AMENDMENT TO SECOND AMENDED AND RESTATED SENIOR REVOLVING CREDIT AGREEMENT

Exhibit 10.3

TWELFTH AMENDMENT TO SECOND AMENDED AND RESTATED
SENIOR REVOLVING CREDIT AGREEMENT

     This TWELFTH AMENDMENT TO SECOND AMENDED AND RESTATED SENIOR REVOLVING CREDIT AGREEMENT (this “Amendment”) is made as of July 19, 2006, by and among ENESCO GROUP, INC., an Illinois corporation (the “Borrower”), the Borrowing Subsidiaries that may from time to time become a party to the Second Amended and Restated Senior Revolving Credit Agreement, the Lenders, and BANK OF AMERICA, N.A. (successor by merger to Fleet National Bank) , a national banking association, as Agent.

RECITALS

     The Borrower, the Borrowing Subsidiaries, the Lenders and the Agent are parties to a certain Second Amended and Restated Senior Revolving Credit Agreement dated as of June 16, 2003, as amended by a First Amendment dated as of March 5, 2004; a Second Amendment dated as of August 10, 2004; a Third Amendment dated as of November 2, 2004; a Fourth Amendment dated as of November 22, 2004; a Fifth Amendment dated as of January 28, 2005, as amended by a letter agreement dated as of February 7, 2005; a Sixth Amendment dated as of March 29, 2005; a Seventh Amendment dated as of May 16, 2005; an Eighth Amendment dated as of July 7, 2005, as amended by a letter agreement dated as of July 28, 2005; a Ninth Amendment dated as of August 31, 2005; a Tenth Amendment dated as of December 21, 2005; and an Eleventh Amendment dated as of March 31, 2006 (as the same may be further amended or restated from time to time, collectively, the “Credit Agreement”), pursuant to which the Lenders have, subject to the terms and conditions set forth therein, made certain credit facilities available to the Borrower and the Borrowing Subsidiaries including those evidenced by the Notes executed and delivered pursuant to the Credit Agreement. The parties hereto have agreed to further modify the Credit Agreement as set forth herein. All capitalized terms used herein and not otherwise defined herein shall have their meanings as defined in the Credit Agreement.

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

     1. Upon satisfaction in full, on or prior to July 19, 2006 (i.e. not later than midnight, New York time, on July 19, 2006), of the conditions precedent set forth in Section 3 below, the Credit Agreement is amended as follows:

(a) The following definitions in ARTICLE I of the Credit Agreement are amended and restated in their entirety to read as follows:

“Borrowing Capacity” means the lesser of:

(x) the Maximum Borrowing Amount, and

(y) the sum of (i) eighty-five percent (85%) of Accounts Receivable of

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the Borrower, Gregg, the Canadian Subsidiary, the Hong Kong Subsidiary and the U.K. Credit Parties which are not Ineligible Accounts, provided that not more than $12,000,000 will be included in the Borrowing Capacity pursuant to this clause (y) with respect to Accounts Receivable of the Canadian Subsidiary, (ii) the lesser of (A) the sum of thirty-three percent (33%) of the Eligible Inventory of the Borrower, Gregg, the Canadian Subsidiary and the U.K. Credit Parties other than Eligible Discontinued Inventory and ten percent (10%) of Eligible Discontinued Inventory, and (B) $12,500,000, provided that not more than $24,000,000 will be included in the Borrowing Capacity with respect to United Kingdom inventory and accounts receivable in the aggregate, (iii) during such time as the Borrower continues to own the real estate owned by the Borrower on the Ninth Amendment Date and located in Itasca, Illinois seventy percent (70%) of the appraised fair market value of such real estate, such appraised fair market value to be determined by the Agent based on an appraisal (or, if updated by the Agent in its sole discretion from time to time, the most recent appraisal) in form and substance, and by an appraiser, acceptable to the Agent in its sole discretion, and (iv) between the Twelfth Amendment Date and September 15, 2006, the Permitted Overadvance Amount (but this clause (iv) shall be zero after September 15, 2006), minus (v) the amount of reserves in respect of Canada Preferential Indebtedness, Hong Kong Preferential Indebtedness, U.K. Preferential Indebtedness and any Unpaid Supplier Reserve, such amounts under this clause (v) to be determined by the Agent (which determination may occur from time to time) in its discretion (such discretion to be exercised in its reasonable business judgment) as a result of conducting a commercial finance examination or otherwise (such amount to remain at zero in respect of Hong Kong Preferential Indebtedness so long as the Agent’s lien on Hong Kong accounts receivable and on each Hong Kong Controlled Account remains a fixed charge).

     “Default” or “Event of Default” mean an event described in Article VII hereof.

     “Facility Termination Date” means September 15, 2006.

     “Maximum Borrowing Amount” means between the Twelfth Amendment Date and September 15, 2006, $63,000,000 for Loans (excluding Letters of Credit and Bankers’ Acceptances) and $7,000,000 for Letters of Credit and Bankers’ Acceptances.

     “Obligations” means all unpaid principal of and accrued and unpaid interest on the Notes, all accrued and unpaid fees and all expenses, reimbursement obligations pursuant to Letters of Credit issued at the request of any Credit Party, indemnities and other obligations of the Credit Parties or any of them to the Agent or any of the Lenders or any indemnified party hereunder arising under the Loan Documents, including without limitation the Borrowing Subsidiary Obligations, and all overdraft obligations, fees, costs, charges,

expenses and other obligations of the Credit Parties or any of them to the Agent or any of the Lenders or any indemnified party hereunder arising under any cash management agreement (including ACH transactions but excluding contracts or other arrangements to purchase foreign currency) or operating or deposit account.

     “Prime Rate” means the variable per annum rate of interest designated by Bank of America, N.A. from time to time as its prime rate or base rate. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer.

(b) The following definitions are added to ARTICLE I of the Credit Agreement in appropriate alphabetical order:

     “Additional Collateral Date” means that date that the Borrower has complied with clauses (a), (b) and (c) of Section 6.31 hereof and Agent has a valid, perfected first lien on all of the Collateral referred to therein.

     “Dormant Subsidiaries” means Subsidiaries of the Borrower that have less than $1,000 (valued at the greater of book value or fair market value) in assets and that conduct no business and are not parties to any contracts or agreements.

     “Eligible Discontinued Inventory” means Eligible Inventory which is designated on the Borrower’s (or a Subsidiary of the Borrower’s) books and records as discontinued inventory.

     “Overadvance Amount” means the amount by which (A) the Obligations exceed (B) the sum of clause (i) plus clause (ii) plus clause (iii) minus clause (v) of clause (y) of the definition of Borrowing Capacity.

     “Permitted Overadvance Amount” means, as of any date, the amount for such date shown on the Twelfth Amendment Overadvance Covenant Spreadsheet.

     “Transfer or Business Commencement Action” means any transfer, assignment or contribution of any asset to any Person that, prior to such transfer, assignment or contribution, was a Dormant Subsidiary, or any commencement or continuation of any business by any Person that prior to such commencement or continuation of business was a Dormant Subsidiary, or the execution of any contract or agreement by any Person that, prior to such execution was a Dormant Subsidiary.

     “Twelfth Amendment Cash Receipts and Cash Disbursements Projection and Covenants Spreadsheet” means the spreadsheet delivered by the Borrower to the Agent on the Twelfth Amendment Date pursuant to clause (xvi) of Section

6.1 hereof.

     “Twelfth Amendment Date “ means the date that the Twelfth Amendment to this Agreement takes effect.

     “Twelfth Amendment Overadvance Covenant Spreadsheet” means the spreadsheet attached to the Twelfth Amendment hereto as Exhibit A thereto.

(c) The following sentence is added to the end of sentence of Section 2.10:

     Notwithstanding the foregoing or any provision of Section 2.8 or any other provision hereof (but subject to Section 2.11), (a) no Loans or other Advances will be (and no Loans or Advances may be converted to) LIBOR Advances or Cost of Funds Advances at any time after the Twelfth Amendment Date and all Loans and other Advances will be Alternate Base Rate Advances on and after the Twelfth Amendment Date, (b) except as otherwise provided in clause (c) of this sentence or in Section 2.11, the interest rate payable on all Loans and Advances from and after the Twelfth Amendment Date shall be the sum of the Alternate Base Rate plus 2% per annum, and (c) at any time during which there is an Overadvance Amount, the interest rate payable on the Overadvance Amount shall be the Alternate Base Rate plus 3% per annum and the interest rate payable on the portion of the Loans and Advances other than the Overadvance Amount shall be the Alternate Base Rate plus 2% per annum.

(d) The last sentence of Section 2.11 is amended and restated in its entirety to read as follows:

During the continuance of a Default, each Loan and other Advance shall bear interest at a rate equal to the sum of (a) the rate provided therefor in Section 2.10 or otherwise applicable thereto, plus (b) 2% per annum (the sum of (a) and (b) being the “Default Rate”).

(e) Section 2.24 is amended and restated in its entirety to read as follows:

     2.24 Usage Fee and Extension Fees . In addition to the Facility Fee, Commitment Fee, and all other amounts payable hereunder and previously paid hereunder, the Borrower shall pay to the Agent for the account of the Lenders, (a) (i) on the first Business Day in each month, commencing on January 1, 2006 and continuing through and including May 1, 2006, a fee in the amount of 0.10% (10 basis points) of the highest amount of Loans that were outstanding on any day in the immediately preceding month, and (ii) on the first Business Day in each month, commencing on June 1, 2006 and continuing until the Facility Termination Date, a fee in the amount of 0.20% (20 basis points) of the highest amount of Loans that were outstanding on any day in the immediately preceding month, (b) on January 1, 2006, a fee in the amount of $75,000, (c) on February 1, 2006, a fee in the amount of $150,000, (d) on March 1, 2006, a fee in the amount of $250,000 (e) on April 1, 2006, a fee in the amount of $275,000, (f) on

May 1, 2006, a fee in the amount of $750,000, (g) on June 1, 2006, a fee in the amount of $750,000, and (h) on the earlier of (i) the first date after the Twelfth Amendment Date that an Event of Default occurs, (ii) the date that the Obligations are paid in full and all Letters of Credit and Bankers Acceptances expire, are returned to the Agent for cancellation or are secured by cash collateral in a manner satisfactory to the Agent and the Commitment hereunder is terminated and (iii) the Facility Termination Date, a fee (fully earned as of the Twelfth Amendment Date) in the amount of $2,100,000 provided that, (i) the fee payable under clause (h) of this paragraph will be reduced to $1,400,000 if, on or before September 1, 2006 (i.e. not later than midnight, New York time, on September 1, 2006), the Obligations are paid in full and all Letters of Credit and Bankers Acceptances expire, are returned to the Agent for cancellation or are secured with cash collateral in a manner satisfactory to the Agent and the Commitment hereunder is terminated.

     (f) Clause (xv) of Section 6.1 is amended and restated in its entirety to read as follows:

     (xv) On or before Wednesday of every week, commencing on the next Wednesday after the Twelfth Amendment Date, (A) a Borrowing Base Certificate in the form of Exhibit C-1 hereto showing the calculations necessary to determine Borrowing Capacity, which certificates shall have been signed by the Borrower’s Chief Financial Officer or Treasurer, provided that, even though the amount of Accounts Receivable set forth on such Exhibit C-1 shall in each case be as of