THE RUSS COMPANIES, INC. Secured Promissory Note

Exhibit 10.116 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE " SECURITIES ACT "), APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN JURISDICTION. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, RENOUNCED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY FOREIGN JURISDICTION, OR AN APPLICABLE EXEMPTION FROM SUCH REQUIREMENTS. THIS NOTE IS SUBJECT TO THE TERMS OF AN INTERCREDITOR AGREEMENT (THE " INTERCREDITOR AGREEMENT ") DATED AS OF DECEMBER 23, 2008 BETWEEN HOLDER (DEFINED BELOW) AND WELLS FARGO BANK, NATIONAL ASSOCIATION (" SENIOR LENDER "), ACTING THROUGH ITS WELLS FARGO BUSINESS CREDIT OPERATING DIVISION, WHICH INTERCREDITOR AGREEMENT IS INCORPORATED HEREIN BY REFERENCE. NOTWITHSTANDING ANY STATEMENT TO THE CONTRARY IN THIS NOTE, (I) NO PAYMENT ON ACCOUNT OF PRINCIPAL, INTEREST, FEES OR OTHER AMOUNTS SHALL BECOME DUE OR BE PAID EXCEPT IN ACCORDANCE WITH THE TERMS OF THE INTERCREDITOR AGREEMENT, AND (II) ANY SECURITY INTEREST, LIEN, PLEDGE OR ENCUMBRANCE GRANTED TO HOLDER SHALL BE SUBORDINATE TO THE SECURITY INTEREST, LIEN, PLEDGE OR ENCUMBRANCE GRANTED TO SENIOR LENDER AND SHALL BE ENFORCEABLE ONLY IN ACCORDANCE WITH THE TERMS OF THE INTERCREDITOR AGREEMENT.

THE RUSS COMPANIES, INC.
Secured Promissory Note FOR VALUE RECEIVED, the undersigned, THE RUSS COMPANIES, INC., a Delaware corporation (the " Company "), hereby promises to pay to Russ Berrie and Company, Inc., or registered assigns (in either case, the " Holder "), (i) the principal amount of U.S. $19,000,000, payable on December 23, 2013 (the " Maturity Date "), (ii) interest at a rate of 6% per year on the unpaid principal of this Note, compounded annually, payable on the Maturity Date, and (iii) in the case of (i) and (ii), interest at a rate of 7% per year on overdue principal and, to the extent legally enforceable, overdue interest. Interest shall be calculated on the basis of a 360 day year consisting of 12 30-day months. If the Company fails to pay any royalties pursuant to the License Agreement, dated December 23, 2008, between the Company and RB Trademark Holdco, LLC, a Delaware limited liability company, the rate of interest on this Note shall be increased to 7% per annum for so long as any such royalties remain unpaid.

The Holder is entitled to the benefits of a Guaranty, dated as of December 23, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the " Guaranty ") with respect to the obligations under this Note executed by The Encore Group, Inc., Russ Berrie U.S. Gift, Inc., Russ Berrie and Company Investments, Inc., Russ Berrie and Company Properties, Inc., and Russplus, Inc. (each individually a " Guarantor " and collectively, the " Guarantors ") and such Guaranty shall be secured by liens on the assets of each of such Guarantors pursuant to security agreements entered into between each of such Guarantors and the Holder. The Company’s obligations under this Note are further secured pursuant the Security Agreement (as defined in clause XV below) as further set forth below. All payments of principal and interest shall be made on the date(s) required pursuant to this Note in lawful money of the United States of America and shall be made by wire transfer of immediately available funds to an account designated by the Holder or at the principal office of the Holder or such other place as may be designated in writing by the Holder to the Company. The Company may, without premium or penalty, at any time and from time to time, upon three business days prior written notice to the Holder, prepay all or any integral multiple of $1,000,000 of the outstanding principal balance due under this Note, provided that each such prepayment is accompanied by all accrued but unpaid interest on this Note calculated to the date of such prepayment. On or before April 30 in each year, the Company shall prepay the Note in an amount equal to the excess, if any, of (x) the maximum amount available to be borrowed under the Credit and Security Agreement, dated as of December 23, 2008 (calculated in the manner set forth in the Intercreditor Agreement so long as such Intercreditor Agreement is in effect), among the Company and the other borrowers named therein and Senior Lender (as amended, restated, refinanced, supplemented or otherwise modified from time to time, any such indebtedness thereunder, the " Senior Indebtedness" ) during April of that year over (y) $10,000,000; any such prepayment shall be applied first to the payment of accrued but unpaid interest on this Note and the balance, if any, to principal of this Note. Concurrently with any such prepayment, or on or before April 30 of each year in which there is no such prepayment, the Company shall deliver to the Holder a certificate of its chief financial officer setting forth the calculation of the amount, if any, to be prepaid in reasonable detail.

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This Note has been duly authorized and issued pursuant to a Purchase Agreement, dated as of December 23, 2008 (as the same may be amended or otherwise modified from time to time, the " Purchase Agreement "), between the Holder and the Company. For the purposes of this Note, the term "Subsidiary" shall mean any corporation or other entity of which securities or other interests having the power to elect a majority of that corporation’s or other entity’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other entity (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Company or one or more of its Subsidiaries. I.  Subordination . The Holder agrees that payments of all indebtedness hereunder shall to the extent and manner set forth in the Intercreditor Agreement be subordinate and junior in right of payment to the payment of the Senior Indebtedness of Senior Lender. II.  Effect of Subordination . Subject to the rights, if any, of the Senior Lender under this Section II to receive cash, securities or other properties otherwise payable or deliverable to the Holder of this Note as set forth in the Intercreditor Agreement, nothing contained in this Section II shall impair, as between the Company and the Holder, the obligation of the Company, subject to the terms and conditions hereof, to pay to the Holder the principal hereof and interest hereon as and when the same become due and payable, or shall prevent the Holder of this Note, upon default hereunder, from exercising all rights, powers and remedies otherwise provided herein or by applicable law.

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III. Events of Default . The entire unpaid principal amount of this Note, together with all accrued interest thereon, shall, at the option of the Holder exercised by written notice to the Company, or automatically and without any such notice in the case of (E) or (F) below forthwith become and be due and payable if any one or more of the following events of default (each, an " Event of Default ") shall have occurred (for any reason whatsoever and whether such happening shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) and be continuing beyond the expiration of any applicable cure period: A. if default shall be made in the due and punctual payment of the principal of, or any interest on, this Note when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise; B. if default shall be made in the performance or observance of the provisions of this Note or of any provision of the Security Agreement, and if such default is solely with respect to delivery of financial information is not cured within twenty (20) days; C. if any Guarantor defaults in the performance or observance of the covenants contained in the Guaranty or any security agreement entered into by any Guarantor to secure its obligations pursuant to the Guaranty; and, provided it is a non-monetary default, such default is not cured within ten (10) days; D. if the Company or any Guarantor (i) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of that certain Amended and Restated Subordinated Promissory Note of even date made by The Encore Group, Inc. in the original principal amount of $500,000 payable to Eldridge C. Hanes (the " Hanes Note "), any Senior Indebtedness or other indebtedness for borrowed money in the outstanding principal amount that exceeds individually or in the aggregate $100,000, or (ii) fails to observe or perform any other agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause the holder or holders or the beneficiary or beneficiaries of such indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries), with the giving of notice if required, such indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such indebtedness to be made, prior to its stated maturity, or cash collateral in respect thereof to be demanded;

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E. if: 1. an involuntary proceeding shall be commenced or an involuntary petition sha