Exhibit 10.1

AMENDMENT TO

REVOLVING CREDIT AND SECURITY AGREEMENT

THIS AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this “Amendment”)
made as of December 31, 2008 among PNC BANK, NATIONAL ASSOCIATION (“Lender” or
“PNC”), and FRANKLIN ELECTRONIC PUBLISHERS, INC., a Pennsylvania corporation
(“Franklin Inc.”); FRANKLIN ELECTRONIC PUBLISHERS (EUROPE) LTD., a United
Kingdom corporation (“Franklin Ltd.”) and FRANKLIN ELECTRONIC PUBLISHERS
(DEUTSCHLAND) GMBH, a German corporation (“Franklin GmbH”) (Franklin Inc.,
Franklin Ltd. and Franklin GmbH are referred to herein collectively as
“Borrowers”, and individually as “Borrower”).

W I T N E S S E T H

A. Lender and Borrowers have previously entered into a commercial lending
relationship in accordance with the terms and conditions of a Revolving Credit
and Security Agreement dated December 7, 2004, as amended by a First Amendment
to Revolving Credit and Security Agreement dated December 29, 2005, an Amendment
to Loan Documents dated December 22, 2006, an Amendment to Loan Documents dated
March 30, 2007, an Amendment to Loan Documents dated as of December 7, 2007,
Letter of Extension dated March 4, 2008, Letter of Extension dated May 6, 2008,
and Amendment to Revolving Loan and Security Agreement dated May 19, 2008, as
such has been further amended, supplemented or otherwise modified from time to
time (the “Agreement”) pursuant to which Lender agreed to make certain
extensions of credit to Borrowers on a secured basis and Borrowers have agreed
to repay same, all upon the terms and subject to the conditions set forth
herein;

B. Borrowers have requested Lender and Lender has agreed to, among other things,
decrease the Maximum Revolving Advance Amount, modify the interest rate and fees
and amend certain covenants and definitions as set forth in the Loan Agreement,
and to document such other amendments as have been approved by the Lender.

C. Lender is willing to make such accommodations and to make such other
amendments, upon the terms and subject to the conditions set forth below in this
Amendment.

NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

1. Capitalized terms used in this Amendment shall have the same meanings given
them in the Agreement, unless otherwise defined herein.

2. The term “Agreement”, as defined in the preamble to the Agreement, shall be
deemed to include any amendments, supplements or other modifications made
thereto from time to time (including, without limitation, pursuant to this
Amendment).

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3. The definition of “Maximum Revolving Advance Amount” is hereby amended to
read as follows:

“Maximum Revolving Advance Amount” shall mean $15,000,000 with sublimits of
$1,000,000 for Letters of Credit, $500,000 for foreign currency borrowings and
$10,000,000 for acquisitions provided Borrowers have obtained Lender’s express
written consent to any such acquisition and have given evidence satisfactory to
Lender, in its sole discretion, that Funded Debt to EBlTDA is less than 2.25;

4. The definition of “Revolving Interest Rate” is hereby amended to read as
follows:

 

“Funded Debt/EBITDA

   LIBOR    PNC Base Rate

<1.0x

   +200 bps    +50 bps

³1.0x

   +225 bps    +50 bps

³1.5x

   +250 bps    +75 bps

³2.0x

   +300 bps    +l00 bps”

5. Section 2.12 entitled “Use of Proceeds” is hereby amended to read as follows:

“2.12 Use of Proceeds Borrowers shall apply the proceeds of Advances to (i) pay
fees and expenses relating to this transaction, (ii) to provide for its working
capital needs and other reasonable needs for corporate purposes (which shall not
include the purchase of Borrowers’ common stock) and (iii) provide cash advance
not to exceed $10,000,000 to be used for acquisitions provided Borrowers have
obtained Lender’s express written consent to any such acquisition and have given
evidence satisfactory to Lender, in its sole discretion, that Funded Debt to
EBITDA is less than 2.25.”

6. Section 3.8 is hereby amended to read as follows:

“3.8 Unused Line Fee Borrowers shall unconditionally pay to Lender a fee
(“Unused Line Fee”) equal to one-quarter of one percent ( 1/4%) per annum of the
unused portion of the Maximum Revolving Advance Amount. The unused portion of
the Maximum Revolving Advance Amount shall be the difference between (a) the
Maximum Revolving Advance Amount and (b)(i) the average daily outstanding
balance of the Revolving Advances during each month (or portion thereof), plus
(ii) 100% of the average daily undrawn amount of all Letters of Credit issued
and outstanding during each month (or portion thereof), which fee shall be
calculated and payable quarterly, in arrears, and shall be due and payable on
the first Business Day of each quarter.”

 

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7. Section 6.7 entitled Fixed Charge Coverage Ratio is hereby amended to read as
follows:

“6.7 Fixed Charge Coverage Ratio. Maintain at the end of each fiscal quarter, on
a rolling four-quarter basis, a minimum Fixed Charge Coverage Ratio of no less
than 1.25× to 1.0, provided however, that for the fiscal quarter ending
December 31, 2008 only, such minimum Fixed Charge Coverage Ratio shall be no
less than .85× to 1.0. The minimum Fixed Charge Coverage Ratio shall revert back
to the required 1.25× to 1.0 level for the fiscal quarter ending March 31, 2009
and for each fiscal quarter thereafter without the necessity of entry into any
further documentation.”

8. Section 7.4 (e) is hereby amended to read as follows:

“With the prior written consent of Lender, which consent may be granted or
denied in Lender’s sole discretion to be exercised in Lender’s reasonable
business judgment, acquisitions of subsidiary companies or minority interest for
which the sole consideration is common stock of Franklin, Inc. or acquisitions
of subsidiary companies or minority interests, in which cash is consideration
provided cash does not exceed $10,000,000.00 and at no time shall the aggregate
cash used in such acquisitions exceed $10,000,000.00 without the prior written
consent of the Lender and provided further Borrowers have given evidence
satisfactory to Lender, in its sole discretion, that Funded Debt to EBITDA is
less than 2.25.”

9. Representations. In order to induce Lender to enter into this Amendment, each
Borrower hereby represents and warrants to Lender that:

(a) no Event of Default, or any event which, with the giving of notice, the
lapse of time, or both or the occurrence of any other condition, would
constitute an Event of Default, has occurred and is continuing;

(b) the Agreement, Revolving Credit Note and each of the other Documents, after
giving effect to this Amendment and the transactions contemplated hereby,
continue to be in fully force and effect and to constitute the legal, valid and
binding obligations of each Borrower that is a party thereto, enforceable
against each Borrower in accordance with their respective terms;

(c) the representations and warranties made by each Borrower in or pursuant to
the Agreement or any Other Document, or which are contained in any certificate,
document or financial or other statement furnished at any time under or in
connection herewith or therewith, are each true and correct in all material
respects on and as of the date hereof as though made as of such date:

(d) no Company has amended its Certificate of Incorporation, Bylaws or other
governing documents subsequent to December 7, 2004.

 

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10. Conditions Precedent. This Amendment shall become effective upon the
satisfaction of the following conditions:

(a) Lender shall have received a copy of this Amendment, duly executed and
delivered on behalf of each Borrower;

(b) Lender shall have received a copy of the resolutions of the Board of
Directors of each Borrower authorizing the execution, delivery and performance
of this Amendment and the Agreement as amended hereby (including, without
limitation, the borrowings provided for herein) certified by the Secretary or an
Assistant Secretary of such Borrower, as of the date of this Amendment, which
certificate shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded as of the date of this Amendment;

(c) Lender shall have received a certificate of the Secretary or an Assistant
Secretary of each Borrower, dated the date of this Amendment, as to the
incumbency and signature of each officer signing this Amendment and any other
certificate or other document to be delivered pursuant hereto, together with
evidence of the incumbency of such Secretary or Assistant Secretary; and

(d) Borrowers shall pay to Lender, simultaneously with the execution of this
Amendment by Borrowers, an amendment fee equal to $2,000; and

(e) the Borrowers shall have paid all expenses of Lender, including, without
limitation, reasonable counsel fees, in connection with the preparation,
execution and delivery of this Amendment and all other documents and instruments
to be executed and delivered pursuant hereto or in connection herewith, and the
transactions contemplated hereby, which fees are computed to be $1,000.00.

11. Inconsistency. This Amendment is deemed incorporated into the Agreement. To
the extent that any terms or provision of this Amendment is or may be deemed
expressly inconsistent with any term or provision in the Agreement, the terms
and provisions hereof shall control.

12. Counterparts. This Amendment may be executed in several counterparts, each
of which, when executed and delivered, shall be deemed an original, and all of
which together shall constitute one agreement.

13. New Jersey Law. This Amendment shall be governed by and construed and
interpreted in accordance with the laws of the State of New Jersey, without
giving effect to principles of conflicts law.

14. Enforceability. Except as amended and otherwise modified by this Amendment,
the Agreement and the Other Documents shall remain in full force and effect in
accordance with their respective terms.

 

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15. Successors and Assigns. This Amendment will be binding upon and inure to the
benefit of the Borrowers and the Lender and their respective heirs, executors
administrators, successors and assigns.

16. Amendment. Except as amended hereby, the terms and provisions of the
Agreement remain unchanged and in full force and effect. Except as expressly
provided herein, this Amendment shall be not constitute an amendment, waiver,
consent or release with respect to any provision of the Agreement, a waiver of
any default or Event of Default thereunder, or a waiver reserved. THE BORROWERS
IRREVOCABLY WAIVE ANY AND ALL RIGHTS THE BORROWERS MAY HAVE TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AMENDMENT OR
THE AGREEMENT OR ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AMENDMENT OR THE
AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY SUCH DOCUMENTS. THE BORROWERS
ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING ABOUT VOLUNTARY.

17. Headings. The headings as used in this Amendment are inserted solely for
convenience of reference and shall not constitute a part of this Amendment nor
affect its meaning, construction or effect.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

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18. No Defense to Payment. Borrowers waive and forever release and discharge
Lender, its officers, agents and employees, successors and assigns from any and
all claims, actions, causes of action, suits, counterclaims, set-offs, rights
and defenses against Lender (its officers, directors, agents and employees,
successors and assigns), which Borrowers its successors or assigns have or
hereafter can, shall or may have, for, upon, or by reason of any matter, cause
or thing whatsoever up to and including the date of this Amendment; and
Borrowers represent and warrant to Lender that Borrowers have no defenses to the
repayment of any or all of the Obligations and has no claims, rights of set-off
or causes of action against Lender.

 

ATTEST:      FRANKLIN ELECTRONIC PUBLISHERS, INC.      By:  

/s/ Frank A. Musto

/s/ Barbara Anderson

     Name:   Frank A. Musto Barbara Anderson      Title:   VP & CFO Assistant
Treasurer        ATTEST:      FRANKLIN ELECTRONIC PUBLISHERS (EUROPE) LTD.     
By:  

/s/ Frank A. Musto

/s/ Barbara Anderson

     Name:   Frank A. Musto Barbara Anderson      Title:   Assistant Treasurer
       ATTEST:      FRANKLIN ELECTRONIC PUBLISHERS (DEUTSCHLAND) GMBH      By:  

/s/ Frank A. Musto

/s/ Barbara Anderson

     Name:   Frank A. Musto Barbara Anderson        Assistant Treasurer       
     PNC BANK, NATIONAL ASSOCIATION      By:  

/s/ Michael Raynor

       Michael Raynor        Senior Vice President

 

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