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EXHIBIT 5.1
SUBSCRIPTION AGREEMENT
The undersigned HERTH Management, Inc. ("HERTH") hereby subscribes to
and agrees to purchase the following described securities of PF Management, Inc.
(hereinafter called the "Corporation"), a corporation organized or to be
organized under the laws of the State of North Carolina.
1. Description of securities. The securities hereby subscribed
and agreed to be purchased are eleven thousand eight hundred seventy-five
(11,875) shares of the common capital stock of the Corporation.
2. Purchase price. In consideration of the shares HERTH will
contribute to the Corporation (i) the following securities, subject to certain
liabilities, all as set forth on Exhibit A attached hereto and (ii) all key man
insurance policies owned by HERTH on Xxxxx X. Xxxx and Xxxxxxx X. Xxxxxx and on
its insured principals who will be shareholders of the Corporation, subject to
any credit facility assignments.. By acceptance of this Subscription, the
Corporation hereby agrees to assume the aforesaid liabilities and hold HERTH
harmless therefrom.
3. Assignment. HERTH represents and warrants to the Corporation
that its intent is, and it has so declared, to distribute the aforesaid shares
of the Corporation to be received hereby in the redemption of the interest of
Xxxxx X. Xxxxxxxxx in XXXXX. In furtherance thereof, HERTH hereby expressly
directs the Corporation to issue the aforesaid shares (herein the "Assigned
Securities") and register the same as follows:
Xxxxx X. Xxxxxxxxx - 11,875 shares
4. Investment representation. The undersigned Xxxxx X. Xxxxxxxxx
hereby represents and agrees that any securities of the Corporation received by
him by dividend, liquidation redemption or otherwise from HERTH Management, Inc.
(the "Assigned Securities") will be for investment only, for his own account,
and not with any view to the resell or distribution thereof; that the
undersigned will not resell the Assigned Securities without registration under
federal and state securities laws or exemptions therefrom; and that the
undersigned understands that the Assigned Securities will be issued, without
registration, under exemptions in the federal and state securities laws that
depend upon the intent hereby represented and that the Corporation will rely on
such representation in issuing such securities without registration. The
undersigned further agrees that the share certificates issued for the Assigned
Securities, and any replacements thereof, may be marked with a legend to the
effect that such securities cannot be sold or transferred without either (a)
registration under federal and state securities laws, or (b) an opinion of
counsel satisfactory to the Corporation that neither the sale nor the proposed
transfer constitutes a violation of any federal or state securities law.
[Signature Page Attached]
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This 17th day of April, 2001.
HERTH MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
-----------------------------------------
Xxxxx X. Xxxxxxxxxx, Xx. - President
Address: Xxxx Xxxxxx Xxx 0000
Xxxxxxx, XX 00000
Taxpayer Identification No.:
00-0000000
/s/ Xxxxx X. Xxxxxxxxx
--------------------------------------(SEAL)
Xxxxx X. Xxxxxxxxx
Accepted this 17th day of April, 2001.
PF Management, Inc.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
President
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EXHIBIT A
1,227,234 shares of Pierre Foods, Inc. ("Pierre") subject to the
following liabilities of HERTH Management, Inc. ("HERTH"), hereby assumed by the
Corporation:
(a) Note dated February 9, 2000 in original amount of
$1,900,000.00 with present balance of $1,900,000.00 payable to
Carolina First Bank, secured by: (i) 147,377 shares of Pierre
(owned by HERTH) and 331,077 shares of Pierre (owned by Xxxxx
X. Xxxxxxxxxx, Xx.), (ii) an assignment of life insurance of
$1,900,000 on the life of Xxxxx X. Xxxxxxxxxx, Xx. and (iii)
the guaranty of Xxxxx X. Xxxxxxxxxx, Xx. Said assumption to be
evidenced by such loan assumption and/or other loan or
collateral documentation as agreed by and between the
Corporation and aforesaid lender et al.
(b) Note dated November 11, 1998 in original amount of
$1,602,432.00 payable to Peoples Bank with present balance of
$1,500,000.00 after principal curtailment by HERTH, secured
by: (i) 131,729 shares of Pierre (owned by HERTH) and 180,000
shares of Pierre (owned by Xxxxx X. Xxxxxxxxxx, Xx.), (ii) an
assignment of life insurance of $1,600,000 on the life of
Xxxxx X. Xxxxxxxxxx, Xx., and (iii) the guaranty of Xxxxx X.
Xxxxxxxxxx, Xx., Xxxxxxx X. Xxxxxx, and Xxxxx X. Xxxx. Said
assumption to be evidenced by such loan assumption and/or
other loan or collateral documentation as agreed by and
between the Corporation and aforesaid lender et al.
(c) Note dated February 19, 1999 in original amount of $500,000.00
with present balance of $500,000.00 payable to Bank of
Granite, secured by the guaranty of Xxxxx X. Xxxxxxxxxx, Xx.
and Xxxxx X. Xxxxx. Said assumption to be evidenced by such
loan assumption and/or other loan or collateral documentation
as agreed by and between the Corporation and aforesaid lender
et al.
(d) Note dated January 12, 2000 in original amount of $750,000.00
with present balance of $750,000.00 payable to First Union
National Bank, secured by the guaranty of Xxxxx X. Xxxxxxxxxx,
Xx. and Xxxxx X. Xxxxx. Said assumption to be evidenced by
such loan assumption and/or other loan or collateral
documentation as agreed by and between the Corporation and
aforesaid lender et al.
(e) Note dated February 19, 1999 in original amount of
$4,925,000.00 with present balance of $4,925,000.00 payable to
First Century Bank, N.A., secured by: (i) 930,530 shares of
Pierre (owned by HERTH), (ii) assignments of life insurance of
$5,000,000 each on the lives of Xxxxx X. Xxxxxxxxxx, Xx. and
Xxxxx X. Xxxxx, (iii) the guaranty of Xxxxx X. Xxxxxxxxxx, Xx.
and Xxxxx X. Xxxxx. Said assumption to be evidenced by such
loan assumption and/or other loan or collateral documentation
as agreed by and between the Corporation and aforesaid lender
et al.
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Included in the above 1,227,234 shares of Pierre contributed
by HERTH is 8,799 shares of Pierre which is presently pledged
to Peoples Bank as security for a Note from Xxxxx X.
Xxxxxxxxxx, Xx. dated March 18,1998 in the original amount of
$100,000 and 8,799 shares of Pierre which is presently pledged
to Peoples Bank as security for a Note from Xxxxx X.
Xxxxxxxxxx, Xx. dated January 18, 2000 in the original amount
of $153,359.24. In consideration of the registration of said
shares in the name of the Corporation, Peoples Bank will
require the pledge and hypothecation of such shares without
recourse as continuing collateral security for the aforesaid
Notes of Xxxxxxxxxx.
