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                                                                   EXHIBIT 10.27

                          SECOND AMENDMENT TO RESTATED
                          CREDIT AND SECURITY AGREEMENT

     THIS SECOND AMENDMENT TO RESTATED CREDIT AND SECURITY AGREEMENT (the
"Second Amendment") by and between EDUCATIONAL DEVELOPMENT CORPORATION, a
Delaware corporation, as borrower (the "Company"), and ARVEST STATE BANK,
successor via name change to State Bank & Trust, Tulsa, Oklahoma, as lender (the
"Bank"), is entered into effective as of the 30th day of June, 2001.

     WITNESSETH:

     WHEREAS, pursuant to the Restated Credit and Security Agreement dated as of
June 30, 1999, as amended by the First Amendment to Restated Credit and Security
Agreement dated as of June 30, 2000 (collectively the "Restated Credit
Agreement"), the Bank extended a Three Million Five Hundred Thousand Dollar
($3,500,000) revolving line of credit (the "Revolving Credit Loan") to the
Company upon the terms and conditions therein set forth, the Revolving Credit
Loan being secured by the Collateral defined and described in Section 7.1 of the
Restated Credit Agreement and in the Security Agreement more particularly
described and defined therein;

     WHEREAS, the Company has requested the Bank to extend and renew the
revolving credit facility for one (1) year until June 30, 2002 in the maximum
principal amount of $3,500,000; and

     WHEREAS, subject to the terms, provisions and conditions hereinafter set
forth, the Bank is willing to so extend, amend and modify the Revolving Credit
Loan facility established pursuant to the Restated Credit Agreement in the
maximum principal amount of $3,500,000.

     NOW, THEREFORE, for good and valuable consideration and for the extension
and amendment of the Restated Credit Agreement, the Company and the Bank hereby
agree as follows:

     1. The maturity date of the Revolving Credit Loan shall be extended from
June 30, 2001 to June 30, 2002 and Revolving Credit Loan advances shall be
evidenced by that certain replacement Revolving Credit Note of even date
herewith in the original principal amount of Three Million Five Hundred Thousand
Dollars ($3,500,000) payable to the order of the Bank and bearing interest at a
variable annual rate equal from day to day to Prime Rate (as therein defined)
minus one-quarter of one percentage point (0.25%). References to such Prime Rate
and the applicable interest rate in Sections 2.1 and 2.2 of the Restated Credit
Agreement are modified accordingly. A true and correct copy of the replacement
Revolving Credit Note is annexed hereto as Exhibit A and made a part hereof (the
"Replacement Note").

     2. The remaining terms, provisions and conditions set forth in the Restated
Credit Agreement shall remain in full force and effect for all purposes. The
Company restates, confirms and ratifies the warranties, covenants and
representations set forth therein and further represents to the Bank that no
defaults or Events of Default exist under the Restated Credit Agreement as of
the date hereof. The Company further confirms, continues, grants and re-grants
to and in favor of the

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Bank, as secured party, a continuous and continuing first and prior security
interest in all of the items and types of Collateral more particularly described
in Section 7.1 of the Restated Credit Agreement and in Section 2 of the Security
Agreement described therein.

     3. The condition precedent for the key man life insurance policy collateral
assignment described required by Section 3.1(f) of the Restated Credit Agreement
is deleted.

     4. The Company represents and warrants to the Bank that it is a corporation
duly organized and validly existing and in good standing under the laws of the
State of Delaware and that the Company is duly licensed, qualified and in good
standing under the laws of the State of Oklahoma as a foreign corporation. The
Company will not change the jurisdiction or state of its incorporation or
otherwise re-incorporate without prior notification thereof to the Bank,
including authorization to the Bank to file amended or supplemental financing
statements and execution by the Company of such supplemental or amended security
agreements and/or financing statements as deemed appropriate by the Bank.

     5. The Company agrees to pay the Bank's legal fees incurred in connection
with the negotiation, preparation and closing of this Second Amendment.

     IN WITNESS WHEREOF, this Second Amendment is executed and delivered to the
Bank by the undersigned duly authorized corporate officer of the Company, which
officer has full power and authority to do so on behalf and in the name of the
Company by virtue of all necessary corporate action of the Board of Directors of
the Company, effective as of the 30th day of June, 2001.

                                       EDUCATIONAL DEVELOPMENT
                                       CORPORATION

                                       By
                                          --------------------------------------
                                          Randall White
                                          President

                                                       "Company"

                                       ARVEST STATE BANK

                                       By
                                          --------------------------------------
                                          Dennis Colvard
                                          Senior Vice President

                                                         "Bank"

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                              REVOLVING CREDIT NOTE

$3,500,000                                                       Tulsa, Oklahoma
                                                                   June 30, 2001

     FOR VALUE RECEIVED, the undersigned (the "Maker") promises to pay to the
order of ARVEST STATE BANK, successor via name change to State Bank & Trust (the
"Payee"), at the Payee's main banking office in Tulsa, Oklahoma, the principal
sum of THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000), or
so much thereof as shall have been advanced by Payee to Maker and remains
unpaid, on June 30, 2002, together with interest thereon from the date funds are
advanced hereon on the unpaid balances of principal from time to time
outstanding, at the variable annual rate of interest hereinafter specified,
which interest is payable in monthly installments due and payable on the last
day of each calendar month, commencing July 31, 2001, and at final maturity on
June 30, 2002.

     The rate of interest payable upon the indebtedness evidenced by this note
shall be a variable annual rate of interest equal from day to day to Prime Rate,
as hereinafter defined, minus one-quarter of one percentage point (0.25%). Prime
Rate of interest shall be effective with respect to this note as of the date
upon which any change in such rate of interest shall occur. Interest shall be
computed on the basis of a year of 360 days but assessed only for the actual
number of days elapsed.

     For the purposes of this note, Prime Rate shall mean, as of the date upon
which such rate of interest is to be determined, the prime rate of interest
published in the Money Rates column of The Wall Street Journal (Southwest
Edition) or a similar rate as determined by Payee if such rate ceases to be
published.

     All parties (maker, endorsers, sureties, guarantors and all others now or
hereafter liable for payment of the indebtedness evidenced by this note) waive
presentment and diligence in collection and agree that without notice to, and
without discharging the liability of any party, this note may be extended or
renewed from time to time and for any term or terms by agreement between the
holder of this note and any of such parties and all parties shall remain liable
on each such extension or renewal.

     If the principal or any installment of interest due upon this note is not
paid as and when the same becomes due and payable (whether by extension,
acceleration or otherwise), or any party now or hereafter liable (directly or
indirectly) for payment of this note makes an assignment for benefit of
creditors, becomes insolvent, has an order for relief under the United States
Bankruptcy Code, as amended, entered against it, or any receiver, trustee,
custodian or like officer is appointed to take custody, possession or control of
any property of any such party, the holder hereof may, without notice, declare
all of the unpaid balance hereof to be immediately due and payable. Such right
of acceleration is cumulative and in addition to any other right or rights of
acceleration under the Restated Credit and Security Agreement between the Maker
and the Payee dated as of June 30, 1999, as amended by the First Amendment
thereto dated as of June 30, 2000, and as further amended by the Second
Amendment thereto dated as of even date herewith (collectively the "Credit
Agreement")

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and any other writing now or hereafter evidencing or securing payment of any of
the indebtedness evidenced hereby. After maturity, whether by acceleration,
extension or otherwise, this note shall bear interest at a variable annual rate
equal to Prime Rate plus four percentage points (4.0%). Maker and all other
parties liable hereon shall pay all reasonable attorney fees and all court costs
and other costs and expenses of collection incurred by the holder hereof.

     This is the Revolving Credit Note defined in the Credit Agreement and
constitutes an extension and renewal of that certain $3,500,000 Revolving Credit
Note dated as of June 30, 2000. Reference is made to the Credit Agreement and to
the Security Agreement and Assignment dated as of June 10, 1996, for the
provisions with respect to acceleration, description of collateral securing
payment of the indebtedness evidenced hereby, rights and remedies in respect
thereof and other matters.

     This note is executed and delivered to the order of the Payee in Tulsa,
Oklahoma, by the undersigned duly authorized corporate officer of the Maker
pursuant to all necessary corporate action and shall be governed by and
construed in accordance with the laws of the State of Oklahoma.

                                       EDUCATIONAL DEVELOPMENT
                                       CORPORATION, a Delaware corporation

                                       By
                                          --------------------------------------
                                          Randall White
                                          President

                                                        "Maker"

Due: June 30, 2002

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