Document:

Amendment to the Revolving Credit and Security Agreement dated May 6, 2008

 Exhibit 10.25 
 

 
 As of May 6, 2008 
 Franklin
Electronic Publishers, Inc. 
 Franklin Electronic Publishers (Europe) Ltd. 
 Franklin Electronic Publishers (Deutschland) GmbH 
 One Franklin Plaza 
 Burlington, New Jersey 08016-4908 
 Attention: Frank Musto 
  

	Re:	Extension of Expiration Date for $20,000,000.00 Committed Line of Credit 

 Dear Mr. Musto: 
 We are writing to inform you that your committed line of credit has been temporarily extended pending
further credit review and approval. The Expiration Date, as set forth in that certain Revolving Credit and Security Agreement dated December 7, 2004, and in the Revolving Credit Note executed and delivered pursuant to that Letter Agreement, has
been extended from May 6, 2008 to June 20, 2008, effective on May 7, 2008. All other terms and conditions of the Committed Line of Credit Note and the Letter Agreement remain in full force and effect. 
 It has been a pleasure working with you and I look forward to a continued successful relationship. Thank you again for your business. 
  

			
	Very truly yours,
	
	PNC BANK, NATIONAL ASSOCIATION
		
	By: 	 	/s/ Lori S. Franzon
		 	Lori S. Franzon
		 	Vice PresidentAmendment to the Revolving Credit and Security Agreement dated May 19, 2008

 Exhibit 10.26 
 AMENDMENT TO 
 REVOLVING CREDIT AND SECURITY AGREEMENT 
 THIS AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this “Amendment”) made as of May 19, 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”). 
 WITNESSETH 
 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 and Letter of Extension dated May 6, 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 extend the term for a three year period,
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 waivers 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). 

 3. Subsection (q) of the definition of “Eligible Receivables” in Subsection 1.2 is
hereby amended to read as follows: 
 “(q) such Receivable in the case of Franklin Ltd. are in amounts not to exceed $500,000 in the
aggregate and such Receivable in the case of Franklin GmbH are in amounts not to exceed $2,500,000 in the aggregate, with the total borrowings from Franklin Ltd. and Franklin GmbH not exceeding the aggregate of $3,000,000 or twenty-five percent
(25%) of Eligible Receivables, whichever is less;” 
 4. The definition of “Maximum Revolving Advance Amount” is
hereby amended to read as follows: 
 “Maximum Revolving Advance Amount” shall mean $20,000,000 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 given evidence satisfactory to Lender, in its sole discretion, that Funded Debt to EBITDA is less than 2.25; 
 5. Section 1.2 is hereby amended to add the following definition: 
 “Unused Line Fee” has the meaning set forth in Section 3.8; 
 6. 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 given evidence satisfactory to Lender, in its sole discretion, that Funded Debt to EBITDA is less than 2.25. 
 7. Article III is hereby amend to add the following Section 3.8: 
 “3.8 Unused Line Fee Borrowers shall
unconditionally pay to Lender a fee (“Unused Line Fee”) equal to one-eighth of one percent 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.” 
 8. Section 6.5 is hereby amended to read as follows: 
 “6.5 Minimum Tangible Net Worth. Maintain at all times a minimum Tangible Net Worth of 80% of Tangible Net Worth as of March 31, 2007 plus 50% of positive net income adjusted at the last day of each
fiscal year end thereafter.” 
  

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 9. Section 6.8 is hereby amended to read as follows: 
 “6.8 Clean Down Requirement During each twelve month period, Borrowers will be required to clean the Revolving Advance down to zero amount
outstanding for a consecutive 30 day period.” 
 10. Section 7.4 (e) is hereby amended to read as follows: 

“With the prior written consent of Lender, 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. 
 11. Section 9.8 is hereby amended to add the following: 
 “Borrowers shall also furnish Lender prior to the commencement of the following fiscal year, annual projections and quarterly projections, together with balance sheets and income statements.” 
 12. Section 13.1 entitled “Term” is hereby amend to substitute the date of December 7, 2010 for the current date of
December 7, 2007. 
 13. The form of the Borrowing Base Certificate set forth in Exhibit A to the Agreement is hereby amended to
substitute the Dilution Reserve of 12.7% for the current Dilution Reserve of 6.2% 
 14. 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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 15. 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, a facility fee equal
to $5,000; 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. 

16. 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. 
 17. 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. 
 18. 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. 
 19. 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. 
 20. 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. 
  

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 21. Amendment. Except as amended hereby, the terms and provisions of the Agreement remain
uncharged 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 AND 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. 
 22. 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. 
 23. 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. 
  

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	FRANKLIN ELECTRONIC PUBLISHERS, INC.	 		 	
			
	ATTEST:	 		 	
				
	/s/ Barbara Anderson	 		 	By: 	 	/s/ Frank A. Musto
	Barbara Anderson	 		 	Name:	 	Frank A. Musto
	Assistant Treasurer	 		 		 	
		 		 	FRANKLIN ELECTRONIC PUBLISHERS (EUROPE) LTD.
			
	ATTEST:	 		 	
				
	/s/ Barbara Anderson	 		 	By: 	 	/s/ Frank A. Musto
	Barbara Anderson	 		 	Name:	 	Frank A. Musto
	Assistant Treasurer	 		 		 	
		 		 	FRANKLIN ELECTRONIC PUBLISHERS (DEUTSCHLAND) GMBH
			
	ATTEST:	 		 	
				
	/s/ Barbara Anderson	 		 	By: 	 	/s/ Frank A. Musto
	Barbara Anderson	 		 	Name:	 	Frank A. Musto
	Assistant Treasurer	 		 		 	
		 		 	PNC BANK, NATIONAL ASSOCIATION
				
		 		 	By: 	 	/s/ Michael Raynor
		 		 	Name:	 	Michael Raynor, Senior Vice President

  

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