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                                                                   EXHIBIT 10.26


                           FIRST AMENDMENT TO RESTATED
                          CREDIT AND SECURITY AGREEMENT


         THIS FIRST AMENDMENT TO RESTATED CREDIT AND SECURITY AGREEMENT (the
"First Amendment") by and between EDUCATIONAL DEVELOPMENT CORPORATION, as
borrower (the "Company"), and STATE BANK & TRUST, Tulsa, Oklahoma, as lender
(the "Bank"), is entered into effective as of the 30th day of June, 2000.

         WITNESSETH:

         WHEREAS, pursuant to the Restated Credit and Security Agreement dated
as of June 30, 1999 (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, 2001 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, 2000 to June 30, 2001 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 regrants to
and in favor of the 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 Company agrees to pay the Bank's legal fees incurred in
connection with the negotiation, preparation and closing of this First
Amendment.



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         IN WITNESS WHEREOF, this First 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, 2000.


                                        EDUCATIONAL DEVELOPMENT
                                        CORPORATION


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

                                                      "Company"


                                        STATE BANK & TRUST



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


                                                      "Bank"


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