EX-99.1 2 dex991.txt INVESTMENT LETTER EXHIBIT 1 INVESTMENT LETTER April 20, 1994 ICO, Inc. 100 Glenborough Drive Suite 250 Houston, Texas 77067 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 26 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. 27 (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/ Jack C. Cave ---------------- Jack C. Cave 28