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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 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.
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EXHIBIT 1
(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.
(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.
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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
