<PAGE>   1
                                                                   EXHIBIT 10.5

                         ENVIRONMENTAL SAFEGUARDS, INC.

                               WARRANT AGREEMENT

                                                              December 17, 1997

To the persons whose names appear
on the signature page of this Agreement
c/o Cahill, Warnock & Company
One South Street, Suite 2150
Baltimore, Maryland 21202

Gentlemen:

         In consideration of entering into a transaction composed of a Purchase
Agreement for the sale of Series B Convertible Preferred Stock and Series C
Preferred Stock ("Purchase Agreement") and that certain Loan and Security
Agreement ("Loan Agreement") with Environmental Safeguards, Inc. (the
"Company"), the Company hereby agrees to issue non-redeemable stock purchase
warrants ("Warrants") to the persons whose names appear on Exhibit A of this
Agreement entitling them to purchase an aggregate of 707,142 shares of Company
common stock, $0.001 par value per share ("Common Stock"). The Warrants are
evidenced by warrant certificates in the form attached hereto as Exhibit B
("Warrant Certificate"). The number of shares of Common Stock purchasable upon
exercise of the Warrants is subject to adjustment as provided in Section 4
below. The Warrants will be exercisable by you or any other Warrant holder (as
defined in Section 2(a) below) as to all or any lesser number of shares of
Common Stock covered thereby, at the Purchase Price of $0.01 per share
("Exercise Price"), at any time and from time to time during the period
beginning December 17, 1997 and ending at 5:00 p.m., Houston, Texas time, on
December 16, 2007. The term "Warrant holder" refers to the person whose name
appears on the signature page of this Warrant Agreement and any transferee or
transferees of it permitted by Section 3(a) below. Such term, when used in this
Warrant Agreement in reference to or in the context of a person who holds or
owns shares of Common Stock issued upon exercise of a Warrant, refers where
appropriate to such person who holds or owns such shares of Common Stock.

1.       Representations and Warranties.

         The Company represents and warrants to each Warrant holder as follows:

         (a) Corporate and Other Action. The Company has all requisite power
and authority and has taken all necessary corporate action, to authorize,
execute, deliver and perform this Warrant Agreement, to execute, issue, sell
and deliver the Warrants and Warrant certificates evidencing the Warrants, to
authorize and reserve for issue and, upon payment from time to time of the
Exercise Price, to issue, sell and deliver, the shares of the Common Stock
issuable upon exercise of the Warrants ("Shares"), and to perform all of its
obligations under this Warrant



WARRANT AGREEMENT                                                        PAGE 1
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Agreement and the Warrants. This Warrant Agreement and, when issued, each
Warrant issued pursuant hereto, has been or will be duly executed and delivered
by the Company and is or will be a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms. No authorization, approval,
consent or other order of any governmental entity, regulatory authority or
other third party is required for such authorization, execution, delivery,
performance, issue or sale.

         (b) No Violation. The execution and delivery of this Warrant
Agreement, the consummation of the transactions herein contemplated and the
compliance with the terms and provisions of this Warrant Agreement and of the
Warrants will not conflict with, or result in a breach of, or constitute a
default or an event permitting acceleration under, any statute, the Articles of
Incorporation or Bylaws of the Company or any indenture, mortgage, deed of
trust, note, bank loan, credit agreement, franchise, license, lease, permit, or
any other agreement, understanding, instrument, judgment, decree, order,
statute, rule or regulation to which the Company is a party or by which it is
or may be bound.

2.       Exercise of Warrants.

         The Warrants may be exercised by the Warrant holder in whole, or in
part, by surrender of the Warrant Certificate at the office of the Company (or
such other office or agency of the Company as may be designated by notice in
writing to the Warrant holder at the address of such Warrant holder appearing
on the books of the Company) with the subscription form attached hereto duly
completed, at any time within the period beginning on the date hereof and
expiring at 5:00 p.m. Houston, Texas time, on December 16, 2007 (the "Exercise
Period") and by payment to the Company by certified check or bank draft of the
Exercise Price for such shares. The Company agrees that the shares of Common
Stock so purchased shall be and are deemed to be issued to the Warrant holder
as the record owner of such shares of Common Stock as of the close of business
on the date on which the Warrant Certificate shall have been surrendered and
payment made for such shares of Common Stock. Certificates representing the
shares of Common Stock so purchased, together with any cash for fractional
shares of Common Stock paid pursuant to Section 4(f), shall be delivered to the
Warrant holder promptly, and, unless the Warrants have expired, a new Warrant
Certificate representing the number of Warrants represented by the surrendered
Warrant Certificate, if any, that shall not have been exercised also shall be
delivered to the Warrant holder within such time.

3.       Transfer.

         (a) Transferability of Warrants and Shares. The Warrant holder agrees
that the Warrants are being acquired as an investment and not with a view to
distribution thereof (except for partners, limited partners or affiliates of
the Warrant holder) and that the Warrants and the underlying Shares issued on
exercise of the Warrants, may not be transferred, sold, assigned or otherwise
disposed of without registration under the Securities Act of 1933, as amended
(the "Act"), or any exemption therefrom and for which the Company is provided
with an opinion of counsel to

WARRANT AGREEMENT                                                        PAGE 2

<PAGE>   3

the Warrant holder, reasonably satisfactory to the Company, to the effect that
such transfer is not in violation of any of said securities laws. Any Warrants
issued upon the transfer of a Warrant shall be registered in a Warrant Register
as they are issued. The Company shall be entitled to treat the registered
holder of any Warrant on the Warrant Register as the owner in fact thereof for
all purposes and shall not be bound to recognize any equitable or other claim
to or interest in such Warrant on the part of any other person. Warrants may be
exchanged, at the option of the Holder thereof, for another Warrant, or other
Warrants of different denominations, of like tenor or representing in the
aggregate the right to purchase a like number of shares of Common Stock, upon
surrender to the Company or its duly authorized agent. Notwithstanding the
foregoing, the Company shall have no obligation to cause the Warrants to be
transferred on its books to any person if, in the opinion of counsel to the
Company, this transfer does not comply with the provisions of the Act, and the
rules and regulations thereunder.

         (b) Registration of Shares. You agree not to make any sale or other
disposition of the Shares except pursuant to a registration statement which has
become effective under the Act, setting forth the terms of such offering, the
underwriting discount and commissions and any other pertinent data with respect
thereto, unless the Warrant holder has provided the Company with an opinion of
counsel reasonably acceptable to the Company that such registration is not
required. Notwithstanding the foregoing, the Warrant holder further agrees that
it will not sell, transfer, assign or otherwise dispose of the Shares prior to
December 17,1998, without the prior written consent of the Company.
Certificates representing the Shares shall bear an appropriate legend
reflecting these restriction and shall be subject to a "stop-transfer" order.

         (c) Investment Representations. Each of the Warrant holders,
severally, represent and warrant to the Company as follows:

                  (i) Each Warrant holder which is a corporation, partnership
or trust is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, has all requisite power and authority
and has taken all necessary action required for the due authorization,
execution, delivery and performance of this Warrant Agreement, and any other
agreements or instruments executed in connection herewith or therewith and the
consummation of the transactions contemplated herein or therein, and has not
been organized, reorganized or recapitalized specifically for the purposes of
investing in the Company;

                  (ii) Assuming due execution and delivery by the Company of
this Warrant Agreement, this Warrant Agreement to which such Warrant holder is
a party constitutes the legal, valid and binding obligation of such Warrant
holder, enforceable against such Warrant holder in accordance with its terms;

                  (iii) Such Warrant holder has been advised and understands
that neither the Warrants nor the underlying shares of Common Stock have been
registered under the Act, on the basis that no public offering of the Warrants
or underlying shares of Common Stock is to be effected, except in compliance
with applicable securities laws and regulations or pursuant to an exemption

WARRANT AGREEMENT                                                         PAGE 3

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therefrom, and that, in this connection, the Company is relying in part on the
representations of such Warrant holders set forth in this Section 3(c);

                  (iv) Such Warrant holder is purchasing the Warrant for
investment purposes, for its own account and not with a view to, or for sale in
violation of Federal or state securities laws; and

                  (v) Such Warrant holder is an "accredited investor" within
the meaning of Rule 501 of Regulation D promulgated under the Act and, by
reason of its business or financial experience, such Warrant holder has the
capacity to protect its own interest in connection with the transactions
contemplated hereunder.

4.       Adjustment of Number of Shares Purchasable.

         The number of Shares to be issued upon exercise of the Warrant is
subject to adjustment from time to time as set forth in this Section 4.

         (a) Stock Dividend; Stock Splits; Reverse Stock Splits;
Reclassifications. In case the Company shall at any time after the date of this
Agreement (i) declare a dividend on the Common Stock in shares of its capital
stock, (ii) subdivide the outstanding Shares, (iii) combine the outstanding
Common Stock into a smaller number of Common Stock, or (iv) issue any shares of
its capital stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the number of Shares
of Common Stock for which this Warrant is exercisable shall be adjusted so that
the holder hereof after such time shall be entitled to receive the aggregate
number and kind of Shares which, if such Warrant had been exercised immediately
prior to such time, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination, or
reclassification. An adjustment made pursuant to this subsection (a) shall
become effective on the date of the dividend payment, subdivision, combination
or issuance retroactive to the record date with respect thereto, if any, for
such event. Such adjustment shall be made successively whenever any event
listed above shall occur. In the event that at any time, as a result of an
adjustment made pursuant to this subsection (a), the holder hereof shall become
entitled to purchase any securities other than shares of Common Stock,
thereafter the number of such other securities so purchasable upon exercise of
such Warrant and the exercise price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions of this Section 4 with respect to the shares of Common Stock for
which this Warrant shall be exercisable.

         (b) Adjustment of Exercise Price. Whenever the number of shares of
Common Stock purchasable upon the exercise of each Warrant is adjusted pursuant
to Section 4(a), the Exercise Price for each share of Common Stock payable upon
exercise of each Warrant shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise

WARRANT AGREEMENT                                                         PAGE 4

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of each Warrant immediately prior to such adjustment, and the denominator of
which shall be the number of shares of Common Stock so purchasable immediately
thereafter.

         (c) De Minimis Adjustments. No adjustment in the number of shares of
Common Stock for which this Warrant is exercisable shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
number of shares of Common Stock for which this Warrant is exercisable;
provided, however, that any adjustments which by reason of this subsection (c)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 4 shall be made
to the nearest one-hundredth of a share.

         (d) Notice of Adjustment. Whenever the number of shares of Common
Stock purchasable upon the exercise of each Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall promptly notify the Warrant
holder in writing (such writing referred to as an "Adjustment Notice") of such
adjustment or adjustments and shall deliver to such Warrant holder a statement
setting forth the number of shares of Common Stock purchasable upon the
exercise of each Warrant and the Exercise Price after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made.

         (e) Statement on Warrant Certificates. The form of the Warrant
Certificate need not be changed because of any change in the Exercise Price or
in the number or kind of shares purchasable upon the exercise of a Warrant.
However, the Company may at any time in its sole discretion make any change in
the form of the Warrant Certificate that it may deem appropriate and that does
not affect the substance thereof and any Warrant Certificate thereafter issued,
whether in exchange or substitution for any outstanding Warrant Certificate or
otherwise, may be in the form so changed.

         (f) Fractional Shares. No fractional Shares are to be issued upon the
exercise of any Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount equal
to such fraction multiplied by the fair value of a share of Common Stock on the
date of such exercise as determined by the board of directors of the Company.

         (g) Capital Reorganization. In case of any capital reorganization of
the Company, or of any reclassification of the Common Stock (other than a
reclassification of the Common Stock referred to in subsection (a) of this
Section 4), or in the case of the consolidation of the Company with or the
merger of the Company into any other Company which does not result in a change
of control, each Warrant shall after such capital reorganization,
reclassification of the Common Stock, consolidation or merger be exercisable,
upon the terms and conditions specified in this Agreement, for the number of
shares of stock or other securities, assets, or cash to which a holder of the
number of shares of Common Stock purchasable (at the time of such capital
reorganization, reclassification of shares, consolidation or merger) upon
exercise of such Warrant would have

WARRANT AGREEMENT                                                         PAGE 5

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been entitled upon such capital reorganization, reclassification of the Common
Stock, consolidation or merger; and in any such case, if necessary, the
provisions set forth in this Section 4 with respect to the rights and interests
thereafter of the holders of the Warrants shall be appropriately adjusted so as
to be applicable, as nearly as may reasonably be, to any shares of stock or
other securities, assets, or cash thereafter deliverable upon the exercise of
the Warrants. The subdivision or combination of the Common Stock at any time
outstanding into a greater or lesser number of shares shall not be deemed to be
a reclassification of the Common Stock for the purposes of this paragraph. The
Company shall not effect any such consolidation or merger unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing or receiving such assets or other appropriate
corporation or entity shall assume the obligation to deliver to the Warrant
holder such shares of stock, securities, or assets as, in accordance with the
foregoing provisions, such holders may be entitled to purchase, and to perform
the other obligations of the Company under this Warrant Agreement.

5. Covenants of the Company.

         (a) Reservation and Authorization of Common Stock. The Company
covenants and agrees (i) that all shares of Common Stock which may be issued
upon the exercise of the Warrants represented by the Warrant Certificate, upon
issuance and when fully paid for, will be validly issued, fully paid and
nonassessable and free of all taxes, liens, charges, encumbrances and security
interests other than those attaching by or through the Warrant holder, (ii)
that during the Exercise Period, the Company will at all times have authorized,
and reserved for the purpose of issue or transfer upon exercise of the Warrants
evidenced by the Warrant Certificate, sufficient shares of Common Stock to
provide for the exercise of the Warrants represented by the Warrant Certificate
and (iii) that the Company will take all such action as may be necessary to
ensure that the shares of Common Stock issuable upon the exercise of the
Warrants may be so issued without violation of any applicable law or
regulation, or any requirement of any securities exchange upon which any
capital stock of the Company may be listed.

         (b) Replacement of Warrant Certificates. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant Certificate and, in the case of any such loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant Certificate, the Company, at the
expense of the Warrant holder, will execute and deliver, in lieu thereof, a new
Warrant Certificate of like tenor.

         (c) Reporting by the Company. The Company agrees that during the term
of the Warrants it will use its best efforts to keep current in the filing of
all forms and other materials, if any, which it may be required to file with
the appropriate regulatory authority pursuant to the Securities Exchange Act of
1934, as amended ("Exchange Act"), and all other forms and reports required to
be filed with any regulatory authority having jurisdiction over the Company.


WARRANT AGREEMENT                                                         PAGE 6

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6.       No Rights of Stockholder.

         The Warrant holder shall not be entitled to vote or to receive
dividends or shall otherwise be deemed to be the holder of shares of Common
Stock for any purpose, nor shall anything contained herein or in any Warrant
Certificate be construed to confer upon the Warrant holder, as such, any of the
rights of a stockholder of the Company or any right to vote upon or give or
withhold consent to any action of the Company (whether upon any reorganization,
issuance of securities, reclassification or conversion of Common Stock,
consolidation, merger, sale, lease, conveyance, or otherwise), receive notice
of meetings or other action affecting stockholders (except for notices
expressly provided for herein) or receive dividends or subscription rights,
until the Warrant Certificate shall have been surrendered for exercise
accompanied by full and proper payment of the Exercise Price as provided herein
and shares of Common Stock hereunder shall have become issuable and until the
Warrant holder shall have been deemed to have become a holder of record of such
shares. The Warrant holder shall not, upon the exercise of Warrants, be
entitled to any dividends if the record date with respect to payment of such
dividends shall be a date prior to the date such shares of Common Stock became
issuable upon the exercise of such Warrants. Notwithstanding the foregoing,
this Section 6 shall not affect a Warrant holder's rights as a stockholder
pursuant to his or its ownership of Common Stock or Preferred Stock of the
Company.

7.       Miscellaneous.

         All notices, certificates and other communications from or at the
request of the Company to any Warrant holder shall be delivered personally, by
prepaid overnight courier, by facsimile transmission or by certified mail,
return receipt requested, addressed to the Warrant Holder at its address as it
appears on the books of the Company. This Warrant Agreement and any of the
terms hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought. This Warrant Agreement
shall be construed and enforced in accordance with and governed by the laws of
the State of Maryland. The headings in this Warrant Agreement are for purposes
of reference only and shall not limit or otherwise affect any of the terms
hereof. This Warrant Agreement, together with the forms of instruments annexed
hereto as exhibits, constitutes the full and complete agreement of the parties
hereto with respect to the subject matter hereof.
This Warrant Agreement may be executed in counterparts.









WARRANT AGREEMENT                                                         PAGE 7

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         IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to
be executed on this the 17th day of December, 1997, in Houston, Texas, by its
proper corporate officers, thereunto duly authorized.

                                                ENVIRONMENTAL SAFEGUARDS, INC.


                                                By: /s/ JAMES  S. PERCELL
                                                    JAMES  S. PERCELL, President

The above Warrant Agreement is confirmed and agreed to as of this 17th day of
December, 1997.

CAHILL, WARNOCK STRATEGIC PARTNERS FUND, L.P.
By:      CAHILL, WARNOCK STRATEGIC PARTNERS, L.P.,
         its General Partner

By:      /s/ David L. Warnock
         Name: David L. Warnock
         Title:   a General Partner


STRATEGIC ASSOCIATES, L.P.
By:      CAHILL, WARNOCK & COMPANY, L.L.C.,
         its General Partner

By:      /s/ David L. Warnock
         Name: David L. Warnock
         Title:   Managing Member


NEWPARK RESOURCES, INC.

By:      /s/ James D. Cole
         Name: James D. Cole
         Title:   Chairman of the Board, President and
                  Chief Executive Officer


JAMES H. STONE


/s/ JAMES H. STONE


WARRANT AGREEMENT                                                         PAGE 8

<PAGE>   9



                                                                      EXHIBIT A

<TABLE>
<CAPTION>


NAME                                                                                       TOTAL NUMBER OF WARRANTS
----                                                                                       ------------------------

<S>                                                                                                        <C>
Newpark Resources, Inc......................................................................................353,571

Cahill, Warnock Strategic Partners Fund, L.P................................................................323,044

Strategic Associates, L.P....................................................................................17,900

James H. Stone...............................................................................................12,628

</TABLE>


                                      A-1

<PAGE>   10



                                                                      EXHIBIT B
                              WARRANT CERTIFICATE

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR AN OPINION OF COUNSEL TO
THE COMPANY IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION. THIS WARRANT AND ITS
TRANSFERABLILITY IS FURTHER SUBJECT TO THAT CERTAIN WARRANT AGREEMENT DATED
DECEMBER 17,1997, A COPY OF WHICH IS ON FILE AT THE OFFICES OF ENVIRONMENTAL
SAFEGUARDS, INC.


Warrant No. W-_____                                                  To Purchase
                                                             _________ Shares of
                                                                    Common Stock


                         ENVIRONMENTAL SAFEGUARDS, INC.
                     Incorporated Under the Laws of Nevada

         This certifies that, for value received, the hereafter named
registered owner is entitled, subject to the terms and conditions of this
Warrant, until the expiration date, to purchase the number of shares subject to
adjustment set forth above of the common stock ("Common Stock"), of
Environmental Safeguards, Inc. ("Corporation") from the Corporation at the
purchase price per share hereafter set forth, on delivery of this Warrant to
the Corporation with the form of subscription duly executed and payment of the
purchase price pursuant to Section 2 of that certain Warrant Agreement between
the parties thereto dated as of December 17, 1997. This Warrant is subject to
the terms of the Warrant Agreement between the parties, the terms of which are
hereby incorporated herein. Reference is hereby made to such Warrant Agreement
for a further statement of the rights of the holder of this Warrant.

Registered Owner:          _________                     Date: December 17, 1997

Purchase Price
  Per Share:               $.01

Expiration Date:     Subject to Section 2 of the Warrant Agreement, 5:00 p.m.
                     Houston, Texas time on December 16, 2007.

         WITNESS the signature of the Corporation's authorized officer:

                                               ENVIRONMENTAL SAFEGUARDS, INC.


                                               By /s/ James S. Percell
                                                  -----------------------------
                                                  JAMES S. PERCELL, President

                                      B-2

<PAGE>   11


                              FORM OF SUBSCRIPTION
                  (To be signed only upon exercise of Warrant)


To Environmental Safeguards, Inc.

         The undersigned, the holder of the enclosed Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _________* shares of Common Stock of
Environmental Safeguards, Inc. and herewith makes payment of $_______________
therefor, and requests that the certificate or certificates for such shares be
issued in the name of and delivered to the undersigned.

Dated:______________


                                -------------------------------------------
                                (Signature must conform in all respects to
                                name of holder as specified on the face of
                                the enclosed Warrant)


                                --------------------------------------------
                                (Address)








---------------------------

(*)      Insert here the number of shares called for on the face of the Warrant
         or, in the case of a partial exercise, the portion thereof as to which
         the Warrant is being exercised, in either case without making any
         adjustment for additional Common Stock or any other stock or other
         securities or property or cash which, pursuant to the adjustment
         provisions of the Warrant Agreement pursuant to which the Warrant was
         granted, may be delivered upon exercise.


                                      B-3