EXHIBIT 1
INVESTMENT LETTER
April 20, 1994
ICO, Inc.
000 Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Gentlemen:
In connection with the Agreement and Plan of Merger (the "Agreement") dated
April 19, 1994, by and among ICO, Inc. ("ICO"), a Texas corporation, Frontier
Inspection Services, Inc. (the "Company"), a New Mexico corporation, FIS
ACQUISITION Corp. (the "Purchaser"), a New Mexico corporation, and each of the
shareholders of Frontier Inspection Services, Inc., pursuant to which the
Company will merge into the Purchaser and the undersigned will receive 138,000
shares of common stock of ICO no par value (the "Shares") in exchange for 600
shares of common stock $1.00 par value of the Company, ICO has required this
letter from the undersigned as a condition and inducement to the issuance of
such Shares.
Accordingly, the undersigned hereby represents, warrants and covenants and
agrees as follows:
(1) The undersigned acknowledges that the Shares are being acquired for
investment and not with a view to the distribution or further resale
thereof.
(2) The Shares being received under the Agreement have not been registered
under the Securities Act of 1933 (the "Act") or the blue sky or
securities laws of any state including Texas, where each Shareholder
resides, and, therefore, must be held until they are registered under
the Act and applicable state securities laws or unless an exemption
from such registration is available for any such proposed sale or
transfer. The undersigned further understands that Rules 144 and 145
under the Act provide a basis for making routine sales of restricted
securities without registration under the Act but only upon strict
compliance with the conditions set forth in such Rules and that there
can be no assurances that the conditions of such Rules will be
satisfied so as to allow a proposed sale.
(3) The undersigned will not sell, pledge, hypothecate or otherwise
transfer any of the Shares received under the Agreement except or
unless there is in effect a registration statement under the Act
covering such proposed disposition and the disposition is
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made in accordance with such registration statement or the undersigned
has notified ICO of the proposed disposition and shall have furnished
ICO with a detailed statement of the circumstances surrounding the
proposed distribution, and, if reasonably requested by ICO, the
undersigned shall have furnished ICO with an opinion of counsel,
reasonably satisfactory to ICO, that such disposition will not require
registration of such Shares under the Act or any state or securities
act.
(4) The undersigned acknowledges that ICO has no obligation to register any
of the shares except as set forth on the Registration Rights Agreement
dated April 20, 1994.
(5) The undersigned acknowledges that a legend will be placed upon
certificates representing the Shares purchased in substantially the
following form:
The securities represented by this Certificate have not been
registered under the Securities Act of 1933 or the laws of any
state and may not be transferred in the absence of (a) an
effective registration statement for the securities under the
Securities Act of 1933 and applicable state laws, or (b) an
opinion of counsel for the corporation that such registration is
not required.
(6) The undersigned has received and reviewed ICO's Form 10-K dated
September 30, 1993, ICO's Form 10-Q dated December 31, 1993, ICO's
Prospectus dated November 18, 1993 and ICO's Forms 8-K dated January 5,
1994, January 19, 1994 and February 4, 1994.
(7) The undersigned and the undersigned's offeree representative, if
applicable, has carefully read the documents referred to in Paragraph
(6) and fully understands their content and has had an opportunity to
ask questions and receive answers from executive officers of ICO with
respect to this investment.
(8) The undersigned, either alone or acting with the undersigned's offeree
representative, has such knowledge and experience in financial and
business matters in general and investments in particular that he or
she is capable of evaluating the merits and risks of the investment in
ICO and has obtained sufficient information from the documents provided
under Paragraph (6) to evaluate the merits and risks of such
investment.
(9) The undersigned has received copies of the annual financial statements
of the Company and other pertinent business and financial records of
the Company and has been provided with current interim financial
statements of the Company. The undersigned has also had an opportunity
to ask questions and receive answers from executive officers of the
Company with respect to the Company's business and operations and its
value.
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(10) The undersigned irrevocably appoints the Chairman of the Board and the
President of ICO, or either of them, as the true and lawful proxy of
the undersigned to vote all Shares of ICO acquired in the merger at any
annual or special Shareholders' meeting of ICO, cumulatively or
otherwise, on any matter on which shareholders are entitled to vote.
THIS PROXY IS IRREVOCABLE AND COUPLED WITH AN INTEREST REGARDING SHARES
PURCHASED PURSUANT TO THIS AGREEMENT. THIS PROXY SHALL EXPIRE UPON THE EARLIEST
OF TERMINATION OF EMPLOYMENT OF THE UNDERSIGNED BY ICO, Inc. OR ANY DIRECT OR
INDIRECT SUBSIDIARY THEREOF, THE TRANSFER OF SUCH SHARES TO A PERSON NOT
AFFILIATED WITH OR AN IMMEDIATE FAMILY MEMBER OF THE UNDERSIGNED OR TEN YEARS
AFTER THE DATE OF THIS AGREEMENT.
The grant of this proxy shall be noted on the certificates for the shares.
Very truly yours,
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
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