EXHIBIT 11
-----------------------------------------------------------------------
CO-SALE AGREEMENT
DATED AS OF DECEMBER 17, 1997
-----------------------------------------------------------------------
CO-SALE AGREEMENT
CO-SALE AGREEMENT dated as of December 17, 1997 (this "Agreement'), by and
among Xxxxx Xxxxxxx ("Xxxxxxx") and each of the persons listed on the signature
page hereto under the caption "Purchasers" (collectively, the "Purchasers").
W I T N E S S E T H
WHEREAS, Environmental Safeguards, Inc. (the "Company") and the Purchasers
have entered into that certain Series B Convertible Preferred Stock Purchase
Agreement, dated as of November 17, 1997 (the "Purchase Agreement'), pursuant to
which the Company has agreed to sell, and the Purchasers have agreed to purchase
shares of Series B Convertible Preferred Stock ("Preferred Stock"), which shall
be convertible into shares of the Company's common stock, par value of $0.001
per share (the "Common Stock") (as converted from Preferred Stock the
("Conversion Shares").
WHEREAS, Xxxxxxx is the President of the Company and a major shareholder of
the Company; and
WHEREAS, as a condition to the obligations set forth in the Purchase
Agreement, each of the parties hereto has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Xxxxxxx and the Purchasers agree as
follows:
SECTION 1
TAG-ALONG RIGHTS
1.1 Right to Sell Proportionate Number of Shares of Common Stock. Xxxxxxx
------------------------------------------------------------
and each of the Purchasers agree that, if he or it shall receive and determine
to accept any bona fide written offer (a "Notice of Offer") from a Buyer to
---- ----
purchaser or otherwise acquire for value, in one transaction or a series of
related transactions, shares of Common Stock (the "Offer Shares") beneficially
owned by him or it and representing 35% or more of all of the then issued and
outstanding Common Stock of the Company beneficially owned by each of them, each
of the other parties to this Agreement shall have the right to participate in
such transaction in the manner set forth in this Agreement. The term "Buyer,"
as used herein, means a person or entity, other than one or the parties to this
Agreement or any person or entity directly or indirectly controlling, controlled
by or under direct or indirect common control or, in the case of the Purchasers,
a partner, of each of the parties to this Agreement, that has offered to
purchase or otherwise acquire for value shares of Common Stock of the Company
(other than in connection with a registered public offering).
-2-
1.2 Notifications. Each of the parties shall, promptly after receipt of a
-------------
Notice of Offer (and in any event not later than 10 days after such receipt),
send a copy thereof to each of the other parties to this Agreement. The
delivery of such Notice of Offer shall be effected not less than 30 days prior
to the closing of such proposed sale or other acquisition. Upon receipt of a
Notice of Offer, each of the other parties shall have 15 days to deliver a
written notice of its election to participate in such sale or other acquisition
and of the number of its shares to be included in such sale or other acquisition
and which shares shall be converted into Conversion Shares (if applicable),
subject to and effective upon the closing of such sale or other acquisition. If
such written notice of election is not received from the other parties within
the 15-day period specified above, then the party who received the Notice of
Offer shall have the right to sell or otherwise transfer the aforesaid Common
stock to the Buyer without any participation by such other parties, but only (a)
on the terms and conditions stated in the Notice of Offer and (b) if the sale or
other transfer is consummated not later than 30 days after the end of the
aforesaid 30-day period.
1.3 Selling a Proportionate Number of Shares of Common Stock. In the
--------------------------------------------------------
event the number of shares for which a party elects to sell pursuant to a Notice
of Offer exceeds the number of shares which the Buyer is willing to purchase,
the number of shares to be sold or transferred to the Buyer by each transferor
shall be reduced so that each transferor is entitled to sell or transfer the
same percentage of its shares as each other transferor.
1.4 Purchase Price. The purchase price and the terms of the purchase or
--------------
other acquisition for each transferor shall be the same as the purchase price
and terms set forth in such Notice of Offer.
1.5 Closing of Sale. Each party in respect of a Notice of Offer shall
----------------
delivery to the Buyer in respect of such Notice of Offer, against payment of the
total purchase price, on the closing date specified in such Notice of Offer, a
certificate or certificates representing the number of such shares which he or
it has elected to sell pursuant to this Agreement, together with appropriate
instruments of transfer duly endorsed in blank.
SECTION 2
ENTIRE AGREEMENT
This Agreement and the other documents referenced herein contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede any and all prior agreements and understandings, both written and
oral, with respect thereto.
SECTION 3
SEVERABILITY
It is the desire and intent of the parties that the provisions of this
Agreement been enforced to the fullest extent possible under the law and public
policies applied in each
-3-
jurisdiction in which enforcement is sought. Accordingly, in the event that any
provision of this Agreement would be held in any jurisdiction to be invalid,
prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining provision
of this Agreement or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 4
GOVERNING LAW
This Agreement shall be construed in accordance with and governed by the
laws of the State of Maryland, without giving effect to the principles of
conflicts of laws thereof.
SECTION 5
TERM
This Agreement shall terminate 365 days after the closing of the Purchase
Agreement.
SECTION 7
COUNTERPARTS
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereof and
hereto were upon the same instrument.
SECTION 8
NOTICE
Any notices or other communications required or permitted hereunder shall
be sufficient given if in writing and delivered in person, transmitted or
facsimile transmission (fax) or sent by registered or certified mail (return
receipt requested) or recognized overnight delivery service, postage pre-paid,
addressed as follows, or to such other address has such party may notify tot he
other parties in writing:
(a) if to Xxxxx Xxxxxxx:
Environmental Safeguards, Inc.
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxxx, Xxxxx & Xxxxxxxxx
0000 Xxxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
-4-
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
(b) if to the Purchasers:
c/x Xxxxxx, Xxxxxxx & Company
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
A notice or communication will be effective (i) if delivered in person or by
overnight courier, on the business day it is delivered, (ii) if transmitted by
telecopier, on the business day of actual confirmed receipt by the addressee
thereof, and (iii) if sent by registered or certified mail, three (3) business
day after dispatch.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
---------------------------------------------
PURCHASERS:
XXXXXX, XXXXXXX STRATEGIC PARTNERS FUND, L.P.
By: XXXXXX XXXXXXX STRATEGIC PARTNERS, L.P.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: a General Partner
STRATEGIC ASSOCIATES, L.P.
By: XXXXXX, XXXXXXX & COMPANY, LLC, its
General Partner
-5-
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Member
NEWPARK RESOURCES, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
Title: Chairman of the Board, President
and Chief Executive Officer
XXXXX X. XXXXX
/s/ Xxxxx X. Xxxxx
---------------------------------------------
