Document:

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                                                                     Exhibit 4.1

                                                                  Execution Copy

             CERTIFICATE OF DESIGNATIONS, PREFERENCES, AND RIGHTS
                                      of
                           SERIES A PREFERRED STOCK,
                         SERIES B PREFERRED STOCK, AND
                           SERIES C PREFERRED STOCK
                                      of

                               SAFESCIENCE, INC.

          We, Bradley J. Carver and John W. Burns, the President and the
Secretary, respectively, of SafeScience, Inc., a corporation organized and
existing under the laws of the State of Nevada (the "Corporation"), in
                                                     -----------
accordance with the provisions of Section 78.1955 of the Nevada Revised
Statutes, DO HEREBY CERTIFY:

          That pursuant to the authority conferred upon the Board of Directors
of the Corporation (the "Board of Directors") by the Articles of Incorporation
                         ------------------
of the Corporation and by Section 78.195 of the Nevada Revised Statutes, on June
22, 2001, the Board of Directors adopted the following resolution, creating
three series of shares of preferred stock designated as the "Series A Preferred
Stock", the "Series B Preferred Stock", and the "Series C Preferred Stock":

     "RESOLVED, that pursuant to the authority vested in the Board of Directors
     (the "Board of Directors") of SafeScience, Inc., a corporation organized
           ------------------
     and existing under the laws of the State of Nevada (the "Corporation"), by
                                                              -----------
     the Certificate of Incorporation of the Corporation (the "Certificate of
                                                               --------------
     Incorporation"), the Board of Directors does hereby provide for the
     -------------
     issuance of (i) a series of preferred stock, par value U.S.$0.01 per share,
     of the Corporation, to be designated "Series A Preferred Stock", initially
                                           ------------------------
     consisting of 7,500 shares, (ii) a series of preferred stock, par value
     U.S.$0.01 per share, of the Corporation, to be designated "Series B
                                                                --------
     Preferred Stock", initially consisting of 10,000 shares, and (iii) a series
     ---------------
     of preferred stock, par value U.S.$0.01 per share, of the Corporation, to
     be designated "Series C Preferred Stock", initially consisting of 1,117
                    ------------------------
     shares, and to the extent that the designations, powers, preferences, and
     relative participating, optional, or other special rights, and the
     qualifications, limitations, and restrictions of the Series A Preferred
     Stock, the Series B Preferred Stock, and the Series C Preferred Stock are
     not stated and expressed in the Certificate of Incorporation, the Board of
     Directors does hereby fix and herein state and express such designations,
     powers, preferences, and relative participating, optional, or other special
     rights, and the qualifications, limitations, and restrictions thereof, as
     follows (respectively, the "Series A Designation", the "Series B
                                 --------------------        --------
     Designation", and the "Series C Designation"):
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                                   Article I

                    Designation of Series A Preferred Stock

          1.   Designation and Rank.
               --------------------

               (a) 7,500 shares of the preferred stock of the Corporation shall
     be designated and known as the "Series A Preferred Stock".  Such number of
                                     ------------------------
     shares may not be increased or decreased without obtaining the consent of a
     majority in interest of the holders of the then-outstanding shares of
     Series A Preferred Stock, except as set forth in Section 15 below;

     provided, that no decrease shall reduce the number of shares of Series A
     --------
     Preferred Stock to a number less than the number of shares then outstanding
     plus the number of such shares issuable upon exercise of outstanding
     rights, options or warrants or upon conversion of outstanding securities
     issued by the Corporation.

               (b) The Series A Preferred Stock shall rank senior and prior to
     the Common Stock, par value U.S.$0.01, of the Corporation (the "Common
                                                                     ------
     Stock") and, except as otherwise provided herein, all other classes or
     -----
     series of the capital stock of the Corporation (now or hereafter authorized
     or issued), with respect to the payment of any dividends and to any payment
     upon liquidation or redemption; provided, that the Series A Preferred Stock
                                     --------
     shall rank pari passu with the Series B Preferred Stock with respect to the
     payment of any dividends and to any payment and upon liquidation or
     redemption.

          2.   Dividend Rights.
               ---------------

               (a) Dividend Preference.  From and after the Series A Original
                   -------------------
     Issue Date (as defined in Section 4(e) of this Series A Designation), when
     and if the Board of Directors of the Corporation declares a dividend or
     distribution payable with respect to (i) the Common Stock or any other
     capital stock or security issued by the Corporation which is junior to the
     Series A Preferred Stock as to such dividends or distributions, such
     dividend or distribution shall not be paid until the payment to the holders
     of the Series A Preferred Stock of all dividends or distributions accrued
     or to be accrued through that date, or (ii) the then-outstanding capital
     stock of the Corporation that is pari passu to the Series A Preferred Stock
     as to such dividends or distributions, such dividends or distributions
     shall not be paid unless an equivalent payment is made to the holders of
     the Series A Preferred Stock pro rata on the accrued and unpaid dividends
     or distributions payable to the Series A Preferred Stock as of the date of
     such payment.

               (b) Discretionary Dividends.  From and after the date hereof,
                   -----------------------
     when and if the Board of Directors declares a dividend or distribution
     payable with respect to the then-outstanding shares of Common Stock, the
     holders of the Series A Preferred Stock shall be entitled to the amount of
     dividends per share in

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     the same form as such Common Stock dividends that would be payable on the
     largest number of whole shares of Common Stock into which a holder's
     aggregate shares of Series A Preferred Stock could then be converted
     pursuant to Section 4 of this Article I (such number to be determined as of
     the record date for the determination of holders of Common Stock entitled
     to receive such dividend).

               (c) Mandatory Dividends.  In addition to Section 2(b) above, each
                   -------------------
     share of Series A Preferred Stock, shall be entitled to receive a mandatory
     dividend equal to 7% of the Series A Liquidation Preference (as defined
     below), per annum, compounded annually on each succeeding 12 month
     anniversary of the first issuance.  Such dividend shall be cumulative and
     shall be payable annually on each succeeding 12 month anniversary of the
     first issuance and shall be payable solely by the issuance of additional
     shares of Series A Preferred Stock at a price per share equal to
     U.S.$2,430.00 (the "Series A Original Issue Price") and not in cash;
                         -----------------------------
     provided, that such dividend shall not be declared or paid to any holder
     --------
     without the prior, written consent of such holder.  Fractional shares of
     the Series A Preferred Stock shall be issuable for all purposes hereunder.

          3.  Liquidation Rights.
              ------------------

               (a)  Liquidation Events.  The occurrence of any of the following
                    ------------------
     events shall be deemed a "Liquidation":  (i) any liquidation, dissolution,
                               -----------
     or winding-up of the affairs of the Corporation; (ii) any consolidation or
     merger of the Corporation with or into any other corporation or other
     entity or person, or any other corporate reorganization, in which the
     stockholders of the Corporation immediately prior to such consolidation,
     merger or reorganization, own less than 50% of the outstanding voting
     securities of the surviving or resulting entity immediately after such
     consolidation, merger or reorganization (a "Merger Event"); (iii) any
                                                 ------------
     transaction or series of related transactions in which securities of the
     Corporation representing 50% or more of the combined voting power of the
     Corporation's then outstanding voting securities are acquired by a person,
     entity or group of related persons or entities, excluding any consolidation
     or merger effected exclusively to change the domicile of the Corporation;
     or (iv) any sale, lease, exclusive license or other disposition of all or
     substantially all of the assets of the Corporation.

               (b)  Liquidation Preference.
                    ----------------------

                    (i) In the event of any Liquidation, whether voluntary or
     involuntary, before any payment of cash or distribution of other property
     shall be made to the holders of Common Stock, or any other class or series
     of stock subordinate in liquidation preference to the Series A Preferred
     Stock, the holders of the Series A Preferred Stock shall be entitled to
     receive out of the assets of the Corporation legally available for
     distribution to its stockholders, on behalf of each share of Series A
     Preferred Stock held by such holder, the Series A Original Issue Price (as
     appropriately adjusted for any combinations, divisions, or similar

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     recapitalizations affecting the capital stock after issuance) and all
     accrued and unpaid dividends thereon (collectively, the "Series A
                                                              --------
     Liquidation Preference").
     ----------------------

                    (ii)   If, upon any Liquidation, the assets of the
     Corporation available for distribution to its stockholders are insufficient
     to pay the holders of the Series A Preferred Stock the Series A Liquidation
     Preference in full, the holders of the Series A Preferred Stock shall share
     pro rata in any distribution of assets in proportion to the respective
     amounts which would be payable to the holders of the Series A Preferred
     Stock and any other class or series of capital stock of the Corporation
     ranking pari passu with the Series A Preferred Stock in respect of the
     shares held by them.

                    (iii)  After the distributions described in clause (b)(i)
     above have been paid, subject to the rights of any other class or series of
     capital stock of the Corporation that may from time to time come into
     existence, the remaining assets of the Corporation available for
     distribution to stockholders shall be distributed among the holders of
     Common Stock, the holders of the Series A Preferred Stock, and the holders
     of any other class or series of capital stock of the Corporation entitled
     to share in such distribution pro rata based on the number of shares of
     Common Stock held by each, assuming conversion of any other class or series
     of capital stock of the Corporation convertible into shares of Common
     Stock.

               (c)  Non-Cash Distributions.  If any distribution to be made
                    ----------------------
     pursuant to this Section 3 is to be paid other than in cash, the value of
     such distribution will be deemed its fair market value as determined in
     good faith by the Board of Directors.  Any securities shall be valued as
     follows:

                    (i)    Securities not subject to investment letter or other
     similar restrictions on free marketability covered by clause (ii) below:

                         (A) if traded on a securities exchange or through the
     Nasdaq National Market, the value shall be deemed to be the average of the
     closing prices of the securities on such quotation system over the thirty
     (30) trading day period ending three (3) trading days prior to the
     occurrence of the Liquidation;

                         (B) if actively traded over-the-counter, the value
     shall be deemed to be the average of the closing bid or sale prices
     (whichever is applicable) over the thirty (30) trading day period ending
     three (3) trading days prior to the occurrence of the Liquidation; and

                         (C) if there is no active public market, the value
     shall be the fair market value thereof, as determined by the Board of
     Directors, subject to the approval of holders of at least a majority of the
     then-outstanding shares of Series A Preferred Stock, as of the occurrence
     of the Liquidation.

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                    (ii)   The method of valuation of securities subject to
     investment letter or other restrictions on free marketability (other than
     restrictions arising solely by virtue of a stockholder's status as an
     affiliate or former affiliate) shall be to effectuate an appropriate
     discount from the market value, as determined by clauses (i)(A), (B) or (C)
     of this Section 3(c), so as to reflect the approximate fair market value
     thereof, as determined by the Board of Directors, subject to the approval
     of holders of at least a majority of the then-outstanding shares of such
     Series A Preferred Stock, as of the occurrence of the Liquidation.

               (d) Dispute as to Value of Non-Cash Distributions.  If holders of
                   ---------------------------------------------
     at least a majority of the then-outstanding shares of Series A Preferred
     Stock do not approve the determination, pursuant to clauses (c)(i)(C) or
     (c)(ii) of this Section 3, of the Board of Directors as to valuation, the
     Corporation and the holders of at least a majority of the then-outstanding
     shares of Series A Preferred Stock shall mutually agree upon and appoint,
     as an appraiser, a nationally-recognized investment banking firm, which
     shall be commissioned to investigate the value of the property to be
     distributed and shall submit a notice of an appraisal of that value to the
     Corporation and each holder of Series A Preferred Stock within 30 days of
     such commission.  The appraiser shall be instructed to determine such value
     without regard to income tax consequences to the recipient as a result of
     receiving consideration other than cash.  The value determined by the
     appraiser shall be conclusive.  If the appraised value varies by less than
     7.5% from the value determined by the Board of Directors, the aggregate
     amount to be distributed shall be reduced by the expense of the appraisal
     process and if the appraised value varies by 7.5% or more from the value
     determined by the Corporation's Board of Directors, the expense of the
     appraisal process shall be borne by the Corporation.

          4.   Conversion Rights.  The holders of the Series A Preferred Stock
               -----------------
     shall have conversion rights as follows (the "Series A Conversion Right"):
                                                   -------------------------

               (a) Series A Conversion Price.  The "Series A Conversion Price"
                   -------------------------
     shall, initially, be U.S.$2.43 per share and shall be subject to adjustment
     as set forth below in Section 4(e).

               (b) Optional Conversion.  Each share of Series A Preferred Stock
                   -------------------
     shall be convertible, at the option of the holder thereof (subject to
     regulatory approvals), at any time after the second anniversary of the
     Series A Original Issue Date (as defined below) that is at least two years
     after the issuance thereof, at the office of the Corporation or any
     transfer agent for such stock, into such number of fully paid and non-
     assessable shares of Common Stock as is determined by dividing (x) the
     Series A Liquidation Preference of such share of Series A Preferred Stock
     (including any accrued but unpaid dividends thereon) by (y) the Series A
     Conversion Price (as defined above).

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                    (c)  Required Conversion. Notwithstanding the above, in the
                         -------------------
     event that there shall occur any Merger Event, at the option of the
     Corporation or the holders of at least a majority of the then-outstanding
     shares of Series A Preferred Stock and subject to applicable regulatory
     approvals, the outstanding shares of the Series A Preferred Stock shall,
     immediately prior to the consummation thereof, be converted into the same
     number of shares of Common Stock into which such shares are convertible
     pursuant to Section 4(b) (a "Series A Required Conversion"); provided, that
                                  ----------------------------    --------
     in the event of a Series A Required Conversion, the Common Stock delivered
     upon such conversion shall have the benefit of the Exchange Right (as
     defined in Section 5 below).

                    (d)  Mechanics of Conversion. In order to exercise the
                         -----------------------
     Series A Conversion Right pursuant to Section 4(b), a holder of Series A
     Preferred Stock shall provide written notice to the Corporation, setting
     forth (i) such holder's intent to exercise the Series A Conversion Right,
     and (ii) the proposed date for such exercise (the "Series A Conversion
                                                        -------------------
     Date"), which shall be between 10 and 30 days after the date of such
     ----
     notice. If a Merger Event occurs and, pursuant to Section 4(c), a Series A
     Required Conversion is elected by the Corporation or holders of at least a
     majority of the then-outstanding shares of Series A Preferred Stock, the
     Corporation shall notify in writing all holders of Series A Preferred Stock
     of such Series A Required Conversion and the date of such Merger Event
     shall be referred to as the "Series A Required Conversion Date". On the
                                  ---------------------------------
     Series A Conversion Date or the Series A Required Conversion Date, as the
     case may be, (i) the holder (and in the case of a Series A Required
     Conversion, each holder) shall tender such holder's shares of Series A
     Preferred Stock to the Corporation for cancellation, free and clear of
     encumbrances of any type or nature, and (ii) the Corporation shall cause to
     be delivered to such holder, a number of shares of Common Stock as
     calculated pursuant to Section 4(b) above, free and clear of encumbrances
     of any type or nature. Each holder and the Corporation shall take all other
     necessary or appropriate actions in connection with or to effect such
     closing.

                    (e)  Certain Adjustments.
                         -------------------

                    (i)  Sale of Shares Below Fair Market Value.
                         --------------------------------------

                         (A)  Sale of Additional Shares. If at any time or from
     time to time after the date that the first share of Series A Preferred
     Stock is issued (the "Series A Original Issue Date"), the Corporation
                           ----------------------------
     issues or sells, or is deemed by the express provisions of this subsection
     4(e)(i) to have issued or sold, Additional Shares of Common Stock (as
     defined in clause (D) below), other than as a dividend or other
     distribution on any class of stock as provided in Section 4(e)(ii) below,
     and other than a subdivision or combination of shares of Common Stock as
     provided in Section 4(e)(iii) below, for an Effective Price (as defined in
     clause (D) below) that is less than the lower of (x) the Series A
     Conversion Price then in effect and (y) the Fair Market Value of a share of
     Common Stock (as

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     defined in Section 6(a) below) (the "Series A ADP Price"), then and in each
     such case, the then-existing Series A Conversion Price shall be reduced, as
     of the opening of business on the date of such issuance or sale, to a price
     determined by multiplying the Series A Conversion Price by a fraction (x)
     the numerator of which shall be (I) the number of shares of Common Stock
     deemed outstanding immediately prior to such issuance or sale, plus (II)
     the number of shares of Common Stock which the aggregate consideration
     received (as defined in clause (B) below) by the Corporation for the total
     number of Additional Shares of Common Stock so issued would purchase at the
     then-applicable Series A ADP Price, and (y) the denominator of which shall
     be the number of shares of Common Stock deemed outstanding immediately
     prior to such issue or sale plus the total number of Additional Shares of
     Common Stock so issued. For the purposes of the preceding sentence, the
     number of shares of Common Stock deemed to be outstanding as of a given
     date shall be the sum of (I) the number of shares of Common Stock actually
     outstanding and (II) the number of shares of Common Stock into which all
     then-outstanding shares of capital stock of the Corporation convertible
     into shares of Common Stock could be converted if fully converted on the
     day immediately preceding the given date. No adjustment shall be made to
     the Series A Conversion Price in an amount less than U.S.$0.01 per share.
     Any adjustment otherwise required by this Section 4(e)(i) that is not
     required to be made due to the preceding sentence shall be included in any
     subsequent adjustment to the Series A Conversion Price.

                         (B)  Consideration Received for Additional Shares. For
                              --------------------------------------------
     the purpose of making any adjustment required under this Section 4(e)(i),
     the consideration received by the Corporation for any issue or sale of
     securities shall (x) to the extent it consists of cash, be computed at the
     net amount of cash received by the Corporation after deduction of any
     underwriting or similar commissions, compensation or concessions paid or
     allowed by the Corporation in connection with such issue or sale but
     without deduction of any expenses payable by the Corporation, and (y) to
     the extent it consists of property other than cash, be computed at the fair
     value of that property as determined, in good faith, by the Board of
     Directors. If Additional Shares of Common Stock, Convertible Securities (as
     defined in clause (C) below) or rights, warrants or options to purchase
     either Additional Shares of Common Stock or Convertible Securities are
     issued or sold together with other stock or securities or other assets of
     the Corporation for a consideration which covers both, the consideration
     received by the Corporation for such issuance or sale of Additional Shares
     of Common Stock, Convertible Securities or rights, warrants or options to
     purchase either Additional Shares of Common Stock or Convertible Securities
     shall be computed as the portion of the consideration so received that may
     be reasonably determined, in good faith, by the Board of Directors to be
     allocable to such Additional Shares of Common Stock, Convertible Securities
     or rights, warrants or options and shall be reasonably agreed to by holders
     of at least a majority of the Series A Preferred Stock; provided, that in
                                                             --------
     the event the Corporation and the holders of at least a

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     majority of the Series A Preferred Stock do not agree on the value of such
     consideration, the parties shall jointly appoint an independent third party
     to determine such value pursuant to the procedure set forth in Section 3(d)
     of this Series A Designation.

                    (C) Securities Convertible, Exchangeable and Exercisable for
                        --------------------------------------------------------
     Common Stock.  For the purpose of the adjustment required under this
     ------------
     Section 4(e)(i), if the Corporation issues or sells (i) stock or other
     securities convertible or exchangeable into Additional Shares of Common
     Stock (such convertible or exchangeable stock or securities being herein
     referred to as "Convertible Securities"), or (ii) rights, warrants or
                     ----------------------
     options for the purchase of Additional Shares of Common Stock or
     Convertible Securities and if the Effective Price of such Additional Shares
     of Common Stock is less than the then-applicable Series A ADP Price, in
     each case the Corporation shall be deemed to have issued at the time of the
     issuance of such rights, warrants or options or Convertible Securities the
     maximum number of Additional Shares of Common Stock issuable upon exercise,
     exchange, or conversion thereof and to have received as consideration for
     the issuance of such shares an amount equal to the total amount of the
     consideration, if any, received by the Corporation for the issuance of such
     rights, warrants or options or Convertible Securities, (A) plus, in the
     case of such rights, warrants or options, the minimum amounts of
     consideration, if any, payable to the Corporation upon the exercise of such
     rights, warrants or options (without respect to any "cashless" exercise
     provision), (B) plus, in the case of Convertible Securities, the minimum
     amounts of consideration, if any, payable to the Corporation (other than by
     cancellation of liabilities or obligations evidenced by such Convertible
     Securities) upon the conversion or exchange thereof; provided, that if in
                                                          --------
     the case of Convertible Securities the minimum amounts of such
     consideration cannot be ascertained, but are a function of anti-dilution or
     similar protective clauses, the Corporation shall be deemed to have
     received the minimum amounts of consideration without reference to such
     clauses; provided further, that if the minimum amount of consideration
              ----------------
     payable to the Corporation upon the exercise, exchange or conversion of
     rights, warrants, options or Convertible Securities is reduced over time or
     on the occurrence or non-occurrence of specified events (other than by
     reason of anti-dilution adjustments), the Effective Price shall be
     recalculated using the figure to which such minimum amount of consideration
     is reduced; provided further, that if the minimum amount of consideration
                 ----------------
     payable to the Corporation upon the exercise, exchange or conversion of
     such rights, warrants, options or Convertible Securities is subsequently
     increased, the Effective Price shall be again recalculated using the
     increased minimum amount of consideration payable to the Corporation upon
     the exercise, exchange or conversion of such rights, warrants, options or
     Convertible Securities.  No further adjustment of the Series A Conversion
     Price, as adjusted upon the issuance of such rights, options or Convertible
     Securities, shall be made as a result of the actual issuance of Additional
     Shares of Common Stock on the exercise of any such rights, warrants,
     options or the conversion or exchange of any

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     such Convertible Securities. If any such rights, warrants or options or the
     conversion or exchange privilege represented by any such Convertible
     Securities shall expire without having been exercised, the Series A
     Conversion Price as adjusted upon the issuance of such rights, warrants,
     options or Convertible Securities shall be readjusted to the Series A
     Conversion Price which would have been in effect had an adjustment been
     made on the basis that the only Additional Shares of Common Stock so issued
     were the Additional Shares of Common Stock, if any, actually issued or sold
     on the exercise of such rights, warrants or options or rights of conversion
     or exchange of such Convertible Securities, and such Additional Shares of
     Common Stock, if any, were issued or sold for the consideration actually
     received by the Corporation upon such exercise, plus the consideration, if
     any, actually received by the Corporation for the granting of all such
     rights, warrants or options, whether or not exercised, plus the
     consideration received for issuing or selling the Convertible Securities
     actually converted or exchanged, plus the consideration, if any, actually
     received by the Corporation (other than by cancellation of liabilities or
     obligations evidenced by such Convertible Securities) upon the conversion
     or exchange of such Convertible Securities; provided, that such
                                                 --------
     readjustment shall not apply to prior conversions of Series A Preferred
     Stock.

                    (D) Certain Definitions. "Additional Shares of Common Stock"
                        -------------------   ---------------------------------
     shall mean all shares of Common Stock issued by the Corporation or deemed
     to be issued pursuant to this Section 4(e)(i) or, as applicable, Section
     4(e)(i) of the Series B Designation, other than (i) shares of Common Stock
     issued upon conversion of the Series A Preferred Stock, the Series B
     Preferred Stock, or the Series C Preferred Stock, (ii) shares of Common
     Stock and/or options, warrants or other Common Stock purchase rights, and
     the Common Stock issued pursuant to such options, warrants or other rights
     (as adjusted for any stock dividends, combinations, splits,
     recapitalizations and the like) after the Series A Original Issue Date or,
     as applicable, the Series B Original Issue Date (as defined in Article II)
     to employees, officers or directors of, or consultants or advisors to the
     Corporation pursuant to stock purchase or stock option plans or other
     arrangements that are approved by the Board of Directors (which approval
     must include a member of the Board of Directors nominated by any holder of
     a majority of the Series A Preferred Stock or, as applicable, the Series B
     Preferred Stock to the extent such stock purchase or stock option plan or
     other arrangement is approved by the Board of Directors after the Series A
     Original Issue Date or, as applicable, the Series B Original Issue Date),
     and (iii) shares of Common Stock issued upon exercise of warrants or
     options (as adjusted for any stock dividends, combinations, splits,
     recapitalizations and the like) issued by the Corporation prior to the
     Series A Original Issue Date or, as applicable, the Series B Original Issue
     Date. References to Common Stock in the subsections of this clause (D)
     above shall mean all shares of Common Stock issued by the Corporation or
     deemed to be issued pursuant to this Section 4(e)(i) of this Series A
     Designation or, as applicable, Section 4(e)(i) of the Series B Designation.
     The

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     "Effective Price" of Additional Shares of Common Stock shall mean the
      ---------------
     quotient determined by dividing the total number of Additional Shares of
     Common Stock issued or sold, or deemed to have been issued or sold by the
     Corporation under this Section 4(e)(i) of this Series A Designation or, as
     applicable, Section 4(e)(i) of the Series B Designation, into the aggregate
     consideration received, or deemed to have been received by the Corporation
     for such issue under this Section 4(e)(i) of this Series A Designation or,
     as applicable, Section 4(e)(i) of the Series B Designation, for such
     Additional Shares of Common Stock.

               (ii)   Adjustment for Common Stock Dividends and Distributions.
                      -------------------------------------------------------
     If, at any time after the Series A Original Issue Date, the Corporation
     makes, or fixes a record date for the determination of holders of Common
     Stock entitled to receive, a dividend or other distribution payable in
     additional shares of Common Stock, in each such event the Series A
     Conversion Price that is then in effect shall be decreased as of the time
     of such issuance or, in the event such record date is fixed, as of the
     close of business on such record date, by multiplying the Series A
     Conversion Price then in effect by a fraction (x) the numerator of which is
     the total number of shares of Common Stock issued and outstanding
     immediately prior to the time of such issuance or the close of business on
     such record date, and (y) the denominator of which is the total number of
     shares of Common Stock issued and outstanding immediately prior to the time
     of such issuance or the close of business on such record date plus the
     number of shares of Common Stock issuable in payment of such dividend or
     distribution; provided, that if such record date is fixed and such dividend
                   --------
     is not fully paid or if such distribution is not fully made on the date
     fixed therefor, the Series A Conversion Price shall be recomputed
     accordingly as of the close of business on such record date and thereafter
     the Series A Conversion Price shall be adjusted pursuant to this Section
     4(e)(ii) to reflect the actual payment of such dividend or distribution.

               (iii)  Adjustments for Stock Splits, Stock Subdivisions and
                      ----------------------------------------------------
     Combinations.  If, at any time after the Series A Original Issue Date, the
     ------------
     Corporation subdivides or combines the Common Stock, (A) in the case of a
     subdivision (including a stock split), the Series A Conversion Price in
     effect immediately prior to such event shall be proportionately decreased
     and the number of shares of Common Stock purchasable thereunder shall be
     proportionately increased, and (B) in the case of a combination (including
     a reverse stock split), the Series A Conversion Price in effect immediately
     prior to such event shall be proportionately increased and the number of
     shares of Common Stock purchasable thereunder shall be proportionately
     decreased. Any adjustment under this Section 4(e)(iii) shall become
     effective at the close of business on the date the subdivision or
     combination becomes effective.

               (iv)   Adjustments for Reclassification, Reorganization and
                      ----------------------------------------------------
     Consolidation.  In case of (A) any reclassification, reorganization,
     -------------
     change,

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     exchange or conversion of securities of the class issuable upon conversion
     of the Series A Preferred Stock (other than a change in par value, or from
     par value to no par value) into other shares or securities of the
     Corporation, or (B) any merger or consolidation of the Corporation with or
     into another entity (other than a merger or consolidation with another
     entity in which the Corporation is the acquiring and the surviving entity
     and that does not result in any reclassification or change of outstanding
     securities issuable upon conversion of the Series A Preferred Stock), or
     (C) any sale of all or substantially all the assets of the Corporation,
     each holder of shares of Series A Preferred Stock shall have the right to
     receive, in lieu of the shares of Common Stock otherwise issuable upon the
     conversion of its shares of Series A Preferred Stock and accumulated and
     unpaid dividends then-outstanding thereunder, the kind and amount of shares
     of stock and other securities, money and property receivable upon such
     reclassification, reorganization, change, merger, consolidation or
     conversion by a holder of the maximum number of shares of Common Stock into
     which such shares of Series A Preferred Stock could have been converted
     immediately prior to such reclassification, reorganization, change, merger,
     consolidation or conversion, all subject to further adjustment as provided
     herein or with respect to such other securities or property by the terms
     thereof. The provisions of this clause (iv) shall similarly attach to
     successive reclassifications, reorganizations, changes, and conversions.

          5.   Exchange Right.
               --------------

               (a)  The original purchaser (or any of its affiliates) of the
     Series A Preferred Stock shall have the right, exercisable at its (or their
     individual) option at any time following the Series A Original Issue Date,
     to exchange (the "Exchange Right") all of the shares of Series A Preferred
                       --------------
     Stock for all the non-voting convertible preferred shares ("Newco Preferred
                                                                 ---------------
     Shares") (as adjusted for any combinations or divisions or similar
     ------
     recapitalizations) of SafeScience Newco, Ltd., a Bermuda exempted limited
     liability company ("Newco"), held by the Corporation and which shall be
                         -----
     convertible into 50% of Newco's common shares on a fully diluted basis (or,
     if the Newco Preferred Shares shall have been converted by the Corporation
     pursuant to the terms thereof prior to the exercise of the Exchange Right,
     the Series A Preferred Stock shall be exchangeable for the common shares of
     Newco issued upon such conversion).

               (b)  Upon exercise of the Exchange Right, all shares of Series A
     Preferred Stock originally purchased from the Corporation, including shares
     of Series A Preferred Stock paid as dividends with respect thereto, shall
     be canceled and shall no longer be entitled to any rights in the
     Corporation.

               (c)  Upon exercise of the Exchange Right, any and all accrued and
     unpaid dividends upon shares of Series A Preferred Stock shall not be
     declared payable and shall not be due.

                                       11
<PAGE>

               (d)  Other than in the case of a Series A Required Conversion, if
     any shares of the Series A Preferred Stock are converted pursuant to
     Section 5(a) of this Article I, into shares of Common Stock, the Exchange
     Right with respect to the shares of Series A Preferred Stock originally
     purchased from the Corporation shall be canceled and shall no longer be
     entitled to any Exchange Right.  In the case of a Series A Required
     Conversion, the Exchange Right shall remain valid and enforceable.

               (e)  In order to exercise the Exchange Right, the holders of the
     Series A Preferred Stock shall provide written notice thereof to the
     Corporation, setting forth (i) the fact that such holders intend to
     exercise the Exchange Right, and (ii) the proposed date for such exercise
     (the "Exercise Date"), which shall be between 10 and 30 days after the date
           -------------
     of such notice.  On the Exercise Date, (i) the exercising holders shall
     tender all shares of Series A Preferred Stock to the Corporation for
     cancellation, free and clear of encumbrances of any type or nature, and
     (ii) the Corporation shall cause to be delivered to Elan International
     Services, Ltd., a Bermuda exempted limited liability company, acting on
     behalf of such holders, such shares of Newco, free and clear of
     encumbrances of any type or nature.  The holders of the Series A Preferred
     Stock and the Corporation shall take all other necessary or appropriate
     actions in connection with or to effect such closing.

          6.   Redemption.
               ----------

               (a)  To the extent the Corporation shall have funds legally
     available for such payment, on July ___, 2007, if any shares of the Series
     A Preferred Stock shall be outstanding, the Corporation shall redeem all
     outstanding shares of the Series A Preferred Stock, at a redemption price
     per share equal to the aggregate Series A Liquidation Preference, either
     (i) in cash, or (ii) by the issuance of shares of Common Stock with an
     aggregate Fair Market Value (as defined below) equal to such redemption
     price, in each case, together with any accrued and unpaid dividends thereon
     to the date fixed for redemption.  For the purposes of this Section 6 and
     Section 4(e)(i), the "Fair Market Value" of one share of Common Stock shall
                           -----------------
     be determined by the Board of Directors in good faith and certified in a
     board resolution (taking into account the most recently or concurrently
     completed arm's length transaction between the Corporation and an
     unaffiliated third party the closing of which occurs within the six months
     preceding or on the date of such calculation, if any) and shall be
     reasonably agreed to by a majority of the holders of the Series A Preferred
     Stock or, as applicable, the Series B Preferred Stock; provided, that in
                                                            --------
     the event the Corporation and a majority of holders of the Series A
     Preferred Stock or, as applicable, the Series B Preferred Stock do not
     agree on the Fair Market Value, the parties shall jointly appoint an
     independent third party appraiser to determine the Fair Market Value
     pursuant to the procedure set for in Section 3(d) hereof; provided further,
                                                               ----------------
     that in the event the Common Stock is traded on a securities exchange, the
     Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value
     shall be

                                       12
<PAGE>

     deemed to be the average of the closing sale prices for the Common Stock
     over the 30-day trading period (or such shorter period for which closing
     sale prices are available if the Common Stock commenced trading during such
     period) ending three (3) trading days prior to, in the case of this Section
     6, the date of notice of exercise of redemption pursuant to this Section 6
     and, in the case of Section 4(e)(i) or, as applicable, Section 4(e)(i) of
     the Series B Designation, the date of the sale of Additional Shares that
     results in an adjustment to the Series A Conversion Price pursuant to
     Section 4(e)(i) or, as applicable, the Series B Conversion Price (as
     defined in Article II) pursuant to Section 4(e)(i) of the Series B
     Designation.

               (b)  In the event the Corporation redeems shares of Series A
     Preferred Stock pursuant to Section 6(a), notice of such redemption shall
     be given by first class mail, postage prepaid, mailed not less than 10 days
     nor more than 20 days prior to the redemption date, to each holder of
     record of the shares of Series A Preferred Stock to be redeemed at such
     holder's address as the same appears on the stock register of the
     Corporation; provided, that neither the failure to give such notice, nor
                  --------
     any defect therein, shall affect the validity of the giving of notice for
     the redemption of any share of Series A Preferred Stock to be redeemed,
     except as to the holder to whom the Corporation has failed to give said
     notice or except as to the holder whose notice was defective.  Each such
     notice shall state:  (i) the redemption date; (ii) the number of shares of
     Series A Preferred Stock to be redeemed; (iii) the redemption price and the
     Fair Market Value of the Common Stock, if applicable; (iv) the place or
     places where certificates for such shares are to be surrendered for payment
     of the redemption price; and (v) that dividends on the shares to be
     redeemed will cease to accrue on such redemption date.

               (c)  In the case of any redemption pursuant to Section 6(a), as
     to which notice was properly mailed as provided in Section 6(b), from and
     after the redemption date (unless default shall be made by the Corporation
     in providing money for the payment of the redemption price of the shares
     called for redemption), dividends on the shares of Series A Preferred Stock
     so called for redemption shall cease to accrue, and all rights of the
     holders thereof as stockholders of the Corporation (except the right to
     receive from the Corporation the redemption price per share) shall cease.
     Upon surrender in accordance with said notice of the certificates for any
     shares so redeemed (properly endorsed or assigned for transfer, if the
     Board of Directors shall so require and the notice shall so state), such
     share shall be redeemed by the Corporation at the redemption price
     aforesaid.

          7.   Other Distributions.  In the event the Corporation provides the
               -------------------
     holders of its Common Stock with consideration that is not otherwise
     addressed in Section 4 of this Series A Designation (including, without
     limitation, declaring a distribution payable in securities of other
     persons, providing evidences of indebtedness issued by the Corporation or
     other persons, assets, cash (excluding cash dividends declared out of
     retained earnings)), then, in each such case, the holders of the Series A
     Preferred Stock shall be entitled to a pro rata share of any

                                       13
<PAGE>

     such distribution as though they were the holders of the number of shares
     of Common Stock of the Corporation into which their shares of Series A
     Preferred Stock would be convertible as of the record date fixed for the
     determination of the holders of Common Stock of the Corporation entitled to
     receive such distribution.

          8.   Recapitalizations. If at any time there occurs a recapitalization
               -----------------
     of the Common Stock (other than a subdivision, combination, or merger or
     sale of assets provided for in Section 4 of this Series A Designation), the
     holders of the Series A Preferred Stock shall be entitled to receive upon
     conversion of the Series A Preferred Stock the number of shares of capital
     stock or other securities or property of the Corporation or otherwise, to
     which a holder of the Common Stock deliverable upon conversion would have
     been entitled on such recapitalization. In any such case, appropriate
     adjustment shall be made in the application of the provisions of Section 4
     with respect to the rights of the holders of the Series A Preferred Stock
     after the recapitalization to the end that the provisions of Section 4
     (including adjustment of the Series A Conversion Price then in effect and
     the number of shares purchasable upon conversion of the Series A Preferred
     Stock) shall be applicable after that event as nearly equivalent as may be
     practicable.

          9.   No Impairment.
               -------------

               (a)  The Corporation shall not, by amendment of the Certificate
     of Incorporation or through any reorganization, recapitalization, transfer
     of assets, consolidation, merger, dissolution, issuance or sale of
     securities or any other voluntary action, avoid or seek to avoid the
     observance or performance of any of the terms to be observed or performed
     hereunder by the Corporation, but will at all times in good faith assist in
     the carrying out of all the provisions of this Certificate of Incorporation
     relating to the Series A Preferred Stock and in the taking of all such
     action as may be necessary or appropriate in order to protect the Series A
     Conversion Right, Exchange Right, and redemption rights of the holders of
     the Series A Preferred Stock against impairment.

               (b)  If the Corporation is unable or shall fail to discharge its
     obligations under Section 5 or Section 6(a) of this Series A Designation
     (each, an "Obligation"), such Obligation shall be discharged as soon as the
                ----------
     Corporation is able to discharge such Obligation.  If and so long as any
     Obligation with respect to the Series A Preferred Stock shall not be fully
     discharged, the Corporation shall not (i) directly or indirectly, redeem,
     purchase or otherwise acquire any classes or series of preferred stock with
     a liquidation preference, dividend or other rights senior or pari passu to
     the Series A Preferred Stock ("Senior and/or Parity Stock") or discharge
                                    --------------------------
     any mandatory or optional redemption, sinking fund or other similar
     obligation in respect of any Senior and/or Parity Stock (except in
     connection with a redemption, sinking fund or other similar obligation to
     be satisfied pro rata with the Series A Preferred Stock) or (ii) declare or
     make any distribution to any class or series of preferred stock with a
     liquidation preference, dividend or other rights

                                       14
<PAGE>

     junior to the Series A Preferred Stock or any other security which ranks
     junior to the Series A Preferred Stock (collectively, "Junior Securities")
                                                            -----------------
     or, directly or indirectly, discharge any mandatory or optional redemption,
     sinking fund, or other similar obligation in respect of any Junior
     Security.

          10.  No Fractional Shares and Certificate as to Adjustments.
               ------------------------------------------------------

               (a) No fractional shares shall be issued upon the conversion of
     any share or shares of the Series A Preferred Stock, and the number of
     shares of Common Stock to be issued shall be rounded to the nearest whole
     share.  Such rounding shall be determined on the basis of the aggregate
     number of shares of Series A Preferred Stock each holder is at the time
     converting into Common Stock and the aggregate number of shares of Common
     Stock issuable to each such holder upon such conversion.

               (b) Upon the occurrence of each adjustment or readjustment of the
     Series A Conversion Price pursuant to Section 4 of this Series A
     Designation, the Corporation, at its expense, shall promptly compute such
     adjustment or readjustment in accordance with the terms hereof and prepare
     and furnish to each holder of shares of Series A Preferred Stock a
     certificate setting forth such adjustment or readjustment and showing in
     detail the facts upon which such adjustment or readjustment is based.  The
     Corporation shall, upon the written request at any time of any holder of
     Series A Preferred Stock, furnish or cause to be furnished to such holder a
     like certificate setting forth (i) such adjustment or readjustment, (ii)
     the Series A Conversion Price at the time in effect, and (iii) the number
     of shares of Common Stock and the amount, if any, of other property which
     at the time would be received upon the conversion of a share of Series A
     Preferred Stock.

          11.  Reservation of Stock Issuable Upon Conversion.  The Corporation
               ---------------------------------------------
     shall at all times reserve and keep available out of its authorized but
     unissued shares of Common Stock, solely for the purposes of effecting the
     conversion of the shares of the Series A Preferred Stock or paying any
     dividends contemplated by the second provision of Section 2(c) of this
     Series A Designation, such number of its shares of Common Stock that shall
     from time to time be sufficient to effect the conversion of all outstanding
     shares of the Series A Preferred Stock; and if at any time the number of
     authorized but unissued shares of Common Stock not otherwise reserved for
     issuance shall not be sufficient to effect the conversion of all then
     outstanding shares of the Series A Preferred Stock, the Corporation shall
     take such corporate action that may, in the opinion of its counsel, be
     necessary to increase its authorized but unissued shares of Common Stock to
     such number of shares as shall be sufficient for such purposes, including
     without limitation, engaging in best efforts to obtain the requisite
     stockholder approval of any necessary amendment to its Articles of
     Incorporation.

          12.  Notices.
               -------

                                       15
<PAGE>

               (a)  Any notice required by the provisions hereof to be given to
     the holders of shares of Series A Preferred Stock shall be given in writing
     and shall be deemed to have been given on the date of service if served
     personally on the party to whom notice is to be given, or on the date of
     transmittal of services by facsimile transmission to the party to whom
     notice is to be given, and addressed to each holder of record at his
     address appearing on the books of the Corporation.

               (b)  In case at any time:

                    (i)   the Corporation shall declare any dividend upon any of
     its Junior Securities payable in cash or stock or make any other
     distribution to the holders of any of its Junior Securities;

                    (ii)  the Corporation shall offer for subscription pro rata
     to the holders of its Common Stock any additional shares of stock of any
     class or other rights;

                    (iii) there shall be any capital reorganization or
     reclassification of the capital stock of the Corporation, or a
     consolidation or merger of the Corporation with, or a sale of all or
     substantially all its assets to, another entity; or

                    (iv)  there shall be a voluntary or involuntary Liquidation
     of the Corporation;

     then, in any one or more of said cases, the Corporation shall give, by
     first class mail, postage prepaid, return receipt requested, addressed to
     each holder of any shares of Series A Preferred Stock at the address of
     such holder as shown on the books of the Corporation, (A) at least 15 days'
     prior written notice of the date on which the books of the Corporation
     shall close or a record shall be taken for such dividend, distribution or
     subscription rights or for determining rights to vote in respect of any
     such reorganization, reclassification, consolidation, merger, sale,
     dissolution, liquidation or winding up, and (B) in the case of any such
     reorganization, reclassification, consolidation, merger, sale, dissolution,
     liquidation or winding up, at least 15 days' prior written notice of the
     date when the same shall take place.  Such notice in accordance with the
     foregoing clause (A) shall also specify, in the case of any such dividend,
     distribution or subscription rights, the date on which the holders of
     Junior Securities (or in the case of subscription rights, Common Stock)
     shall be entitled thereto, and such notice in accordance with the foregoing
     clause (B) shall also specify the date on which the holders of Common Stock
     shall be entitled to exchange their Common Stock for securities or other
     property deliverable upon such reorganization, reclassification,
     consolidation, merger, sale, dissolution, liquidation or winding up, as the
     case may be.

                                       16
<PAGE>

          13.  Voting Rights.  Subject to Section 14 of this Series A
               -------------
     Designation, holders of Series A Preferred Stock shall not be entitled to
     vote, including with respect to the election of directors of the
     Corporation.

          14.  Protective Provisions.  Subject to the rights of any series of
               ---------------------
     preferred stock that may from time to time come into existence, so long as
     any shares of Series A Preferred Stock are outstanding, the Corporation
     shall not without first obtaining the approval (by vote or written consent,
     as provided by law) of the holders of at least a majority of the then-
     outstanding shares of Series A Preferred Stock, voting separately as a
     series:

               (a)  amend its Certificate of Incorporation so as to affect
     adversely the shares of Series A Preferred Stock or any holder thereof
     (including by creating any additional classes or series of Senior and/or
     Parity Stock);

               (b)  change the rights of the holders of the Series A Preferred
     Stock in any other respect;

               (c)  authorize, create, designate or issue of any additional
     equity securities of the Corporation having any rights that are senior or
     pari passu to the Series A Preferred Stock with respect to liquidation
     preference or rights to dividends or distributions; or

               (d)  issue authorized but unissued shares of Series A Preferred
     Stock after the Series A Original Issue Date, other than as required by the
     terms of this Series A Designation.

          15.  Status of Converted Stock.  In the event any shares of Series A
               -------------------------
     Preferred Stock shall be converted pursuant to Section 4 of this Series A
     Designation, or exchanged pursuant to Section 5 of this Series A
     Designation, the shares so converted or exchanged shall be canceled and
     shall not be reissuable by the Corporation.  The Certificate of
     Incorporation shall be appropriately amended to effect the corresponding
     reduction in the Corporation's authorized capital stock.

                                       17
<PAGE>

                                  Article II

                    Designation of Series B Preferred Stock

          1.   Designation and Rank.
               --------------------

               (a)  10,000 shares of the preferred stock of the Corporation
     shall be designated and known as the "Series B Preferred Stock". Such
                                           ------------------------
     number of shares may not be increased or decreased without obtaining the
     consent of a majority in interest of the holders of the then-outstanding
     shares of Series B Preferred Stock, except as provided in Section 13 below;
     provided, that no decrease shall reduce the number of shares of Series B
     --------
     Preferred Stock to a number less than the number of shares then outstanding
     plus the number of such shares issuable upon exercise of outstanding
     rights, options or warrants or upon conversion of outstanding securities
     issued by the Corporation.

               (b)  The Series B Preferred Stock shall rank senior and prior to
     the Common Stock and, except as otherwise provided herein, all other
     classes or series of the capital stock of the Corporation (now or hereafter
     authorized or issued), with respect to the payment of any dividends and to
     any payment and upon liquidation; provided, that the Series B Preferred
                                       --------
     Stock shall rank pari passu with the Series A Preferred Stock with respect
     to the payment of any dividends and to any payment and upon liquidation.

          2.   Dividend Rights.
               ---------------

               (a)  Dividend Preference.  From and after the Series B Original
                    -------------------
     Issue Date (as defined in Section 4(e) of this Series B Designation), when
     and if the Board of Directors of the Corporation declares a dividend or
     distribution payable with respect to (i) the Common Stock or any other
     capital stock or security issued by the Corporation which is junior to the
     Series B Preferred Stock as to such dividends or distributions, such
     dividend or distribution shall not be paid until the payment to the holders
     of the Series B Preferred Stock of all dividends or distributions accrued
     or to be accrued through that date, or (ii) the then-outstanding capital
     stock of the Corporation that is pari passu to the Series B Preferred Stock
     as to such dividends or distributions, such dividends or distributions
     shall not be paid unless an equivalent payment is made to the holders of
     the Series B Preferred Stock pro rata on the accrued and unpaid dividends
     or distributions payable to the Series B Preferred Stock as of the date of
     such payment.

               (b)  Discretionary Dividends.  From and after the date hereof,
                    -----------------------
     when and if the Board of Directors declares a dividend or distribution
     payable with respect to the then-outstanding shares of Common Stock, the
     holders of the Series B Preferred Stock shall be entitled to the amount of
     dividends per share in the same form as such Common Stock dividends that
     would be payable on the

                                       18
<PAGE>

     largest number of whole shares of Common Stock into which a holder's
     aggregate shares of Series B Preferred Stock could then be converted
     pursuant to Section 4 of this Article II (such number to be determined as
     of the record date for the determination of holders of Common Stock
     entitled to receive such dividend).

               (c)  Mandatory Dividends.  In addition to Section 2(b) above,
                    -------------------
     each share of Series B Preferred Stock, shall be entitled to receive a
     mandatory dividend equal to 7% of the Series B Liquidation Preference (as
     defined below), per annum, compounded annually on each succeeding 12 month
     anniversary of the first issuance. Such dividend shall be cumulative and
     shall be payable annually on each succeeding 12 month anniversary of the
     first issuance and shall be payable solely by the issuance of additional
     shares of Series B Preferred Stock at a price per share equal to
     U.S.$1,700.00 (the "Series B Original Issue Price") and not in cash;
                         -----------------------------
     provided, that such dividend shall not be declared or paid to any holder
     --------
     without the prior, written consent of such holder. Fractional shares of the
     Series B Preferred Stock shall be issuable for all purposes hereunder.

          3.   Liquidation Rights.
               ------------------

               (a)  Liquidation Preference.
                    ----------------------

                    (i)    In the event of any Liquidation (as defined in
     Article I), whether voluntary or involuntary, before any payment of cash or
     distribution of other property shall be made to the holders of Common
     Stock, or any other class or series of stock subordinate in liquidation
     preference to the Series B Preferred Stock, the holders of the Series B
     Preferred Stock shall be entitled to receive out of the assets of the
     Corporation legally available for distribution to its stockholders, on
     behalf of each share of Series B Preferred Stock held by such holder, the
     Series B Original Issue Price (as appropriately adjusted for any
     combinations, divisions, or similar recapitalizations affecting the capital
     stock after issuance) and all accrued and unpaid dividends thereon
     (collectively, the "Series B Liquidation Preference").
                         -------------------------------

                    (ii)   If, upon any Liquidation, the assets of the
     Corporation available for distribution to its stockholders are insufficient
     to pay the holders of the Series B Preferred Stock the Series B Liquidation
     Preference in full, the holders of the Series B Preferred Stock shall share
     pro rata in any distribution of assets in proportion to the respective
     amounts which would be payable to the holders of the Series B Preferred
     Stock and any other class or series of capital stock of the Corporation
     ranking pari passu with the Series B Preferred Stock in respect of the
     shares held by them.

                    (iii)  After the distributions described in clause (a)(i)
     above have been paid, subject to the rights of any other class or series of
     capital stock of the Corporation that may from time to time come into
     existence, the remaining assets of the Corporation available for
     distribution to stockholders shall

                                       19
<PAGE>

     be distributed among the holders of Common Stock, the holders of the Series
     B Preferred Stock and the holders of any other class or series of capital
     stock of the Corporation entitled to share in such distribution, pro rata
     based on the number of shares of Common Stock held by each, assuming
     conversion of any other class or series of capital stock of the Corporation
     convertible into shares of Common Stock.

               (c)  Non-Cash Distributions.  If any distribution to be made
                    ----------------------
     pursuant to this Section 3 is to be paid other than in cash, the value of
     such distribution will be deemed its fair market value as determined in
     good faith by the Board of Directors.  Any securities shall be valued as
     follows:

                    (i)  Securities not subject to investment letter or other
     similar restrictions on free marketability covered by clause (ii) below:

                         (A)  if traded on a securities exchange or through the
     Nasdaq National Market, the value shall be deemed to be the average of the
     closing prices of the securities on such quotation system over the thirty
     (30) trading day period ending three (3) days prior to the occurrence of
     the Liquidation;

                         (B)  if actively traded over-the-counter, the value
     shall be deemed to be the average of the closing bid or sale prices
     (whichever is applicable) over the thirty (30) trading day period ending
     three (3) trading days prior to the occurrence of the Liquidation; and

                         (C)  if there is no active public market, the value
     shall be the fair market value thereof, as determined by the Board of
     Directors, subject to the approval of holders of at least a majority of the
     then-outstanding shares of Series B Preferred Stock, as of the occurrence
     of the Liquidation.

                    (ii) The method of valuation of securities subject to
     investment letter or other restrictions on free marketability (other than
     restrictions arising solely by virtue of a stockholder's status as an
     affiliate or former affiliate) shall be to effectuate an appropriate
     discount from the market value, as determined by clauses (i)(A), (B) or (C)
     of this Section 3(b), so as to reflect the approximate fair market value
     thereof, as determined by the Board of Directors, subject to the approval
     of holders of at least a majority of the then-outstanding shares of such
     Series B Preferred Stock, as of the occurrence of the Liquidation.

               (d)  Dispute as to Value of Non-Cash Distributions.  If holders
                    ---------------------------------------------
     of at least a majority of the then-outstanding shares of Series B Preferred
     Stock do not approve the determination, pursuant to clauses (b)(i)(C) or
     (b)(ii) of this Section 3, of the Board of Directors as to valuation, the
     Corporation and the holders of at least a majority of the then-outstanding
     shares of Series B Preferred Stock shall mutually agree upon and appoint,
     as an appraiser, a nationally-recognized investment banking firm, which
     shall be commissioned to investigate the value of the property to be
     distributed and shall submit a notice of an appraisal

                                       20
<PAGE>

     of that value to the Corporation and each holder of Series B Preferred
     Stock within 30 days of such commission. The appraiser shall be instructed
     to determine such value without regard to income tax consequences to the
     recipient as a result of receiving consideration other than cash. The value
     determined by the appraiser shall be conclusive. If the appraised value
     varies by less than 7.5% from the value determined by the Board of
     Directors, the aggregate amount to be distributed shall be reduced by the
     expense of the appraisal process and if the appraised value varies by 7.5%
     or more from the value determined by the Corporation's Board of Directors,
     the expense of the appraisal process shall be borne by the Corporation.

          4.   Conversion Rights.  The holders of the Series B Preferred Stock
               -----------------
     shall have conversion rights as follows (the "Series B Conversion Right"):
                                                   -------------------------

               (a)  Series B Conversion Price. The "Series B Conversion Price"
                    -------------------------       -------------------------
     shall, initially, be U.S.$1.70 per share and shall be subject to adjustment
     as set forth below in Section 4(e).

               (b)  Optional Conversion.   Each share of Series B Preferred
                    -------------------
     Stock shall be convertible, at the option of the holder thereof (subject to
     regulatory approvals), at any time after the second anniversary of the
     Series B Original Issue Date, at the office of the Corporation or any
     transfer agent for such stock, into such number of fully paid and non-
     assessable shares of Common Stock as is determined by dividing (x) the
     Series B Liquidation Preference of such share of Series B Preferred Stock
     (including any accrued but unpaid dividends thereon) by (y) the Series B
     Conversion Price (as defined above).

               (c)  Required Conversion.  Notwithstanding the above, in the
                    -------------------
     event that there shall occur any Merger Event (as defined in Article I), at
     the option of the Corporation or the holders of at least a majority of the
     then-outstanding shares of Series B Preferred Stock, and subject to
     applicable regulatory approvals, the outstanding shares of the Series B
     Preferred Stock shall, immediately prior to the consummation thereof, be
     converted into the same number of shares of Common Stock into which such
     shares are convertible pursuant to Section 4(b) (a "Series B Required
                                                         -----------------
     Conversion").
     ----------

               (d)  Mechanics of Conversion.  In order to exercise the Series B
                    -----------------------
     Conversion Right pursuant to Section 4(b), a holder of Series B Preferred
     Stock shall provide written notice to the Corporation, setting forth (i)
     such holder's intent to exercise the Series B Conversion Right, and (ii)
     the proposed date for such exercise (the "Series B Conversion Date"), which
                                               ------------------------
     shall be between 10 and 30 days after the date of such notice.  If a Merger
     Event occurs and, pursuant to Section 4(c), a Series B Required Conversion
     is elected by the Corporation or holders of at least a majority of the
     then-outstanding shares of Series B Preferred Stock, the Corporation shall
     notify in writing all holders of Series B Preferred Stock of such Series B
     Required Conversion and the date of such Merger Event

                                       21
<PAGE>

     shall be referred to as the "Series B Required Conversion Date". On the
                                  ---------------------------------
     Series B Conversion Date or the Series B Required Conversion Date, as the
     case may be, (i) the holder (and in the case of a Series B Required
     Conversion, each holder) shall tender such holder's shares of Series B
     Preferred Stock to the Corporation for cancellation, free and clear of
     encumbrances of any type or nature, and (ii) the Corporation shall cause to
     be delivered to such holder, a number of shares of Common Stock as
     calculated pursuant to Section 4(b) above, free and clear of encumbrances
     of any type or nature. Each holder and the Corporation shall take all other
     necessary or appropriate actions in connection with or to effect such
     closing.

               (e)  Certain Adjustments.
                    -------------------

                    (i)  Sale of Shares Below Fair Market Value.
                         --------------------------------------

                         (A)  Sale of Additional Shares. If at any time or from
                              -------------------------
     time to time after the date that the first share of Series B Preferred
     Stock is issued (the "Series B Original Issue Date"), the Corporation
                           ----------------------------
     issues or sells, or is deemed by the express provisions of this subsection
     4(e)(i) to have issued or sold, Additional Shares of Common Stock (as
     defined in Article I), other than as a dividend or other distribution on
     any class of stock as provided in Section 4(e)(ii) below, and other than a
     subdivision or combination of shares of Common Stock as provided in Section
     4(e)(iii) below), for an Effective Price (as defined in Article I) that is
     less than the lower of (x) the Series B Conversion Price then in effect and
     (y) the Fair Market Value of a share of Common Stock (as defined in Section
     6(a) below) (the "Series B ADP Price"), then and in each such case, the
                       ------------------
     then-existing Series B Conversion Price shall be reduced, as of the opening
     of business on the date of such issuance or sale, to a price determined by
     multiplying the Series B Conversion Price by a fraction (x) the numerator
     of which shall be (I) the number of shares of Common Stock deemed
     outstanding immediately prior to such issuance or sale, plus (II) the
     number of shares of Common Stock which the aggregate consideration received
     (as defined in clause (B) below) by the Corporation for the total number of
     Additional Shares of Common Stock so issued would purchase at the then-
     applicable Series B ADP Price, and (y) the denominator of which shall be
     the number of shares of Common Stock deemed outstanding immediately prior
     to such issue or sale plus the total number of Additional Shares of Common
     Stock so issued. For the purposes of the preceding sentence, the number of
     shares of Common Stock deemed to be outstanding as of a given date shall be
     the sum of (I) the number of shares of Common Stock actually outstanding
     and (II) the number of shares of Common Stock into which all then-
     outstanding shares of capital stock of the Corporation convertible into
     shares of Common Stock could be converted if fully converted on the day
     immediately preceding the given date. No adjustment shall be made to the
     Series B Conversion Price in an amount less than U.S.$0.01 per share. Any
     adjustment otherwise required by this Section 4(e)(i) that is not required
     to be made due to the

                                       22
<PAGE>

     preceding sentence shall be included in any subsequent adjustment to the
     Series B Conversion Price.

                         (B)  Consideration Received for Additional Shares. For
                              --------------------------------------------
     the purpose of making any adjustment required under this Section 4(e)(i),
     the consideration received by the Corporation for any issue or sale of
     securities shall (x) to the extent it consists of cash, be computed at the
     net amount of cash received by the Corporation after deduction of any
     underwriting or similar commissions, compensation or concessions paid or
     allowed by the Corporation in connection with such issue or sale but
     without deduction of any expenses payable by the Corporation, and (y) to
     the extent it consists of property other than cash, be computed at the fair
     value of that property as determined, in good faith, by the Board of
     Directors. If Additional Shares of Common Stock, Convertible Securities (as
     defined in Article I) or rights, warrants or options to purchase either
     Additional Shares of Common Stock or Convertible Securities are issued or
     sold together with other stock or securities or other assets of the
     Corporation for a consideration which covers both, the consideration
     received by the Corporation for such issue or sale of Additional Securities
     of Common Stock, Convertible Securities or rights, warrants or options to
     purchase either Additional Shares of Common Stock or Convertible Securities
     shall be computed as the portion of the consideration so received that may
     be reasonably determined, in good faith, by the Board of Directors to be
     allocable to such Additional Shares of Common Stock, Convertible Securities
     or rights, warrants or options and shall be reasonably agreed to by holders
     of at least a majority of the Series B Preferred Stock; provided, that in
                                                             --------
     the event the Corporation and the holders of at least a majority of the
     Series B Preferred Stock do not agree on the value of such consideration,
     the parties shall jointly appoint an independent third party to determine
     such value pursuant to the procedure set forth in Section 3(d) of this
     Series B Designation.

                         (C)  Securities Convertible, Exchangeable and
                              ----------------------------------------
     Exercisable for Common Stock. For the purpose of the adjustment required
     ----------------------------
     under this Section 4(e)(i), if the Corporation issues or sells (i)
     Convertible Securities, or (ii) rights, warrants or options for the
     purchase of Additional Shares of Common Stock or Convertible Securities and
     if the Effective Price of such Additional Shares of Common Stock is less
     than the then-applicable Series B ADP Price, in each case the Corporation
     shall be deemed to have issued at the time of the issuance of such rights,
     warrants or options or Convertible Securities the maximum number of
     Additional Shares of Common Stock issuable upon exercise, exchange, or
     conversion thereof and to have received as consideration for the issuance
     of such shares an amount equal to the total amount of the consideration, if
     any, received by the Corporation for the issuance of such rights, warrants
     or options or Convertible Securities, (A) plus, in the case of such rights,
     warrants or options, the minimum amounts of consideration, if any, payable
     to the Corporation upon the exercise of such rights, warrants or options
     (without respect to any "cashless" exercise provision), (B) plus, in the
     case of Convertible Securities, the minimum amounts of consideration, if
     any, payable to the

                                       23
<PAGE>

     Corporation (other than by cancellation of liabilities or obligations
     evidenced by such Convertible Securities) upon the conversion or exchange
     thereof; provided, that if in the case of Convertible Securities the
              --------
     minimum amounts of such consideration cannot be ascertained, but are a
     function of anti-dilution or similar protective clauses, the Corporation
     shall be deemed to have received the minimum amounts of consideration
     without reference to such clauses; provided further, that if the minimum
                                        ----------------
     amount of consideration payable to the Corporation upon the exercise,
     exchange or conversion of rights, warrants, options or Convertible
     Securities is reduced over time or on the occurrence or non-occurrence of
     specified events (other than by reason of anti-dilution adjustments), the
     Effective Price shall be recalculated using the figure to which such
     minimum amount of consideration is reduced; provided further, that if the
                                                 ----------------
     minimum amount of consideration payable to the Corporation upon the
     exercise, exchange or conversion of such rights, warrants, options or
     Convertible Securities is subsequently increased, the Effective Price shall
     be again recalculated using the increased minimum amount of consideration
     payable to the Corporation upon the exercise, exchange or conversion of
     such rights, warrants, options or Convertible Securities. No further
     adjustment of the Series B Conversion Price, as adjusted upon the issuance
     of such rights, options or Convertible Securities, shall be made as a
     result of the actual issuance of Additional Shares of Common Stock on the
     exercise of any such rights, warrants, options or the conversion or
     exchange of any such Convertible Securities. If any such rights, warrants
     or options or the conversion or exchange privilege represented by any such
     Convertible Securities shall expire without having been exercised, the
     Series B Conversion Price as adjusted upon the issuance of such rights,
     warrants, options or Convertible Securities shall be readjusted to the
     Series B Conversion Price which would have been in effect had an adjustment
     been made on the basis that the only Additional Shares of Common Stock so
     issued were the Additional Shares of Common Stock, if any, actually issued
     or sold on the exercise of such rights, warrants or options or rights of
     conversion or exchange of such Convertible Securities, and such Additional
     Shares of Common Stock, if any, were issued or sold for the consideration
     actually received by the Corporation upon such exercise, plus the
     consideration, if any, actually received by the Corporation for the
     granting of all such rights, warrants or options, whether or not exercised,
     plus the consideration received for issuing or selling the Convertible
     Securities actually converted or exchanged, plus the consideration, if any,
     actually received by the Corporation (other than by cancellation of
     liabilities or obligations evidenced by such Convertible Securities) upon
     the conversion or exchange of such Convertible Securities; provided, that
                                                                --------
     such readjustment shall not apply to prior conversions of Series B
     Preferred Stock.

               (ii)    Adjustment for Common Stock Dividends and Distributions.
                       -------------------------------------------------------
     If, at any time after the Series B Original Issue Date, the Corporation
     makes, or fixes a record date for the determination of holders of Common
     Stock entitled to receive, a dividend or other distribution payable in

                                       24
<PAGE>

     additional shares of Common Stock, in each such event the Series B
     Conversion Price that is then in effect shall be decreased as of the time
     of such issuance or, in the event such record date is fixed, as of the
     close of business on such record date, by multiplying the Series B
     Conversion Price then in effect by a fraction (x) the numerator of which is
     the total number of shares of Common Stock issued and outstanding
     immediately prior to the time of such issuance or the close of business on
     such record date, and (y) the denominator of which is the total number of
     shares of Common Stock issued and outstanding immediately prior to the time
     of such issuance or the close of business on such record date plus the
     number of shares of Common Stock issuable in payment of such dividend or
     distribution; provided, that if such record date is fixed and such dividend
                   --------
     is not fully paid or if such distribution is not fully made on the date
     fixed therefor, the Series B Conversion Price shall be recomputed
     accordingly as of the close of business on such record date and thereafter
     the Series B Conversion Price shall be adjusted pursuant to this Section
     4(e)(ii) to reflect the actual payment of such dividend or distribution.

               (iii)   Adjustments for Stock Splits, Stock Subdivisions and
                       ----------------------------------------------------
     Combinations.  If, at any time after the Series B Original Issue Date, the
     ------------
     Corporation subdivides or combines the Common Stock, (A) in the case of a
     subdivision (including a stock split), the Series B Conversion Price in
     effect immediately prior to such event shall be proportionately decreased
     and the number of shares of Common Stock purchasable thereunder shall be
     proportionately increased, and (B) in the case of a combination (including
     a reverse stock split), the Series B Conversion Price in effect immediately
     prior to such event shall be proportionately increased and the number of
     shares of Common Stock purchasable thereunder shall be proportionately
     decreased. Any adjustment under this Section 4(e)(iii) shall become
     effective at the close of business on the date the subdivision or
     combination becomes effective.

               (iv)    Adjustments for Reclassification, Reorganization and
                       ----------------------------------------------------
     Consolidation.  In case of (A) any reclassification, reorganization,
     -------------
     change, exchange or conversion of securities of the class issuable upon
     conversion of the Series B Preferred Stock (other than a change in par
     value, or from par value to no par value) into other shares or securities
     of the Corporation, or (B) any merger or consolidation of the Corporation
     with or into another entity (other than a merger or consolidation with
     another entity in which the Corporation is the acquiring and the surviving
     entity and that does not result in any reclassification or change of
     outstanding securities issuable upon conversion of the Series B Preferred
     Stock), or (C) any sale of all or substantially all the assets of the
     Corporation, each holder of shares of Series B Preferred Stock shall have
     the right to receive, in lieu of the shares of Common Stock otherwise
     issuable upon the conversion of its shares of Series B Preferred Stock and
     accumulated and unpaid dividends then-outstanding thereunder, the kind and
     amount of shares of stock and other securities, money and property
     receivable upon such reclassification, reorganization, change, merger,
     consolidation or conversion by a holder of the maximum number of

                                       25
<PAGE>

     shares of Common Stock into which such shares of Series B Preferred Stock
     could have been converted immediately prior to such reclassification,
     reorganization, change, merger, consolidation or conversion, all subject to
     further adjustment as provided herein or with respect to such other
     securities or property by the terms thereof. The provisions of this clause
     (iv) shall similarly attach to successive reclassifications,
     reorganizations, changes, and conversions.

          5.   Other Distributions.  In the event the Corporation provides the
               -------------------
     holders of its Common Stock with consideration that is not otherwise
     addressed in Section 4 of this Series B Designation (including, without
     limitation, declaring a distribution payable in securities of other
     persons, providing evidences of indebtedness issued by the Corporation or
     other persons, assets, cash (excluding cash dividends declared out of
     retained earnings)), then, in each such case, the holders of the Series B
     Preferred Stock shall be entitled to a pro rata share of any such
     distribution as though they were the holders of the number of shares of
     Common Stock of the Corporation into which their shares of Series B
     Preferred Stock would be convertible as of the record date fixed for the
     determination of the holders of Common Stock of the Corporation entitled to
     receive such distribution.

          6.   Recapitalizations. If at any time there occurs a recapitalization
               -----------------
     of the Common Stock (other than a subdivision, combination, or merger or
     sale of assets provided for in Section 4 of this Series B Designation), the
     holders of the Series B Preferred Stock shall be entitled to receive upon
     conversion of the Series B Preferred Stock the number of shares of capital
     stock or other securities or property of the Corporation or otherwise, to
     which a holder of the Common Stock deliverable upon conversion would have
     been entitled on such recapitalization. In any such case, appropriate
     adjustment shall be made in the application of the provisions of Section 4
     with respect to the rights of the holders of the Series B Preferred Stock
     after the recapitalization to the end that the provisions of Section 4
     (including adjustment of the Series B Conversion Price then in effect and
     the number of shares purchasable upon conversion of the Series B Preferred
     Stock) shall be applicable after that event as nearly equivalent as may be
     practicable.

          7.   No Impairment.  The Corporation shall not, by amendment of the
               -------------
     Certificate of Incorporation or through any reorganization,
     recapitalization, transfer of assets, consolidation, merger, dissolution,
     issuance or sale of securities or any other voluntary action, avoid or seek
     to avoid the observance or performance of any of the terms to be observed
     or performed hereunder by the Corporation, but will at all times in good
     faith assist in the carrying out of all the provisions of this Certificate
     of Incorporation relating to the Series B Preferred Stock and in the taking
     of all such action as may be necessary or appropriate in order to protect
     the Series B Conversion Right against impairment.

                                       26
<PAGE>

          8.   No Fractional Shares and Certificate as to Adjustments.
               ------------------------------------------------------

               (a)  No fractional shares shall be issued upon the conversion of
     any share or shares of the Series B Preferred Stock, and the number of
     shares of Common Stock to be issued shall be rounded to the nearest whole
     share.  Such rounding shall be determined on the basis of the aggregate
     number of shares of Series B Preferred Stock each holder is at the time
     converting into Common Stock and the aggregate number of shares of Common
     Stock issuable to each such holder upon such conversion.

               (b)  Upon the occurrence of each adjustment or readjustment of
     the Series B Conversion Price pursuant to Section 4 of this Series B
     Designation, the Corporation, at its expense, shall promptly compute such
     adjustment or readjustment in accordance with the terms hereof and prepare
     and furnish to each holder of shares of Series B Preferred Stock a
     certificate setting forth such adjustment or readjustment and showing in
     detail the facts upon which such adjustment or readjustment is based. The
     Corporation shall, upon the written request at any time of any holder of
     Series B Preferred Stock, furnish or cause to be furnished to such holder a
     like certificate setting forth (i) such adjustment or readjustment, (ii)
     the Series B Conversion Price at the time in effect, and (iii) the number
     of shares of Common Stock and the amount, if any, of other property which
     at the time would be received upon the conversion of a share of Series B
     Preferred Stock.

          9.   Reservation of Stock Issuable Upon Conversion.  The Corporation
               ---------------------------------------------
     shall at all times reserve and keep available out of its authorized but
     unissued shares of Common Stock, solely for the purposes of effecting the
     conversion of the shares of the Series B Preferred Stock or paying any
     dividends contemplated by the second provision of Section 2(c) of this
     Series B Designation, such number of its shares of Common Stock that shall
     from time to time be sufficient to effect the conversion of all outstanding
     shares of the Series B Preferred Stock; and if at any time the number of
     authorized but unissued shares of Common Stock not otherwise reserved for
     issuance shall not be sufficient to effect the conversion of all then
     outstanding shares of the Series B Preferred Stock, the Corporation shall
     take such corporate action that may, in the opinion of its counsel, be
     necessary to increase its authorized but unissued shares of Common Stock to
     such number of shares as shall be sufficient for such purposes, including
     without limitation, engaging in best efforts to obtain the requisite
     stockholder approval of any necessary amendment to its Articles of
     Incorporation.

          10.  Notices.
               -------

               (a)  Any notice required by the provisions hereof to be given to
     the holders of shares of Series B Preferred Stock shall be given in writing
     and shall be deemed to have been given on the date of service if served
     personally on the party to whom notice is to be given, or on the date of
     transmittal of services by

                                       27
<PAGE>

     facsimile transmission to the party to whom notice is to be given, and
     addressed to each holder of record at his address appearing on the books of
     the Corporation.

          (b)  In case at any time:

               (i)   the Corporation shall declare any dividend upon any of its
     Junior Securities payable in cash or stock or make any other distribution
     to the holders of any of its Junior Securities;

               (ii)  the Corporation shall offer for subscription pro rata to
     the holders of its Common Stock any additional shares of stock of any class
     or other rights;

               (iii) there shall be any capital reorganization or
     reclassification of the capital stock of the Corporation, or a
     consolidation or merger of the Corporation with, or a sale of all or
     substantially all its assets to, another entity; or

               (iv)  there shall be a voluntary or involuntary Liquidation of
     the Corporation;

     then, in any one or more of said cases, the Corporation shall give, by
     first class mail, postage prepaid, return receipt requested, addressed to
     each holder of any shares of Series B Preferred Stock at the address of
     such holder as shown on the books of the Corporation, (A) at least 30 days'
     prior written notice of the date on which the books of the Corporation
     shall close or a record shall be taken for such dividend, distribution or
     subscription rights or for determining rights to vote in respect of any
     such reorganization, reclassification, consolidation, merger, sale,
     dissolution, liquidation or winding up, and (B) in the case of any such
     reorganization, reclassification, consolidation, merger, sale, dissolution,
     liquidation or winding up, at least 30 days' prior written notice of the
     date when the same shall take place.  Such notice in accordance with the
     foregoing clause (A) shall also specify, in the case of any such dividend,
     distribution or subscription rights, the date on which the holders of
     Junior Securities (or in the case of subscription rights, Common Stock)
     shall be entitled thereto, and such notice in accordance with the foregoing
     clause (B) shall also specify the date on which the holders of Common Stock
     shall be entitled to exchange their Common Stock for securities or other
     property deliverable upon such reorganization, reclassification,
     consolidation, merger, sale, dissolution, liquidation or winding up, as the
     case may be.

          11.  Voting Rights.  Subject to Section 12 of this Series B
               -------------
     Designation, holders of Series B Preferred Stock shall not be entitled to
     vote, including with respect to the election of directors of the
     Corporation.

                                       28
<PAGE>

          12.  Protective Provisions.  Subject to the rights of any series of
               ---------------------
     preferred stock that may from time to time come into existence, so long as
     any shares of Series B Preferred Stock are outstanding, the Corporation
     shall not without first obtaining the approval (by vote or written consent,
     as provided by law) of the holders of at least a majority of the then-
     outstanding shares of Series B Preferred Stock, voting separately as a
     series:

               (a)  amend its Certificate of Incorporation so as to affect
     adversely the shares of Series B Preferred Stock or any holder thereof
     (including by creating any additional classes or series of Senior and/or
     Parity Stock);

               (b)  change the rights of the holders of the Series B Preferred
     Stock in any other respect;

               (c)  authorize, create, designate or issue of any additional
     equity securities of the Corporation having any rights that are senior or
     pari passu to the Series B Preferred Stock with respect to liquidation
     preference or rights to dividends or distributions; or

               (d)  issue authorized but unissued shares of Series B Preferred
     Stock after the Series B Original Issue Date, other than as required by the
     terms of this Series B Designation.

          13.  Status of Converted Stock.  In the event any shares of Series B
               -------------------------
     Preferred Stock shall be converted pursuant to Section 4 of this Series B
     Designation, the shares so converted shall be canceled and shall not be
     reissuable by the Corporation.  The Certificate of Incorporation shall be
     appropriately amended to effect the corresponding reduction in the
     Corporation's authorized capital stock.

                                       29
<PAGE>

                                  Article III

                    Designation of Series C Preferred Stock
                    ---------------------------------------

          1.   Rank.
               ----

               (a)  1,117 shares of the preferred stock of the Corporation shall
     be designated and known as the "Series C Preferred Stock". Such number of
                                     ------------------------
     shares may not be increased or decreased without obtaining the consent of a
     majority in interest of the holders of the then-outstanding shares of
     Series C Preferred Stock; provided, that no decrease shall reduce the
                               --------
     number of shares of Series C Preferred Stock to a number less than the
     number of shares then outstanding plus the number of such shares issuable
     upon exercise of outstanding rights, options or warrants or upon conversion
     of outstanding securities issued by the Corporation.

               (b)  The Series C Preferred Stock shall rank (i) junior to the
     Common Stock and all other classes or series of the capital stock of the
     Corporation (now or hereafter authorized or issued), with respect to the
     payment of any dividends and (ii) pari pasu with the Common Stock, and
     junior to all other classes or series of the capital stock of the
     Corporation (now or hereafter authorized or issued), with respect to any
     payment upon liquidation.

          2.   Dividends.  The Series C Preferred Stock shall not bear a
               ---------
     dividend.

          3.   Liquidation.  In any Liquidation Event (as defined in Article I),
               -----------
     whether voluntary or involuntary, the holders of Series C Preferred Stock
     shall have the right to receive, pari passu with the holders of the Common
     Stock and subject to the rights of the holders of any other senior class or
     series of capital stock of the Corporation, the assets of the Corporation
     in proportion to the number of shares of Common Stock held by each such
     holder (assuming, for such purposes, the holders of Series C Preferred
     Stock are deemed to hold that number of shares of Common Stock equal to the
     number of shares of Common Stock into which such shares of Series C
     Preferred Stock are then convertible).

          4.   Conversion Rights.  The holders of the Series C Preferred Stock
               -----------------
     shall have conversion rights as follows (the "Series C Conversion Right"):
                                                   -------------------------

               (a)  Series C Conversion Ratio. The "Series C Conversion Ratio"
                    -------------------------       -------------------------
     shall, initially, be 1000 shares of Common Stock for each share of Series C
     Preferred Stock and shall be subject to adjustment as set forth below in
     Section 4(e).

               (b)  Optional Conversion.   Each share of Series C Preferred
                    -------------------
     Stock shall be convertible, at the option of the holder thereof (subject to
     regulatory approvals), at any time after the second anniversary of the
     Series C Original Issue Date (as defined below), at the office of the
     Corporation or any

                                       30
<PAGE>

     transfer agent for such stock, into such number of fully paid and non-
     assessable shares of Common Stock as is determined by applying the Series C
     Conversion Ratio (as defined above) then in effect.

               (c)  Required Conversion.  Notwithstanding the above, in the
                    -------------------
     event that there shall occur any Merger Event (as defined in Article I), at
     the option of the Corporation or the holders of at least a majority of the
     then-outstanding shares of Series C Preferred Stock, and subject to
     applicable regulatory approvals, the outstanding shares of the Series C
     Preferred Stock shall, immediately prior to the consummation thereof, be
     converted into the same number of shares of Common Stock into which such
     shares are convertible pursuant to Section 4(b) (a "Series C Required
                                                         -----------------
     Conversion").
     ----------

               (d)  Mechanics of Conversion.  In order to exercise the Series C
                    -----------------------
     Conversion Right pursuant to Section 4(b), a holder of Series C Preferred
     Stock shall provide written notice to the Corporation, setting forth (i)
     such holder's intent to exercise the Series C Conversion Right, and (ii)
     the proposed date for such exercise (the "Series C Conversion Date"), which
                                               ------------------------
     shall be between 10 and 30 days after the date of such notice. If a Merger
     Event occurs and, pursuant to Section 4(c), a Series C Required Conversion
     is elected by the Corporation or holders of at least a majority of the
     then-outstanding shares of Series C Preferred Stock, the Corporation shall
     notify in writing all holders of Series C Preferred Stock of such Series C
     Required Conversion and the date of such Merger Event shall be referred to
     as the "Series C Required Conversion Date". On the Series C Conversion Date
             ---------------------------------
     or the Series C Required Conversion Date, as the case may be, (i) the
     holder (and in the case of a Series C Required Conversion, each holder)
     shall tender such holder's shares of Series C Preferred Stock to the
     Corporation for cancellation, free and clear of encumbrances of any type or
     nature, and (ii) the Corporation shall cause to be delivered to such
     holder, a number of shares of Common Stock as calculated pursuant to
     Section 4(b) above, free and clear of encumbrances of any type or nature.
     Each holder and the Corporation shall take all other necessary or
     appropriate actions in connection with or to effect such closing.

               (e)  Certain Adjustments.
                    -------------------

                    (i)  Adjustments for Stock Splits, Stock Subdivisions and
                         ----------------------------------------------------
     Combinations.  If at any time or from time to time after the date that the
     ------------
     first share of Series C Preferred Stock is issued (the "Series C Original
                                                             -----------------
     Issue Date"), the Corporation subdivides or combines the Common Stock, (A)
     ----------
     in the case of a subdivision (including a stock split), the Series C
     Conversion Ratio in effect immediately prior to such event shall be
     proportionately increased and the number of shares of Common Stock
     purchasable thereunder shall be proportionately increased, and (B) in the
     case of a combination (including a reverse stock split), the Series C
     Conversion Ratio in effect immediately prior to such event shall be

                                       31
<PAGE>

     proportionately decreased and the number of shares of Common Stock
     purchasable thereunder shall be proportionately decreased. Any adjustment
     under this Section 4(e)(i) shall become effective at the close of business
     on the date the subdivision or combination becomes effective.

                    (ii)   Adjustments for Reclassification, Reorganization and
                           ----------------------------------------------------
     Consolidation. In case of (A) any reclassification, reorganization, change,
     -------------
     exchange or conversion of securities of the class issuable upon conversion
     of the Series C Preferred Stock (other than a change in par value, or from
     par value to no par value) into other shares or securities of the
     Corporation, or (B) any merger or consolidation of the Corporation with or
     into another entity (other than a merger or consolidation with another
     entity in which the Corporation is the acquiring and the surviving entity
     and that does not result in any reclassification or change of outstanding
     securities issuable upon conversion of the Series C Preferred Stock), or
     (C) any sale of all or substantially all the assets of the Corporation,
     each holder of shares of Series C Preferred Stock shall have the right to
     receive, in lieu of the shares of Common Stock otherwise issuable upon the
     conversion of its shares of Series C Preferred Stock and accumulated and
     unpaid dividends then-outstanding thereunder, the kind and amount of shares
     of stock and other securities, money and property receivable upon such
     reclassification, reorganization, change, merger, consolidation or
     conversion by a holder of the maximum number of shares of Common Stock into
     which such shares of Series C Preferred Stock could have been converted
     immediately prior to such reclassification, reorganization, change, merger,
     consolidation or conversion, all subject to further adjustment as provided
     herein or with respect to such other securities or property by the terms
     thereof. The provisions of this clause (ii) shall similarly attach to
     successive reclassifications, reorganizations, changes, and conversions.

          5.   Voting.  Except as required by law, the holders of Series C
               ------
     Preferred Stock shall not be entitled to vote on matters submitted to the
     holders of the Common Stock or any other class of capital stock of the
     Corporation."

                           (signature page follows)

                                       32
<PAGE>

          IN WITNESS WHEREOF, said SafeScience, Inc. has caused this Certificate
of Designations, Preferences and Rights of Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock to be signed by Bradley J. Carver,
its President, and John W. Burns, its Secretary, this ___ day of July, 2001.

                                  SafeScience, Inc.

                                  By: _______________________________
                                      Name:  Bradley J. Carver
                                      Title: President

                                  By: _______________________________
                                      Name:  John W. Burns
                                      Title: Secretary<PAGE>

                                                                    Exhibit 10.1

                                                                  Execution Copy

                         Securities Purchase Agreement

          Securities Purchase Agreement (as amended at any time, this
"Agreement"), dated as of June 22, 2001, between SafeScience, Inc., a Nevada
 ---------
corporation (the "Company"), and Elan International Services, Ltd., a Bermuda
                  -------
exempted limited liability company ("EIS").
                                     ---

                               R E C I T A L S:

          A.  The Company desires to issue and sell to EIS, and EIS desires to
purchase from the Company, on the date hereof, (i) 4,944.44 shares of a newly-
created series of the Company's preferred stock, par value U.S.$.01 per share,
designated "Series A Convertible Exchangeable Preferred Stock" (the "Series A
                                                                     --------
Preferred Stock"), (ii) 1,116.79 shares of a newly-created series of the
---------------
Company's preferred stock, par value U.S.$.01 per share, designated the "Series
C Convertible Preferred Stock" (the "Series C Preferred Stock"), (iii) 2.7
                                     ------------------------
million shares of the Company's common stock, par value U.S.$.01 per share (the
"Common Stock"), and (iv) a warrant, in a form reasonably satisfactory to the
 ------------
Company and EIS(as amended at any time, the "Warrant"), to purchase initially up
                                             -------
to 381,679 shares of Common Stock.  In addition, the Company may issue to EIS
from time to time in accordance with the terms hereof up to 5,654.1176 shares of
a newly-created series of the Company's preferred stock, par value U.S.$.01 per
share, designated the Series B Convertible Preferred Stock" (the "Series B
                                                                  --------
Preferred Stock"; together with the Series A Preferred Stock and the Series C
---------------
Preferred Stock, the "Preferred Stock"; and together with the Common Stock and
                      ---------------
the Warrant, the "Securities").  The rights, preferences and privileges of the
                  ----------
Preferred Stock are as set forth in the Company's Certificate of Designations,
Preferences and Rights, in the form attached hereto as Exhibit A-1 (the
                                                       -----------
"Certificate of Designations").
 ---------------------------

          B.  The Company and EIS have formed SafeScience Newco, Ltd., an
exempted limited liability company organized under the laws of Bermuda
("Newco"), and pursuant to the terms of a Subscription, Joint Development and
  -----
Operating Agreement, dated as of the date hereof (as amended at any time, the
"JDOA"), simultaneously with the transactions contemplated by this Agreement to
 ----
occur on the Initial Closing Date (as defined below):  (i) the Company shall
acquire 6,000 voting common shares of Newco, par value U.S.$1.00 per share (the
"Newco Common Shares"), representing 100% of the issued and outstanding Newco
 -------------------
Common Shares and, on a fully-diluted basis, 50% of the aggregate outstanding
Newco Shares (as defined below), and 3,612 non-voting convertible preference
shares of Newco, par value of U.S.$1.00 per share (the "Newco Preferred Shares";
                                                        ----------------------
together with the Newco Common Shares, the "Newco Shares"), representing 60.2%
                                            ------------
of the issued and outstanding Newco Preferred Shares and, on a fully-diluted
basis, 80.1% of the aggregate outstanding Newco Shares, and (ii) EIS shall
acquire 2,388 Newco Preferred Shares, representing 39.8% of the issued and
outstanding Newco Preferred Shares and, on a fully-diluted basis, 19.9% of the
aggregate outstanding Newco Shares.  Additionally, as of the date hereof, Newco
has entered into license agreements with (a) Elan
<PAGE>

(such agreement, as amended at any time, the "Elan License Agreement") and (b)
                                              ----------------------
the Company (such agreement, as amended at any time, the "Company License
                                                          ---------------
Agreement"; together with the Elan License Agreement, the "License Agreements").
---------                                                  ------------------

          C.  The Company and EIS are executing and delivering on the date
hereof a Registration Rights Agreement, in a form reasonably satisfactory to the
Company and EIS (as amended at any time, the "Company Registration Rights
                                              ---------------------------
Agreement"), in respect of (i) the Common Stock issued and purchased hereunder,
---------
the Common Stock issued or issuable upon conversion of the Preferred Stock or
exercise of all or any portion of the Warrant and (ii) any other Common Stock
owned by EIS or any of its affiliates or their respective permitted transferees.
The Company, EIS and Newco are also executing and delivering on the date hereof
a Registration Rights Agreement, in a form reasonably satisfactory to the
Company and EIS (as amended at any time, the "Newco Registration Rights
                                              -------------------------
Agreement").  This Agreement, the Certificate of Designations, the Warrant, the
---------
JDOA, the Company Registration Rights Agreement, the Newco Registration Rights
Agreement, the License Agreements and each other document or instrument executed
and delivered in connection with the transactions contemplated hereby and by the
JDOA are referred to, collectively, herein as the "Transaction Documents".
                                                   ---------------------

                               A G R E E M E N T:

          In consideration of the foregoing premises and the mutual covenants
contained herein, the sufficiency of which is hereby acknowledged, the parties
hereby agree as follows:

          SECTION 1.  Closing.
                      -------

          (a)  Time and Place.  The closing of the Initial Purchase (as defined
               --------------
below) (the "Initial Closing") shall occur the first business day that is at
             ---------------
least 11 days after the mailing by the Company of a letter to its stockholders
regarding its exemption from stockholder approval for the execution of this
Agreement and the consummation of the transactions contemplated hereby or such
other date as mutually agreed by the Parties (the "Initial Closing Date").  The
                                                   --------------------
funding of each purchase of shares of Series B Preferred Stock (each, a "P.S.
                                                                         ----
Closing") shall occur on such dates as set forth in Section 1(e) (each, a "P.S.
-------                                                                    ----
Closing Date").  The Initial Closing and each P.S. Closing individually are
------------
referred to herein as a "Closing", and the Initial Closing Date and each P.S.
                         -------
Closing Date individually are referred to herein as a "Closing Date".  The
                                                       ------------
Initial Closing shall be held at the offices of Reitler Brown LLC, 800 Third
Avenue, New York, New York 10022 (by means of facsimile or overnight mail) and
each P.S. Closing shall be a "paper closing" by means of facsimile or as
otherwise agreed by the parties.

          (b)  Sale and Purchase.  At the Initial Closing, subject to the terms
               -----------------
and conditions hereof, the Company shall issue and sell to EIS, and EIS shall
purchase from the Company, (i) 4,944.44 shares of Series A Preferred Stock, (ii)
2.7 million shares of Common Stock, (iii) 1,116.79 shares of Series C Preferred
Stock and (iv) the Warrant (the "Initial Purchase").
                                 ----------------

                                       2
<PAGE>

          (c)  Purchase Price.  The aggregate purchase price for the Initial
               --------------
Purchase shall be U.S.$17.015 million (the "Initial Purchase Price"),
                                            ----------------------
U.S.$12.015 million of which represents the purchase price for the 4,944.44
shares of Series A Preferred Stock, and U.S.$5 million of which represents the
purchase price for the 2.7 million shares of Common Stock and 1,116.79 shares of
Series C Preferred Stock and the Warrant.

          (d)  Initial Closing Delivery.  On or before the Initial Closing Date,
               ------------------------
subject to the terms and conditions hereof:

               (i)    EIS shall pay the Initial Purchase Price by wire transfer
     of U.S.$17.015 million to an account designated in writing by the Company;

               (ii)   EIS shall execute and deliver or cause to be executed and
     delivered to the Company:  (A) the Company Registration Rights Agreement,
     (B) the Newco Registration Rights Agreement, (C) the JDOA, and (D) the Elan
     License Agreement;

               (iii)  the Company shall execute and deliver or cause to be
     executed and delivered to EIS, as applicable: (A) certificates representing
     4,944.44 shares of Series A Preferred Stock, 2.7 million shares of Common
     Stock and 1,116.79 shares of Series C Preferred Stock, (B) the Warrant, (C)
     the Company Registration Rights Agreement, (D) the Newco Registration
     Rights Agreement, (E) the Certificate of Designations as filed with the
     Secretary of State of the State of Nevada, (F) the JDOA, (G) the Company
     License Agreement, (H) the pledged shares including the Stock Powers
     executed pursuant to Section 7 hereof, (I) a customary secretary's
     certificate from the secretary of the Company, including a certificate as
     to the incumbency of the officers of the Company executing any of the
     Transaction Documents, (J) the Cross Receipt, and (K) any other documents
     or instruments reasonably requested by EIS; and

               (iv)   the Company shall cause to be delivered to EIS an opinion
     of counsel in a form reasonably satisfactory to EIS.

               (v)    the Company shall cause to be delivered to EIS, the
     delivery of which shall be a condition to EIS's obligations hereunder, a
     letter from Nasdaq confirming to the Company that the approval of the
     Company's stockholders is not required to consummate the transactions
     contemplated by this Agreement.

          (e)  Series B Preferred Stock Purchases.  It is estimated that Newco
               ----------------------------------
will require additional funds to commence development of Newco's products.
Within the period commencing on the Initial Closing Date and ending on the
second year anniversary of the Initial Closing Date (the "Development Period"),
                                                          ------------------
EIS and the Company may provide to Newco up to an aggregate maximum amount of
U.S.$12 million (excluding paid-in-kind dividends thereon), such funding to be
provided by EIS and the Company on a pro rata basis based on their respective
equity interests, on a fully-diluted basis, in Newco (the "Development
                                                           -----------
Funding").  In order to ensure the Company has funds available for its share of
-------
the Development Funding, EIS has agreed to purchase from the Company up to
U.S.$9.612 million of Series B Preferred Stock at U.S.$1,700.00 per share,
subject to the terms and conditions set forth below.

                                       3
<PAGE>

             (1) From time to time at the request of the Company, EIS shall
     purchase shares of the Series B Preferred Stock, at a price of
     U.S.$1,700.00 per share (each, a "Purchase"), up to an aggregate of
                                       --------
     5,654.1176 shares (the "Total Commitment"); provided, that the Total
                             ----------------    --------
     Commitment shall be reduced in an amount equal to amounts funded by the
     Company to Newco as Development Funding (each a "Development Funding
                                                      -------------------
     Contribution") for which a Purchase was not concurrently requested
     ------------
     hereunder.  The aggregate amount of Purchases hereunder shall not in any
     event exceed the amount of Development Funding funded by the Company to
     Newco (after giving effect to any concurrent Purchase made hereunder and
     Development Funding Contribution made by the Company) (the "Maximum
                                                                 -------
     Amount").
     ------
             (2) Each Purchase shall be subject to the following terms and
     conditions:

                 (A) each Purchase shall be made at such time that (x) each
     Participant (as defined in the JDOA) shall have determined, pursuant to
     Clauses 6.3 and 6.4 of the JDOA, that Development Funding shall be
     provided, (y) Newco shall have provided written notice thereof to EIS and
     to the Company and (z) the Company shall have delivered a written request
     to EIS in the form attached hereto as Exhibit A-2 with attached thereto an
                                           -----------
     executed copy of the officer's certificate (the "Funding Officer's
                                                      -----------------
     Certificate") attached hereto as Exhibit A-3 (collectively, the "Purchase
     -----------                      -----------                     --------
     Notice") not less than 10 business days prior to the requested P.S. Closing
     ------
     Date;

                 (B) the minimum amount of each Purchase shall be not less than
     U.S.$500,000, i.e., 294.11765 shares of Series B Preferred Stock (or such
     lesser amount up to the Maximum Amount or the Total Commitment, as the case
     may be, if the amount that remains available is less than U.S.$500,000).
     The Company shall be entitled to request up to four Purchases in any
     calendar year;

                 (C) each Purchase shall (x) occur only during the Development
     Period, (y) together with all previous Purchases, not exceed the Total
     Commitment, and (z) together with all previous Purchases, not exceed the
     Maximum Amount;

                 (D) at the time of each Purchase, no material breach or default
     by the Company under any Transactions Document shall have occurred and be
     continuing;

                 (E) at the time of each Purchase, the representations and
     warranties of the Company contained herein shall be true and correct in all
     material respects as of the date made and as of the Closing Date (except
     those representations and warranties made as of a specific date which need
     only be true and correct as of such date); and

                 (F) at the time of each Advance, EIS shall have received any
     required approvals under the Mergers and Takeovers (Control) Acts 1978-1996
     (Ireland), the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
     amended, and any other similar law or regulation (collectively, the
     "Applicable Anti-Trust Laws"); provided, that in the event that EIS shall
      --------------------------    --------
     not have obtained approval under all Applicable Anti-Trust Laws at the time
     a determination of the necessity of such funding by the Newco Directors and
     such

                                       4
<PAGE>

     approval would be required, the Company shall issue to EIS a non-
     convertible note, in form reasonably satisfactory to EIS and the Company,
     and the parties hereto shall work together in good faith to agree on an
     alternative funding mechanism for future borrowings; it being understood
     that such note shall subsequently be exchanged for the applicable number of
     shares of Series B Preferred Stock at such time that approval under the
     Applicable Anti-Trust Laws shall have been obtained.

             (3) On each P.S. Closing Date (A) EIS shall fund the amount set
     forth in the Purchase Notice by wire transfer of immediately available
     funds and confirm, in writing, the aggregate number of shares of Series B
     Preferred Stock outstanding immediately thereafter, (B) the Company shall
     cause to be delivered to EIS an officers' certificate confirming (x) that
     the conditions described in clauses (2)(A)-(F) above have been satisfied
     and (y) the outstanding aggregate principal amount after such wire
     transfer, and (C) the Company shall furnish such documents and instruments
     that EIS shall reasonably request, including updates of the Company
     documents referred to in Section 1(d)(iii)(G).

          (f)  Exemption from Registration; Legend.  The Securities and any
               -----------------------------------
underlying shares of Common Stock will be issued under an exemption or
exemptions from registration under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and are also subject to certain rights and obligations
      --------------
set forth herein.  Accordingly, the certificates evidencing the Preferred Stock,
the Common Stock, the Warrant and any shares of Common Stock or other securities
issuable upon the exercise, conversion or exchange of any of the Securities
shall, upon issuance, contain a legend, substantially in the form as follows:

     THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
     SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
                                              ---
     SECURITIES LAWS AND NO INTEREST THEREIN MAY BE SOLD, TRANSFERRED OR
     OTHERWISE DISPOSED OF UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT TO
     SUCH SECURITIES SHALL BE EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE
     SECURITIES LAWS OR (2) SUCH SECURITIES ARE TRANSFERRED PURSUANT TO RULE 144
     PROMULGATE UNDER THE ACT (OR ANY SUCCESSOR RULE), OR (3) THE ISSUER OF
     THESE SECURITIES SHALL HAVE RECEIVED AN OPINION OF COUNSEL FOR THE HOLDER
     OF THESE SECURITIES SATISFACTORY TO THE ISSUER THAT NO VIOLATION OF THE ACT
     OR SIMILAR STATE SECURITIES LAWS WILL BE INVOLVED IN SUCH TRANSFER.

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RIGHTS
     AND OBLIGATIONS CONTAINED IN THAT CERTAIN SECURITIES PURCHASE AGREEMENT,
     DATED AS OF JUNE __, 2001, BY AND BETWEEN SAFESCIENCE, INC. AND ELAN
     INTERNATIONAL SERVICES, LTD.

                                       5
<PAGE>

          Notwithstanding the foregoing, the second paragraph of the foregoing
legend shall only be included if then applicable.

          SECTION 2.  Representations and Warranties of the Company.  The
                      ---------------------------------------------
Company hereby represents and warrants to EIS, as of each Closing Date, as
follows:

          (a)  Organization and Qualification.  The Company is duly organized,
               ------------------------------
validly existing and in good standing under the laws of the State of Nevada and
has all requisite corporate power and authority to own and lease its properties,
to carry on its business as presently conducted and as proposed to be conducted
and to consummate the transactions contemplated hereby.  The Company is duly
qualified as a foreign corporation and in good standing to do business in each
jurisdiction in which the nature of the business conducted or the property owned
by it requires such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse effect on
the business, assets, liabilities (contingent or otherwise), operations,
condition (financial or otherwise), or prospects of the Company (a "Company
                                                                    -------
Material Adverse Effect").
-----------------------

          (b)  Capitalization.
               --------------

               (i)    The authorized capital stock of the Company immediately
     prior to the Initial Closing, consists of (A) 100,000,000 shares of Common
     Stock, of which 25,770,403 shares are issued and outstanding, and of which
     1,151,230 shares are reserved for issuance upon exercise of options granted
     to employees, officers, directors and consultants, and (B) 7,500 shares of
     Series A Preferred Stock, none of which are issued or outstanding, 10,000
     shares of Series B Preferred Stock, none of which are issued or
     outstanding, and 1,117 shares of Series C Preferred Stock, none of which
     are issued or outstanding.

               (ii)   As of the Initial Closing Date, the Company has reserved a
     sufficient number of shares of Common Stock for issuance upon conversion of
     the Preferred Stock and exercise of the Warrant (and as pay-in-kind
     dividends on the Preferred Stock).

               (iii)  There are no preemptive rights, voting agreements, rights
     of first offer or refusal, options, warrants or other conversion or
     exchange privileges or rights presently outstanding to purchase, subscribe
     for or otherwise acquire, or any securities convertible into or exercisable
     or exchangeable for or into, any of the Company's capital stock
     (collectively, "Preemptive Rights"), except as described on Schedule 2(b)
                     -----------------                           -------------
     attached hereto. There are no agreements to register any of the Company's
     outstanding securities under U.S. federal securities laws, other than the
     Company Registration Rights Agreement and except as described on Schedule
                                                                      --------
     2(b).
     ----

               (iv)   All of the outstanding shares of capital stock of the
     Company have been issued in accordance with applicable state and federal
     laws and regulations (or exemptions therefrom) governing the sale and
     purchase of securities, except as described on Schedule 2(b), and all of
                                                    -------------
     such shares have been duly and validly issued and are fully paid and non-
     assessable. The Securities, when issued against payment therefor in

                                       6
<PAGE>

     accordance with this Agreement (including upon any conversion of any
     thereof), will be duly and validly issued, fully paid and non-assessable,
     and the Warrant, when issued against payment therefor in accordance with
     this Agreement, will be duly and validly issued, and in each case will not
     be issued in violation of any Preemptive Rights. The shares of Common Stock
     issuable upon conversion or exercise of the Preferred Stock or the Warrant,
     or as payment for any required anti-dilution adjustment according to the
     terms thereto, when issued upon conversion, exercise or in accordance with
     the terms thereof (the "Underlying Shares"), will be duly and validly
                             -----------------
     issued, fully paid and non-assessable, and will not be issued in violation
     of any Preemptive Rights.

          (c)  Authorization of Transaction Documents.  The Company has full
               --------------------------------------
corporate power and authority to execute and deliver this Agreement and each of
the other Transaction Documents to which it is a party, and to perform its
obligations hereunder and thereunder.  The execution, delivery and performance
by the Company of this Agreement and each of the other Transaction Documents to
which it is a party (including the issuance and sale of the Securities and the
issuance of the Underlying Shares) have been duly authorized by all requisite
corporate action by the Company and, when executed and delivered by the Company,
this Agreement and each of the other Transaction Documents to which it is a
party will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.

          (d)  No Violations.  The execution, delivery and performance by the
               -------------
Company of this Agreement and each of the other Transaction Documents to which
it is a party (including the issuance and sale of the Securities and the
issuance of the Underlying Shares) and the compliance with the provisions hereof
and thereof by the Company do not and will not violate, conflict with or
constitute or result in a breach of or default under (or an event which with
notice or passage of time or both would constitute a default) or give rise to
any right of termination, cancellation or acceleration under, or result in the
creation of any Encumbrance (as defined below) upon any properties or assets of
the Company under (i) the Articles of Incorporation or bylaws of the Company,
(ii) any applicable law, statute, rule or regulation, or any ruling, writ,
injunction, order, judgment or decree of any court, arbitrator, administrative
agency or other governmental body applicable to the Company or any of its
properties or assets or (iii) any contract, indenture, mortgage, deed of trust,
lease, agreement or other instrument, to which the Company is a party or by
which the Company or any of its property is bound, except, in each case, where
such violation, conflict, breach, default, termination, cancellation,
acceleration or Encumbrance would not, individually or in the aggregate, have a
Company Material Adverse Effect.  As used herein, the term "Encumbrance" shall
                                                            -----------
mean any material lien, charge, encumbrance, claim, option, proxy, pledge,
security interest, or other similar right of any nature other than statutory
liens securing payments not yet due and payable or due but not yet delinquent.

          (e)  Approvals.  Except as set forth on Schedule 2(e) attached hereto
               ---------                          -------------
and for consent which may be required under any Applicable Anti-Trust Law, no
permit, authorization, consent, approval, or order of or by, or any notification
of or filing with, any person or entity (governmental or otherwise) is required
in connection with the execution, delivery or

                                       7
<PAGE>

performance of this Agreement or the other Transaction Documents (including the
issuance and sale of the Securities and the issuance of the Underlying Shares)
by the Company.

          (f)  Financial Statements.  Schedule 2(f) attached hereto contains (i)
               --------------------   -------------
the audited balance sheets of the Company at December 31, 2000 (the "Last Audit
                                                                     ----------
Date"), and 1999 and the related statements of operations, stockholders' equity
----
(deficit) and cash flows for the years then ended, together with the reports and
opinions thereon of Arthur Anderson LLP (the "Audited Financial Statements"),
                                              -----------------------------
and (ii) the unaudited balance sheet of the Company at March 31, 2001 and the
related statements of operations and cash flows for the three months then ended
(the "Unaudited Financial Statements"; collectively with the Audited Financial
      ------------------------------
Statements, the "Financial Statements").  The Financial Statements are accurate
                 --------------------
and complete and fairly present the financial position of the Company and the
results of its operations and its cash flows at such dates and for the periods
indicated and were prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated (except as may be otherwise indicated therein), subject, in the case
of the Unaudited Financial Statements, to normal year-end audit adjustments
(which shall not be material in the aggregate) and the absence of footnote
disclosures.  As of the Initial Closing Date, the Company has not incurred and
is not liable for any material liabilities or obligations except as set forth on
the face of the March 31, 2001 balance sheet or Schedule 2(f).
                                                -------------

          (g)  Taxes.  The Company has filed in a timely manner any federal,
               -----
state, local and foreign tax returns, reports and filings (collectively,
"Returns"), including income, franchise, property and other taxes, and has paid
 -------
or accrued the appropriate amounts reflected on such Returns heretofore required
to be filed.  Except as set forth on Schedule 2(g) attached hereto, none of the
                                     -------------
Returns have been audited or challenged, nor has the Company received any notice
of challenge nor have any of the amounts or other data included in the Returns
been challenged or reviewed by any governmental authority.  Prior to the Initial
Closing, the Company provided EIS with true and complete copies of each Return.
The Company has no knowledge of any liability of any tax to be imposed upon its
properties or assets as of the Initial Closing that is not adequately provided
for.

          (h)  Plans.  Except as set forth on Schedule 2(h) attached hereto,
               -----                          -------------
which sets forth an accurate and complete list and description of all employee
benefit plans maintained or sponsored by the Company or to which the Company is
required to make contributions (the "Benefit Plans"), the Company does not
                                     -------------
maintain, sponsor, is not required to make contributions to or otherwise have
any liability with respect to any pension, profit sharing, thrift or other
retirement plan, employee stock ownership plan, deferred compensation, stock
ownership, stock purchase, performance share, bonus or other incentive plan,
severance plan, health or group insurance plan, welfare plan, or other similar
plan, agreement, policy or understanding (whether written or oral), whether or
not such plan is intended to be qualified under Section 401(a) of the U.S.
Internal Revenue Code of 1986, as amended, or within the meaning of Section 3(3)
of the U.S. Employee Retirement Income Security Act of 1974, as amended, which
plan covers any employee or former employee of the Company.  The Benefit Plans
have been and are administered in substantial compliance with their terms and
the requirements of applicable law.

                                       8
<PAGE>

          (i)  Absence of Certain Events.  Since March 31, 2001, except as
               -------------------------
contemplated by the Transaction Documents or as set forth on Schedule 2(i)
                                                             -------------
attached hereto, (A) the Company has not (i) made, paid or declared any dividend
or distribution to any equity holder (in such capacity) or redeemed any of its
capital stock, (ii) varied its business plan or practices, in any material
respect, from past practices, (iii) entered into any financing, joint venture,
license or similar arrangement that would limit or restrict its ability to
perform its obligations hereunder and under each of the other Transaction
Documents or (iv) suffered or permitted to be incurred any liability or
obligation or any Encumbrance against any of its properties or assets that would
limit or restrict its ability to perform its obligations hereunder and under
each of the other Transaction Documents; and (B) there has not been any change
or development which has had, or could reasonably be expected to have, a Company
Material Adverse Effect.

          Without limiting the generality of the foregoing, since March 31,
2001, except as set forth on Schedule 2(i), there has not been (1) any lapse of
                             -------------
any of the Company's trade secrets, inventions, patents, patent applications or
continuations (in whole or in part), trademarks, trademark registrations,
service marks, service mark registrations, copyrights, copyright registrations,
or any application therefor or filing in respect thereof (collectively, and
together with any and all know-how, trade secrets and proprietary business or
technology information, the "Intellectual Property") that could reasonably be
                             ---------------------
expected to result in a Company Material Adverse Effect; (2) any loss of the
services of any of the key officers or key employees of the Company; (3) any
incurrence of or entry into any liability, mortgage, Encumbrance, commitment or
transaction, including without limitation, any borrowing (or assumption or
guarantee thereof) or guarantee of a third party's obligations, or capital
expenditure (or lease in the nature of a conditional purchase of capital
equipment) in excess of U.S.$50,000, other than in the ordinary course of
business; (4) any material change by the Company in accounting methods or
principles; or (5) any change in the assets, liabilities, condition (financial
or otherwise), results or operations or prospects of the Company from those
reflected on the Financial Statements, except changes in the ordinary course of
business and changes that have not had or could not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.

          (j)  No Liabilities.  Since March 31, 2001, the Company has not
               --------------
incurred or suffered any liability or obligation, matured or unmatured,
contingent or otherwise, except in the ordinary course of business and except
any such liability or obligation that have not had and could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.

          (k)  Properties and Assets; Etc.
               --------------------------

               (i)    Except as set forth on Schedule 2(k) attached hereto, the
                                             -------------
     Company has good and marketable title to its properties and assets shown in
     the Financial Statements to be owned by the Company, and has valid
     leasehold interests to the properties and assets shown in the Financial
     Statements to be leased by the Company, in each case subject to no
     Encumbrances.

               (ii)   The Company owns or possesses sufficient legal rights to
     use pursuant to license, sublicense, agreement or permission all
     Intellectual Property used in the

                                       9
<PAGE>

     operation of its business as presently conducted, in each case, subject to
     no Encumbrances required to be disclosed in the Financial Statements except
     as set forth therein, other than any failure to own or possess sufficient
     legal rights which, individually or in the aggregate, would not have a
     Company Material Adverse Effect. All of the Intellectual Property which is
     owned by the Company is owned free and clear of all Encumbrances; none of
     the Company's rights in or use of the Intellectual Property has been or, to
     the Company's knowledge, is currently threatened to be challenged; to the
     Company's knowledge, without making any inquiry other than those, if any,
     routinely conducted by the Company in the ordinary course of business, no
     current or currently planned product based upon the Company's Intellectual
     Property would infringe any patent, trademark, service mark, trade name or
     copyright of any other person or entity issued or pending on the Closing
     Date if the Company were to distribute, sell, market or manufacture such
     products, and the Company is not aware of any actual or threatened claim by
     any person or entity alleging any infringement by the Company of a patent,
     trademark, service mark, trade name or copyright possessed by such person
     or entity. None of such Intellectual Property, whether foreign or domestic,
     has been canceled, abandoned, or otherwise terminated, other than such
     cancellations, abandonments or terminations which, individually or in the
     aggregate, would not have a Company Material Adverse Effect.

               (iii)  Schedule 2(k) lists the material contracts and agreements
                      -------------
     of the Company, and each is a legal and valid agreement binding upon the
     Company and, to the Company's knowledge, is in full force and effect. To
     the Company's knowledge, there is no breach or default by any party
     thereunder except any such breach or default that has not had and could not
     reasonably be expected to have, individually or in the aggregate, a Company
     Material Adverse Effect.

               (iv)   The Company has and maintains adequate and sufficient
     insurance, including liability, casualty and products liability insurance,
     covering risks associated with its business, properties and assets,
     including insurance that is customary for companies similarly situated.

               (v)    The Company, its business and properties and assets are in
     compliance in all material respects with all applicable statutes, laws and
     regulations, including without limitation, those relating to (i) health,
     safety and employee relations, (ii) environmental matters, including the
     discharge of any hazardous or potentially hazardous materials into the
     environment, and (iii) the development, commercialization and sale of
     pharmaceutical and biotechnology products, including all applicable
     regulations of the U.S. Food and Drug Administration and comparable
     applicable foreign regulatory authorities and to its knowledge, no material
     expenditures are or will be required in order to comply with any such
     existing statute, law or regulation, except any such non-compliance that
     could not reasonably be expected to have, individually or in the aggregate,
     a Company Material Adverse Effect.  No Hazardous Materials (as defined
     below) are used or have been used, stored, or disposed of by the Company
     or, to the Company's knowledge after reasonable investigation, by any other
     person or entity on any property owned, leased or used by the Company.  For
     the purposes of the preceding sentence, "Hazardous Materials" shall mean

                                       10
<PAGE>

     (a) materials which are listed or otherwise defined as "hazardous" or
     "toxic" under any applicable local, state, federal and/or foreign laws and
     regulations that govern the existence and/or remedy of contamination on
     property, the protection of the environment from contamination, the control
     of hazardous wastes, or other activities, involving hazardous substances,
     including building materials, or (b) any petroleum products or nuclear
     materials.

          (l)  Legal Proceedings, etc.  There is no legal, administrative,
               ----------------------
arbitration or other action or proceeding or governmental or investigation
pending, or to the Company's knowledge, threatened against the Company, or any
director, officer or employee of the Company in their capacities as such that
(i) challenges the validity or performance of this Agreement or the other
Transaction Documents or (ii) could reasonably be expected to have a Company
Material Adverse Effect, other than the Staff Determination contained in the
June 6, 2001 letter received by the Company from the Nasdaq Stock Market.  The
Company is not in violation of, or default under, any material laws, judgments,
injunctions, orders or decrees of any court, governmental department,
commission, agency, instrumentality or arbitrator applicable to its business,
other than any violations or defaults which, individually or in the aggregate,
would not have a Company Material Adverse Effect.

          (m)  Disclosure.  The representations and warranties set forth herein
               ----------
and in the other Transaction Documents, when viewed collectively, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements contained herein not misleading in light of the
circumstances in which they were made.

          (n)  Brokers or Finders.  There have been no investment bankers,
               ------------------
brokers or finders used by the Company in connection with the transactions
contemplated by the Transaction Documents and no persons or entities are
entitled to a fee or compensation in respect thereof, other than the Shemano
Group and Michaelangelo, LLC.

          (o)  SEC Filings.  Except as set forth on Schedule 2(o) attached
               -----------                          -------------
hereto, the Company has timely filed with the Securities and Exchange Commission
(the "SEC") all forms, reports, schedules, statements, exhibits and other
      ---
documents (collectively, the "SEC Filings") required to be filed by the Company
                              -----------
on or before the date hereof.  At the time filed, the SEC Filings, including
without limitation, any financial statements, exhibits and schedules included
therein or documents incorporated therein by reference (i) did not contain any
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading and (ii)
complied in all material respects with the applicable requirement of the
Securities Act of 1934, as amended (the "Exchange Act"), as the case may be.
                                         ------------

          SECTION 3.  Representations and Warranties of EIS  .  EIS hereby
                      -------------------------------------
represents and warrants to the Company, as of the date hereof, as follows:

          (a)  Organization.  Such Investor is duly organized, validly existing
               ------------
and, where applicable, in good standing under the laws of the jurisdiction of
its organization and has all requisite corporate power and authority to own and
lease its properties, to carry on its business as

                                       11
<PAGE>

presently conducted and as proposed to be conducted and to consummate the
transactions contemplated hereby. EIS, where applicable, is duly qualified as a
foreign corporation and in good standing to do business in each jurisdiction in
which the nature of the business conducted or the property owned by it requires
such qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
business, assets, liabilities (contingent or otherwise), operations, condition
(financial or otherwise), or prospects of EIS, as applicable (an "EIS Material
                                                                  ------------
Adverse Effect").
--------------

          (b)  Authorization of Transaction Documents.  EIS has full corporate
               --------------------------------------
power and authority to execute and deliver this Agreement and each of the other
Transaction Documents to which it is a party, and to perform its obligations
hereunder and thereunder.  The execution, delivery, and performance by EIS of
this Agreement and each other Transaction Document to which it is a party
(including the purchase and acceptance of the Securities) have been duly
authorized by all requisite corporate action by EIS and, when executed and
delivered by EIS, this Agreement and each of the other Transaction Documents to
which it is a party will be the valid and binding obligations of EIS, as
applicable, enforceable against it in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity.

          (c)  No Violation.  The execution, delivery and performance by such
               ------------
Investor  of this Agreement and each other Transaction Document to which it is a
party (including the purchase and acceptance of the Securities) and compliance
with provisions hereof and thereof by EIS will not violate conflict with or
constitute or result in a breach of or default under (or an event which with
notice or passage of time or both would constitute a default) or give rise to
any right of termination, cancellation or acceleration under (i) the charter or
bylaws of EIS, (ii) any applicable law, statute, rule or regulation, or any
ruling, writ, injunction, order, judgment or decree of any court, arbitrator,
administrative agency or other governmental body applicable to EIS or any of
their properties or assets or (iii) any material contract to which EIS is a
party, except, in each case, where such violation, breach, default, termination,
cancellation or acceleration would not, individually or in the aggregate, have
an EIS Material Adverse Effect.

          (d)  Approvals.  Except for consents which may be required under
               ---------
Applicable Anti-Trust Laws, no material permit, authorization, consent, approval
or order of or by, or any notification of or filing with, any person or entity
(governmental or otherwise) is required in connection with the execution,
delivery or performance of this Agreement by EIS or the other Transaction
Documents to which it is a party.

          (e)  Investment Representations.
               --------------------------

               (i)    EIS is sophisticated in transactions of this type and
     capable of evaluating the merits and risks of the transactions described
     herein and in the other Transaction Documents to which it is a party, and
     has the capacity to protect its own interests. EIS has not been formed
     solely for the purpose of entering into the transactions described herein
     and therein and is acquiring the Securities (and the Underlying Shares) for
     investment for its own account, not as a nominee or agent, and not with the
     view to, or for

                                       12
<PAGE>

     resale, distribution or fractionalization thereof, in whole or in part, and
     no other person (other than Elan) has a direct or indirect interest,
     beneficial or otherwise in the Securities (or the Underlying Shares);
     provided, that EIS shall be permitted to convert or exchange such
     --------
     Securities in accordance with their terms.

               (ii)   EIS has not and does not intend to enter into any
     contract, undertaking, agreement or arrangement with any person or entity
     to sell, transfer or pledge the Securities (or the Underlying Shares),
     other than to an affiliate of EIS.

               (iii)  EIS acknowledges its understanding that the private
     placement and sale of the Securities (and the Underlying Shares) is exempt
     from registration under the Securities Act.  In furtherance thereof, EIS
     represents and warrants that it is an "accredited investor" as that term is
     defined in Rule 501 of Regulation D under the Securities Act, has the
     financial ability to bear the economic risk of its investment, has adequate
     means for providing for its current needs and personal contingencies and
     has no need for liquidity with respect to its investment in the Company.

               (iv)   EIS agrees that it shall not sell or otherwise transfer
     any of the Securities (or the Underlying Shares) without registration under
     the Securities Act, pursuant to Rule 144 (or any successor rule) under the
     Securities Act or pursuant to an opinion of counsel reasonably satisfactory
     to the Company that no violation of the Securities Act will be involved in
     such transfer, and fully understands and agrees that it must bear the total
     economic risk of its purchase for an indefinite period of time because,
     among other reasons, none of the Securities (or the Underlying Shares) have
     been registered under the Securities Act or under the securities laws of
     any applicable state or other jurisdiction and, therefore, cannot be
     resold, pledged, assigned or otherwise disposed of unless subsequently
     registered under the Securities Act and under the applicable securities
     laws of such states or jurisdictions or an exemption from such registration
     is available. EIS understands that the Company is under no obligation to
     register the Securities (or the Underlying Shares) on its behalf with the
     exception of certain registration rights with respect to certain of the
     Securities (and the Underlying Shares), as provided in the Company
     Registration Rights Agreement. EIS understands the lack of liquidity and
     restrictions on transfer of the Securities (and the Underlying Shares) and
     that this investment is suitable only for a person or entity of adequate
     financial means that has no need for liquidity of this investment and that
     can afford a total loss of its investment.

          (f)  Legal Proceedings; Etc.  There is no legal, administrative,
               ----------------------
arbitration or other action or proceeding or governmental investigation pending,
or to the knowledge of EIS threatened, against EIS or its affiliates that
challenges the validity or performance of this Agreement or the other
Transaction Documents to which such Investor is a party.

          (g)  Brokers or Finders.  There have been no investment bankers,
               ------------------
brokers or finders used by EIS or its affiliates in connection with the
transactions contemplated by the Transaction Documents and no persons or
entities are entitled to a fee or compensation in respect thereof.

                                       13
<PAGE>

          SECTION 4.  Covenants of the Parties.
                      ------------------------

          (a)  Certain Covenants.  From and after the Initial Closing Date and
               -----------------
until the earlier to occur of the exercise or expiration of the Exchange Right
(as such term is defined in Section 5(c) hereof), the Company shall not without
the prior written consent of EIS:  (i) sell, transfer, encumber, pledge or
otherwise affect, in any respect, the Newco Preferred Shares transferable to EIS
upon exercise by EIS of the Exchange Right; or (ii) affect, in any respect, the
Company's ability to permit EIS to exercise the Exchange Right in full, as
provided herein; or (iii) enter into any material transaction with a director,
officer or more than 20% beneficial owner of Common Stock other than on an
arm's-length basis; or (iv) otherwise vary in any material respect its business,
business plan or method or lines of business; provided, however that the Company
may sell its consumer and industrial business area, agricultural business area,
or specific assets of such business areas on 20 days' prior written notice to
EIS.

          (b)  Fully-diluted Stock Ownership.  Notwithstanding any other
               -----------------------------
provision of this Agreement, in the event that EIS shall have determined that at
any time it (together with its affiliates, if applicable) hold or have the right
to receive Common Stock (or securities or rights, options or warrants
exercisable, exchangeable or convertible for or into Common Stock) representing
in the aggregate in excess of 9.9% of the Company's outstanding  Common Stock on
a fully-diluted basis, EIS shall have the right to elect to convert all or any
part of the Securities or the Underlying Shares into other preferred, non-voting
securities of the Company (on terms mutually satisfactory to EIS and SafeScience
and no more favorable than the Securities or the Underlying Shares being so
converted by EIS) such that EIS and its affiliates will not directly or
indirectly own more than 9.9% of the Common Stock (in aggregate) for a period of
at least two years from the Initial Closing Date.  In the event that EIS shall
elect such conversion, EIS and its affiliates shall retain the right to transfer
all or a portion of such securities (including the Common Stock issuable upon
conversion thereof) to its affiliates.  Each of the Company and EIS shall use
commercially reasonable efforts to promptly effect such transactions and any
required subsequent conversions or adjustments to the securities position of
EIS, on a quarterly basis, within 15 business days of the end of each of EIS's
fiscal quarters.

          (c)  Use of Proceeds.  The Company shall use the proceeds of (i) the
               ---------------
issuance and sale of the Series A Preferred Stock solely to meet its initial
capitalization obligations to Newco as described in the JDOA; (ii) the issuance
and sale of the Common Stock and Series C Preferred Stock for general working
capital purposes and (iii) the issuance and sale of the Series B Preferred Stock
solely to make a substantially concurrent Developmental Funding Contribution to
Newco, as described Section 1(e), and, in each case, for no other purpose.

          (d)  Confidentiality; Non-Disclosure.  Prior to issuing the initial
               -------------------------------
press release or public disclosure in respect of this Agreement or the
transactions contemplated hereby (the "Initial Press Release"), the party
                                       ---------------------
proposing such issuance shall obtain the consent of the other party to the
contents thereof, which consent shall not be unreasonably withheld or delayed.
Thereafter, the Company may issue press releases made in the ordinary course of
its business, referring to research collaborations involving the Company, and
which do not differ from or go beyond the terms of the Initial Press Release
(except that no quotes from EIS shall be repeated) unless required by applicable
law, without obtaining the consent of the other parties to the

                                       14
<PAGE>

contents thereof; provided, that any other type of press release or public
                  --------
disclosure by the Company in respect of this Agreement or the transactions
contemplated hereby, unless required by applicable law, will require the consent
of EIS to the contents thereof, which consent shall not be unreasonably withheld
or delayed; it being understood that if such second party shall not have
responded to such consent request within three business days, such consent shall
be deemed given.

          (e) Further Assurances.  From and after the date hereof, each of the
              ------------------
parties hereto agree to do or cause to be done such further acts and things and
deliver or cause to be delivered to each other such additional assignments,
agreements, powers and instruments, as each may reasonably require or deem
advisable to carry into effect the purposes of this Agreement and the other
Transaction Documents.

          SECTION 5.  Certain Rights of EIS.
                      ---------------------

          (a) Right of First Refusal on Certain Issuances. Until the fourth
              -------------------------------------------
anniversary of the Initial Closing Date, EIS shall have the right (but not the
obligation) to participate in any equity financing, any financing involving
securities convertible or exchangeable for equity, or any grant of options,
warrants or other rights to purchase any capital stock of the Company or any
security convertible or exchangeable for any capital stock of the Company
("Rights"), in each case, consummated, or proposed to be consummated, by the
  ------
Company, on the same or monetarily equivalent terms and conditions offered to
the other proposed investors in such financing or recipient of such grant (the
"Right of First Refusal"). If, in connection with such an issuance, securities
 ----------------------
are to be issued and sold for consideration other than cash, then the Board (as
defined in Section 5(b) below) shall, in good faith, determine the fair market
value of such non-cash consideration, subject to EIS's reasonable approval
(provided, that if EIS shall not approve such valuation, the Company and EIS
 --------
shall agree upon a third party appraiser who shall determine the cash valuation
of such non-cash consideration), and offer to sell the subject securities as set
forth herein for the cash equivalent of such non-cash consideration.  Notice of
such a proposed offering shall be given by the Company to EIS at least 30 days
prior to the closing of such financing (the "New Issue Notice") and shall state
                                             ----------------
the Company's bona fide intent to offer such securities or Rights, the number of
securities or Rights to be offered (a calculation of the number of shares of
Common Stock into which such securities may be converted or exchanged or such
Rights may be exercised), the identity of the parties to whom such securities or
Rights are being offered, and the price and terms, if any, upon which it
proposes to offer such securities.  The Right of First Refusal may be exercised
by EIS, in whole or in part, at any time within the 15 day period after receipt
of the New Issue Notice by delivery to the Company of a writing notifying the
Company of such exercise.  If the proposed offering of securities is altered in
any material respect, the Company shall send to EIS a revised New Issue Notice
and EIS shall respond thereto, each within a 15 day period commencing upon
receipt of such revised notice.  If EIS elects not to exercise the Right of
First Refusal, the Company may sell such securities and/or grant such Rights to
the parties set forth in the New Issue Notice, at any time within 60 days of the
expiration of the applicable 15-day period, on terms no more favorable to the
offerees than as set forth in the New Issue Notice; provided that if such
                                                    --------
offering is not completed within such 60-day period, such offering shall again
be subject to such Right of First Refusal and the Company shall comply with the
terms of this Section 5(a).  The Right of First Refusal shall not apply to (i)

                                       15
<PAGE>

offering under a stock option or similar plan approved by the Board for the
benefit of its officers, directors, employees and/or consultants as of the
Initial Closing Date or approved by the Board (including the director nominated
by EIS), after the Initial Closing Date, (ii) asset or company acquisition by
merger or purchase of substantially all of the assets or stock of such Company
paid for, in whole or in part, in shares of Common Stock that do not exceed, in
the aggregate, 10% of the outstanding shares of Common Stock on an as-converted
basis as of the Initial Closing Date, or (iii) any securities issued pursuant to
the exercise of currently outstanding options, warrants or other written
agreements. The Right of First Refusal shall automatically convert into a
preemptive right (and thereafter terminate) at such time as the Company's
Articles of Incorporation do not prohibit the granting of preemptive rights.
Such preemptive right shall continue through the fourth anniversary of the
Initial Closing Date and enable EIS and its affiliates to maintain their pro
rata, fully diluted interest in the Company, based on the number of shares of
Common Stock owned by EIS and its affiliates, assuming conversion or exercise of
all Securities with respect to transactions to which the Right of First Refusal
was formerly applicable.

          (b) Board Seat Rights.
              -----------------

              (i)  For as long as EIS and/or its affiliates, directly or
indirectly, collectively own at least 10% of the Common Stock (assuming the
exercise, conversion or exchange thereof by EIS and its affiliates but not of
any other securities convertible, exercisable or exchangeable into Common
Stock), EIS shall be entitled to nominate one member to the Company's board of
directors (the "Board"). In connection with the foregoing, the Company will take
                -----
all necessary and/or appropriate steps to effect such appointment and any
appointment of an EIS designated replacement, including, without limitation,
using its best efforts to promote the election of an EIS designee by the then
current Board and the inclusion of the EIS designee as part of the management
recommended slate of directors presented at any regular or special meeting or
consent of the stockholders of the Company at which directors of the Company are
to be elected. Notwithstanding the forgoing provisions of this Section 5(b), the
EIS director shall not in any event have greater than 15% of the voting power on
the Board during the period from the date of Closing through the second
anniversary thereof and if there are fewer then six members on the Board, (x)
EIS shall not be entitled to appoint a director and shall be entitled to an
observer instead and (y) at the next regularly-scheduled meeting of stockholders
after the date hereof, the Company shall cause the Board to be expanded to at
least six members, at which time EIS shall be entitled to appoint its director.
The Company will take all necessary or appropriate steps to effect the
appointment and any replacement of EIS's designee.

              (ii) The Company shall reimburse EIS's designee, whether or not
     serving as a member of the Board, for his or her out-of-pocket expenses
     reasonably incurred in connection with his or her attendance of the Board
     meetings.

          (c) Conversion and Exchange Rights. The Company acknowledges that the
              ------------------------------
Certificate of Designations sets forth certain rights of the holders of shares
of Series A Preferred Stock to convert such shares of Preferred Stock into newly
issued fully paid, non-assessable shares of Common Stock, or to exchange such
of Series A Preferred Stock (or the shares of Common Stock into which such
shares of  Series A Preferred Stock were converted under

                                       16
<PAGE>

certain specified circumstances) for the Newco Preferred Shares issued to the
Company on the Initial Closing Date (including stock distributions and dividends
issued thereon and securities into which such Newco Preferred Shares were
converted, the "Exchange Shares") (the "Exchange Right"), and agrees that it
                ---------------         --------------
will not take any action which would impair such rights other than as otherwise
permitted by the provisions thereof.

          (d) Make-Whole. If EIS shall have exercised its Exchange Right (as
              ----------
such term is defined in the Company's articles of incorporation as amended on
the Initial Closing Date), EIS, pursuant to Section 5(c), shall cause to be paid
to the Company within 30 days of such exercise, an amount equal to 30.1% of the
aggregate amount of the Development Funding actually provided by each of the
parties to Newco from and after the Initial Closing Date through the date of
such exercise (the "Make-Whole Amount").  EIS may pay the Make-Whole Amount
                    -----------------
payable upon such exercise, at its option, either (i) in cash, which cash
payment shall include any interest thereon actually paid by the Company in cash
up to the rate of interest charged hereunder (ii) by the Company canceling
shares of Series B Preferred Stock, including accrued and unpaid dividends
thereon (which shall not be declared and shall not be due), at a value of
U.S.$1,700.00 per share so canceled, or (iii) in a combination of (i) and (ii).
If the payment of the Make-Whole Amount, or any portion of the Make-Whole
Amount, is effected by such cancellation, such payment shall be evidenced in
writing by an appropriate written instrument reasonably satisfactory to the
Company and EIS.

          (e) Required Conversion. In the event of a Required Conversion (as
              -------------------
defined in the Certificate of Designations), the Common Stock delivered upon
such conversion shall have the benefit of the Exchange Right identical to that
with respect to the Series A Preferred Stock so converted and shall be evidenced
by a security substantially in the form of Exhibit B.
                                           ---------

          SECTION 6.  Pledge of and Charge Over Exchange Shares. As continuing
                      -----------------------------------------
security for the Company's obligations pursuant to the Exchange Right, the
Company, as the legal and beneficial owner of the Exchange Shares hereby
pledges, assigns, sets over charges by way of a first fixed charge in favor of,
and grants a security interest to EIS in respect of all of the Company's right,
title and interest in and to all Exchange Shares deliverable by the Company upon
exercise of the Exchange Right for such period of time as the Exchange Right
shall be exercisable. The Company shall cause to be delivered to EIS all of the
certificates together with duly executed stock powers in favor of EIS evidencing
such shares, and cause to be filed with the Secretaries of State of the
Commonwealth of Massachusetts and the State of Nevada an appropriate UCC-1
financing statement in respect of such pledge, assignment or setting over, and
take all other necessary, appropriate and customary actions in connection
therewith or otherwise reasonably requested by EIS, including, without
limitation, to the extent necessary, the filing of particulars of the charge
with the Bermuda Registrar of Companies pursuant to the terms of the Bermuda
Companies Act 1981. Such pledge shall be governed by the applicable provisions
of the UCC (as defined in Section 7). Upon exercise of the Exchange Right, EIS
shall be entitled to keep and retain such share certificates, which shall then
be owned by EIS in accordance with the terms thereof. Until such time period EIS
exercises the Exchange Right, the Company shall retain all rights in and to the
pledged Exchange Shares (including without limitation all voting, dividend,
liquidation and other rights), subject only to this pledge, the JDOA and the
Security Interests (as defined in Section 7 hereof) granted in favor of EIS
pursuant to Section 7 hereof.

                                       17
<PAGE>

          SECTION 7.  Security Interest. (a) Certain Definitions. For purposes
                      -----------------      -------------------
of this Section 7, the following definitions shall apply:

          "Proceeds" means all proceeds of, and all other profits, products,
           --------
rents or receipts, in whatever form, arising from the sale, exchange,
assignment, or other disposition of the Collateral (as defined in Section 7(b)
below).

          "Secured Obligations" means the Company's obligations hereunder and in
           -------------------
the Certificate of Designations in respect of the Exchange Right.

          "Security Interests" means the security interests in the Collateral
           ------------------
(as defined in Section 7(b)) granted hereunder securing the Secured Obligations.

          "UCC" means the Uniform Commercial Code as in effect on the date
           ---
hereof in the State of New York; provided, that if by reason of mandatory
                                 --------
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interest in any Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect is such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or non-
perfection.

          (b) Grant of Security Interest. As continuing security for the full
              --------------------------
and punctual payment of the Secured Obligations in accordance with the terms
thereof, the Company hereby charges by way of a first fixed charge in favor of
EIS in respect, and grants to EIS a continuing security interest in and to all,
of the Exchange Shares, owned or held by the Company and any other capital stock
of Newco that is acquired in the future by the Company or any affiliates of the
Company in respect of the Exchange Shares (the "Collateral"), and all Proceeds
                                                ----------
of all or any of the Collateral.

          (c) Covenants and Representations Regarding Security Interest.
              ---------------------------------------------------------

              (i)  The Security Interests constitute valid security interests
     under the UCC securing the Secured Obligations.  When UCC financing
     statements shall have been filed in the appropriate UCC filing offices for
     a debtor with a chief executive office and principal place of business
     located in the County of Suffolk, of the Commonwealth of Massachusetts, the
     Security Interests shall constitute perfected security interests in the
     Collateral, prior to all other Encumbrances and rights of others therein,
     except as otherwise provided in Section 6.

              (ii) The Company will not change its name, identity or corporate
     structure in any manner unless it shall have given EIS prior written notice
     thereof.  The Company will not change the location of (i) its chief
     executive office or principal place of business or (ii) the locations where
     it keeps or holds any Collateral or any records relating thereto unless it
     shall have given EIS prior written notice thereof.  The Company shall not
     in any event change the location of any Collateral if such change would
     cause the Security Interests in such Collateral to lapse or cease to be
     perfected.

                                       18
<PAGE>

              (iii) The Company will, from time to time (and will, as of the
     Initial Closing Date) at its expense, execute, deliver, file and record any
     statement, assignment, instrument, document, agreement or other paper and
     take any other action (including, without limitation, any filings of
     financings or continuation statements under the UCC and the filing of
     particulars of the charge with the Bermuda Registrar of Companies pursuant
     to the terms of the Bermuda Companies Act 1981) that from time to time may
     be necessary or desirable, or that EIS may reasonably request, in order to
     create, preserve, perfect, confirm or validate the Security Interests, or
     to enable EIS to exercise or enforce any of its rights, powers and remedies
     hereunder with respect to any of the Collateral.  To the extent permitted
     by applicable law, the Company hereby authorizes EIS to execute and file
     financing statements or continuation statements without the Company's
     signature appearing thereon. The Company agrees that a carbon,
     photographic, photostatic or other reproduction of this Agreement or of a
     financing statement is sufficient as a financing statement.

          (d) Remedies. If any event of default or breach relating to the
              --------
Exchange Right has occurred and is continuing, EIS may exercise all rights of a
secured party under the UCC (whether or not in effect in the jurisdiction where
such rights are exercised).  EIS may be the purchaser of any or all of the
Collateral so sold at any public sale.  The Company will execute and deliver
such documents and take such other action as EIS deems necessary or advisable in
order that any such sale may be made in compliance with law.  Upon any such
sale, the Collateral shall be delivered, assigned and transferred to EIS.  At
any such sale, EIS shall hold the Collateral absolutely and free from any claim
or right of whatsoever kind, including any equity or right of redemption of the
Company which may be waived, and the Company, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay or appraisal which it
has or may have under any law now existing or hereafter adopted.

          (e) Termination of Security Interest. Upon the repayment,
              --------------------------------
performance in full or termination of all Secured Obligations, the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Company (except as otherwise provided in Section 6 hereof).  Upon such
termination, EIS shall take, at the Company's expense, all commercially
reasonable actions reasonably requested by the Company to effect and evidence
the termination of the Security Interests, including, without limitation, the
preparation and filing of any UCC-3 termination statements.

          SECTION 8.  Survival and Indemnification.
                      ----------------------------

          (a) Survival. For the purposes of this Section, the representations
              --------
and warranties of the Company and EIS contained herein shall survive for a
period of 24 months from and after the date hereof.

          (b) Indemnification. In addition to all rights and remedies
               ---------------
available to the parties hereto at law or in equity, each party hereto (in such
capacity, "Indemnifying Party") shall indemnify the other party, its respective
           ------------------
stockholders, officers, directors, employees, agents, representatives,
affiliates and successors and assigns (each, an "Indemnified Person"), and save
                                                 ------------------
and hold each Indemnified Person harmless from and against and pay on behalf of
or reimburse

                                       19
<PAGE>

each such Indemnified Person, as and when incurred, for any and all loss,
liability, demand, claim, action, cause of action, cost, damage, deficiency,
tax, penalty, fine or expense, whether or not arising out of any claims by or on
behalf of such Indemnified Person or any third party, including interest,
penalties, reasonable attorneys' fees and expenses and all reasonable amounts
paid in investigation, defense or settlement of any of the foregoing (including
all reasonable attorneys' fees and expenses incurred in connection with the
enforcement of this Section 8) (collectively, "Losses"), that any such
                                               ------
Indemnified Person may suffer, sustain incur or become subject to, as a result
of, in connection with, relating or incidental to or by virtue of:

              (i)  any misrepresentation or breach of warranty on the part of
     the Indemnifying Party under Sections 2 or 3 of this Agreement or any of
     the other Transaction Documents (it being understood that neither the
     Company nor EIS shall be responsible for any such misrepresentation or
     breach of warranty by Newco); or

              (ii) any nonfulfillment, default or breach of any covenant or
     agreement on the part of the Indemnifying Party under Sections 4, 6 or 7 of
     this Agreement.

          (c) Maximum Recovery. Notwithstanding anything in this Agreement to
              ----------------
the contrary, in no event shall the Indemnifying Party be liable for
indemnification under this Section 8 in an amount in excess of the aggregate of
the purchase price paid for the Securities, the Warrant and including Purchases
made in respect of the Series B Preferred Stock.  No Indemnified Person shall
assert any such claim unless Losses in respect thereof incurred by any
Indemnified Person, when aggregated with all previous Losses hereunder, equal or
exceed U.S.$50,000, but at such time that an Indemnified Person is entitled to
assert a claim, such claim shall include all Losses covered by this Section 8.

          (d) Investigation. All indemnification rights hereunder shall survive
              -------------
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, irrespective of any investigation, inquiry or
examination made for or on behalf of, or any knowledge of the Indemnified Person
or the acceptance of any certificate or opinion.

          (e) Contribution. If the indemnity provided for in this Section 8
              ------------
shall be, in whole or in part, unavailable to any Indemnified Person, due to
Section 8(b) being declared unenforceable by a court of competent jurisdiction
based upon reasons of public policy, so that Section 8(b) shall be insufficient
to hold each such Indemnified Person harmless from Losses which would otherwise
be indemnified hereunder, then the Indemnifying Party and the Indemnified Person
shall each contribute to the amount paid or payable for such Loss in such
proportion as is appropriate to reflect not only the relative benefits received
by the Indemnifying Party on the one hand and the Indemnified Person on the
other, but also the relative fault of the Indemnifying Party and be in addition
to any liability that the Indemnifying Party may otherwise have.  The indemnity,
contribution and expense reimbursement obligations that the Indemnifying Party
has under this Section 8 shall survive the expiration of the Transaction
Documents.  The parties hereto further agree that the indemnification and
reimbursement commitments set forth in this Agreement shall apply whether or not
the Indemnified Person is a formal party to any such lawsuit, claims or other
proceedings.

                                       20
<PAGE>

          (f) Limitation. This Section 8 is not intended to limit the rights
              ----------
or remedies otherwise available to any party hereto with respect to this
Agreement or the Transaction Documents.

          SECTION 9.  Notices. All notices, demands and requests of any kind to
                      -------
be delivered to any party in connection with this Agreement shall be in writing
and shall be deemed to have been duly given if personally or hand delivered or
if sent by an internationally-recognized overnight delivery courier or by
registered or certified mail, return receipt requested and postage prepaid, or
by facsimile transmission addressed as follows:

          (i)   if to SafeScience, Inc.:

                SafeScience, Inc.
                Park Square Building
                31 St. James Avenue, 8/th/ Floor
                Boston, Massachusetts 02116
                Attention: Chief Executive Officer
                Facsimile: (617) 422-0675

                with a copy to:

                McDermott, Will & Emery
                50 Rockefeller Plaza
                New York, New York 10020
                Attention: Cheryl Reicin
                Facsimile: (212) 547-5444

          (ii)  if to EIS, to:

                Elan International Services, Ltd.
                102 St. James Court
                Flatts, Smiths Parish
                Bermuda FL 04
                Attention:  Chief Executive Officer
                Facsimile:  (441) 292-2224

          with a copy to:

                Reitler Brown LLC
                800 Third Avenue
                New York, New York  10022
                Attention:  David Robbins
                Facsimile:  (212) 371-5500

or to such other address as the party to whom notice is to be given may have
furnished to the other party hereto in writing in accordance with provisions of
this Section 9.  Any such notice or

                                       21
<PAGE>

communication shall be deemed to have been effectively given (i) in the case of
personal or hand delivery, on the date of such delivery, (ii) in the case of an
internationally-recognized overnight delivery courier, on the second business
day after the date when sent, (iii) in the case of mailing, on the fifth
business day following that day on which the piece of U.S. mail containing such
communication is posted, and (iv) in the case of facsimile transmission, the
date of telephone confirmation of receipt.

         SECTION 10. Entire Agreement. This Agreement and the other Transaction
                     ----------------
Documents contain the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior agreements and
understandings among the parties with respect thereto.

         SECTION 11. Amendments and Waiver. This Agreement may not be modified
                     ---------------------
or amended, or any of the provisions hereof waived, except by written agreement
of the Company and EIS dated after the date hereof.

         SECTION 12. Counterparts and Facsimile. The Transaction Documents may
                     --------------------------
be executed in any number of counterparts, and each such counterpart hereof
shall be deemed to be an original instrument, but all such counterparts together
shall constitute one agreement. Each of the Transaction Documents may be signed
and delivered to the other party by facsimile transmission; such transmission
shall be deemed a valid signature.

         SECTION 13. Headings. The section and paragraph headings contained in
                     --------
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of the Agreement.

         SECTION 14. Governing Law; Disputes. This Agreement shall be governed
                     -----------------------
by and construed in accordance with the internal laws of the State of New York,
without giving effect to principles of conflicts of laws. Any dispute under the
Transaction Documents that is not settled by mutual consent shall be finally
adjudicated by any federal or state court sitting in the City, County and State
of New York, and each party consents to the exclusive jurisdiction of such
courts (or any appellate court therefrom) over any such dispute.

         SECTION 15. Expenses. Except as provided in Section 8 hereof, each of
                     --------
the parties shall be responsible for its own costs and expenses incurred in
connection with the transactions contemplated hereby and by the other
Transaction Documents.

         SECTION 16. Exhibits and Schedules. The exhibits to and schedules
                     ----------------------
delivered by or on behalf of any party in connection with this Agreement are an
integral part of this Agreement, and any statements contained in such schedules
shall be deemed to be representations and warranties under this Agreement.

         SECTION 17. Assignments. This Agreement and all of the provisions
                     -----------
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. All or any part of this
Agreement may be assigned by EIS and its permitted assigns to its affiliates and
subsidiaries, as well as any special purpose financing or

                                       22
<PAGE>

similar vehicle established by EIS. Other than as set forth above, no party
shall assign all or any part of this Agreement without the prior written consent
of the other party.

          SECTION 18. Severability. In case any provision of this Agreement
                      ------------
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be in any way affected or
impaired thereby.

                           [Signature page follows]

                                       23
<PAGE>

         IN WITNESS WHEREOF, each of the undersigned has duly executed this
Agreement as of the date first written above.

                                       SAFESCIENCE, INC.

                                       By:   /s/ Bradley J. Carver
                                            ---------------------------
                                            Name: Bradley J. Carver
                                            Title: President and CEO

                                       ELAN INTERNATIONAL SERVICES, LTD.

                                       By:   /s/ Debra Moore Boryj
                                            ---------------------------
                                            Name:  Debra Moore Boryj
                                            Title: Vice President
<PAGE>

                                  EXHIBIT A-1

                      FORM OF CERTIFICATE OF DESIGNATIONS
<PAGE>

                                  EXHIBIT A-2

                         FORM OF NOTICE OF REQUEST FOR
                     PURCHASE OF SERIES B PREFERRED STOCK

Date: _________, 200__

To:   Elan International Services, Ltd.

From: SafeScience, Inc.

Re:   Request for Purchase of Series B Preferred Stock

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

          Pursuant to Section 1(e) of the Securities Purchase Agreement between
(the "Company") and Elan International Services, Ltd., dated June 22, 2001 (as
      -------
amended at any time, the "Purchase Agreement"), the Company hereby notifies EIS
                          ------------------
of its request for a purchase of Series B Preferred Stock  as amended at any
time, in the amount of U.S.$__________ on __________, 200__ (the "P.S. Closing
                                                                  ------------
Date"). Please provide funding on the Closing Date in the requested amount to
----
the Company in accordance with the following wire instructions:

                                       [wire instructions:
                                       Bank Name: ______________________
                                       ABA No.: ________________________
                                       Acct. No.: ______________________
                                       For credit to: __________________]

          After giving effect to the requested disbursement, total Purchases (as
defined in the Purchase Agreement) shall equal U.S. $___________.

                                       SAFESCIENCE, INC.

                                       By: _____________________________
                                           Name:
                                           Title:
<PAGE>

                                  EXHIBIT A-3

                         FORM OF OFFICER'S CERTIFICATE

OFFICER' CERTIFICATE
--------------------

          The undersigned, [__________________] being the [title of officer] of
SafeScience, Inc., a Nevada corporation (the "Company"), does hereby certify on
                                              -------
behalf of the Company under Section 1(e) of the Securities Purchase Agreement,
as amended at any time, the "Securities Purchase Agreement"), dated as of 2001,
                             -----------------------------
between Elan International Services, Ltd., a Bermuda exempted limited liability
company, and the Company, as follows (capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to them in the Securities
Purchase Agreement):

1.  As of the date of this Officer's Certificate, the Company is not in default
    or breach in any respect under any of the terms and provisions of the
    Securities Purchase Agreement, the JDOA or any other Transaction Document;

2.  The representation and warranties made by the Company referenced in clause
    (1)(e)(2)(E) of the Securities Purchase Agreement are true and correct as at
    the times specified therein; and

3.  The purchase of shares of Series B Preferred Stock requested in connection
    with this Officer's Certificate (a) is in respect of the Securities Purchase
    Agreement and the JDOA in the amount of U.S.$[_____] as approved by the
    appropriate parties as provided therein, respectively, and (b) is in
    compliance with applicable laws and regulations and no regulatory approval
    therefor (that has not been obtained) is required in connection therewith.

4.  The aggregate amount of outstanding shares of Series B Preferred Stock is
    [____] after the requested wire transfer.

5.  The Company will notify EIS in writing of any information or change in
    circumstances that may arise between the date hereof and the date of the
    funding requested in connection herewith if such shall make any of the
    certifications herein to be untrue or misleading.

          In Witness Whereof, the undersigned has executed this Officer's
Certificate on the [___] day of [_____________], 200[_].

                                       ________________________________
                                       [___________________]
                                       [___________________]
<PAGE>

                                   EXHIBIT B

                          FORM OF RIGHTS CERTIFICATE

Certificate No. R-                                                _______ Rights

Date of Issuance:  ___________, 200__

                               SAFESCIENCE, INC.

                               Rights Certificate

          This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, which entitles the
owner thereof, subject to the terms, provisions and conditions set forth herein,
to acquire from SafeScience, Inc. (the "Corporation") at any time after the date
                                        -----------
of issuance hereof [_____]shares of non-voting convertible preference shares (as
adjusted for any combinations or divisions or similar recapitalizations) of
SafeScience Newco, Ltd.., a Bermuda exempted limited liability company

("Newco"), held by the Corporation (or, if such preference shares have been
  -----
converted by the Corporation pursuant to the terms thereof, the securities
issued upon such conversion) (the "Newco Preferred Shares") in exchange for
                                   ----------------------
tendering this certificate and all shares of the Corporation's Common Stock (as
defined in the Corporation's Certificate of Incorporation) issued upon
conversion of the Series A Preferred Stock (as adjusted for any combinations or
divisions or similar recapitalizations).

          In order to exercise the Right, the holders shall provide written
notice thereof to the Corporation, setting forth (a) the fact that such holders
intend to exercise the Right, and (b) the proposed date for such exercise (the
"Exercise Date"), which shall be between 10 and 30 days after the date of such
 -------------
notice, provided, however, that if the Corporation shall deliver the holders a
        --------  -------
written request to delay the date for such exercise by no more than 45 days, the
Exercise Date will be as set forth in that request.  On the Exercise Date, (y)
the holders shall tender their shares of Common Stock to the Corporation for
cancellation, and (z) the Corporation shall cause to be delivered to Elan
International Services, Ltd., acting on behalf of such holders, such shares of
Newco.  The holders and the Corporation shall take all other necessary or
appropriate actions in connection with or to effect such closing.

          This Right Certificate, upon surrender, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to
<PAGE>

purchase a like aggregate number of Newco Preferred Shares as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase.

          The Rights evidenced by this Certificate may be exercised in whole and
not in part.

          No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Newco Preferred
Shares or of any other securities of Newco which may at any time be issuable on
the exercise hereof, nor shall anything contained herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of Newco or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions affecting
stockholders, or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised.

          The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issuance or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by the Corporation,
but will at all times in good faith assist in the carrying out of all the
provisions hereof and in the taking of all such action as may be necessary or
appropriate in order to protect the exchange right of the holders of this Rights
Certificate against impairment.

          If the Corporation is unable or shall fail to discharge its
obligations hereunder (an "Obligation"), such Obligation shall be discharged as
                           ----------
soon as the Corporation is able to discharge such Obligation.  If and so long as
such Obligation with respect to this Rights Certificate shall not be fully
discharged, the Corporation shall not directly or indirectly, redeem, purchase,
or otherwise acquire any classes or series of its preferred stock or common
stock ("Capital Stock") or discharge any mandatory or optional redemption,
        -------------
sinking fund or other similar obligation in respect of any such Capital Stock.

          Without limiting the foregoing, the holder of this Rights Certificate
shall be entitled to the benefits of that certain Securities Purchase Agreement,
dated as of June __, 2001, between SafeScience and Elan International Services,
Ltd., a Bermuda exempted limited liability company.

          WITNESS the facsimile signature of the proper officer of the
Corporation.

                                       SAFESCIENCE, INC.

                                       By:  ________________________________
                                            Name:
                                            Title:

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