Exhibit 10.38

THE INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATE IN RIGHT OF PAYMENT TO
CERTAIN OTHER INDEBTEDNESS IN ACCORDANCE WITH THAT CERTAIN SUBORDINATION
AGREEMENT DATED AS OF NOVEMBER 21, 2007 AMONG FOREFRONT GROUP, INC., A FLORIDA
CORPORATION, FOREFRONT DEVANT, INC., A FLORIDA CORPORATION, FOREFRONT BURTON,
INC., A FLORIDA CORPORATION, MILLER GOLF COMPANY, A FLORIDA CORPORATION,
FOREFRONT HOLDINGS, INC., A FLORIDA CORPORATION, AND FCC, LLC, D/B/A FIRST
CAPITAL, A FLORIDA LIMITED LIABILITY COMPANY, AS AT ANY TIME AMENDED RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED (THE “SUBORDINATION AGREEMENT”), AND SUCH
SUBORDINATION AGREEMENT SHALL BE BINDING UPON ALL FUTURE HOLDERS OF THIS NOTE.

UNSECURED SUBORDINATED PROMISSORY NOTE

 

$32,500,000.00    November 21, 2007

FOR VALUE RECEIVED, FOREFRONT GROUP, INC., a Florida corporation (the “Maker”),
with its principal address at 835 Bill Jones Industrial Drive, Springfield,
Tennessee 37172, unconditionally promises to pay to the order of FOREFRONT
HOLDINGS, INC., a Florida corporation (the “Payee”), having an office at 835
Bill Jones Industrial Drive, Springfield, Tennessee 37172, the principal amount
of THIRTY TWO MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($32,500,000.00),
or such lesser amount as the Payee advances to the Maker through the Maturity
Date (as defined below) pursuant hereto.

1. PAYMENT OF PRINCIPAL. The entire principal amount hereof shall be payable in
full on the date (the “Maturity Date”) that is six (6) months following the
final maturity date of the Senior Indebtedness (as such term is defined in the
Subordination Agreement), as such maturity date may be extended from time to
time in accordance with the terms of the Senior Creditor Loan Agreement (as such
term is defined in the Subordination Agreement). Notwithstanding the foregoing,
any payments made hereunder shall be subject to satisfaction of the terms and
conditions of the Subordination Agreement.

2. INTEREST. The unpaid principal of this Note shall not bear interest.

3. PAYMENT DATES; MANNER OF PAYMENT; APPLICATION OF PAYMENTS. Should the
principal of this Note become due and payable on any day other than a business
day, then the maturity thereof shall be extended to the next succeeding business
day. All payments of principal of this Note shall be made by Maker to Payee at
its address stated above in good, immediately available funds.

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4. DEFAULT.

4.1 Events of Default. The occurrence of any one or more of the following events
with respect to the Maker shall constitute an event of default hereunder (“Event
of Default”):

(a) If the Maker shall fail to pay when due any payment of principal on this
Note and such failure continues for five (5) days after the Payee notifies the
Maker thereof in writing.

(b) Dissolution, liquidation or permanent cessation of the business of the
Maker.

(c) If, pursuant to or within the meaning of the United States Bankruptcy Code
or any other federal or state law relating to insolvency or relief of debtors (a
“Bankruptcy Law”), the Maker shall (i) commence a voluntary case or proceeding,
(ii) consent to the entry of an order for relief against it in an involuntary
case; (iii) consent to the appointment of a trustee, receiver, assignee,
liquidator or similar official; (iv) make an assignment for the benefit of its
creditors; or (v) admit in writing its inability to pay its debts as they become
due.

(d) If a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (i) is for relief against the Maker in an involuntary case;
(ii) appoints a trustee, receiver, assignee, liquidator or similar official for
the Maker or substantially all the Maker’s properties; or (iii) orders the
liquidation of the Maker, and in each such case, the Maker fails to actively
oppose such order or decree or such order or decree is not dismissed within 60
days from the entry of such order or decree.

(e) Any sale or similar disposition of all or substantially all of the ownership
interests in, or assets of, the Maker.

4.2 Remedies. Subject to the terms and conditions of the Subordination
Agreement, upon the occurrence of an Event of Default hereunder (unless all
Events of Default have been cured or waived by the Payee), the Payee may, at its
option, (i) by written notice to the Maker, declare the entire unpaid balance of
this Note immediately due and payable regardless of any prior forbearance and
(ii) exercise any and all rights and remedies available to it under applicable
law, including, without limitation, the right to collect from the Maker all sums
due under this Note. The Maker shall pay all reasonable costs and expenses
incurred by or on behalf of the Payee in connection with the Payee’s exercise of
any or all of its rights and remedies under this Note, including, without
limitation, reasonable attorneys’ fees.

5. WAIVERS. Maker waives presentment, demand, protest, notice of protest and
non-payment, or other notice of default, notice of acceleration and intention to
accelerate, and agree that its liability under this Note shall not be affected
by any renewal or extension in the time of payment hereof, or in any
indulgences, and hereby consents to any and all renewals, extensions,
indulgences, releases, or changes, regardless of the number of such renewals,
extensions, indulgences, releases, or changes.

6. NO WAIVER. No waiver by Payee of any of its rights or remedies hereunder or
under any other document evidencing this Note or otherwise shall be considered a
waiver of any other subsequent right or remedy of Payee; no delay or omission in
the exercise or

 

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enforcement by Payee of any rights or remedies shall ever be construed as a
waiver of any right or remedy of Payee; and no exercise or enforcement of any
such rights or remedies shall ever be held to exhaust any right or remedy of
Payee.

7. GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE LAWS OF THE UNITED STATES MAY
APPLY TO THE TERMS HEREOF, THE SUBSTANTIVE LAWS OF THE STATE OF FLORIDA SHALL
GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THIS NOTE.

8. WAIVER OF JURY TRIAL. MAKER AND PAYEE HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MAKER ENTERING INTO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

Executed as of the day and year first above written.

 

MAKER: FOREFRONT GROUP, INC. By:  

 

Name:  

 

Title:  

 

 

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