PPSA, as the context requires. References to Articles, Sections, subsections, Exhibits, Schedules and the like, are to Articles, Sections and
subsections of, or Exhibits or Schedules attached to, this Agreement unless otherwise expressly provided. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. Unless the context in which used herein otherwise clearly requires, “or” has the inclusive meaning represented by the phrase “and/or”. Defined terms include in the singular number the plural and in the plural
number the singular. Reference to any agreement (including the Loan Documents), document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof (and, if
applicable, in accordance with the terms hereof and the other Loan Documents), except where otherwise explicitly provided, and reference to any promissory note includes any promissory note which is an extension or renewal thereof or a substitute or
replacement therefor. Reference to any law, rule, regulation, order, decree, requirement, policy, guideline, directive or interpretation means as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect on the
determination date, including rules and regulations promulgated thereunder. If there is a conflict between any provision of this Agreement and any provision of another document contemplated by or delivered under or in connection with this Agreement,
the relevant provision of this Agreement is to prevail. Time shall be of the essence in all provisions of this Agreement. 
 ARTICLE II

 AMOUNT AND TERMS OF THE CREDIT FACILITY 
  

	 	Section 2.1	Canadian Revolving Advances. 

 The Lender
agrees, subject to the terms and conditions of this Agreement, to make advances (“Canadian Revolving Advances”) to the Borrower from time to time from the date that all of the conditions set forth in Section 4.1 are satisfied
(the “Funding Date”) to and until (but not including) the Termination Date in an aggregate amount not in excess of the Canadian Borrowing Base at the time of the Borrower’s request for a Canadian Revolving Advance. The Lender
shall have no obligation to make a Canadian Revolving Advance to the extent that the amount of the requested Canadian Revolving Advance exceeds Canadian Availability. The Borrower’s obligation to pay the Canadian Revolving Advances shall be
evidenced by the Canadian Revolving Note and shall be secured by the Collateral as provided in ARTICLE III and each of the Guarantees and the Guarantor Security Agreements given in respect thereto. Within the limits set forth in this
Section 2.1, the Borrower may borrow, prepay pursuant to Section 2.12, and reborrow. 
  

	 	Section 2.2	Equipment Term Advance. 

 The Lender agrees,
subject to the terms and conditions of this Agreement, to make single Advance to the Borrower on the Funding Date in the amount of US$653,415 (the “Equipment Term Advance”). The Lender shall have no obligation to make the Equipment
Term Advance if, after giving effect to such requested Equipment Term Advance, the outstanding principal balance of the Equipment Term Advances would exceed the amount determined by multiplying 

  

					
		  	- 22 -	  	

 
the Equipment Advance Rate times the Net Forced Liquidation Value of Eligible Equipment. The Borrower’s obligation to pay the Equipment Term Advance
shall be evidenced by the Equipment Term Note and shall be secured by the Collateral as provided in ARTICLE III and each of the Guarantees and the Guarantor Security Agreements given in respect thereto. 
  

	 	Section 2.3	European Revolving Advances. 

 The Lender
agrees, subject to the terms and conditions of this Agreement, to make advances (“European Revolving Advances”) to the Borrower from time to time from the Funding Date to and until (but not including) the Termination Date in an
aggregate amount not in excess of the European Borrowing Base at the time of the Borrower’s request for a European Revolving Advance. The Lender shall have no obligation to make a European Revolving Advance to the extent that (i) the
amount of the requested European Revolving Advance exceeds European Availability, (ii) there remains any Canadian Availability with respect to the Canadian Revolving Facility or (iii) there remains any Availability with respect to the
Credit Facility (as those terms are defined in the US Credit Agreement). The Borrower’s obligation to pay the European Revolving Advances shall be evidenced by the European Revolving Note and shall be secured by the Collateral as provided in
ARTICLE III and each of the Guarantees and the Guarantor Security Agreements given in respect thereto. Within the limits set forth in this Section 2.3, the Borrower may borrow, prepay pursuant to Section 2.12, and reborrow. 
  

	 	Section 2.4	Payment of Equipment Term Note. 

 The
outstanding principal balance of the Equipment Term Note shall be due and payable as follows: 
 (a) Beginning on October 1, 2007, and on
the first day of each month thereafter, in substantially equal monthly installments equal to an amount sufficient to fully amortize the principal balance of the Equipment Term Note over an assumed term ending on September 10, 2012 (the
“Assumed Maturity Date”). If the Lender makes an Equipment Term Advance after the initial Equipment Term Advance, the amount of each installment will be increased so that the remaining payments will fully amortize the outstanding
principal balance of the Equipment Term Note in substantially equal amounts by the Assumed Maturity Date. 
 (b) If the Lender at any time
obtains an appraisal of the Equipment as permitted under Section 6.8(d) herein, and the appraisal shows the aggregate outstanding principal balance of the Equipment Term Note to exceed one hundred percent (100%) of the Net Forced
Liquidation Value of Eligible Equipment, then the Borrower, upon demand by the Lender, shall, at the Lender’s option, (i) shall make additional monthly principal payments so that the remaining payments will fully amortize the outstanding
principal balance of the Equipment Term Note in substantially equal amounts by the Assumed Maturity Date or (ii) immediately prepay the Equipment Term Note in the amount of such excess, together with any prepayment fee owed pursuant to
Section 2.9(e). 
 (c) All prepayments of principal with respect to the Equipment Term Note shall be applied to the most remote
principal installment or installments then unpaid. 
  

					
		  	- 23 -	  	

 (d) On the Termination Date of the Credit Facility, the entire unpaid principal balance of the Equipment
Term Note and all unpaid interest accrued thereon shall also be fully due and payable. 
  

	 	Section 2.5	Procedures for Requesting Advances. 

 The
Borrower shall comply with the following procedures in requesting Revolving Advances: 
 (a) Type of Advances. Each Advance shall be
funded as a Floating Rate Advance, as the Borrower shall specify in a request delivered to the Lender conforming to the requirements of Section 2.5(b). 
 (b) Time for Requests. The Borrower shall request each Advance so that the Lender receives it not later than the Cut-off Time on the Business Day on which the Advance is to be made. Each request that
conforms to the terms of this Agreement shall be effective upon receipt by the Lender, shall be in writing or by telephone or telecopy transmission, and shall be confirmed in writing by the Borrower if so requested by the Lender, by
(i) an Officer of the Borrower; or (ii) a Person designated as the Borrower’s agent by an Officer of the Borrower in a writing delivered to the Lender; or (iii) a Person whom the Lender reasonably believes to be an Officer of the
Borrower or such a designated agent. The Borrower shall repay all Advances even if the Lender does not receive such confirmation and even if the Person requesting an Advance was not in fact authorized to do so. Any request for an Advance, whether
written or telephonic, shall be deemed to be a representation by the Borrower that the conditions set forth in Section 4.2 have been satisfied as of the time of the request. 
 (c) Good Faith Estimate. In addition to the requirements of Section 2.5(b), the Borrower shall deliver to the Lender a Good Faith Estimate of
the amount of the Advance which the Borrower intends to request pursuant to Section 2.5(b) no later than the Good Faith Estimate Cut-off Time on the Business Day prior to date on which such Advance is to be requested. 
 (d) Disbursement. Upon fulfillment of the applicable conditions set forth in ARTICLE IV, the Lender shall disburse the proceeds of the requested
Advance (i) to the initial Advances, by transmitting proceeds thereof to LaSalle Business Credit, LLC in payment in full of all of the Borrower’s existing loan obligations to that entity and (ii) otherwise by crediting the same to the
Borrower’s demand deposit account maintained with the Account Bank unless the Lender and the Borrower shall agree in writing to another manner of disbursement. Upon the Lender’s request, the Borrower shall promptly confirm each telephonic
request for an Advance by executing and delivering an appropriate confirmation certificate to the Lender. The Borrower shall be obligated to repay all Advances notwithstanding the Lender’s failure to receive such confirmation and
notwithstanding the fact that the Person requesting the same was not in fact authorized to do so. Any request for a Advance, whether written or telephonic, shall be deemed to be a representation by the Borrower, upon which the Lender may rely, that
the Borrower is in compliance with the conditions set forth in Section 4.2 as of the time of the request. 
  

					
		  	- 24 -	  	

	 	Section 2.6	Interest; Default Interest; Application of Payments; Participations; Usury. 

 (a) Interest. Except as provided in Section 2.6(b), Section 2.6(f) and Section 2.8, the principal amount of each Advance shall bear interest at the Floating Rate. 
 (b) Default Interest Rate. At any time during a Default Period arising from an Event of Default or following the Termination Date, in the
Lender’s sole discretion and without waiving any of its other rights or remedies, the principal of the Revolving Notes and the Equipment Term Note shall, subject to Applicable Law, bear interest at the Default Rate or such lesser rate as the
Lender may determine, effective as of the first day of the month in which such Default Period begins through the last day of such Default Period, or any shorter time period that the Lender may determine. The decision of the Lender to impose a rate
that is less than the Default Rate or to not impose the Default Rate for the entire duration of such Default Period shall be made by the Lender in its sole discretion and shall not be a waiver of any of its other rights and remedies, including its
right to retroactively impose the full Default Rate for the entirety of any such Default Period or following the Termination Date. 
 (c)
Application of Payments. Payments shall be applied to the Indebtedness on the Business Day of receipt by the Lender in the Lender’s general account, but the amount of principal paid shall continue to accrue interest at the interest rate
applicable under the terms of this Agreement from the calendar day the Lender receives the payment, and continuing through the end of the first Business Day following receipt of the payment. 
 (d) Participations. If any Person shall acquire a participation in the Advances, the Borrower shall be obligated to the Lender to pay the full
amount of all interest calculated under this Section 2.6, along with all other fees, charges and other amounts due under this Agreement, regardless if such Person elects to accept interest with respect to its participation at a lower rate than
that calculated under this Section 2.6, or otherwise elects to accept less than its pro rata share of such fees, charges and other amounts due under this Agreement. 
 (e) Minimum Interest Charge. Notwithstanding any other terms of this Agreement to the contrary, the Borrower shall pay to the Lender interest and unused line fees under this Agreement and the US Credit
Agreement of not less than an aggregate amount of US$150,000 per Loan Year (the “Minimum Interest Charge”) during the term of this Agreement, and the Borrower shall, to the extent that such Minimum Interest Charge is not paid by the
Parent, pay any deficiency between the Minimum Interest Charge and the amount of interest otherwise calculated under Section 2.6(a) and Section 2.6(a) of the US Credit Agreement on same following each anniversary of the Funding Date and on
the Termination Date (including any Termination Date that occurs due to any refinancing by an Affiliate of the Lender). When calculating this deficiency, the Default Rate and the “Default Rate” under the US Credit Agreement, if applicable,
shall be disregarded. As used in this subsection (c), “Loan Year” means each one-year period ending on an anniversary of the Funding Date. 
 (f) Usury. In any event no rate change shall be put into effect that would result in a rate greater than the highest rate permitted by law. Notwithstanding anything to the contrary 

  

					
		  	- 25 -	  	

 
contained in any Loan Document, all agreements which either now are or which shall become agreements between the Borrower and the Lender are hereby limited
so that in no contingency or event whatsoever shall the total liability for payments in the nature of interest, additional interest and other charges exceed the applicable limits imposed by any applicable usury laws. If any payments in the nature of
interest, additional interest and other charges made under any Loan Document are held to be in excess of the limits imposed by any applicable usury laws, it is agreed that any such amount held to be in excess shall be considered payment of principal
hereunder, and the indebtedness evidenced hereby shall be reduced by such amount so that the total liability for payments in the nature of interest, additional interest and other charges shall not exceed the applicable limits imposed by any
applicable usury laws, in compliance with the desires of the Borrower and the Lender. This provision shall never be superseded or waived and shall control every other provision of the Loan Documents and all agreements between the Borrower and the
Lender, or their successors and assigns. 
  

	 	Section 2.7	Interest Act. 

 For purposes of the
Interest Act (Canada), where in this Agreement a rate of interest is to be calculated on the basis of a year of 360 or 365 days, the yearly rate of interest to which the rate is equivalent is the rate multiplied by the actual number of days
in the year for which the calculation is made and divided by 360 or 365, as applicable. 
  

	 	Section 2.8	Limitations on Rate of Interest. 

 (a)
Adjustment. If any provision of this Agreement or any of the other Documents would obligate the Borrower to make any payment of interest or other amount payable to the Lender in an amount or calculated at a rate which would be prohibited by law or
would result in a receipt by the Lender of interest at a criminal rate (as construed under the Criminal Code (Canada)), then notwithstanding that provision, that amount or rate shall be deemed to have been adjusted with retroactive effect to
the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or result in a receipt by the Lender of interest at a criminal rate, the adjustment to be effected, to the extent necessary, as follows: 
  

	 	(i)	firstly, by reducing the amount or rate of interest required to be paid to the Lender under this ARTICLE II; and 

  

	 	(ii)	thereafter, by reducing any fees, commissions, premiums and other amounts required to be paid to the Lender which would constitute interest for purposes of Section 347 of the
Criminal Code (Canada). 

 (b) Reimbursement. Notwithstanding Section 2.8(a), and after giving effect to all
adjustments contemplated thereby, if the Lender shall have received an amount in excess of the maximum permitted by the Criminal Code (Canada), then the Borrower shall be entitled, by notice in writing to the Lender, to obtain reimbursement
from the Lender in an amount equal to the excess, and pending reimbursement, the amount of the excess shall be deemed to be an amount payable by the Lender to the Borrower. 
  

					
		  	- 26 -	  	

 (c) Actuarial Principles. Any amount or rate of interest referred to in this Section 2.8
shall be determined in accordance with generally accepted actuarial practices and principles as an effective annual rate of interest over the term that any Advance remains outstanding on the assumption that any charges, fees or expenses that fall
within the meaning of “interest” (as defined in the Criminal Code (Canada)) shall, if they relate to a specific period of time, be pro-rated over that period of time and otherwise be pro-rated over the period from the date of this
Agreement to the Maturity Date and, in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Lender shall be conclusive for the purposes of that determination. 
  

	 	Section 2.9	Fees. 

 (a) [Reserved] 
 (b) Unused Line Fee. For the purposes of this Section 2.9(a), “Unused Amount” means the Aggregate Maximum Line Amount
reduced by outstanding Revolving Advances. The Borrower agrees to pay to the Lender an unused line fee at the rate of one quarter of a percent (0.25%) per annum on the average daily Unused Amount from the date of this Agreement to and including the
Termination Date, due and payable monthly in arrears on the first day of the month and on the Termination Date. 
 (c) Collateral Exam
Fees. The Borrower shall pay the Lender fees in connection with any collateral exams, audits or inspections conducted by or on behalf of the Lender of any Collateral or the Borrower’s operations or business at the rates established from
time to time by the Lender as its collateral exam fees (which fees are currently US$850 per eight hour day per collateral examiner), together with all actual out-of-pocket costs and expenses incurred in conducting any such collateral examination or
inspection. 
 (d) Termination and Line Reduction Fees. If (i) the Lender terminates the Revolving Facilities during a Default
Period arising from an Event of Default, or if (ii) the Borrower terminates or reduces the Revolving Facilities on a date after the Funding Date and prior to the Maturity Date, then the Borrower shall pay the Lender as liquidated damages and
not as a penalty a termination fee in an amount equal to a percentage of the sum of Aggregate Maximum Line Amount calculated as follows: (A) three percent (3%) if the termination or reduction occurs on or before the first anniversary of
the Funding Date; (B) two percent (2%) if the termination or reduction occurs after the first anniversary of the Funding Date, but on or before the second anniversary of the Funding Date; and (C) one percent (1%) if the
termination or reduction occurs after the second anniversary of the Funding Date and prior to the fourth anniversary of the Funding Date. 
 (e) Prepayment Fees. The Borrower may prepay the principal amount of the Equipment Term Note at any time in any amount, whether voluntarily or by acceleration, subject to the payment of fees on the date of such prepayment as follows:

  

	 	(i)	three percent (3%) of the amount prepaid, if prepayment occurs on or before the first anniversary of the Funding Date; 

  

					
		  	- 27 -	  	

	 	(ii)	two percent (2%) of the amount prepaid, if prepayment occurs after the first anniversary of the Funding Date but on or before the second anniversary of the Funding Date; and

  

	 	(iii)	one percent (1%) of the amount prepaid, if prepayment occurs after the second anniversary of the Funding Date but prior to the fourth anniversary of the Funding Date.

 (f) Waiver of Termination and Prepayment Fees. The Borrower will be excused from the payment of termination and
prepayment fees otherwise due under this Agreement if such termination or prepayment is made because of refinancing through another one of Lender’s operating divisions more than eighteen (18) months after the Funding Date. 
 (g) Other Fees and Charges. The Lender may from time to time impose additional fees and charges as consideration for Advances made in excess of
Availability or for other events that constitute an Event of Default or a Default hereunder, including fees and charges for the administration of Collateral by the Lender, and fees and charges for the late delivery of reports, which may be assessed
in the Lender’s sole discretion on either an hourly, periodic, or flat fee basis, and in lieu of or in addition to imposing interest at the Default Rate. 
  

	 	Section 2.10	Time for Interest Payments; Payment on Non-Business Days; Computation of Interest and Fees. 

 (a) Time For Interest Payments. Accrued and unpaid interest accruing on Floating Rate Advances shall be due and payable on the first day of each
month in arrears and on the Termination Date (each an “Interest Payment Date”). Interest will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of advance to the
Interest Payment Date. 
 (b) Payment on Non-Business Days. Whenever any payment to be made hereunder shall be stated to be due on a
day which is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest on the Advances or the fees hereunder, as the case may be.

 (c) Computation of Interest and Fees. Interest accruing on the outstanding principal balance of the Advances and fees hereunder
outstanding from time to time shall be computed on the basis of actual number of days elapsed in a year of 360 days. 
  

	 	Section 2.11	Lockbox and Blocked Account and Control Agreement. 

  

	 	(a)	Control Account. 

  

	 	(i)	 If the Borrower receives any payments on Accounts, the Borrower shall deposit such payments into the Control Account. The Borrower shall also deposit all other cash
proceeds of Collateral regardless of source or nature directly into the Control Account. Until so deposited, the Borrower shall hold all such payments and cash proceeds in trust for and as the property 

  

					
		  	- 28 -	  	

	 	 
of the Lender and shall not commingle such property with any of its other funds or property. All deposits in the Control Account shall constitute proceeds of
Collateral and shall not constitute payment of the Indebtedness. 

  

	 	(ii)	All items deposited in the Control Account shall be subject to final payment. If any such item is returned uncollected, the Borrower will immediately pay the Lender, or, for items
deposited in the Control Account, the Account Bank, the amount of that item, or such the Account Bank, at its discretion, may charge any uncollected item to the Borrower’s commercial account or other account. The Borrower shall be liable as an
endorser on all items deposited in the Control Account, whether or not in fact endorsed by the Borrower. 

 (b) Sweep of
Funds. The Lender may from time to time, during a Default Period and in accordance with the Blocked Account and Control Agreement, cause funds in the Control Account to be transferred to the Lender’s general account for payment of the
Indebtedness. During a Default Period, amounts deposited in the Control Account shall not be subject to withdrawal by the Borrower, except after payment in full and discharge of all Indebtedness. 
  

	 	Section 2.12	Voluntary Prepayment; Reduction of the Maximum Line Amount; Termination of the Credit Facility by the Borrower. 

 Except as otherwise provided herein, the Borrower may prepay the Advances in whole at any time or from time to time in part; provided that the Borrower
shall apply any prepayment of Advances in respect of the Revolving Facilities first to prepayment of any outstanding European Revolving Advances and second to any outstanding Canadian Revolving Advances. The Borrower may terminate the Credit
Facility or reduce the Canadian Maximum Line Amount or the European Maximum Line Amount at any time if it (i) gives the Lender at least 60 days advance written notice prior to the proposed Termination Date, and (ii) pays the Lender
applicable termination or prepayment fees, and Maximum Line Amount reduction fees in accordance with the terms of this Agreement. Any reduction in the Canadian Maximum Line Amount or the European Maximum Line Amount shall be in multiples of
US$100,000, and with a minimum reduction of at least US$500,000. If the Borrower terminates the Credit Facility or reduces the Aggregate Maximum Line Amount to zero, all Indebtedness shall be immediately due and payable, and if the Borrower
gives the Lender less than the required 60 days advance written notice, then the interest rate applicable to borrowings evidenced by the applicable Revolving Note shall be the Default Rate for the period of time commencing 60 days prior to the
proposed Termination Date through the date that the Lender actually receives such written notice. If the Borrower does not wish the Lender to consider renewal of the Credit Facility on the next Maturity Date, then the Borrower shall give the Lender
at least 60 days written notice prior to the Maturity Date that it will not be requesting renewal. If the Borrower fails to give the Lender such timely notice, then the interest rate applicable to borrowings evidenced by each of the Revolving Notes
shall be the Default Rate for the period of time commencing 60 days prior to the Maturity Date through the date that the Lender actually receives such written notice. 
  

					
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	 	Section 2.13	Mandatory Prepayment. 

 Without notice or
demand, if the sum of the outstanding principal balance of the Canadian Revolving Advances or the European Revolving Advances, as the case may be, shall at any time exceed the Canadian Borrowing Base or the European Borrowing Base, respectively, the
Borrower shall (i) first, within one Business Day, prepay the Canadian Revolving Advances or the European Revolving Advances, as the case may be, to the extent necessary to eliminate such excess; and (ii) if prepayment in full of the
Canadian Revolving Advances or the European Revolving Advances, as the case may be, is insufficient to eliminate such excess, pay to the Lender in immediately available funds for deposit in the Collateral Account an amount equal to the remaining
excess. Any voluntary or mandatory prepayment received by the Lender under this Agreement may be applied to the Indebtedness, in such order and in such amounts as the Lender in its sole discretion may determine from time to time. 
  

	 	Section 2.14	Revolving Advances to Pay Indebtedness. 

 Notwithstanding the terms of Section 2.1, the Lender may, in its discretion at any time or from time to time, without the Borrower’s request and even if the conditions set forth in Section 4.2 would not be satisfied, make a
Revolving Advance in an amount equal to the portion of the Indebtedness from time to time due and payable.  
  

	 	Section 2.15	Use of Proceeds. 

 The Borrower shall use the
proceeds of the Advances (i) as to the initial Advances, to pay in full its existing loan obligation to LaSalle Business Credit, LLC, (ii) for ordinary working capital purposes of the Borrower and the Guarantors and (iii) as to the
proceeds of Equipment Term Advances, for the acquisition or refinancing of Eligible Equipment. 
  

	 	Section 2.16	Liability Records. 

 The Lender may maintain
from time to time, at its discretion, records as to the Indebtedness. All entries made on any such record shall be presumed correct until the Borrower establishes the contrary. Upon the Lender’s demand, the Borrower will admit and certify in
writing the exact principal balance of the Indebtedness that the Borrower then asserts to be outstanding. Any billing statement or accounting rendered by the Lender shall be conclusive and fully binding on the Borrower unless the Borrower gives the
Lender specific written notice of exception within 30 days after receipt. 
  

	 	Section 2.17	Taxes. 

 (a) Payments. All payments to
be made by or on behalf of the Borrower under or with respect to this Agreement are to be made free and clear of and without deduction or withholding for, or on account of, any present or future Taxes, unless such deduction or withholding is
required by Applicable Law. If the Borrower is required to deduct or withhold any Taxes from any amount payable to the Lender, (a) the amount payable shall be increased as may be necessary so that, after making all required deductions or
withholdings (including deductions and withholdings applicable to, and taking into account all Taxes on, or arising by reason of the payment of, additional amounts under this Section 2.17), the Lender receives and 

  

					
		  	- 30 -	  	

 
retains an amount equal to the amount that it would have received had no such deductions or withholdings been required, (b) the Borrower shall make such
deductions or withholdings, and (c) the Borrower shall remit the full amount deducted or withheld to the relevant taxing authority in accordance with Applicable Laws. Notwithstanding the foregoing, the Borrower shall not be required to pay
additional amounts in respect of Excluded Taxes. 
 (b) Indemnity. The Borrower shall indemnify the Lender for the full amount of any
Taxes (other than Excluded Taxes) imposed by any jurisdiction on amounts payable by the Borrower under this Agreement and paid by the Lender and any liability (including penalties, interest and reasonable expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted, and any Taxes levied or imposed with respect to any indemnity payment made under this Section 2.17. The Borrower shall also indemnify the Lender for any Taxes (other than
Excluded Taxes) that may arise as a consequence of the execution, sale, transfer, delivery or registration of, or otherwise with respect to this Agreement or any other Loan Document. The indemnifications contained in this Section 2.17 shall be
made within 30 days after the date the Lender makes written demand therefor. 
 (c) Evidence of Payment. Within 30 days after the date
of any payment of Taxes by the Borrower, the Borrower shall furnish to the Lender the original or a certified copy of a receipt evidencing payment by the Borrower of any Taxes with respect to any amount payable to the Lender hereunder. 

(d) Excluded Taxes. For the purpose of this Section 2.17, “Excluded Taxes” means, in relation to the Lender, any Taxes
imposed on the net income or capital of the Lender by any Governmental Authority as a result of the Lender (a) carrying on a trade or business or having a permanent establishment in any jurisdiction or political subdivision thereof,
(b) being organized under the laws of such jurisdiction or any political subdivision thereof, or (c) being or being deemed to be resident in such jurisdiction or political subdivision thereof. 
 (e) Survival. The Borrower’s obligations under this Section 2.17 shall survive the termination of this Agreement and the payment of all
amounts payable under or with respect to this Agreement. 
 ARTICLE III 
 SECURITY INTEREST; OCCUPANCY; SETOFF 
  

	 	Section 3.1	Grant of Security Interest. 

 (a) The
Borrower hereby pledges, assigns and grants to the Lender a lien and security interest (collectively referred to as the “Security Interest”) in the Collateral, as continuing security for the payment and performance of: (a) all
present and future Indebtedness of the Borrower to the Lender; (b) all obligations of the Borrower and rights of the Lender under this Agreement; and (c) all present and future obligations of the Borrower to the Lender of other kinds.

  

					
		  	- 31 -	  	

 (b) Value Given. The Borrower and the Lender hereby acknowledge that (a) value has been
given; (b) the Borrower has rights in the Collateral in which it has granted the Security Interest; and (c) this Agreement constitutes a security agreement as that term is defined in the PPSA. 
 (c) Attachment of Security Interest. The security interest created hereby is intended to attach, in respect of Collateral in which the Borrower
has rights at the time this Agreement is signed by the Borrower and delivered to the Lender and, in respect of Collateral in which the Borrower subsequently acquires rights, at the time the Borrower subsequently acquires such rights. 
  

	 	Section 3.2	Excluded Collateral 

 The Security Interest
granted under Section 3.1 shall not attach to the following property (collectively referred to as the “Excluded Property”): (a) any lease, license, contract, property rights or agreement to which the Borrower is a party or
any of its rights or interests thereunder if the grant of such Security Interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of the Borrower therein or (ii) in a
breach or termination pursuant to the terms of, or a default under, any such lease, license, contract property rights or agreement (other than to the extent that any such term would be rendered ineffective pursuant to any relevant jurisdiction or
any other Applicable Law (including the Insolvency Laws) or principles of equity), (b) the last day of the term of any lease or agreement therefor but upon the enforcement of the Security Interest granted hereby in the Collateral, the Borrower
shall stand possessed of such last day in trust to assign the same to any Person acquiring such term, or (c) applications filed at CIPO to register Trademarks or service marks on the basis of the Borrower’s “intent to use” such
Trademarks or service marks unless and until the filing of a “Statement of Use” or “Amendment to Allege Use” has been filed and accepted, whereupon such applications shall be automatically subject to the Security Interest granted
herein and deemed included in the Collateral. 
  

	 	Section 3.3	Unlimited Liability Companies. 

 If the
Borrower controls at any time any Pledged ULC Stock, the Borrower shall remain registered as the sole registered and beneficial owner of the Pledged ULC Stock and will remain as registered and beneficial owner until such time as the Pledged ULC
Stock are effectively transferred into the name of the Lender or any other person on the books and records of the ULC. Nothing in this Agreement is intended to or shall constitute the Lender or any Person other than the ULC a shareholder or member
of such ULC until such time as notice is given to the ULC and further steps are taken hereunder so as to register the Lender or any other Person as the holder of such Pledged ULC Stock. To the extent any provision hereof would have the effect of
constituting the Lender or any other Person as a shareholder or member of a ULC prior to such time, such provision shall be severed therefrom and ineffective with respect to the Pledged ULC Stock without otherwise invalidating or rendering
unenforceable this Agreement or invalidating or rendering unenforceable such provision insofar as it relates to Pledged Equity Interests which are not Pledged ULC Stock. Except upon the exercise of rights to sell or otherwise dispose of Pledged ULC
Stock following the occurrence and during the continuance of a Default or an 

  

					
		  	- 32 -	  	

 
Event of Default hereunder, the Borrower shall not cause or permit, or enable any ULC in which it holds Pledged ULC Stock to cause or permit, the Lender to:
(a) be registered as shareholders or members of such ULC; (b) have any notation entered in their favour in the share register of such ULC; (c) be held out as shareholders or members of such ULC; (d) receive, directly or
indirectly, any dividends, property or other distributions from such ULC by reason of the Lender holding a security interest in such ULC; or (e) to act as a shareholder or member of such ULC, or exercise any rights of a shareholder or member
including the right to attend a meeting of, or to vote the shares of, such ULC. 
  

	 	Section 3.4	Notification of Account Debtors and Other Obligors. 

 The Lender may at any time (during a Default Period) notify any account debtor or other Person obligated to pay the amount due that such right to payment has been assigned or transferred to the Lender for security and shall be paid directly
to the Lender. The Borrower will join in giving such notice if the Lender so requests. At any time after the Borrower or the Lender gives such notice to an account debtor or other obligor, the Lender may, but need not, in the Lender’s name or
in the Borrower’s name, demand, sue for, collect or receive any money or property at any time payable or receivable on account of, or securing, any such right to payment, or grant any extension to, make any compromise or settlement with or
otherwise agree to waive, modify, amend or change the obligations (including collateral obligations) of any such account debtor or other obligor. The Lender may, in the Lender’s name or in the Borrower’s name, as the Borrower’s agent
and attorney-in-fact, notify Canada Post to change the address for delivery of the Borrower’s mail to any address designated by the Lender, otherwise intercept the Borrower’s mail, and receive, open and dispose of the Borrower’s mail,
applying all Collateral as permitted under this Agreement and holding all other mail for the Borrower’s account or forwarding such mail to the Borrower’s last known address. 
  

	 	Section 3.5	Assignment of Insurance. 

 As additional
security for the payment and performance of the Indebtedness, the Borrower hereby assigns to the Lender any and all monies (including proceeds of insurance and refunds of unearned premiums) due or to become due under, and all other rights of the
Borrower with respect to, any and all policies of insurance now or at any time hereafter covering the Collateral or the Premises or any evidence thereof or any business records or valuable papers pertaining thereto, and the Borrower hereby directs
the issuer of any such policy to pay all such monies directly to the Lender. At any time, during a Default Period arising from an Event of Default, the Lender may (but need not), in the Lender’s name or in the Borrower’s name, execute and
deliver proof of claim, receive all such monies, endorse cheques and other instruments representing payment of such monies, and adjust, litigate, compromise or release any claim against the issuer of any such policy. Any monies received as payment
for any loss under any insurance policy mentioned above (other than liability insurance policies) or as payment of any award or compensation for condemnation or taking by eminent domain, shall be paid over to the Lender to be applied, at the option
of the Lender, either to the prepayment of the Indebtedness or shall be disbursed to the Borrower under staged payment terms reasonably satisfactory to the Lender for application to the cost of repairs, replacements, or restorations. Any such
repairs, replacements, or restorations shall be effected with reasonable promptness and shall be of a value at least equal to the value of the items or property destroyed prior to such damage or destruction. 
  

					
		  	- 33 -	  	

	 	Section 3.6	Occupancy. 

 (a) The Borrower hereby
irrevocably grants to the Lender the right to take exclusive possession of the Premises at any time during a Default Period arising from an Event of Default without notice or consent. 
 (b) The Lender may use the Premises only to hold, process, manufacture, sell, use, store, liquidate, realize upon or otherwise dispose of goods that are
Collateral and for other purposes that the Lender may in good faith deem to be related or incidental purposes. 
 (c) The Lender’s right
to hold the Premises shall cease and terminate upon the earlier of (i) payment in full and discharge of all Indebtedness and termination of the Credit Facility, and (ii) final sale or disposition of all goods constituting Collateral and
delivery of all such goods to purchasers. 
 (d) The Lender shall not be obligated to pay or account for any rent or other compensation for
the possession, occupancy or use of any of the Premises; provided, however, that if the Lender does pay or account for any rent or other compensation for the possession, occupancy or use of any of the Premises, the Borrower shall
reimburse the Lender promptly for the full amount thereof. In addition, the Borrower will pay, or reimburse the Lender for, all taxes, fees, duties, imposts, charges and expenses at any time incurred by or imposed upon the Lender by reason of the
execution, delivery, existence, recordation, performance or enforcement of this Agreement or the provisions of this Section 3.6. 
  

	 	Section 3.7	License. 

 Without limiting the generality of
any other Security Document, the Borrower hereby grants to the Lender a non-exclusive, worldwide and royalty-free license to use or otherwise exploit all Intellectual Property Rights of the Borrower for the purpose of: (a) completing the
manufacture of any in-process materials during any Default Period so that such materials become saleable Inventory, all in accordance with the same quality standards previously adopted by the Borrower for its own manufacturing and subject to the
Borrower’s reasonable exercise of quality control; and (b) selling, leasing or otherwise disposing of any or all Collateral during any Default Period arising from an Event of Default. 
  

	 	Section 3.8	Financing Statement. 

 The Borrower
acknowledges that the Lender shall file from time to time such financing statements and financing change statements against the Collateral under the PPSA and other Applicable Laws which are necessary or desirable to protect and perfect the Security
Interest of the Lender in such Collateral. The Borrower shall reimburse the Lender for the cost of filing such financing statements and financing change statements, including the Lender’s reasonable legal fees. 
  

					
		  	- 34 -	  	

	 	Section 3.9	Setoff. 

 The Lender may at any time or from
time to time, at its sole discretion and without demand and without notice to anyone, setoff any liability owed to the Borrower by the Lender, whether or not due, against any Indebtedness, whether or not due. In addition, each other Person holding a
participating interest in any Indebtedness shall have the right to appropriate or setoff any deposit or other liability then owed by such Person to the Borrower, whether or not due, and apply the same to the payment of said participating interest,
as fully as if such Person had lent directly to the Borrower the amount of such participating interest. 
  

	 	Section 3.10	Collateral. 

 This Agreement does not
contemplate a sale of accounts, contract rights or chattel paper, and, as provided by law, the Borrower is entitled to any surplus and shall remain liable for any deficiency. The Lender’s duty of care with respect to Collateral in its
possession (as imposed by law) shall be deemed fulfilled if it exercises reasonable care in physically keeping such Collateral, or in the case of Collateral in the custody or possession of a bailee or other third Person, exercises reasonable care in
the selection of the bailee or other third Person, and the Lender need not otherwise preserve, protect, insure or care for any Collateral. The Lender shall not be obligated to preserve any rights the Borrower may have against prior parties, to
realize on the Collateral at all or in any particular manner or order or to apply any cash proceeds of the Collateral in any particular order of application. The Lender has no obligation to clean-up or otherwise prepare the Collateral for sale. The
Borrower waives any right it may have to require the Lender to pursue any third Person for any of the Indebtedness. 
  

	 	Section 3.11	Continuing Liability under Collateral. 

 Notwithstanding anything herein to the contrary, (i) the Borrower shall remain liable for all obligations under the Collateral and nothing contained herein is intended or shall be a delegation of duties to the Lender and (ii) the
Borrower shall remain liable under each of the agreements included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by
it thereunder all in accordance with and pursuant to the terms and provisions thereof and the Lender shall have no obligation or liability under any of such agreements by reason of or arising out of this Agreement or any other document related
thereto nor shall the Lender have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement included in the
Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, (iii) the exercise by the Lender of any of its rights hereunder shall not release the Borrower from any of its duties
or obligations under the contracts and agreements included in the Collateral. 
  

	 	Section 3.12	Continuing Liability. 

 If the Collateral is
realized upon and the security interest in the Collateral is not sufficient to satisfy all of the Indebtedness, the Borrower acknowledges and agrees that, subject to the provisions of the PPSA, the Borrower shall continue to be liable for any
Indebtedness remaining outstanding and the Lender shall be entitled to pursue full payment thereof. 
  

					
		  	- 35 -	  	

	 	Section 3.13	Amalgamation. 

 (a) The Borrower acknowledges
and agrees that, upon its amalgamation with another Person, it is the intention of the parties hereto that the term “the Borrower” shall apply to each of the amalgamating corporations and to the amalgamated corporation, such that the
Security Interest and Lien granted hereby: 
  

	 	(i)	shall extend to all of the Collateral owned by each of the amalgamating corporations and the amalgamated corporation at the time of amalgamation and to any Collateral thereafter
owned or acquired by the amalgamated corporation; and 

  

	 	(ii)	shall secure the Indebtedness of each of the amalgamating corporations and the amalgamated corporation to any Secured Party at the time of amalgamation and any Obligation of the
amalgamated corporation to any Secured Party thereafter arising. 

 (b) The Security Interest shall attach to Collateral owned
by the corporation amalgamating with the Borrower and by the amalgamated corporation, at the time of the amalgamation, and shall attach to any Collateral thereafter owned or acquired by the amalgamated corporation when such becomes owned or is
acquired. 
  

	 	Section 3.14	Copy of Agreement; Verification Statement. 

 The Borrower hereby acknowledges receipt of a signed copy of this Agreement and hereby waives the requirement to be provided with a copy of any verification statement issued in respect of a financing statement or financing change statement
filed under the PPSA in connection with this Agreement to perfect the Security Interest created hereby. 
 ARTICLE IV 
 CONDITIONS OF LENDING 
  

	 	Section 4.1	Conditions Precedent to the Initial Advances. 

 The Lender’s obligation to make the initial Advances shall be subject to the condition precedent that the Lender shall have received all of the following, each properly executed by the appropriate party and in form and substance
satisfactory to the Lender: 
 (a) This Agreement. 
 (b) The Canadian Revolving Note, the Equipment Term Note and the European Revolving Note. 
 (c) Each of the
Security Documents. 
  

					
		  	- 36 -	  	

 (d) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Premises,
together with a landlord’s disclaimer and consent with respect to each such lease, in form and substance acceptable to the Lender. 
 (e) A true and correct copy of any and all mortgages pursuant to which the Borrower has mortgaged the Premises, together with a mortgagee’s disclaimer and consent with respect to each such mortgage, in form and substance acceptable to
the Lender. 
 (f) A true and correct copy of any and all agreements pursuant to which the Borrower’s property is in the possession of
any Person other than the Borrower, together with, in the case of any goods held by such Person for resale, (i) a consignee’s acknowledgment and waiver of Liens, (ii) PPSA financing statements sufficient to protect the Borrower’s
and the Lender’s interests in such goods, and (iii) PPSA searches showing that no other secured party has filed a financing statement against such Person and covering property similar to the Borrower’s other than the Borrower, or if
there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s and the Lender’s interests in the Borrower’s goods from any claim by
such secured party. 
 (g) An acknowledgment and waiver of Liens from each warehouse in which the Borrower is storing Inventory that it
intends is to be considered as Eligible Inventory or Equipment that it intends is to be considered as Eligible Equipment. 
 (h) A true and
correct copy of any and all agreements pursuant to which the Borrower’s property is in the possession of any Person other than the Borrower, together with, (i) an acknowledgment and waiver of Liens from each subcontractor who has
possession of the Borrower’s goods from time to time, (ii) PPSA financing statements sufficient to protect the Borrower’s and the Lender’s interests in such goods, and (iii) PPSA searches showing that no other secured party
has filed a financing statement covering such Person’s property other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect
the Borrower’s and the Lender’s interests in the Borrower’s goods from any claim by such secured party. 
 (i) An
acknowledgment and agreement from each licensor in favor of the Lender, together with a true, correct and complete copy of all license agreements. 
 (j) Current searches of appropriate filing offices showing that (i) no Liens have been filed and remain in effect against the Borrower except Permitted Liens or Liens held by Persons who have agreed in writing that upon receipt of
proceeds of the initial Advances, they will satisfy, release or terminate such Liens in a manner satisfactory to the Lender, and (ii) the Lender has duly filed all financing statements necessary to perfect the Security Interest, to the extent
the Security Interest is capable of being perfected by filing. 
 (k) A certificate of the Borrower’s Secretary or Assistant Secretary
certifying that attached to such certificate are (i) the resolutions of the Parent authorizing the execution, delivery and performance of the Loan Documents, (ii) true, correct and complete copies of the 

  

					
		  	- 37 -	  	

 
Borrower’s Constituent Documents, and (iii) examples of the signatures of the Borrower’s Officers or agents authorized to execute and deliver
the Loan Documents and other instruments, agreements and certificates, including Advance requests, on the Borrower’s behalf. 
 (l)
A current certificate of status issued by the Ontario registrar of corporations, certifying the Borrower’s existence as an Ontario corporation. 
 (m) Evidence that the Borrower is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such
licensing or qualification necessary. 
 (n) A certificate of an Officer of the Borrower confirming the representations and warranties set
forth in ARTICLE V. 
 (o) Certificates of the insurance required hereunder, with all hazard insurance containing a lender’s loss
payable endorsement in the Lender’s favor and with all liability insurance naming the Lender as an additional insured. 
 (p) An opinion
of counsel of the Borrower, addressed to the Lender, in form and substance satisfactory to the Lender, acting reasonably. 
 (q) The separate
Guarantee of each Guarantor, pursuant to which each Guarantor unconditionally guarantees the full and prompt payment of all Indebtedness. 
 (r) A certificate of each Guarantor’s Secretary or Assistant Secretary certifying that attached to such certificate are (i) the resolutions of such Guarantor’s Directors and, if required, Owners, authorizing the execution,
delivery and performance of the Loan Documents to which it is a party, (ii) true, correct and complete copies of such Guarantor’s Constituent Documents, and (iii) examples of the signatures of such Guarantor’s Officers or agents
authorized to execute and deliver the Loan Documents to which it is a party and other instruments, agreements and certificates, on such Guarantor’s behalf. 
 (s) Current searches of appropriate filing offices showing that (i) no Liens have been filed and remain in effect against each Guarantor except Permitted Liens, and (ii) the Lender has duly filed all
financing statements necessary to perfect the Lien granted by each Guarantor to the Lender pursuant to the respective Guarantees, to the extent such Lien is capable of being perfected by filing. 
 (t) An opinion of counsel of each Guarantor, addressed to the Lender, in form and substance satisfactory to the Lender, acting reasonably. 
 (u) Payment of all fees due under the terms of this Agreement through the date of the initial Revolving Advances or Equipment Term Advance, and payment
of all expenses incurred by the Lender through such date and that are required to be paid by the Borrower under this Agreement. 
  

					
		  	- 38 -	  	

 (v) Evidence that after making the initial Revolving Advances, satisfying all obligations owed to
the Borrower’s prior lender, satisfying all trade payables older than 60 days from invoice date, book overdrafts and closing costs, the sum of (a) Availability, (b) “Availability” under and as defined in the US Credit
Agreement, plus (c) all cash proceeds of the initial advance by Whitebox on the Funding Date to the Borrower remaining after the refinancing of certain of the Borrower’s and the Parent’s existing subordinated debt obligations to
Whitebox, plus (d) consolidated cash on hand, shall be not less than US$4,500,000.  
 (w) Evidence that the Parent has received
the proceeds of additional subordinated indebtedness extended to the Parent by Whitebox in an amount not less than US$6,100,000 and that a portion of such subordinated indebtedness shall have been used to repay all of the Parent’s existing
subordinated indebtedness obligations to Whitebox Convertible Arbitrage Partners and Pandora Select Partners, L.P. 
 (x) A payoff letter or
agreement, duly executed by the Borrower and LaSalle Business Credit. 
 (y) Such other documents as the Lender in its sole discretion may
require. 
  

	 	Section 4.2	Conditions Precedent to Advances. 

 (a) The
Lender’s obligation to make each Advance shall be subject to the further conditions precedent that: 
  

	 	(i)	the representations and warranties contained in ARTICLE V are correct on and as of the date of such Advance as though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date; and 

  

	 	(ii)	no event has occurred and is continuing, or would result from such Advance that constitutes a Default or an Event of Default. 

 ARTICLE V 
 REPRESENTATIONS AND
WARRANTIES 
 The Borrower represents and warrants to the Lender as follows: 
  

	 	Section 5.1	Existence and Power; Name; Chief Executive Office; Inventory and Equipment Locations; Federal Employer Identification Number and Organizational Identification Number.

 The Borrower is (a) a corporation, duly organized, validly existing and in good standing under the laws of the Province
of Ontario and (b) is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary and
the failure to be so licensed or qualified could reasonably be expected to have a Material Adverse Effect. The 
  

					
		  	- 39 -	  	

 
Borrower has all requisite power and authority to conduct its business, to own its properties and to execute and deliver, and to perform all of its
obligations under, the Loan Documents. During its existence, the Borrower has done business solely under the names set forth in Schedule 5.1. The Borrower’s chief executive office and principal place of business is located at the address set
forth in Schedule 5.1, and all of the Borrower’s records relating to its business or the Collateral are kept at that location. All substantial administrative, management and executive functions of the Borrower are performed at or under the
supervision of executives located at the address set forth in Schedule 5.1. All Inventory and Equipment is located at that location or at one of the other locations listed in Schedule 5.1. The Borrower’s corporation number and Goods and
Services Tax number are correctly set forth in Schedule 5.1. 
  

	 	Section 5.2	Capitalization. 

 Schedule 5.2 constitutes a
correct and complete list of all ownership interests of the Borrower and rights to acquire ownership interests including the record holder, number of interests and percentage interests on a fully diluted basis and an organizational chart showing the
ownership structure of all Subsidiaries of the Borrower. 
  

	 	Section 5.3	Authorization of Borrowing; No Conflict as to Law or Agreements. 

 The execution, delivery and performance by the Borrower of the Loan Documents and the borrowings from time to time hereunder have been duly authorized by all necessary corporate action and do not and will not
(i) require any consent or approval of the Borrower’s Owners; (ii) require any authorization, consent or approval by, or registration, declaration or filing with, or notice to, any Governmental Authority, or any third party, except
such authorization, consent, approval, registration, declaration, filing or notice as has been obtained, accomplished or given prior to the date hereof; (iii) violate any provision of any Applicable Law currently in effect having applicability
to the Borrower or of the Borrower’s Constituent Documents; (iv) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other Material Contract, lease or instrument to which the Borrower is a
party or by which it or its properties may be bound or affected; or (v) result in, or require, the creation or imposition of any Lien (other than the Security Interest) upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower. 
  

	 	Section 5.4	Legal Agreements. 

 This Agreement
constitutes and, upon due execution by the Borrower, the other Loan Documents will constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms. 
  

	 	Section 5.5	Subsidiaries. 

 Except as set forth in
Schedule 5.5 hereto, the Borrower has no Subsidiaries. 
  

					
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	 	Section 5.6	Financial Condition; No Adverse Change. 

 The
Borrower has furnished to the Lender its Parent’s audited consolidated financial statements for its fiscal year ended September 30, 2006 and its Parent’s unaudited consolidated financial statements for the fiscal-year-to-date period
ended June 30, 2007, and, subject to year-end adjustments in the case of the interim period financial statements, those statements fairly present the Parent’s consolidated financial condition on the dates thereof and the results of its
operations and cash flows for the periods then ended and were prepared in accordance with GAAP, except for the absence of footnotes. Since the date of the most recent financial statements, except as identified on Schedule 5.6, there has been no
change in the Borrower’s business, properties or condition (financial or otherwise) which has had a Material Adverse Effect. 
  

	 	Section 5.7	Litigation. 

 Other than as set forth in
Schedule 5.7 hereto, there are no actions, suits or proceedings pending or, to the Borrower’s knowledge, threatened against or affecting the Borrower or any of its Affiliates or the properties of the Borrower or any of its Affiliates before any
court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which, if determined adversely to the Borrower or any of its Affiliates, would have a Material Adverse Effect on the financial condition,
properties or operations of the Borrower or any of its Affiliates. 
  

	 	Section 5.8	Taxes. 

 The Borrower and its Affiliates have
paid or caused to be paid to the proper authorities when due all federal, provincial, state and local Taxes required to be withheld by each of them. The Borrower and its Affiliates have filed all federal, provincial, state and local tax returns
which to the knowledge of the Officers of the Borrower or any Affiliate, as the case may be, are required to be filed, and the Borrower and its Affiliates have paid or caused to be paid to the respective taxing authorities all Taxes as shown on said
returns or on any assessment received by any of them to the extent such Taxes have become due and payable. 
  

	 	Section 5.9	Titles and Liens. 

 The Borrower has good and
marketable title to all Collateral free and clear of all Liens other than Permitted Liens. No financing statement naming the Borrower as debtor is on file in any office except to perfect only Permitted Liens. 
  

	 	Section 5.10	Intellectual Property Rights. 

 (a) Owned
Intellectual Property. Schedule 5.10 (as such Schedule may be amended or supplemented from time to time pursuant to a Credit Agreement Supplement delivered by the Borrower to the Lender) is a complete list of all Patents, applications for
Patents, Trademarks, applications to register Trademarks, service marks, applications to register service marks, mask works, trade dress and registered Copyrights for which the Borrower is the 
  

					
		  	- 41 -	  	

 
owner of record (the “Owned Intellectual Property”). Except as disclosed on Schedule 5.10, (i) the Borrower owns the Owned Intellectual
Property free and clear of all restrictions (including covenants not to sue a third party), court orders, injunctions, decrees, writs or Liens, whether by written agreement or otherwise, (ii) no Person other than the Borrower owns or has been
granted any right in the Owned Intellectual Property, (iii) all Owned Intellectual Property is valid, subsisting and enforceable and (iv) the Borrower has taken all commercially reasonable action necessary to maintain and protect the Owned
Intellectual Property. 
 (b) Agreements with Employees and Contractors. The Borrower has entered into a legally enforceable agreement
with each of its employees and subcontractors who are engaged in research and development activities obligating each such Person to assign to the Borrower, without any additional compensation, any Intellectual Property Rights created, discovered or
invented by such Person in the course of such Person’s employment or engagement with the Borrower (except to the extent prohibited by law), and further requiring such Person to cooperate with the Borrower, without any additional compensation,
in connection with securing and enforcing any Intellectual Property Rights therein; provided, however, that the foregoing shall not apply with respect to employees and subcontractors whose job descriptions are of the type such that no
such assignments are reasonably foreseeable. 
 (c) Intellectual Property Rights Licensed from Others. Schedule 5.10 (as such Schedule
may be amended or supplemented from time to time pursuant to a Credit Agreement Supplement delivered by the Borrower to the Lender) is a complete list of all agreements under which the Borrower has licensed Intellectual Property Rights from another
Person (“Licensed Intellectual Property”) other than readily available, licenses of Software and other intellectual property used solely for performing accounting, word processing and similar administrative tasks
(“Off-the-shelf Software”) or which are incorporated into the software that is included in the Borrower’s products, and a summary of any ongoing payments the Borrower is obligated to make with respect thereto. Except as
disclosed on Schedule 5.10 and in written agreements, copies of which have been given to the Lender, the Borrower’s licenses to use the Licensed Intellectual Property are free and clear of all restrictions, Liens, court orders, injunctions,
decrees, or writs, whether by written agreement or otherwise. Except as disclosed on Schedule 5.10, the Borrower is not obligated or under any liability whatsoever to make any payments of a material nature by way of royalties, fees or otherwise
to any owner of, licensor of, or other claimant to, any Intellectual Property Rights. 
 (d) Other Intellectual Property Needed for
Business. Except for Off-the-shelf Software and as disclosed on Schedule 5.10 (as such Schedule may be amended or supplemented from time to time pursuant to a Credit Agreement Supplement delivered by the Borrower to the Lender), the Owned
Intellectual Property and the Licensed Intellectual Property constitute all material Intellectual Property Rights used or necessary to conduct the Borrower’s business as it is presently conducted or as the Borrower reasonably foresees
conducting it. 
 (e) Infringement. Except as disclosed on Schedule 5.10 (as such Schedule may be amended or supplemented from time to
time pursuant to a Credit Agreement Supplement delivered by the Borrower to the Lender), the Borrower has no knowledge of, and has not received any written claim or notice alleging, any Infringement of another Person’s Intellectual 

  

					
		  	- 42 -	  	

 
Property Rights (including any written claim that the Borrower must license or refrain from using the Intellectual Property Rights of any third party) nor,
to the Borrower’s knowledge, is there any threatened claim or any reasonable basis for any such claim. 
  

	 	Section 5.11	Pension and Benefit Plans. 

 All Pension
Plans (if any) and Benefit Plans (if any) to which the Borrower is a party are described in Schedule 5.11. The Pension Plans are duly registered under the Income Tax Act (Canada) and all other Applicable Laws which require registration and no
event has occurred which is reasonably likely to cause the loss of that registered status. All material obligations of the Borrower (including fiduciary, funding, investment and administration obligations) required to be performed in connection with
the Pension Plans and the funding agreements therefor have been performed in a timely fashion. There have been no improper withdrawals or applications of the assets of the Pension Plans or the Benefit Plans. There is no proceeding, action, suit or
claim (other than routine claims for benefits) pending or threatened involving the Pension Plans or the Benefit Plans, and no facts exist which could reasonably be expected to give rise to that type of proceeding, action, suit or claim. Each of the
Pension Plans is fully funded both on an ongoing basis and on a solvency basis (using actuarial methods and assumptions which are consistent with the valuations last filed with the applicable Governmental Authorities and which are consistent with
GAAP). No promises of benefit improvements under the Pension Plans or the Benefit Plans have been made except where improvement could not have a Material Adverse Effect and, in any event, no such improvements will result in a solvency deficiency or
going concern unfunded liability in the affected Pension Plans. All contributions or premiums required to be made or paid by the Borrower to the Pension Plans or the Benefit Plans have been made or paid in accordance with the terms of such plans and
all Applicable Laws. All employee contributions to the Pension Plans or the Benefit Plans by way of authorized payroll deduction or otherwise have been properly withheld or collected by the Borrower and have been fully paid into those plans in
compliance with the plans and Applicable Laws. The pension fund under each Pension Plan is exempt from the payment of any income tax and there are no taxes, penalties or interest owing in respect of any pension fund. All material reports and
disclosures relating to the Pension Plans required by those plans and any Applicable Laws to be filed or distributed have been filed or distributed in compliance with the plans and Applicable Laws. 
  

	 	Section 5.12	Default. 

 The Borrower is in compliance with
all provisions of all agreements, instruments, decrees and orders to which it is a party or by which it or its property is bound or affected, the breach or default of which could be reasonably expected to have a Material Adverse Effect. 

 

	 	Section 5.13	Environmental Matters. 

 (a) Except as
disclosed on Schedule 5.13, there are not present in, on or under the Premises any Hazardous Substances in such form or quantity as to create any material liability or obligation for either the Borrower or the Lender under the common law of any
jurisdiction or under any Environmental Law, and no Hazardous Substances have ever been stored, buried, spilled, leaked, discharged, emitted or released in, on or under the Premises in such a way as to create any such material liability. 

 

					
		  	- 43 -	  	

 (b) Except as disclosed on Schedule 5.13, the Borrower has not disposed of Hazardous Substances in such a
manner as to create any material liability under any Environmental Law. 
 (c) Except as disclosed on Schedule 5.13, there have not existed
in the past, nor are there any threatened or impending requests, claims, notices, investigations, demands, administrative proceedings, hearings or litigation relating in any way to the Premises or the Borrower, alleging material liability under,
violation of, or noncompliance with any Environmental Law or any license, permit or other authorization issued pursuant thereto. 
 (d)
Except as disclosed on Schedule 5.13, the Borrower’s businesses are and have in the past always been conducted in accordance with all Environmental Laws and all licenses, permits and other authorizations required pursuant to any Environmental
Law and necessary for the lawful and efficient operation of such businesses are in the Borrower’s possession and are in full force and effect, nor has the Borrower been denied insurance on grounds related to potential environmental liability.
No permit required under any Environmental Law is scheduled to expire within 12 months and there is no threat that any such permit will be withdrawn, terminated, limited or materially changed. 
 (e) The Borrower has delivered to the Lender all environmental assessments, audits, reports, permits, licenses and other documents describing or relating
in any way to the Premises or the Borrower’s businesses. 
  

	 	Section 5.14	Pledged Equity Interests; Pledged Debt. 

 Except as disclosed in Schedule 5.14 (as such Schedule may be amended or supplemented from time to time pursuant to a Credit Agreement Supplement delivered by the Borrower to the Lender), the Borrower does not legally or beneficially own,
either directly or indirectly, any Pledged Equity Interest in any Person or any Pledged Debt of any Person. 
  

	 	Section 5.15	Submissions to Lender. 

 All financial and
other information, other than projections, valuations or proforma financial statements, provided to the Lender by or on behalf of the Borrower in connection with the Borrower’s request for the credit facilities contemplated hereby (i) is
true and correct in all material respects and (ii) does not omit any material fact necessary to make such information not misleading. All projections, valuations or pro forma financial statements, provided to the Lender by or on behalf of the
Borrower or the Parent in connection with the Borrower’s request for the credit facilities contemplated hereby present a good faith opinion as to such projections, valuations and pro forma financial statements. 
  

					
		  	- 44 -	  	

	 	Section 5.16	Financing Statements. 

 The Borrower has
caused to be filed financing statements sufficient when filed to perfect the Security Interest and the other security interests created by the Security Documents. When such financing statements are filed in the offices noted therein, the Lender will
have a valid and first priority perfected security interest in all Collateral which is capable of being perfected by filing financing statements. None of the Collateral is or will become a fixture on real estate, unless a sufficient fixture filing
is in effect with respect thereto. 
  

	 	Section 5.17	Rights to Payment. 

 Each right to payment
and each instrument, document, chattel paper and other agreement constituting or evidencing Collateral is (or, in the case of all future Collateral, will be when arising or issued) the valid, genuine and legally enforceable obligation, subject to no
valid defense, setoff or counterclaim, of the account debtor or other obligor named therein or in the Borrower’s records pertaining thereto as being obligated to pay such obligation. 
  

	 	Section 5.18	Bank Accounts. 

 Schedule 5.18 (as such
Schedule may be amended or supplemented from time to time pursuant to a Credit Agreement Supplement delivered by the Borrower to the Lender) lists all banks and other financial institutions at which the Borrower maintains deposit and/or other
accounts, and such Schedule correctly identifies the name, address and telephone number of each depository, the name in which the account is held, a description of the purpose of the account and the complete account number. 
  

	 	Section 5.19	Financial Solvency. 

 Both before and after
giving effect to all of the transactions contemplated in the Loan Documents, none of the Borrower or its Affiliates: 
 (a) Was or will be
“insolvent”, as defined under Insolvency Laws; 
 (b) Has unreasonably small capital or is engaged or about to engage in a business
or a transaction for which any remaining assets of the Borrower or such Affiliate are unreasonably small; 
 (c) By executing, delivering or
performing its obligations under the Loan Documents or other documents to which it is a party or by taking any action with respect thereto, intends to, nor believes that it will, incur debts beyond its ability to pay them as they mature; 

(d) By executing, delivering or performing its obligations under the Loan Documents or other documents to which it is a party or by taking any action
with respect thereto, intends to hinder, delay or defraud either its present or future creditors; and 
 (e) At this time contemplates filing
a petition in bankruptcy or for an arrangement or reorganization or similar proceeding under any law of any jurisdiction, nor, to the best knowledge of the Borrower, is the subject of any actual, pending or threatened bankruptcy, insolvency or
similar proceedings under any law of any jurisdiction. 
  

					
		  	- 45 -	  	

 ARTICLE VI 
 COVENANTS 
 So long as the Indebtedness shall remain unpaid, or the Credit Facility shall
remain outstanding, the Borrower will comply with the following requirements, unless the Lender shall otherwise consent in writing: 
  

	 	Section 6.1	Reporting Requirements. 

 The Borrower will
deliver, or cause to be delivered, to the Lender each of the following, which shall be in form and detail acceptable to the Lender: 
 (a)
Annual Financial Statements. As soon as available, and in any event within 90 days (except as to management letters referred to in clause (i) below) after the end of each fiscal year of the Parent, the Parent’s audited
consolidated financial statements with the unqualified opinion of independent certified public accountants selected by the Parent and acceptable to the Lender, which annual consolidated financial statements shall include the Parent’s balance
sheet as at the end of such fiscal year and the related statements of the Parent’s income, retained earnings and cash flows for the fiscal year then ended, prepared on a consolidated basis, all in reasonable detail and prepared in accordance
with GAAP, together with (i) copies of all management letters prepared by such accountants (which shall be delivered to the Lender promptly after they are received by the Parent); and (ii) a certificate of the Borrower’s chief
financial officer stating that such financial statements have been prepared in accordance with GAAP, fairly represent the Borrower’s financial position and the results of its operations, and whether or not such Officer has knowledge of the
occurrence of any Default or Event of Default and, if so, stating in reasonable detail the facts with respect thereto. 
 (b) Monthly
Financial Statements. As soon as available and in any event within 30 days (or, with respect to the third month of each of the first three fiscal quarters, 45 days) after the end of the first eleven months of each fiscal year, the
consolidated, unaudited/internal balance sheet and consolidated statements of income and retained earnings of the Parent, Borrower, Delphax UK and Delphax France as at the end of and for such month and for the year to date period then ended,
prepared on a consolidated basis to include any Affiliates, in reasonable detail and stating in comparative form the figures for the corresponding date and periods in the previous year, all prepared in accordance with GAAP, except for the absence of
footnotes, and subject to year-end audit adjustments and which fairly represent the Parent’s, the Borrower’s, Delphax UK’s and Delphax France’s financial position and the results of their operations; and accompanied by a
certificate of the Parent’s chief financial officer, substantially in the form of Exhibit D hereto stating (i) that such financial statements have been prepared in accordance with GAAP, except for the absence of footnotes and subject to
year-end audit adjustments, and fairly represent the Parent’s consolidated financial position and the results of its operations, (ii) whether or not such Officer has knowledge of the occurrence of any Default or 

  

					
		  	- 46 -	  	

 
Event of Default not theretofore reported and remedied and, if so, stating in reasonable detail the facts with respect thereto, and (iii) all relevant
facts in reasonable detail to evidence, and the computations as to, whether or not the Parent is in compliance with the financial covenants in the US Credit Agreement. 
 (c) Collateral Reports. Within 15 days after the end of each month (or more frequently during any Default Period if the Lender so requires), a listing and ageing of the Borrower’s accounts receivable and
its accounts payable, a detailed inventory report, an inventory certification report, and a calculation of each of the Borrower’s, Delphax UK’s and Delphax France’s Accounts, Eligible Accounts, Inventory and Eligible Inventory as at
the end of such month or shorter time period. The Borrower shall submit Accounts aging and Inventory reports electronically to the Lender via its vendor, Collateral Services, Inc. and shall be responsible for paying the monthly processing fee set by
Collateral Services, Inc. 
 (d) Projections. No later than 30 days after the end of each fiscal year, the Parent’s projected
consolidated balance sheets, income statements, statements of cash flow and projected Availability for each month of the succeeding fiscal year, each in reasonable detail prepared on a consolidated basis. 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. 
 (e) Litigation. Immediately after the
commencement thereof, notice in writing of all litigation and of all proceedings before any governmental or regulatory agency affecting the Borrower (i) of the type described in Section 5.13(c), or (ii) which seek a monetary recovery
against the Borrower in excess of US$50,000. 
 (f) Defaults. When any Officer of the Borrower becomes aware of the probable
occurrence of any Default or Event of Default, and no later than (three) 3 days after such Officer becomes aware of such Default or Event of Default, notice of such occurrence, together with a detailed statement by a responsible Officer of the
Borrower of the steps being taken by the Borrower to cure the effect thereof. 
 (g) Plans. 
  

	 	(i)	The Borrower shall ensure that each Canadian Pension Plan described in Schedule 5.11 retains its registered status under and is administered in a timely manner in all respects in
accordance with the applicable pension plan text, funding agreement, the Income Tax Act (Canada) and all other Applicable Laws. 

  

	 	(ii)	Upon the Lender’s request, the Borrower shall obtain and to provide the Lender with written confirmation from the applicable Governmental Authorities that each Pension Plan
adopted by the Borrower after the date hereof which is required to be registered under the Income Tax Act  

  

					
		  	- 47 -	  	

	 	 
(Canada) or any other Applicable Law has been registered without condition. From and after the adoption and registration of any Pension Plan, the Borrower
shall ensure that the plan retains its registered status under and is administered in all respects in accordance with the applicable pension plan text, funding agreement, the Income Tax Act (Canada) and all other Applicable Laws.

  

	 	(iii)	The Borrower shall cause all reports and disclosures relating to any Pension Plan that are required by the plan or any Applicable Laws to be filed or distributed in a timely manner.

  

	 	(iv)	The Borrower shall perform all obligations (including fiduciary, funding, investment and administration obligations) required to be performed in connection with each Pension Plan
and Benefit Plan and the funding media therefor; make all contributions and pay all premiums required to be made or paid by the Borrower in accordance with the terms of the plan and all Applicable Laws; withhold by way of authorized payroll
deductions or otherwise collect and pay into the plan all employee contributions required to be withheld or collected in accordance with the terms of the plan and all Applicable Laws; and ensure that the plan is fully funded, both on an ongoing
basis and on a solvency basis (using actuarial methods and assumptions which are consistent with the valuations last filed with the applicable Governmental Authorities and which are consistent with generally accepted actuarial principles).

  

	 	(v)	The Borrower shall deliver to the Lender, on request, (i) promptly after the filing thereof by the Borrower with any applicable Governmental Authority, copies of each annual
and other return, report or valuation with respect to each Pension Plan; (ii) promptly after receipt thereof, a copy of any direction, order, notice, ruling or opinion that the Borrower may receive from any applicable Governmental Authority
with respect to any Pension Plan; and (iii) notification within 30 days of any increases in the benefits of any existing Pension Plan or Benefit Plan, or the establishment of any new Pension Plan or Benefit Plan, or the commencement of
contributions to any plan to which the Borrower was not previously contributing. 

 (h) Disputes. Promptly upon
knowledge thereof, notice of (i) any disputes or claims by the Borrower’s customers exceeding US$50,000 individually or US$100,000 in the aggregate during any fiscal year; (ii) credit memos; and (iii) any goods returned to or
recovered by the Borrower. 
 (i) Officers and Directors. Promptly upon knowledge thereof, notice of any change in the persons
constituting the Borrower’s Officers and Directors. 
  

					
		  	- 48 -	  	

 (j) Collateral. Promptly upon knowledge thereof, notice of any loss of or material damage to any
Collateral or of any substantial adverse change in any Collateral or the prospect of payment thereof. 
 (k) Intellectual Property.

  

	 	(i)	30 days prior written notice of Borrower’s intent to acquire material Intellectual Property Rights; except for transfers permitted under Section 6.17, the Borrower will
give the Lender 30 days prior written notice of its intent to dispose of material Intellectual Property Rights and upon request shall provide the Lender with copies of all proposed documents and agreements concerning such rights.

  

	 	(ii)	Promptly upon knowledge thereof, notice of (A) any Infringement of its Intellectual Property Rights by others, (B) claims that the Borrower is Infringing another
Person’s Intellectual Property Rights and (C) any threatened cancellation, termination or material limitation of its Intellectual Property Rights. 

  

	 	(iii)	Promptly upon receipt, copies of all registrations and filings with respect to its Intellectual Property Rights. 

 (l) Reports to Owners. Promptly upon their distribution, copies of all financial statements, reports and proxy statements which the Borrower shall
have sent to its Owners generally. 
 (m) Securities Filings. Promptly after the sending or filing thereof, copies of all regular and
periodic reports which the Borrower shall file with the Ontario Securities Commission, the Securities Exchange Commission or any other securities exchange. 
 (n) Violations of Law. Promptly upon knowledge thereof, notice of the Borrower’s violation of any law, rule or regulation, the non-compliance with which could have a Material Adverse Effect on the
Borrower. 
 (o) Other Reports. From time to time, with reasonable promptness, any and all receivables schedules, inventory reports,
collection reports, deposit records, equipment schedules, copies of invoices to account debtors, shipment documents and delivery receipts for goods sold, and such other material, reports, records or information as the Lender may request. 

 

	 	Section 6.2	Permitted Liens; Financing Statements. 

 (a)
The Borrower will not create, incur or suffer to exist any Lien upon or of any of its assets, now owned or hereafter acquired, to secure any indebtedness; excluding, however, from the operation of the foregoing, the following (each a
“Permitted Lien”; collectively, “Permitted Liens”): 
  

	 	(i)	real estate restrictive covenants, restrictions, rights, easements and minor irregularities in title which do not materially interfere with the Borrower’s business or
operations as presently conducted; 

  

					
		  	- 49 -	  	

	 	(ii)	any Lien created by, or arising under any statute or regulation or common law (in contrast with Liens voluntarily granted) in connection with, without limiting the foregoing,
workers’ compensation, employment and unemployment insurance, old age pension, employers’ health tax, vacation pay or other social security or statutory obligations that secure amounts that are not yet due or which are being contested in
good faith by proper proceedings diligently pursued and as to which adequate reserves have been established on the Borrower’s books and records and a stay of enforcement of the Lien is in effect; 

  

	 	(iii)	the reservations, limitations, provisos and conditions, if any, expressed in any original grants from the Crown; 

  

	 	(iv)	Liens in existence on the date hereof and listed in Schedule 6.2 hereto, securing indebtedness for borrowed money permitted under this Agreement (or replacements or refinancings
thereof covering no more than the same property); 

  

	 	(v)	the Security Interest and Liens created by the Security Documents; and 

  

	 	(vi)	Purchase money Liens relating to the acquisition of machinery and equipment of the Borrower or any Subsidiary not exceeding the lesser of cost or fair market value thereof,
not exceeding US$250,000 for any one purchase or US$500,000 in the aggregate during any fiscal year, and so long as no Default Period is then in existence and none would exist immediately after such acquisition. 

 provided that the foregoing list of Permitted Liens is not intended to, and shall not be construed as, subordinating or postponing, or as an agreement to
subordinate or postpone, any Lien of the Lender created by this Agreement to any such Permitted Lien. 
 (b) The Borrower will not amend any
financing statements in favor of the Lender except as permitted by Applicable Law. Any authorization by the Lender to any Person to amend financing statements in favor of the Lender shall be in writing. 
  

	 	Section 6.3	Indebtedness. 

 The Borrower will not incur,
create, assume or permit to exist any Indebtedness or liability on account of deposits or advances or any Indebtedness for borrowed money or letters of credit issued on the Borrower’s behalf, or any other Indebtedness or liability evidenced by
notes, bonds, debentures or similar obligations, except: 
  

	 	(i)	any existing or future Indebtedness or any other obligations of the Borrower to the Lender; 

  

					
		  	- 50 -	  	

	 	(ii)	any Indebtedness of the Borrower in existence on the date hereof and listed in Schedule 6.4 hereto (and any replacements or refinancings thereof that does not increase the aggregate
amount thereof); and 

  

	 	(iii)	any Indebtedness subject to a Subordination Agreement; 

  

	 	(iv)	intercompany Indebtedness of the type specified in Section 6.5(v); and 

  

	 	(v)	any Indebtedness relating to Permitted Liens. 

  

	 	Section 6.4	Guarantees. 

 The Borrower will not assume,
guarantee, endorse or otherwise become directly or contingently liable in connection with any obligations of any other Person, except: 
  

	 	(i)	the endorsement of negotiable instruments by the Borrower for deposit or collection or similar transactions in the ordinary course of business; and 

  

	 	(ii)	Guarantees, endorsements and other direct or contingent liabilities in connection with the obligations of other Persons, in existence on the date hereof and listed in Schedule 6.4
hereto (or replacements thereof). 

  

	 	Section 6.5	Investments and Subsidiaries. 

 The Borrower
will not make or permit to exist any loans or advances to, or make any investment or acquire any interest whatsoever in, any other Person or Affiliate, including any partnership or joint venture, nor purchase or hold beneficially any stock or other
securities or evidence of indebtedness of any other Person or Affiliate, except: 
  

	 	(i)	investments in direct obligations of the United States of America, Canada or any agency or instrumentality thereof whose obligations constitute full faith and credit obligations of
the United States of America or Canada, as the case may be, having a maturity of one year or less, commercial paper issued by U.S. corporations rated “A-1” or “A-2” by Standard & Poor’s Ratings Services or
“P-1” or “P-2” by Moody’s Investors Service or certificates of deposit or bankers’ acceptances having a maturity of one year or less issued by members of the Federal Reserve System or Canadian Schedule I chartered banks
having deposits in excess of US$100,000,000 (which certificates of deposit or bankers’ acceptances are fully insured by the Federal Deposit Insurance Corporation or the Canada Deposit Insurance Corporation, as the case may be);

  

	 	(ii)	travel advances or loans to the Borrower’s Officers and employees not exceeding at any one time an aggregate of US$50,000; 

  

					
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	 	(iii)	prepaid rent not exceeding one month or security deposits; 

  

	 	(iv)	current investments in the Subsidiaries in existence on the date hereof and listed in Schedule 5.5 hereto; and 

  

	 	(v)	unsecured loans by the Parent to the Borrower and unsecured loans by the Borrower to the Parent, in each in the ordinary course of business. 

  

	 	Section 6.6	Dividends and Distributions. 

 The Borrower
will not declare or pay any dividends (other than dividends payable solely in Securities of the Borrower) on any class of its Securities, or make any payment on account of the purchase, redemption or other retirement of any shares of such
Securities, or other securities or evidence of its indebtedness or make any distribution in respect thereof, either directly or indirectly, except as permitted by the Lender in writing. 
  

	 	Section 6.7	Salaries. 

 The Borrower will not pay
excessive or unreasonable salaries, bonuses, commissions, consultant fees or other compensation, or increase the salary, bonus, commissions, consultant fees for any current or former Director or Officer or other compensation of any Director, Officer
or consultant who is or ever was a Director or Officer, or any member of their families, by more than ten percent (10%) in any one year, either individually or for all such persons in aggregate; provided, however, that the Borrower may pay
bonuses in accordance with and subject to the conditions and limitations of the written Management Incentive Plan in effect on the date hereof that has been delivered to the Lender (and which is not to be revised or altered without the Lender’s
prior consent). 
  

	 	Section 6.8	Books and Records; Collateral Examination, Inspection and Appraisals. 

 (a) The Borrower will keep accurate books of record and account for itself pertaining to the Collateral and pertaining to the Borrower’s business and financial condition and such other matters as the Lender may
from time to time request in which true and complete entries will be made in accordance with GAAP and, upon the Lender’s request, will permit any officer, employee, attorney, accountant or other agent of the Lender to audit, review, make
extracts from or copy any and all company and financial books and records of the Borrower at all times during ordinary business hours, to send and discuss with account debtors and other obligors requests for verification of amounts owed to the
Borrower, and to discuss the Borrower’s affairs with any of its Directors, Officers, employees or agents. 
 (b) The Borrower hereby
irrevocably authorizes all accountants and third parties to disclose and deliver to the Lender or its designated agent, at the Borrower’s expense, all financial information, books and records, work papers, management reports and other
information in their possession regarding the Borrower. 
  

					
		  	- 52 -	  	

 (c) The Borrower will permit the Lender or its employees, accountants, attorneys or agents, to examine
and inspect any Collateral or any other property of the Borrower at any time during ordinary business hours. 
 (d) The Lender may also, from
time to time, obtain at the Borrower’s expense an appraisal of any Collateral by an appraiser acceptable to the Lender in its sole discretion. 
  

	 	Section 6.9	Account Verification. 

 (a) The Lender or its
agent may at any time and from time to time send or require the Borrower to send requests for verification of accounts or notices of assignment to account debtors and other obligors. The Lender or its agent may also at any time and from time to time
telephone account debtors and other obligors to verify accounts. 
 (b) The Borrower shall pay when due each account payable due to a
Person holding a Permitted Lien (as a result of such payable) on any Collateral.  
  

	 	Section 6.10	Compliance with Laws. 

 (a) The Borrower
shall (i) comply with the requirements of Applicable Laws, the non-compliance with which would materially and adversely affect its business or its financial condition and (ii) use and keep the Collateral, and require that others use and
keep the Collateral, only for lawful purposes, without material violation of any federal, provincial, state or local law, statute or ordinance. 
 (b) Without limiting the foregoing undertakings, the Borrower specifically agrees that it will comply with all applicable Environmental Laws and obtain and comply with all permits, licenses and similar approvals required by any
Environmental Laws, and will not generate, use, transport, treat, store or dispose of any Hazardous Substances in such a manner as to create any material liability or obligation under the common law of any jurisdiction or any Environmental Law.

  

	 	Section 6.11	Payment of Taxes and Other Claims. 

 The
Borrower will pay or discharge, when due, (a) all Taxes, assessments and governmental charges levied or imposed upon it or upon its income or profits, upon any properties belonging to it (including the Collateral) or upon or against the
creation, perfection or continuance of the Security Interest, prior to the date on which penalties attach thereto, (b) all federal, provincial, state and local taxes required to be withheld by it, and (c) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a Lien upon any properties of the Borrower; provided, that the Borrower shall not be required to pay any such Tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which proper reserves have been made. 
  

					
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	 	Section 6.12	Maintenance of Properties. 

 (a) The Borrower
will keep and maintain the Collateral and all of its other properties necessary or useful in its business in good condition, repair and working order (normal wear and tear excepted) and will from time to time replace or repair any worn, defective or
broken parts; provided, however, that nothing in this covenant shall prevent the Borrower from discontinuing the operation and maintenance of any of its properties if such discontinuance is, in the Borrower’s judgment, desirable
in the conduct of the Borrower’s business and not disadvantageous in any material respect to the Lender. The Borrower will take all commercially reasonable steps necessary to protect and maintain its Intellectual Property Rights. 
 (b) The Borrower will defend the Collateral against all Liens, claims or demands of all Persons (other than the Lender) claiming the Collateral or any
interest therein. The Borrower will keep all Collateral free and clear of all Liens except Permitted Liens. The Borrower will take all commercially reasonable steps necessary to prosecute any Person Infringing its Intellectual Property Rights and to
defend itself against any Person accusing it of Infringing any Person’s Intellectual Property Rights. 
  

	 	Section 6.13	Insurance. 

 The Borrower will obtain and at
all times maintain insurance with insurers acceptable to the Lender, in such amounts, on such terms (including any deductibles) and against such risks as may from time to time be required by the Lender, but in all events in such amounts and against
such risks as is usually carried by companies engaged in similar business and owning similar properties in the same general areas in which the Borrower operates. Without limiting the generality of the foregoing, the Borrower will at all times keep
all tangible Collateral insured against risks of fire (including so-called extended coverage), theft, collision (for Collateral consisting of motor vehicles) and such other risks and in such amounts as the Lender may reasonably request, with any
loss payable to the Lender to the extent of its interest, and all policies of such insurance shall contain a lender’s loss payable endorsement for the Lender’s benefit. All policies of liability insurance required hereunder shall name the
Lender as an additional insured. 
  

	 	Section 6.14	Preservation of Existence. 

 The Borrower
will preserve and maintain its existence and all of its rights, privileges and franchises necessary or desirable in the normal conduct of its business and shall conduct its business in an orderly, efficient and regular manner. 
  

	 	Section 6.15	Delivery of Instruments, etc. 

 Upon request
by the Lender, the Borrower will promptly deliver to the Lender in pledge all Instruments, Documents of Title, Pledged Equity Interests, Pledged Debt and Chattel Paper constituting Collateral, duly endorsed or assigned by the Borrower. 

 

					
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	 	Section 6.16	Sale or Transfer of Assets; Suspension of Business Operations. 

 The Borrower will not sell, lease, assign, transfer or otherwise dispose of (a) the stock of any Subsidiary, (b) all or a substantial part of its assets, or (c) any Collateral or any interest therein
(whether in one transaction or in a series of transactions) to any other Person other than (i) the sale of Inventory in the ordinary course of business or (ii) the disposal of obsolete or unneeded equipment the aggregate value of which
does not exceed US$100,000 during any 12-month period. The Borrower will not liquidate, dissolve or suspend business operations. The Borrower will not transfer any part of its ownership interest in any Intellectual Property Rights and will not
permit any agreement under which it has licensed Licensed Intellectual Property to lapse, except that the Borrower may transfer such rights or permit such agreements to lapse if it shall have reasonably determined that the applicable Intellectual
Property Rights are no longer useful in its business. If the Borrower transfers any Intellectual Property Rights for value, the Borrower will pay over the proceeds to the Lender for application to the Indebtedness. The Borrower will not license any
other Person to use any of the Borrower’s Intellectual Property Rights, except that the Borrower may grant licenses in the ordinary course of its business in connection with sales of Inventory or provision of services to its customers.

  

	 	Section 6.17	Amalgamation, Consolidation and Merger; Asset Acquisitions. 

 The Borrower will not amalgamate with, consolidate with or merge into any Person, or permit any other Person to amalgamate with it or merge into it, or acquire (in a transaction analogous in purpose or effect to a
consolidation or merger) all or substantially all the assets of any other Person. 
  

	 	Section 6.18	Sale and Leaseback. 

 The Borrower will not
enter into any arrangement, directly or indirectly, with any other Person whereby the Borrower shall sell or transfer any real or personal property, whether now owned or hereafter acquired, and then or thereafter rent or lease as lessee such
property or any part thereof or any other property which the Borrower intends to use for substantially the same purpose or purposes as the property being sold or transferred. 
  

	 	Section 6.19	Restrictions on Nature of Business. 

 The
Borrower will not engage in any line of business materially different from that presently engaged in by the Borrower and will not purchase, lease or otherwise acquire assets not related to its business. 
  

	 	Section 6.20	Accounting. 

 The Borrower will not adopt any
material change in accounting principles other than as required by GAAP. The Borrower will not adopt, permit or consent to any change in its fiscal year. 
  

					
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	 	Section 6.21	Discounts, etc. 

 The Borrower will not grant
any discount, credit or allowance to any customer of the Borrower or accept any return of goods sold after notice from the Lender during a Default Period, or, in any case, outside the ordinary course of business. The Borrower will not modify, amend,
subordinate, cancel or terminate any account debtor or other obligor of the Borrower after notice from the Lender during a Default Period, or, in any case, outside the ordinary course of business. 
  

	 	Section 6.22	Plans. 

 Except as disclosed to the Lender in
writing prior to the date hereof, the Borrower will not (i) adopt, create, assume or become a party to any Pension Plan, (ii) incur any obligation to contribute to any Benefit Plan, (iii) incur any obligation to provide
post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required by law) or (iv) amend any Pension Plan or Benefit Plan in a manner that would materially increase its funding obligations.

  

	 	Section 6.23	Place of Business; Name. 

 The Borrower will
not (a) transfer its chief executive office or principal place of business, or (b) except upon no less than 30 days prior written notice to the Lender, move, relocate, close or sell any business location of the Borrower. The Borrower will
not permit any tangible Collateral or any records pertaining to the Collateral to be located in any state or area in which, in the event of such location, a financing statement covering such Collateral would be required to be, but has not in fact
been, filed in order to perfect the Security Interest. The Borrower will not change its name or jurisdiction of organization. 
  

	 	Section 6.24	Constituent Documents. 

 The Borrower will
not amend its Constituent Documents. 
  

	 	Section 6.25	Cash Management. 

 Until the Termination
Date, the Borrower shall maintain the bank accounts specified in Schedule 5.18 including, without limitation, the Control Account; provided that the Borrower shall close the accounts numbered 450131883482 and 450131883481, respectively, maintained
with ABN AMRO Bank N.V., Canada Branch as soon as possible and shall not, on and after the Funding Date, direct any customers to pay any Accounts to such Deposit Accounts. Within thirty (30) days of the Funding Date, the Borrower shall enter
into the Blocked Account and Control Agreement with the Lender and the Account Bank. The Borrower shall not, and shall not permit its Subsidiaries to, open or close any bank accounts without the prior written consent of the Lender. 
  

					
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	 	Section 6.26	Performance by the Lender. 

 If the Borrower
at any time fails to perform or observe any of the foregoing covenants contained in this ARTICLE VI or elsewhere herein, and if such failure shall continue for a period of fifteen (15) calendar days after the Lender gives the Borrower written
notice thereof (or in the case of the agreements contained in Section 6.12 and Section 6.14, immediately upon the occurrence of such failure, without notice or lapse of time), the Lender may, but need not, perform or observe such covenant
on behalf and in the name, place and stead of the Borrower (or, at the Lender’s option, in the Lender’s name) and may, but need not, take any and all other actions which the Lender may reasonably deem necessary to cure or correct such
failure (including the payment of taxes, the satisfaction of Liens, the performance of obligations owed to account debtors or other obligors, the procurement and maintenance of insurance, the execution of assignments, security agreements and
financing statements, and the endorsement of instruments); and the Borrower shall thereupon pay to the Lender on demand the amount of all monies expended and all costs and expenses (including reasonable attorneys’ fees and legal expenses)
incurred by the Lender in connection with or as a result of the performance or observance of such agreements or the taking of such action by the Lender, together with interest thereon from the date expended or incurred at the Default Rate. To
facilitate the Lender’s performance or observance of such covenants of the Borrower, the Borrower hereby irrevocably appoints, effective during any Default Period, the Lender, or the Lender’s delegate, acting alone, as the Borrower’s
attorney in fact (which appointment is coupled with an interest) with the right (but not the duty) from time to time to create, prepare, complete, execute, deliver, endorse or file in the name and on behalf of the Borrower any and all instruments,
documents, assignments, security agreements, financing statements, applications for insurance and other agreements and writings required to be obtained, executed, delivered or endorsed by the Borrower hereunder. 
 ARTICLE VII 
 EVENTS OF DEFAULT,
RIGHTS AND REMEDIES 
  

	 	Section 7.1	Events of Default. 

 “Event of
Default”, wherever used herein, means any one of the following events: 
 (a) Default in the payment of the Canadian Revolving Note,
the Equipment Term Note, the European Revolving Note or any default with respect to any other Indebtedness due from Borrower to Lender as such Indebtedness becomes due and payable; 
 (b) Default in the performance, or breach, of any covenant or agreement of the Borrower contained in this Agreement (other than those described in other
Sections of this Section 7.1) and, except in the case of any such default or breach under Sections 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.11, 6.13, 6.14, 6.16, 6.17, 6.23 or 6.25 of this Agreement or that is not reasonably susceptible of cure, such
default or breach shall continue for 15 calendar days after whichever of the following dates is the earliest: (i) the date the Borrower gives notice of such breach or default to the Lender, (ii) the date the Borrower should have given
notice of such breach or default to the Lender pursuant to Section 6.1 of above, or (iii) the date the Lender gives notice of such breach or default to the Borrower; 
  

					
		  	- 57 -	  	

 (c) A Change of Control shall occur; 
 (d) The Borrower or any Guarantor shall be or become insolvent, or admit in writing its or his inability to pay its or his debts as they mature, or make
an assignment for the benefit of creditors; or the Borrower or any Guarantor shall apply for or consent to the appointment of any receiver, trustee, or similar officer for it or for all or any substantial part of its or his property; or such
receiver, trustee or similar officer shall be appointed without the application or consent of the Borrower or such Guarantor, as the case may be; or the Borrower or any Guarantor shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding relating to it under the laws of any jurisdiction, including under the Insolvency Laws; or any such proceeding
shall be instituted (by petition, application or otherwise) against the Borrower or any such Guarantor; or any judgment, writ, warrant of attachment or execution or similar process shall be issued or levied against a substantial part of the property
of the Borrower or any Guarantor; 
 (e) A petition shall be filed by or against the Borrower or any Guarantor under the United States
Bankruptcy Code, under the Insolvency Laws or the laws of any other jurisdiction naming the Borrower or such Guarantor as debtor; 
 (f) Any
“Event of Default” shall occur under the US Credit Agreement; 
 (g) Any representation or warranty made by the Borrower in this
Agreement, by any Guarantor in any Guaranty delivered to the Lender, or by the Borrower (or any of its Officers) or any Guarantor in any agreement, certificate, instrument or financial statement or other statement contemplated by or made or
delivered pursuant to or in connection with this Agreement or any such Guaranty shall be incorrect in any material respect; 
 (h) The
rendering against the Borrower of a final judgment, decree or order for the payment of money in excess of US$50,000 and the continuance of such judgment, decree or order unsatisfied and in effect for any period of 30 consecutive days without a
stay of execution; 
 (i) Any secured creditor, encumbrancer or lienor, or any trustee, interim receiver, receiver, receiver and manager,
administrative receiver, agent, bailiff or other similar official appointed by any secured creditor, encumbrancer or lienor, takes possession of, forecloses, seizes, retains, sells or otherwise disposes of, or otherwise proceeds to enforce security
over, all or a substantial part of the assets of the Borrower or any of its Subsidiaries or gives notice of its intention to do any of the foregoing; 
 (j) A default under any bond, debenture, note or other evidence of Indebtedness of the Borrower, which bond, debenture, note or Indebtedness is in an amount in excess of US$50,000, owed to any Person other than the
Lender, or under any indenture or other instrument under which any such evidence of indebtedness has been issued or by which it is governed, or under any lease requiring payments by the Borrower in an amount in excess of $50,000 in any fiscal year,
and the expiration of the applicable period of grace, if any, specified in such evidence of indebtedness, indenture, other instrument, lease or contract; 
  

					
		  	- 58 -	  	

 (k) An event of default shall occur under any Security Document and shall continue beyond any grace
period applicable thereto; 
 (l) Default in the payment of any amount owed by the Borrower to the Lender other than any Indebtedness arising
hereunder which default shall continue beyond any grace period applicable thereto; 
 (m) Any Guarantor shall repudiate, purport to revoke or
fail to perform any obligation under such Guaranty in favor of the Lender or any Guarantor shall cease to exist; 
 (n) The Borrower shall
take or participate in any action which would be prohibited under the provisions of any Subordination Agreement or make any payment with respect to indebtedness that has been subordinated pursuant to any Subordination Agreement; 
 (o) There has occurred any breach, default or event of default that shall continue beyond any grace period applicable thereto, if any, by, or
attributable to, any Affiliate under any agreement between the Affiliate and the Lender; 
 (p) The indictment of any Director, Officer,
Guarantor, or any or any Owner of at least twenty (20%) of the issued and outstanding common stock of the Borrower for a felony offence under state or federal law or for an indictable offence under the Criminal Code of Canada relating to
the Borrower, any of its Affiliates or their business or the conviction of any Director, Officer, Guarantor, or any or any Owner of at least twenty (20%) of the issued and outstanding common stock of the Borrower for a felony offence under
state or federal law or for an indictable offence under the Criminal Code of Canada; or 
 (q) This Agreement or any of the other Loan
Documents, or any material provision hereof or thereof, shall at any time after execution and delivery hereof or thereof, for any reason, cease to be a legal, valid and binding obligation of the Borrower or cease to be enforceable against the
Borrower in accordance with its terms or shall be declared to be null and void, or the legality, validity, binding nature or enforceability of this Agreement or any other Loan Document, or any provision hereof or thereof, shall be contested by the
Borrower or the Borrower shall deny that it has any further liabilities or obligations hereunder or thereunder. 
  

	 	Section 7.2	Rights and Remedies. 

 During any Default
Period arising from an Event of Default, the Lender may exercise any or all of the following rights and remedies: 
 (a) The Lender may, by
notice to the Borrower, declare the Commitment to be terminated, whereupon the same shall forthwith terminate; 
 (b) The Lender may, by
notice to the Borrower, declare the Indebtedness to be forthwith due and payable, whereupon all Indebtedness shall become and be forthwith due and payable, without presentment, notice of dishonor, protest or further notice of any kind, all of which
the Borrower hereby expressly waives; 
  

					
		  	- 59 -	  	

 (c) The Lender may, without notice to the Borrower and without further action, apply any and all money
owing by the Lender to the Borrower to the payment of the Indebtedness; 
 (d) The Lender may exercise and enforce any and all rights and
remedies available upon default to a secured party under the PPSA and other Applicable Laws, including the right to take possession of Collateral or the Premises, or any evidence thereof, proceeding without judicial process or by judicial process
(without a prior hearing or notice thereof, which the Borrower hereby expressly waives) and the right to sell, lease, foreclose on or otherwise dispose of any or all of the Collateral or the Premises (with or without giving any warranties as to the
Collateral or the Premises, title to the Collateral or the Premises or similar warranties), and, in connection therewith, the Borrower will on demand assemble the Collateral and make it available to the Lender at a place to be designated by the
Lender which is reasonably convenient to both parties; 
 (e) The Lender may appoint, remove or reappoint by instrument in writing, any
Person or Persons, whether an officer or officers or an employee or employees of the Borrower or not, to be an interim receiver, receiver or receivers (hereafter called a “Receiver”, which term when used herein shall include a
receiver and manager) of the Collateral (including any interest, income or profits therefrom). Any such receiver shall, to the extent permitted by Applicable Law, be deemed the agent of the Borrower and not of the Lender, and the Lender shall not be
in any way responsible for any misconduct, negligence or non-feasance on the part of any such Receiver or its servants, agents or employees. Subject to the provisions of the instrument appointing it, any such Receiver shall (i) have such powers
as have been granted to the Lender under this Agreement and (ii) shall be entitled to exercise such powers at any time that such powers would otherwise be exercisable by the Lender under this Section 7.2. To facilitate the foregoing
powers, any such Receiver may, to the exclusion of all others, including the Borrower, enter upon, use and occupy all premises owned or occupied by the Borrower wherein the Collateral may be situate, maintain the Collateral upon such premises,
borrow money on a secured or unsecured basis and use the Collateral directly in carrying on the Borrower’s business or as security for loans or advances to enable the Receiver to carry on the Borrower’s business or otherwise, as such
Receiver shall, in its reasonable discretion determine. Except as may be otherwise directed by the Lender, all money received from time to time by such Receiver in carrying out his/her/its appointment shall be received in trust for and be paid over
to the Lender and any surplus shall be applied in accordance with applicable law. Every such Receiver may, in the discretion of the Lender, be vested with, in addition to the rights set out herein, all or any of the rights and powers of the Lender
described in the Loan Documents the PPSA, the UCC and under Insolvency Laws. 
 (f) The Borrower shall pay all costs, charges and expenses
incurred by Lender or any Receiver or any nominee or agent of Lender, whether directly or for services rendered (including, without limitation, solicitor’s costs on a solicitor and his own client basis, auditor’s costs, other legal
expenses and Receiver remuneration) in enforcing this Agreement or any other Loan Document and in enforcing the Indebtedness and all such expenses together with any money owing as a result of any borrowing permitted hereby or pursuant to any
Applicable Law shall be a charge on the proceeds of realization and shall be secured hereby. 
  

					
		  	- 60 -	  	

 (g) The Lender may exercise and enforce its rights and remedies under the Loan Documents; 
 (h) The Lender may exercise any other rights and remedies available to it by law or agreement. 
 Notwithstanding the foregoing, upon the occurrence of an Event of Default described in Section 7.1(d) or Section 7.1(e), the Indebtedness shall
be immediately due and payable automatically without presentment, demand, protest or notice of any kind. If the Lender sells any of the Collateral on credit, the Indebtedness will be reduced only to the extent of payments actually received. If the
purchaser fails to pay for the Collateral, the Lender may resell the Collateral and shall apply any proceeds actually received to the Indebtedness. 
  

	 	Section 7.3	Certain Notices. 

 If notice to the Borrower
of any intended disposition of Collateral or any other intended action is required by law in a particular instance, such notice shall be deemed commercially reasonable if given (in the manner specified in Section 8.4) at least ten calendar days
before the date of intended disposition or other action. 
 ARTICLE VIII 
 MISCELLANEOUS 
  

	 	Section 8.1	No Waiver; Cumulative Remedies; Compliance with Laws. 

 No failure or delay by the Lender in exercising any right, power or remedy under the Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other right, power or remedy under the Loan Documents. The remedies provided in the Loan Documents are cumulative and not exclusive of any remedies provided by law. The Lender may
comply with any applicable provincial, state or federal law requirements in connection with a disposition of the Collateral and such compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

  

	 	Section 8.2	Amendments, Etc. 

 No amendment,
modification, termination or waiver of any provision of any Loan Document or consent to any departure by the Borrower therefrom or any release of a Security Interest shall be effective unless the same shall be in writing and signed by the Lender,
and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances. 
  

	 	Section 8.3	Currency. 

 Unless otherwise specified, all
amounts are stated in US Dollars. 
  

					
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	 	Section 8.4	Notices; Communication of Confidential Information; Requests for Accounting. 

 Except as otherwise expressly provided herein, all notices, requests, demands and other communications provided for under the Loan Documents shall be in
writing and shall be (a) personally delivered, (b) sent by first class mail, (c) sent by overnight courier of national reputation, (d) transmitted by telecopy, or (e) sent as electronic mail, in each case delivered or sent
to the party to whom notice is being given to the business address, telecopier number, or e-mail address set forth below next to its signature or, as to each party, at such other business address, telecopier number, or e-mail address as it may
hereafter designate in writing to the other party pursuant to the terms of this Section. All such notices, requests, demands and other communications shall be deemed to be an authenticated record communicated or given on (a) the date received
if personally delivered, (b) when deposited in the mail if delivered by mail, (c) the date delivered to the courier if delivered by overnight courier, or (d) the date of transmission if sent by telecopy or by e-mail, except that
notices or requests delivered to the Lender pursuant to any of the provisions of ARTICLE II shall not be effective until received by the Lender. All notices, financial information, or other business records sent by either party to this Agreement may
be transmitted, sent, or otherwise communicated via such medium as the sending party may deem appropriate and commercially reasonable; provided, however, that the risk that the confidentiality or privacy of such notices, financial
information, or other business records sent by either party may be compromised shall be borne exclusively by the Borrower. The Borrower requests that the Lender respond to all such requests that on their face appear to come from an authorized
individual and releases the Lender from any liability for so responding. The Borrower shall pay the Lender the maximum amount allowed by law for responding to such requests. 
  

	 	Section 8.5	Further Documents. 

 The Borrower will from
time to time execute, deliver, endorse and authorize the filing of any and all instruments, documents, conveyances, assignments, security agreements, financing statements, control agreements and other agreements and writings that the Lender may
reasonably request in order to secure, protect, perfect or enforce the Security Interest or the Lender’s rights under the Loan Documents (but any failure to request or assure that the Borrower executes, delivers, endorses or authorizes the
filing of any such item shall not affect or impair the validity, sufficiency or enforceability of the Loan Documents and the Security Interest, regardless of whether any such item was or was not executed, delivered or endorsed in a similar context
or on a prior occasion). 
  

	 	Section 8.6	Costs and Expenses. 

 The Borrower shall pay
on demand all costs and expenses, including reasonable attorneys’ fees, incurred by the Lender in connection with the Indebtedness, this Agreement, the Loan Documents and any other document or agreement related hereto or thereto, and the
transactions contemplated hereby, including all such costs, expenses and fees incurred in connection with the negotiation, preparation, execution, amendment, administration, performance, collection and enforcement of the Indebtedness and all such
documents and agreements and the creation, perfection, protection, satisfaction, foreclosure or enforcement of the Security Interest. 
  

					
		  	- 62 -	  	

	 	Section 8.7	Indemnity. 

 In addition to the payment of
expenses pursuant to Section 8.6, the Borrower shall indemnify, defend and hold harmless the Lender, and any of its participants, parent corporations, subsidiary corporations, affiliated corporations, successor corporations, and all present and
future officers, directors, employees, attorneys and agents of the foregoing (the “Indemnitees”) from and against any of the following (collectively, “Indemnified Liabilities”): 
  

	 	(i)	Any and all transfer taxes, documentary taxes, assessments or charges made by any Governmental Authority by reason of the execution and delivery of the Loan Documents or the making
of the Advances; 

  

	 	(ii)	Any claims, loss or damage to which any Indemnitee may be subjected if any representation or warranty contained in Section 5.13 proves to be incorrect in any respect or as a
result of any violation of the covenant contained in Section 6.10(b); and 

  

	 	(iii)	Any and all other liabilities, losses, damages, penalties, judgments, suits, claims, costs and expenses of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel) in connection with the foregoing and any other investigative, administrative or judicial proceedings, whether or not such Indemnitee shall be designated a party thereto, which may be imposed on, incurred by or asserted
against any such Indemnitee, in any manner related to or arising out of or in connection with the making of the Advances and the Loan Documents or the use or intended use of the proceeds of the Advances. Notwithstanding the foregoing, the Borrower
shall not be obligated to indemnify any Indemnitee for any Indemnified Liability caused by the gross negligence or willful misconduct of such Indemnitee. 

 If any investigative, judicial or administrative proceeding arising from any of the foregoing is brought against any Indemnitee, upon such Indemnitee’s request, the Borrower, or counsel designated by the Borrower
and satisfactory to the Indemnitee, will resist and defend such action, suit or proceeding to the extent and in the manner directed by the Indemnitee, at the Borrower’s sole costs and expense. Each Indemnitee will use its best efforts to
cooperate in the defense of any such action, suit or proceeding. If the foregoing undertaking to indemnify, defend and hold harmless may be held to be unenforceable because it violates any law or public policy, the Borrower shall nevertheless make
the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under Applicable Law. The Borrower’s obligations under this Section 8.7 shall survive the termination of this Agreement
and the discharge of the Borrower’s other obligations hereunder. 
  

					
		  	- 63 -	  	

	 	Section 8.8	Participants. 

 The Lender and its
participants, if any, are not partners or joint venturers, and the Lender shall not have any liability or responsibility for any obligation, act or omission of any of its participants. All rights and powers (but not obligations) specifically
conferred upon the Lender may be transferred or delegated to any of the Lender’s participants, successors or assigns. 
  

	 	Section 8.9	Execution in Counterparts; Telefacsimile Execution. 

 This Agreement and other Loan Documents may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one
and the same instrument. Delivery of an executed counterpart of this Agreement or any other Loan Document by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Agreement or such other Loan Document.
Any party delivering an executed counterpart of this Agreement or any other Loan Document by telefacsimile also shall deliver an original executed counterpart of this Agreement or such other Loan Document but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement or such other Loan Document. Retention of Borrower’s Records. 
 The Lender shall have no obligation to maintain any electronic records or any documents, schedules, invoices, agings, or other papers delivered to the
Lender by the Borrower or in connection with the Loan Documents for more than 30 days after receipt by the Lender. If there is a special need to retain specific records, the Borrower must inform the Lender of its need to retain those records with
particularity, which must be delivered in accordance with the notice provisions of Section 8.4 within 30 days of the Lender taking control of same. 
  

	 	Section 8.10	Binding Effect; Assignment; Complete Agreement; Sharing Information. 

 The Loan Documents shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights
thereunder or any interest therein without the Lender’s prior written consent and the Lender shall not have the right to assign any of its rights hereunder to a Person who is a non-resident of Canada for purposes of the Income Tax Act
(Canada) unless an Event of Default shall have occurred and be continuing. To the extent permitted by law, the Borrower waives and will not assert against any assignee any claims, defenses or set-offs which the Borrower could assert against the
Lender. This Agreement shall also bind all Persons who become a party to this Agreement as a borrower. This Agreement, together with the Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and
supersedes all prior agreements, written or oral, on the subject matter hereof. To the extent that any provision of this Agreement contradicts other provisions of the Loan Documents, this Agreement shall control. Without limiting the Lender’s
right to share information regarding the Borrower and its Affiliates with the Lender’s participants, accountants, lawyers and other advisors, the Lender and Wells US may share any and all information they may have in their possession regarding
the Borrower and its Affiliates, and the Borrower waives any right of confidentiality it may have with respect to such sharing of information. 
  

					
		  	- 64 -	  	

	 	Section 8.11	Severability of Provisions. 

 Any provision
of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. 
  

	 	Section 8.12	Headings. 

 Article, Section and subsection
headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 
  

	 	Section 8.13	Governing Law; Jurisdiction, Venue; Waiver of Jury Trial. 

 The Loan Documents shall be governed by and construed in accordance with the substantive laws (other than conflict laws) of the Province of Ontario. The parties hereto hereby (i) consent to the personal
jurisdiction of the courts of the Province of Ontario in connection with any controversy related to this Agreement; (ii) waive any argument that venue in any such forum is not convenient; (iii) agree that any litigation initiated by the
Lender or the Borrower in connection with this Agreement or the other Loan Documents may be venued in either the courts located in the City of Toronto in the Province of Ontario and (iv) agree that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 
  

	 	Section 8.14	Judgment Currency. 

 (a) If, for the purpose
of obtaining or enforcing judgment against the Borrower in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 8.14 referred to as the “Judgment
Currency”) an amount due under this Agreement in any currency (the “Obligation Currency”) other than the Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately
preceding the date of actual payment of the amount due, in the case of any proceeding in the courts of the Province of Ontario or in the courts of any other jurisdiction that will give effect to such conversion being made on such date, or the date
on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 8.14 being hereinafter referred to as the “Judgment
Conversion Date”). 
 (b) If, in the case of any proceeding in the court of any jurisdiction referred to in Section 8.14(a)
above, there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual receipt for value of the amount due, the Borrower shall pay such additional amount (if any, but in any event not a lesser amount)
as may be necessary to ensure that the amount actually received in the Judgment Currency, when converted at the rate of 

  

					
		  	- 65 -	  	

 
exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of the
Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date. Any amount due from the Borrower under this Section shall be due as a separate debt and shall not be affected by
judgment being obtained for any other amounts due under or in respect of any of the Loan Documents. 
 (c) The term “rate of
exchange” in this Section 8.14 means the rate of exchange at which the Lender, on the relevant date at or about 1:00 p.m. (New York time), would be prepared to sell, in accordance with its normal course foreign currency exchange practices,
the Obligation Currency against the Judgment Currency. 
 THE BORROWER AND THE LENDER WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW OR IN
EQUITY OR IN ANY OTHER PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. 
 [SIGNATURE PAGE FOLLOWS]

  

					
		  	- 66 -	  	

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective
officers thereunto duly authorized as of the date first above written. 
  

									
	 Delphax Technologies Canada Limited
 5030 Timberlea Blvd.
	 		 	 DELPHAX TECHNOLOGIES CANADA
 LIMITED

	Mississauga, Ontario	 		 		 	
	L4W 2S5	 		 	By:	 	 /s/ Gregory S. Furness

		 		 	Name:	 	Gregory S. Furness
	 Telecopier:
	 	905.238.4543	 		 	Its:	 	Chief Financial Officer
	 Attention:
	 	Controller	 		 		 	
				
	 with a copy to:
	 		 		 	
				
	Delphax Technologies Inc.	 		 		 	
	6100 West 110th Street	 		 		 	
	Bloomington, MN 55438	 		 		 	
					
	 Telecopier:
	 	952.426.6816	 		 		 	
	 Attention:
	 	Chief Financial Officer	 		 		 	
	 e-mail:
	 	gfurness@delphax.com	 		 		 	
			
	 Wells Fargo Financial Corporation Canada
 55
Standish Court, Suite 400
	 		 	 WELLS FARGO FINANCIAL
 CORPORATION CANADA

	Mississauga, Ontario	 		 	
	L5R 4J4	 		 	By:	 	 /s/ Nick Scarfo

		 		 	Name:	 	Nick Scarfo
	 Telecopier:
	 	905.755.7106	 		 		 	Its Vice President
	 Attention:
	 	Nick Scarfo	 		 		 	
	 e-mail:
	 	nickscarfo@wellsfargo.com	 		 		 	
				
	 with a copy to:
	 		 		 	
				
	 Wells Fargo Bank, National Association
	 		 		 	
	 acting through its Wells Fargo Business Credit
	 		 		 	
	 operating division
	 		 		 	
	 Mac N9312-040
	 		 		 	
	 90 South Seventh Street
	 		 		 	
	 Minneapolis, Minnesota
	 		 		 	
	 USA 55479
	 		 		 	
					
	 Telecopier:
	 	612.341.2472	 		 		 	
	 Attention:
	 	Becky A. Koehler, Vice President	 		 		 	
	 e-mail:
	 	becky.a.koehler@wellsfargo.com	 		 		 	

  

					
		  		  	

 TABLE OF EXHIBITS AND SCHEDULES 
  

			
	Exhibit A	 	Form of Canadian Revolving Note
		
	Exhibit B	 	Form of Equipment Term Note
		
	Exhibit C	 	Form of European Revolving Note
		
	Exhibit D	 	Form of Compliance Certificate
		
	Exhibit E	 	Premises
		
	Exhibit F	 	Credit Agreement Supplement
		
	Schedule 5.1	 	Trade Names, Chief Executive Office, Principal Place of Business, and Locations of Collateral
		
	Schedule 5.2	 	Capitalization and Organizational Chart
		
	Schedule 5.5	 	Subsidiaries
		
	Schedule 5.6	 	Changes to Financial Condition
		
	Schedule 5.7	 	Litigation Matters
		
	Schedule 5.10	 	Intellectual Property Disclosures
		
	Schedule 5.11	 	Pension Plans and Benefit Plans
		
	Schedule 5.13	 	Environmental Matters
		
	Schedule 5.14	 	Pledged Equity Interests and Pledged Debt
		
	Schedule 5.18	 	Borrower Bank Accounts
		
	Schedule 6.2	 	Permitted Liens
		
	Schedule 6.4	 	Permitted Indebtedness and Guarantees

  

					
		  		  	

 Exhibit A to Credit and Security Agreement 
 CANADIAN REVOLVING NOTE 
  

			
	US$4,000,000	  	September 10, 2007

 For value received, the undersigned, DELPHAX TECHNOLOGIES CANADA LIMITED, an Ontario corporation
(the “Borrower”), hereby promises to pay to the order of WELLS FARGO FINANCIAL CORPORATION CANADA (the “Lender”), on the Termination Date referenced in the Credit and Security Agreement dated the same date as this
Canadian Revolving Note that was entered into by the Lender and the Borrower (as amended from time to time, the “Credit Agreement”), at Lender’s office located at 55 Standish Court, Suite 400, Mississauga, Ontario, L5R 4J4, or
at any other place designated at any time by the holder hereof, in lawful money of the United States and in immediately available funds, the principal sum of four million Dollars (US$4,000,000) or the aggregate unpaid principal amount of all
Canadian Revolving Advances made by the Lender to the Borrower under the Credit Agreement, together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of the actual number of days elapsed and a
360-day year, from the date hereof until this Canadian Revolving Note is fully paid at the rate from time to time in effect under the Credit Agreement. 
 This Canadian Revolving Note is the Canadian Revolving Note referenced in the Credit Agreement, and is subject to the terms of the Credit Agreement, which provides, among other things, for acceleration hereof.
Principal and interest due hereunder shall be payable as provided in the Credit Agreement, and this Canadian Revolving Note may be prepaid only in accordance with the terms of the Credit Agreement. This Canadian Revolving Note is secured, among
other things, pursuant to the Credit Agreement and the Security Documents as therein defined, and may now or hereafter be secured by one or more other security agreements, mortgages, deeds of trust, assignments or other instruments or agreements.

 For purposes of the Interest Act (Canada), where in this Canadian Revolving Note a rate of interest is to be calculated on the
basis of a year of 360 days, the yearly rate of interest to which the rate is equivalent is the rate multiplied by the actual number of days in the year for which the calculation is made and divided by 360. 
 The Borrower shall pay all costs of collection, including reasonable attorneys’ fees and legal expenses if this Canadian Revolving Note is not paid
when due, whether or not legal proceedings are commenced. 
 Presentment or other demand for payment, notice of dishonor and protest are
expressly waived. 
 IN WITNESS WHEREOF, the undersigned has executed this Canadian Revolving Note on the date first written above. 
  

					
		  	Exh. A - 1	  	

			
	DELPHAX TECHNOLOGIES CANADA LIMITED
		
	By:	 	  

	Name:	 	
	Its:	 	President

  

					
		  	Exh. A - 2	  	

 Exhibit B to Credit and Security Agreement 
 EQUIPMENT TERM NOTE 
  

			
	US$1,000,000	  	September 10, 2007

 For value received, the undersigned, DELPHAX TECHNOLOGIES CANADA LIMITED, an Ontario corporation
(the “Borrower”), hereby promises to pay to the order of WELLS FARGO FINANCIAL CORPORATION CANADA (the “Lender”), on the Termination Date set forth in the Credit and Security Agreement dated the same date as this
Equipment Term Note that was entered into by the Lender and the Borrower (as amended from time to time, the “Credit Agreement”), at Lender’s office located at 55 Standish Court, Suite 400, Mississauga, Ontario, L5R 4J4, or at
any other place designated at any time by the holder hereof, in lawful money of the United States and in immediately available funds, the principal sum of one million Dollars (US$1,000,000) or the aggregate unpaid principal amount of all Equipment
Term Advances made by the Lender to the Borrower under the Credit Agreement together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of the actual number of days elapsed and a 360-day year,
from the date hereof until this Equipment Term Note is fully paid at the rate from time to time in effect under the Credit Agreement. 
 This
Equipment Term Note is the Equipment Term Note referred to in the Credit Agreement, and is subject to the terms of, the Credit Agreement, which provides, among other things, for acceleration hereof. Principal and interest due hereunder shall be
payable as provided in the Credit Agreement, and this Equipment Term Note may be prepaid only in accordance with the terms of the Credit Agreement. This Equipment Term Note is secured, among other things, pursuant to the Credit Agreement and the
Security Documents as therein defined, and may now or hereafter be secured by one or more other security agreements, mortgages, deeds of trust, assignments or other instruments or agreements. 
 For purposes of the Interest Act (Canada), where in this Equipment Term Note a rate of interest is to be calculated on the basis of a year of 360
days, the yearly rate of interest to which the rate is equivalent is the rate multiplied by the actual number of days in the year for which the calculation is made and divided by 360. 
 The Borrower hereby agrees to pay all costs of collection, including attorneys’ fees and legal expenses in the event this Equipment Term Note is not
paid when due, whether or not legal proceedings are commenced. 
 Presentment or other demand for payment, notice of dishonor and protest are
expressly waived. 
 IN WITNESS WHEREOF, the undersigned has executed this Equipment Term Note on the date first written above. 
  

					
		  	Exh. B - 1	  	

			
	DELPHAX TECHNOLOGIES CANADA LIMITED
		
	By:	 	  

	Name:	 	
	Its:	 	President

  

					
		  	Exh. B - 2	  	

 Exhibit C to Credit and Security Agreement 
 EUROPEAN REVOLVING NOTE 
  

			
	US$2,000,000	  	September 10, 2007

 For value received, the undersigned, DELPHAX TECHNOLOGIES CANADA LIMITED, an Ontario corporation
(the “Borrower”), hereby promises to pay to the order of WELLS FARGO FINANCIAL CORPORATION CANADA (the “Lender”), on the Termination Date referenced in the Credit and Security Agreement dated the same date as this
European Revolving Note that was entered into by the Lender and the Borrower (as amended from time to time, the “Credit Agreement”), at Lender’s office located at 55 Standish Court, Suite 400, Mississauga, Ontario, L5R 4J4, or
at any other place designated at any time by the holder hereof, in lawful money of the United States and in immediately available funds, the principal sum of two million Dollars (US$2,000,000) or the aggregate unpaid principal amount of all European
Revolving Advances made by the Lender to the Borrower under the Credit Agreement, together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of the actual number of days elapsed and a 360-day
year, from the date hereof until this European Revolving Note is fully paid at the rate from time to time in effect under the Credit Agreement. 
 This European Revolving Note is the Revolving Note referenced in the Credit Agreement, and is subject to the terms of the Credit Agreement, which provides, among other things, for acceleration hereof. Principal and interest due hereunder
shall be payable as provided in the Credit Agreement, and this European Revolving Note may be prepaid only in accordance with the terms of the Credit Agreement. This European Revolving Note is secured, among other things, pursuant to the Credit
Agreement and the Security Documents as therein defined, and may now or hereafter be secured by one or more other security agreements, mortgages, deeds of trust, assignments or other instruments or agreements. 
 For purposes of the Interest Act (Canada), where in this European Revolving Note a rate of interest is to be calculated on the basis of a year of
360 days, the yearly rate of interest to which the rate is equivalent is the rate multiplied by the actual number of days in the year for which the calculation is made and divided by 360. 
 The Borrower shall pay all costs of collection, including reasonable attorneys’ fees and legal expenses if this European Revolving Note is not paid
when due, whether or not legal proceedings are commenced. 
 Presentment or other demand for payment, notice of dishonor and protest are
expressly waived. 
 IN WITNESS WHEREOF, the undersigned has executed this European Revolving Note on the date first written above. 
  

					
		  	Exh. C - 1	  	

			
	DELPHAX TECHNOLOGIES CANADA LIMITED
		
	By:	 	  

	Name:	 	
	Its:	 	President

  

					
		  	Exh. C - 2	  	

 Exhibit D to Credit and Security Agreement 
 Compliance Certificate 
  

			
	 To:
	  	Wells Fargo Financial Corporation Canada
	 Date:
	  	[                        ,
200    ]
	 Subject:
	  	Financial Statements

 In accordance with our Credit and Security Agreement dated as of September 10, 2007 (as
amended from time to time, the “Credit Agreement”), attached are the financial statements of Delphax Technologies Inc., which consolidate the results for Delphax Technologies Canada Limited (the “Borrower”) as of
and for [                        , 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. 
 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 date thereof. 
 I further hereby certify as follows: Events of Default. (Check one):

  

	 	 ̈	The undersigned does not have knowledge of the occurrence of a Default or Event of Default under the Credit Agreement except as previously reported in writing to the Lender.

  

	 	 ̈	The undersigned has knowledge of the occurrence of a Default or Event of Default under the Credit Agreement not previously reported in writing to the Lender and attached hereto is a
statement of the facts with respect to thereto. The Borrower acknowledges that pursuant to Section 2.6(b) of the Credit Agreement, the Lender may impose the Default Rate at any time during the resulting Default Period. 

Material Adverse Change in Litigation Matters of the Borrower. I further hereby certify as follows (check one): 
  

	 	 ̈	The undersigned has no knowledge of any material adverse change to the litigation exposure of the Borrower or any of its Affiliates or of any Guarantor. 

  

	 	 ̈	The undersigned has 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. Attached to this Certificate is a statement of the facts with respect thereto. 

 Salaries. As of the
Reporting Date, the Borrower has not paid excessive or unreasonable salaries, bonuses, commissions, consultant fees or other compensation, or increase the salary, bonus, commissions, consultant fees for any current or former Director or Officer or
other 

  

					
		  	Exh. D - 1	  	

 
compensation of any Director, Officer or consultant who is or ever was a Director or Officer, or any member of their families, by more than ten percent
(10%) in any one year, either individually or for all such persons in 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 was delivered to the Lender, and has not altered or revised such plan except as agreed to be the Lender, and as a consequence  ̈ is
 ̈ is not in compliance with Section 6.7 of the Credit Agreement. 
 Attached hereto are all relevant facts in reasonable detail to evidence, and the computations of the financial covenants referred to above. These
computations were made in accordance with GAAP. 
  

			
	DELPHAX TECHNOLOGIES CANADA LIMITED
		
	By:	 	  

		 	Its Chief Financial Officer

  

					
		  	Exh. D - 2	  	

 Exhibit E to Credit and Security Agreement 
 Premises 
 The Premises referred to in the Credit and Security Agreement
are legally described as follows: 
 Delphax Technologies Inc. 
 6100 West 110th
Street 
 Bloomington, MN 55438 
 Lot 2, Block 1, Nesbitt Industrial Park 2nd Addition, according to the recorded plat thereof, and situate in Hennepin County, Minnesota 
 Delphax Technologies Canada Ltd. 
 5030 - 5040 Timberlea Boulevard 
 Mississauga, Ontario 
 L4W 2S5 
 ALL AND SINGULAR that certain parcel or tract of land and premises situate, lying and being in the City of Mississauga, in the Regional Municipality of
Peel, and being composed of part of Block H, according to a Plan filed in the Land Registry Office for the Land Titles Division of Peel as Number M-219, designated as Parts 3 and 7 on a Plan of Survey of Record registered in the said Land Registry
Office as Number 43R-6987. 
 RESERVING the rights set out as set out I Instrument No. 234803; 
 SUBJECT to and easement over that part of Block H, designated as Part 7 on Reference Plan 43R-6987, as set out in Instrument No. 207133. 

Being the whole of Parcel H-12 in the register for Section M-219. 
 Note: A portion of this location (22,921 square feet) that is leased by Delphax Technologies Canada Ltd. has been subleased to Access Metal Services Inc. 
 Delphax Technologies Canada Ltd. 
 5060 Tomken Road 
 Mississauga, Ontario 
 ALL AND SINGULAR that certain parcel or tract of land and premises situate, lying and
being in the city of Mississauga in the Regional Municipality of Peel and Province of Ontario and being composed of: 
 Block D, Plan M-267
and Parts 1, 2 and 3 of Plan 43R-8425 being that part of the original allowance for road between Lot 1 in the Second Concession East of Hurontario Street and Lot 1 in the Third Concession East of Hurontario Street (known as Second Line East).

  

					
		  	Exh. E - 1	  	

 Delphax Technologies Limited 
 Unit 3 Satellite Business Village 
 Fleming Way, Crawley 
 West Sussex RH10 9NE 
 United Kingdom 
 All that land edged red on the Plan together with the building accessways paved areas car parking spaces fire escape and bin store erected or laid out thereon known as Unit 3 The Satellite Business Village Fleming Way Crawley West Sussex.

 Delphax Technologies Limited 
 Unit 4 Satellite Business
Village 
 Fleming Way, Crawley 
 West Sussex RH10 9NE 

United Kingdom 
 All that land edged red on the Plan
together with the building accessways paved areas car parking spaces fire escape and bin store erected or laid out thereon known as Unit 4 The Satellite Business Village Fleming Way Crawley West Sussex. 
 Note: This location, leased by Delphax Technologies Limited, has been subleased to: 
  Afriso Eurogauge Limited 
  Imberhorne Lane 
  East Grinstead 
  West Sussex RH19 1RF 
 Delphax
Technologies S.A.S. 
 8 – 10 rue du bois Sauvage 
 91055,
Evry cedex 
 France 
 Block J, stand alone
building, 2 floors and 500 square meters. 
  

					
		  	Exh. E - 2	  	

 Exhibit F to Credit and Security Agreement 
 FORM OF CREDIT AGREEMENT SUPPLEMENT 
 This CREDIT AGREEMENT SUPPLEMENT, dated
[mm/dd/yy], is delivered by DELPHAX TECHNOLOGIES CANADA LIMITED (the “Borrower”) pursuant to the Credit and Security Agreement dated as of September 10, 2007 (including all Exhibits and Schedules thereto and forming part
thereof, and as it may be from time to time amended, restated, modified or supplemented, the “Credit Agreement”), between the Borrower and Wells Fargo Financial Corporation Canada. Capitalized terms used herein not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement. 
 [Describe supplement to Credit Agreement Schedule] 
 The Borrower represents and warrants that this Credit Agreement Supplement accurately and completely sets forth all additional information required pursuant to the
Credit Agreement and hereby agrees that this Credit Agreement Supplement shall constitute part of the Credit Agreement. 
 IN WITNESS WHEREOF, the
Borrower has caused this Credit Agreement Supplement to be duly executed and delivered by its duly authorized officer as of [mm/dd/yy]. 
  

			
	DELPHAX TECHNOLOGIES CANADA LIMITED
		
	 By:
	 	  

	 Name:
	 	
	 Title:

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