Unassociated Document


    EXHIBIT
4.6

    


     

    CERTIFICATE
OF DESIGNATION

    OF
RIGHTS AND PREFERENCES OF

    SERIES
B PREFERRED STOCK

    OF
SPECTRASCIENCE, INC.

     

    (PURSUANT
TO MINNESOTA STATUTES, SECTION 302A.401, SUBD. 3(B))

     

     

    The
undersigned, being the Secretary of SpectraScience, Inc., a corporation
organized and existing under the laws of the State of Minnesota (the “Company”), in
accordance with the provisions of Minnesota Statutes, Section 302A.401, Subd.
3(b), does hereby certify that pursuant to the authority vested in the Company’s
Board of Directors by the Company’s Amended and Restated Articles of
Incorporation (the “Articles”), the Board
of Directors on June 22, 2009, in accordance with Minnesota Statutes, Section
302A.401, Subd. 3 and Section 2.01 of the Articles duly adopted the following
resolution establishing the Series B Preferred Stock of the
Company:

     

    RESOLVED,
that pursuant to the authority vested in the Board of Directors of the Company
by the Articles, the Board of Directors hereby establishes a class of preferred
stock entitled the Series B Preferred Stock, and hereby states the designation
and number of shares, and fixes the relative rights and preferences, of the
Series B Preferred Stock as follows:

     

    
      Designation and
Rank.

    

     

    Fifteen
Million (15,000,000) shares of the Company’s undesignated stock authorized by
Article 2.01 of the Articles are designated as Series B Preferred Stock, par
value $0.1 per share, (the “Series B Stock”). The
Series B Stock shall rank, with respect to dividends and rights upon
liquidation, winding up and dissolution, senior to the Common Stock of the
Company.

     

    
      Definitions.

    

     

    For
purposes of this Certificate of Designation (“Certificate”) the
following definitions shall apply and shall be equally applicable to both the
singular and plural forms of the defined terms:

     

    “Conversion
Shares” shall mean the securities issued or issuable upon conversion of the
Series B Stock.

     

    2.2           “Free Trading” shall
mean that (i) Conversion Shares consist of Common Stock and are freely tradable
by non-affiliates of the Company (subject only to the volume limitations imposed
by Rule 144 under the Securities Act of 1933) and (ii) over a period of ten
consecutive trading days immediately prior to the Mandatory Conversion Date (as
defined in Section 5.2 hereof) the Common Stock has had (A) an average closing
price not less than the Conversion Price then in effect and (B) average daily
trading volume of not less than 50,000 shares.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.3           “Original
Issue Price” shall mean $.20 per share of Series B Stock (subject to appropriate
adjustments for stock splits and other combinations of the Series B Stock in the
same manner as set forth in Section 5.6).

     

    2.4           “Person”
shall include all natural persons, corporations, business trusts, associations,
limited liability companies, partnerships, joint ventures and other entities,
governments, agencies and political subdivisions.

     

    2.5           “Qualified
Public Offering” shall mean the closing of the first underwritten public
offering pursuant to an effective registration statement filed under the
Securities Act after June 1, 2009 covering the offering and sale of Common Stock
for the account of the Company on a firm commitment basis in which (i) the
aggregate gross proceeds to the Company arising from the sale of securities
solely for cash is at least $10,000,000 before deduction of underwriters’
commissions and expenses and (ii) prior to or as a result of such offering, the
Common Stock is listed for trading on the New York Stock Exchange, the American
Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the
Nasdaq Capital Market, or any other “exchange” recognized by rule of the
Securities and Exchange Commission.

     

    2.6           “Series
B Stock” shall mean Series B Preferred Stock of the Company.

     

    
      	
              2. 

            	
              Voting
      Rights.

            


    

     

    2.1           General.  At
all meetings of the shareholders of the Company and in the case of any actions
of shareholders in lieu of a meeting, each holder of the Series B Stock shall
have that number of votes on all matters submitted to the shareholders that is
equal to the number of whole shares of Common Stock into which such holder’s
shares of Series B Stock are then convertible, as provided in Section 5 hereof,
at the record date for the determination of the shareholders entitled to vote on
such matters or, if no such record date is established, at the date such vote is
taken or any written consent of such shareholders is effected.  Except
as may be otherwise provided in this Certificate, by agreement, or by law, the
holders of the Common Stock and the holders of the Series B Stock shall vote
together as a single class on all actions to be taken by the shareholders of the
Company.

     

    2.2           Additional
Class Votes by the Series B Stock.  For so long as at least 35% of the
shares of Series B Stock originally issued remain outstanding, the Company shall
not, without the affirmative vote of at least 67% of the then outstanding shares
of the Series B Stock, with each share of the Series B Preferred entitled to one
vote in each instance:

     

     

    (i)           take
any action, including, without limitation, any action that constitutes or
results in an amendment or waiver of any provision of the Company’s Articles of
Incorporation or Bylaws, if such action in any way affects, alters or changes
any existing rights, preferences, privileges or provisions relating to the
Series B Stock or the holders thereof, or results in any increase or decrease in
the authorized number of shares of the Series B Stock;

     

     

    (ii)           authorize,
issue or otherwise create (by reclassification or otherwise) any new class of
additional shares of capital stock of the Company having rights, preferences or
privileges that are senior to or on priority with the Series B Stock (including
any additional shares of the Series B Stock).

     

    
      
        
        

      

      
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              3. 

            	
              Dividends.

            


    

     

    3.1           Dividends.  No
dividend or other distribution shall accrue or be paid with respect to any
shares of capital stock of the Company for any period, whether before or after
the effective date of this Certificate, unless and until all accrued dividends
on the Series B Stock are paid in full.  The Series B Stock shall be
entitled to receive cumulative dividends in preference to any dividend which may
be declared on the Common Stock at the rate of 8% of the Original Issue Price
(subject to any adjustment for stock splits, stock dividends or other
recapitalizations).  Dividends on shares of capital stock of the
Company shall be payable only out of funds legally available
therefore.  Dividends on the Series B Stock shall be due and payable
annually on the last business day of December and shall be payable in cash, or
at the option of the Company, in shares of Common Stock.

     

    3.2           Non-Cash
Dividends.  Whenever a dividend provided for in this Section 3 shall
be payable in property other than cash (including without limitation Common
Stock), the value of such dividend shall be deemed to be the fair market value
of such property as determined in good faith by the Board.

     

    3.3           Payments
on Conversion.  If the Company shall have accrued but unpaid cash
dividends with respect to any of the Series B Stock upon its conversion as
provided in Section 5 hereof, then all such accrued but unpaid dividends on such
converted shares shall be canceled.

     

    
      	
              4. 

            	
              Liquidation
      Rights.

            


    

     

    4.1           Preference
of the Series B Stock.  In the event of any liquidation, dissolution
or winding up of the Company, whether voluntary or involuntary, the holders of
the Series B Stock then outstanding shall be entitled to be paid out of the
assets of the Company available for distribution to its shareholders, whether
such assets are capital, surplus, or earnings, before any payment or declaration
and setting apart for payment of any amount shall be made in respect of the
Common Stock or any other class or series of shares ranking junior to the Series
B Stock, an amount equal to (a) the Original Issue Price (subject to appropriate
adjustments for stock splits, stock dividends, recapitalizations and other
combinations in the same manner as set forth in Section 5) plus (b) declared but
unpaid dividends to and including the date full payment shall be tendered to the
holders of the Series B Stock (the “Liquidation Price”) with respect to such
liquidation, dissolution or winding up.  If, upon any liquidation,
dissolution, or winding up of the Company, whether voluntary or involuntary, the
assets to be distributed to the holders of the Series B Stock shall be
insufficient to permit the payment to such shareholders of the full preferential
amounts aforesaid, then all of the assets of the Company shall be distributed
ratably to the holders of the Series B Stock based upon the full Liquidation
Price payable with respect to such shares of the Series B Stock if such
liquidation preference was paid in full.

     

    4.2           Reorganization;
Sale of Assets.  The merger, acquisition or consolidation of the
Company into or with any other entity or entities which results in the exchange
of outstanding shares of the Company for securities or other consideration
issued or paid or caused to be issued or paid by any such entity or affiliate
thereof pursuant to which the shareholders of the Company immediately prior to
the transaction do not own a majority of the outstanding shares of the surviving
corporation immediately after the transaction, or any sale, lease, license (on
an exclusive basis) or transfer by the Company of all or substantially all its
assets, shall be deemed to be a liquidation, dissolution or winding up of the
Company within the meaning of the provisions of this Section 5 unless this
provision is waived by the affirmative vote of the holders of at least 50% of
the Series B Stock then outstanding.

     

    
      
        
        

      

      
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    4.3           Notice.  Written
notice of such liquidation, dissolution or winding up, stating a payment date
and the place where said payments shall be made, shall be given by mail, postage
prepaid, or by telephone facsimile to non-U.S. residents, not less than 20 days
prior to the earlier of (i) the shareholders’ meeting called to approve such
transaction or (ii) the closing of such transaction, to the holders of record of
the Series B Stock, such notice to be addressed to each such holder at its
address as shown by the records of the Company.  The first of such
notices shall describe all material terms and conditions of the transaction and
of Section 4.2 hereof (including, without limiting the generality of the
foregoing, a description of the value of the consideration, if any, being
offered to the holders of the Series B Stock in the transaction and the amount
to which such holders would be entitled if such transaction were (as described
in Section 4.2 hereof) to be deemed a liquidation, dissolution or winding up of
the Company) and the Company shall thereafter give such holders prompt notice of
any material changes to such terms and conditions.  The transaction
shall in no event take place sooner than 20 days after the mailing by the
Company of the first notice provided for herein or sooner than 10 days after the
mailing by the Company of any notice of material changes as provided for herein;
provided that such periods may be reduced upon the written consent of the
holders of a majority in interest of the Series B Stock then outstanding, voting
together as a single class on an as-if-converted basis.

     

    
      	
              5. 

            	
              Conversion.  The
      holders of the Series B Stock shall have the following conversion rights
      (the “Conversion Rights”):

            


    

     

    Optional
Conversion of the Series B Stock.  The Series B Stock shall be
convertible, in whole or in part, without the payment of any additional
consideration by the holder thereof and at the option of the holder thereof, at
any time after the date of this Certificate at the office of the Company into
that number of shares of Common Stock as is determined by dividing $.20 by the
Conversion Price (as defined below) in effect at the time of conversion and then
multiplying such quotient by each share of the Series B Stock to be
converted.  The price at which the shares of Common Stock shall be
deliverable upon conversion without payment of any additional consideration by
the holder thereof shall be initially $.20 per share (the “Conversion
Price”).  The Conversion Price shall be subject to adjustment, in
order to adjust the number of shares of the Common Stock into which the Series B
Stock is convertible, as hereinafter provided.

     

    Automatic
Conversion of the Series B Stock.  If at any time (a) the Company
shall complete a Qualified Public Offering, or (b) the holders of at least 67%
of the outstanding Series B Stock shall consent in writing to the conversion of
the Series B Stock into shares of the Common Stock, or (c) the Conversion Shares
upon issuance will be Free Trading, then effective upon (i) the closing of the
sale of such shares by the Company pursuant to such Qualified Public Offering,
(ii) such consent of the holders of the Series B Stock, or (iii) notice by the
Company to the holders of the Series B Stock that the Conversion Shares are Free
Trading, as the case may be, all outstanding shares of Series B Stock shall
automatically convert into shares of the Common Stock at the Conversion Price as
of a date specified by the Company (the “Mandatory Conversion
Date”).

     

    Fractional
Shares.  No fractional shares of Common Stock shall be issued upon
conversion of the Series B Stock.  In lieu of any fractional share to
which any holder would otherwise be entitled upon conversion of some or all of
the Series B Stock owned by such holder, the Company shall, at the discretion of
the Board, pay cash equal to such fraction multiplied by the then effective
Conversion Price or round up to the nearest whole share.

     

    
      
        
        

      

      
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    Mechanics
of Optional Conversion.  Before any holder of the Series B Stock shall
be entitled to convert the same into full shares of Common Stock, such holder
shall surrender the certificate or certificates therefore, endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Company, duly executed by the registered holder or by such
holder’s attorney duly authorized in writing, at the office of the Company and
shall give written notice to the Company at such office that such holder elects
to convert the same and shall state therein such holder’s name or the name of
the nominees in which such holder wishes the certificate or certificates for
shares of the Common Stock to be issued.  The Company shall, as soon
as practicable thereafter, issue and deliver at such office to such holder of
the Series B Stock, or to such holder’s nominee or nominees, a certificate or
certificates for the number of shares of the Common Stock to which such holder
shall be entitled as aforesaid, together with cash if any, to be delivered in
lieu of any fraction of a share.  Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the shares of the Series B Stock to be converted, and the person or
persons entitled to receive the shares of the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such shares of the Common Stock on such date.  From and after such
date, all rights of the holder with respect to the Series B Stock so converted
shall terminate, except only the right of such holder, upon the surrender of
his, her or its certificate or certificates therefore, to receive certificates
for the number of shares of the Common Stock issuable upon conversion thereof,
certificates for the number of shares of the Series B Stock remaining and cash
for fractional shares.

     

    Mechanics
of Automatic Conversion.  All holders of record of shares of the
Series B Stock will be given at written notice of the date of any automatic
conversion pursuant to Section 5.2 hereof not later than three business days’
following the actual date of such automatic conversion.  Each such
notice shall designate a place for exchange of all of the shares of such Series
B Stock.  Such notices will be sent by mail, first class, postage
prepaid to each record holder of the Series B Stock at such holder’s address
appearing on the Company’s stock register, or by overnight courier service in
the case of the notice prior to the actual date of conversion.  Each
holder of shares of the Series B Stock shall surrender such holder’s certificate
or certificates for all such shares to the Company at the place designated in
such notice, and shall thereafter receive certificates for the number of shares
of the Common Stock or other securities to which such holder is
entitled.  Failure to provide such notice or untimely notice shall not
affect the validity of automatic conversion hereunder.  On the date
fixed for conversion, all rights with respect to the Series B Stock will
terminate, except only the rights of the holders thereof, upon surrender of
their certificate or certificates therefore, to receive certificates for the
number of shares of the Common Stock or other securities into which such Series
B Stock has been converted and cash for fractional shares.  If so
required by the Company, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Company, duly executed by the registered holder or by
her, his or its attorney duly authorized in writing.  All certificates
evidencing shares of the Series B Stock which are required to be surrendered for
conversion in accordance with the provisions hereof shall, from and after the
date such certificates are so required to be surrendered, be deemed to have been
retired and canceled and the shares of the Series B Stock represented thereby
converted into the Common Stock for all purposes, notwithstanding the failure of
the holder or holders thereof to surrender such certificates on or prior to such
date; provided that the Company may require the holder to provide adequate
protection to the Company for the loss of such certificate(s) prior to issuing
certificates for shares of Common Stock to such holder.  As soon as
practicable after the date of such automatic conversion and the surrender of the
certificate or certificates for the Series B Stock as aforesaid, the Company
shall cause to be issued and delivered to such holder, or to her, his or its
written order, a certificate or certificates for the number of full shares of
the Common Stock or other securities issuable on such conversion in accordance
with the provisions hereof and cash as provided in Section 5.3 hereof in respect
of any fraction of a share of Common Stock otherwise issuable upon such
conversion.

     

    
      
        
        

      

      
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    Certain
Adjustments to Conversion Price for Stock Splits, Dividends, Mergers,
Reorganizations, Etc.

     

    Adjustment
for Stock Splits, Stock Dividends and Combinations of Common
Stock.  In the event the outstanding shares of Common Stock shall,
after the filing of this Certificate, be further subdivided (split), or combined
(reverse split), by reclassification or otherwise, or in the event of any
dividend or other distribution payable on the Common Stock in shares of Common
Stock, the applicable Conversion Price in effect immediately prior to such
subdivision, combination, dividend or other distribution shall, concurrently
with the effectiveness of such subdivision, combination, dividend or other
distribution, be proportionately adjusted.

     

    Adjustment
for Merger or Reorganization, Etc.  In the event of a
reclassification, reorganization or exchange (other than described in Section
5.6(a) above) or any merger, acquisition, consolidation or reorganization of the
Company with another company or entity (other than a merger, acquisition or
other consolidation or reorganization as defined in Section 4.2 hereof, which is
considered a liquidation pursuant to Section 4 above), each share of the Series
B Stock shall thereafter be convertible into the number of shares of stock or
other securities or property to which a holder of the number of shares of the
Common Stock of the Company deliverable upon conversion of the Series B Stock
would have been entitled upon such reclassification, reorganization, exchange,
consolidation, merger or conveyance had the conversion occurred immediately
prior to the event; and, in any such case, appropriate adjustment (as determined
by the Board) shall be made in the application of the provisions herein set
forth with respect to the rights and interests thereafter of the holders of the
Series B Stock, to the end that the provisions set forth herein (including
provisions with respect to changes in and other adjustments of the applicable
Conversion Price) shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares of stock or other property thereafter deliverable
upon the conversion of the Series B Stock.

     

    Duration
of Adjusted Conversion Price.  Following each computation or
readjustment of an adjusted Conversion Price as provided above in this Section
5, the new adjusted Conversion Price shall remain in effect until a further
computation or readjustment thereof is required by this Section 5.

     

    Other
Action Affecting the Common Stock.  In case, after the filing of this
Certificate, the Company shall take any action affecting the Common Stock, other
than an action described above in this Section 5, which in the good faith
opinion of the Board would have a materially adverse effect upon the Conversion
Rights of the Series B Stock granted herein, the Conversion Price shall be
adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.

     

    Certificate
as to Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 5, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each holder of the applicable Series B
Stock a certificate setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is
based.  The Company shall, upon the written request, at any time, of
any holder of the Series B Stock, furnish or cause to be furnished to such
holder a like certificate setting forth: (i) such adjustments and readjustments;
(ii) the applicable Conversion Price at the time in effect; and (iii) the number
of shares of the Common Stock and the amount, if any, of other property which at
the time would be received upon the conversion of such Series B
Stock.

     

    
      
        
        

      

      
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    Notices
of Record Date.  In the event of any taking by the Company of a record
of the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend (other than a cash
dividend which is the same as cash dividends paid in previous quarters) or other
distribution, any capital reorganization of the Company, any reclassification or
recapitalization of the Company’s capital stock, any consolidation or merger
with or into another Company, any transfer of all or substantially all of the
assets of the Company or any dissolution, liquidation or winding up of the
Company, the Company shall mail to each holder of the Series B Stock at least 10
days prior to the date specified for the taking of a record, a notice specifying
the date on which any such record is to be taken for the purpose of such
dividend or distribution.

     

    Common
Stock Reserved.  The Company shall reserve and keep available out of
its authorized but unissued Common Stock such number of shares of the Common
Stock as shall from time to time be sufficient to effect conversion of the
Series B Stock.

     

    Payment
of Taxes.  The Company will pay all taxes (other than taxes based upon
income) and other governmental charges that may be imposed with respect to the
issue or delivery of shares of the Common Stock upon conversion of shares of the
Series B Stock, other than any tax or other charge imposed in connection with
any transfer involved in the issue and delivery of shares of the Common Stock in
a name other than that in which the shares of the Series B Stock so converted
were registered.

     

    No
Impairment.  The Company will not through any reorganization, transfer
of assets, merger, dissolution, issue 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 Company but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 5 and in taking of all such action as may be necessary or appropriate in
order to protect the Conversion Rights of the holders of the Series B Stock
against impairment.  Notwithstanding the foregoing, nothing in this
Section 5.10 shall prohibit the Company from amending its Articles with the
requisite consent of its shareholders and the Board of Directors.

     

    Status of
Series B Stock Upon Retirement.

     

    Shares of
Series B Stock which are acquired or redeemed by the Company or converted
pursuant to Section 5 shall become authorized undesignated shares and may be
redesignated and reissued by the Board of Directors as provided in the
Articles.

     

    IN
WITNESS WHEREOF, the Company has caused this Certificate to be signed by Jim
Hitchin, its Secretary, this 23rd day of July, 2009.

     

    
      	 	

              SPECTRASCIENCE,
      INC.

               

              By:            /s/  Jim
      Hitchin

               

              Name:             Jim
      Hitchin

               

              Its:                 Secretary

            


    

     

    
      
        
        

      

      
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