AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT

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).

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:

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