MEDICAL
      DISCOVERIES, INC.

     

    CERTIFICATE
      OF DESIGNATION OF PREFERENCES AND RIGHTS

    OF
      

    SERIES
      B CONVERTIBLE PREFERRED STOCK

     

    
      
        

      

    

     

    Pursuant
      to the authority conferred upon the Board of Directors by the Amended and
      Restated Articles of Incorporation of Medical Discoveries, Inc., a Utah
      corporation (the “Corporation”), and pursuant to the provisions of Section
      16-10a-601 of the Utah Revised Business Corporation Act, said Board of Directors
      pursuant to a unanimous written consent, dated as of November 6,
      2007, adopted a
      resolution establishing the rights, preferences, privileges and restrictions
      of,
      and the number of shares comprising, a new series of the Corporation’s Preferred
      Stock, which resolution is as follows:

     

    WHEREAS,
      the Amended and Restated Articles of Incorporation of the Corporation provide
      for 50,000,000 shares of a class of shares known as “Preferred Stock,” issuable
      from time to time in one or more series; and

     

    WHEREAS,
      the Board of Directors of the Corporation is authorized to create a new series
      of Preferred Stock and to determine the preferences, limitations and relative
      rights granted to or imposed upon any wholly unissued series of Preferred Stock,
      to fix the number of shares constituting any such Series, and to determine
      the
      designation thereof;

     

    WHEREAS,
      the Board of Directors of the Corporation desires, pursuant to its authority
      as
      aforesaid, to determine and fix the powers, preferences voting and other rights
      and restrictions relating to a new series of Preferred Stock and the number
      of
      shares constituting and the designation of said new series;

     

    NOW,
      THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and
      determines number of shares constituting, and the rights, preferences,
      privileges and restrictions relating to a new series of the Corporation’s
      Preferred Stock as follows:

     

    1.  DESIGNATION
      OF SERIES.
      There is
      hereby established a series of preferred stock, no par value per share, of
      the
      Corporation, which new series is designated as “Series B Convertible Preferred
      Stock” (“Series B Preferred Stock”). The number of shares constituting such
      series is 13,000, which number may from time to time be increased or decreased
      (but not below the number then outstanding) by the Board of Directors. The
      Series B Preferred Stock shall have a stated value of $100 per share for the
      purpose of calculating amounts payable upon liquidation, dissolution or winding
      up, and adjustments to the Conversion Price. Shares of Series B Preferred Stock
      may be issued in fractional shares, which fractional shares shall entitle the
      holder, in proportion to such holder’s fractional share, to all rights of a
      holder of a whole share of this series.

     

    
      
         

      

      
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    2.  RANK.
      The
      Series B Preferred Stock shall, with respect to the rights of the Corporation’s
      shareholders upon liquidation, dissolution or winding up of the affairs of
      the
      Corporation, rank (i) senior and prior to the Corporation’s Common Stock, no par
      value per share (the “Common Stock”), and (ii) junior to the Series A
      Convertible Preferred Stock. 

     

    3.  DIVIDENDS.
      No
      dividends are required to be paid to the holders of Series B Preferred Stock.
      However, no dividend shall be declared or paid on the Common Stock, other than
      dividends payable solely in capital stock, unless an equivalent dividend
      (computed in proportion to the number of shares of Common Stock into which
      each
      share of Series B Preferred Stock is then convertible) is paid and declared
      for
      all outstanding shares of Series B Preferred Stock. Each dividend shall be
      paid
      to the holders of record of shares of the Series B Preferred Stock as they
      appear on the stock register of the Corporation on a date determined by the
      Board of Directors (the “Dividend Record Date”). Holders of shares of the Series
      B Preferred Stock converted between the close of business on a Dividend Record
      Date and the close of business on the dividend payment date shall, in lieu
      of
      receiving such dividend on the dividend payment date fixed therefor, receive
      such dividend payment on the date of conversion. The holders of shares of the
      Series B Preferred Stock shall not be entitled to any dividends other than
      the
      dividends provided for in this Paragraph 3. 

     

    4.  LIQUIDATION.

     

    a.  The
      liquidation value per share of shares of the Series B Preferred Stock, in case
      of the voluntary or involuntary liquidation, dissolution or winding-up of the
      affairs of the Corporation, shall be $100 per share, plus an amount equal to
      the
      dividends declared and unpaid with respect to each such share, to the payment
      date (such aggregate amount being hereinafter referred to as the “Liquidation
      Preference”). Whenever the distribution provided for in this Paragraph 4 shall
      be paid in property other than cash, the value of such distribution shall be
      the
      fair market value of such property as determined in good faith by the Board
      of
      Directors of the Corporation.

     

    b.  In
      the
      event of a distribution in connection any voluntary or involuntary liquidation,
      dissolution or winding-up of the Corporation, and subject to the prior rights
      of
      the Corporation’s Series A Convertible Preferred Stock, the holders of shares of
      the Series B Preferred Stock shall be entitled to receive out of the assets
      of
      the Corporation, whether such assets are capital or surplus of any nature,
      an
      amount per share equal to the Liquidation Preference of such shares held by
      them
      in preference to and in priority over any distributions made to the holders
      of
      Common Stock. If, upon the occurrence of a liquidation, dissolution or winding
      up, the assets and funds of the Corporation legally available for distribution
      to shareholders shall be insufficient to permit the payment in full to holders
      of Series B Preferred Stock of the Liquidity Preference, then all of the assets
      and funds of the Corporation legally available for distribution to holders
      of
      the Series B Preferred Stock shall be distributed ratably among the holders
      of
      Series B Preferred Stock in proportion to the preferential amount each such
      holder is otherwise entitled to receive. Upon payment of the Liquidation
      Preference to which the holders of shares of the Series B Preferred Stock are
      entitled in accordance with this paragraph, the Series B Preferred Stock shall
      be cancelled and the holders of shares of the Series B Preferred Stock shall
      not
      thereafter be entitled to any further participation in any distribution of
      assets by the Corporation. 

     

    
      
         

      

      
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    c.  Neither
      a
      consolidation or merger of the Corporation with or into any other entity, nor
      a
      merger of any other entity with or into the Corporation, nor a sale or transfer
      of all or any part of the Corporation’s assets for cash or securities or other
      property shall be considered a liquidation, dissolution or winding-up of the
      Corporation within the meaning of this Paragraph 4. 

     

    d.  Written
      notice of any liquidation, dissolution or winding up of the Corporation, stating
      the payment date or dates when and the place or places where the amounts
      distributable in such circumstances shall be payable, shall be given by first
      class mail, postage prepaid, not less than 30 days prior to any payment date
      stated therein to the holders of shares of the Series B Preferred Stock at
      their
      respective addresses as the same shall appear on the books of the transfer
      agent
      with respect to the Series B Preferred Stock.

     

    5.  VOTING.
      The
      holders of Series B Preferred Stock shall be entitled to vote upon all matters
      presented to the Corporation’s shareholders, together with the holders of the
      Common Stock as one class. Each share of Series B Preferred Stock shall entitle
      the holder thereof to that number of votes equal to the number of shares of
      Common Stock into which each such share of Series B Preferred Stock would have
      been convertible, if such conversion had taken place on the record date set
      for
      determining stockholders entitled to vote at a meeting or the date of the
      consent of stockholders if action is being taken by written
      consent.

     

    6.  CONVERSION.
      The
      holder of any shares of Series B Preferred Stock shall have the right at any
      time commencing from the date of issuance to convert any and all of such
      holder’s shares of Series B Preferred Stock into duly authorized, validly
      issued, fully paid and nonassessable shares of Common Stock of the Corporation
      at the Conversion Price, as defined herein, and upon the terms set forth herein.
      The holder of any shares of the Series B Preferred Stock may exercise such
      holder’s right to voluntarily convert such shares into shares of Common Stock by
      surrendering for such purpose to the Corporation, at its principal office or
      at
      such other office or agency maintained by the Corporation for that purpose,
      a
      certificate or certificates representing the shares of Series B Preferred Stock
      to be converted, accompanied by a written notice stating that such holder elects
      to convert all or a specified whole number of such shares in accordance with
      the
      provisions of this Paragraph 6 and specifying the name or names in which such
      holder wishes the certificate or certificates for shares of Common Stock to
      be
      issued. In case such notice shall specify a name or names other than that of
      such holder, such notice shall be accompanied by (i) payment of any transfer
      taxes payable upon the issuance of shares of Common Stock in such name or names
      and (ii) evidence, satisfactory to the Corporation, that the transfer of such
      shares will not violate any applicable securities or other laws. As promptly
      as
      practicable, and in any event within ten (10) business days after the surrender
      of such certificates and the receipt of such notice relating thereto and, if
      applicable, payment of all transfer taxes, the Corporation shall deliver or
      cause to be delivered (i) certificates representing the number of validly
      issued, fully paid and nonassessable shares of Common Stock to which the holder
      of the Series B Preferred Stock so converted shall be entitled, (ii) any payment
      (in either cash of shares of Series B Preferred Stock) required to be made
      with
      respect to declared but unpaid dividends on the converted shares of Series
      B
      Preferred Stock, and (iii) if less than the full number of shares of the Series
      B Preferred Stock evidenced by the surrendered certificate or certificates
      are
      being converted, a new certificate or certificates, of like tenor, for the
      number of shares evidenced by such surrendered certificate or certificates
      less
      the number of shares converted. Such conversions shall be deemed to have been
      made at the close of business on the date of giving of such notice and of such
      surrender of the certificate or certificates representing the shares of the
      Series B Preferred Stock to be converted so that the rights of the holder
      thereof shall cease except for the right to receive Common Stock and any accrued
      dividend in accordance herewith, and the converting holder shall be treated
      for
      all purposes as having become the record holder of such Common Stock at such
      time.

     

    
      
         

      

      
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    7.  CONVERSION
      PRICE.
      Each
      share of Series B Preferred Stock shall be converted into a number of shares
      of
      Common Stock determined by dividing (i) $100 by (ii) the Conversion Price of
      such shares as in effect on the date of conversion. The initial Conversion
      Price
      shall be $0.11 per share. The initial Conversion Price shall be subject to
      further adjustment as set forth in Paragraph 9 hereof.

     

    8.  CONVERSION
      PROCEDURE.
      Upon any
      conversion of any shares of Series B Preferred Stock under Paragraph 6, the
      holder of the converted Series B Preferred Stock shall be entitled to receive
      (i) shares of Common Stock in exchange for the shares of Series B Preferred
      Stock submitted for, or subject to conversion, and (ii) if applicable, declared
      but unpaid dividends in respect of the shares so converted. 

     

    9.  CONVERSION
      PRICE ADJUSTMENTS.
      The
      initial Conversion Price for each respective issuance of shares of Series B
      Preferred Stock shall be subject to adjustment from time to time upon the
      occurrence of certain events as follows:

     

    a.  Stock
      Dividends, Subdivisions, Reclassifications or Combinations. If
      the
      Corporation shall (i) declare a dividend or make a distribution in shares of
      Common Stock, (ii) subdivide or reclassify the outstanding shares of Common
      Stock into a greater number of shares, or (iii) combine or reclassify the
      outstanding Common Stock into a smaller number of shares, the Conversion Price
      in effect at the time of the record date of such dividend or distribution on
      the
      effective date of such subdivision, combination or reclassification shall be
      proportionately adjusted so that the holder of any shares of Series B Preferred
      Stock surrendered for conversion immediately after such record date shall be
      entitled to receive the number of shares of Common Stock which he or she would
      have owned or been entitled to receive had such Series B Preferred Stock been
      converted immediately prior to such record date. Successive adjustments in
      the
      Conversion Price shall be made whenever any event specified above shall
      occur.

     

    b.  Other
      Distributions. In
      case
      the Corporation shall hereafter fix a record date for the making of a
      distribution to all holders of shares of Common Stock, (i) of shares of any
      class of capital stock of the Corporation other than shares of Common Stock,
      or
      (ii) of evidences of indebtedness of the Corporation, or (iii) of assets
      (excluding cash dividends or distributions, and dividends or distributions
      referred to in subparagraph 9a hereof), or (iv) of rights or warrants entitling
      the holders of Common Stock to subscribe for or purchase shares of Common Stock;
      in each such case, the Conversion Price in effect immediately prior thereto
      shall be reduced immediately thereafter to the price determined by dividing
      (1)
      an amount equal to the difference resulting from (A) the number of shares of
      Common Stock outstanding on such record date multiplied by the Conversion Price
      per share on such record date, less
      (B) the
      fair market value (as determined by the Board of Directors in their reasonable
      discretion) of said shares or evidences of indebtedness or assets or rights
      or
      warrants to be so distributed by (2) the number of shares of Common Stock
      outstanding on such record date. Such adjustment shall be made successively
      whenever such a record date is fixed. In the event that such distribution is
      not
      so made, the Conversion Price then in effect shall be readjusted, effective
      as
      of the date when the Board of Directors determines not to distribute such
      shares, evidences of indebtedness, assets, rights or warrants, as the case
      may
      be, to the Conversion Price which was in effect prior to the fixing of the
      record date (subject to any adjustments made pursuant to this Paragraph 9 since
      such record date).

     

    
      
         

      

      
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    c.  Rounding
      of Calculations; Minimum Adjustment. All
      calculations under this Paragraph 9 shall be made to the nearest cent or to
      the
      nearest one-hundredth of a share, as the case may be. No adjustment in the
      Conversion Price shall be made if the amount of such adjustment would be less
      than $0.01, but any such amount shall be carried forward and an adjustment
      with
      respect thereto shall be made at the time of and together with any subsequent
      adjustment which, together with such amount and any other amount or amounts
      so
      carried forward, shall aggregate $0.01 or more.

     

    d.  Adjustments
      for Consolidation, Merger, etc. In
      case
      the Corporation, (i) shall consolidate with or merge into any other person
      and
      shall not be the continuing or surviving corporation of such consolidation
      or
      merger, (ii) shall permit any other person to consolidate with or merge into
      the
      Corporation and the Corporation shall be the continuing or surviving person,
      but, in connection with such consolidation or merger, the Common Stock shall
      be
      changed into or exchanged for stock or other securities of any other person
      or
      cash or any other property, or (iii) shall effect a capital reorganization
      or
      reclassification of the Common Stock (other than a capital reorganization or
      reclassification resulting in the issue of additional shares of Common stock
      for
      which adjustment is provided in this Paragraph 9); then, and in each such case,
      proper provision shall be made so that each share of Series B Preferred Stock
      then outstanding shall be converted into, or exchanged for, one share of
      preferred stock of the acquiring corporation entitling the holder thereof to
      all
      of the rights (including voting rights), powers, privileges and preferences
      with
      respect to the acquiring corporation to which the holder of a share of Series
      B
      Preferred Stock is entitled with respect to the Corporation, and being subject
      with respect to the acquiring corporation to the qualifications, limitations
      and
      restrictions to which a share
      of
      Series B Preferred Stock is subject with respect to the
      Corporation.

     

    10.  VOLUNTARY
      ADJUSTMENT.
      The
      Corporation may make, but shall not be obligated to make, such decreases in
      the
      Conversion Price so as to increase the number of shares of Common Stock into
      which the Series B Preferred Stock may be converted, in addition to those
      required by Paragraph 9 hereof, as it considers to be advisable in order to
      avoid federal income tax treatment as a dividend of stock or stock
      rights.

     

    11.  NOTICE
      OF ADJUSTMENT OF CONVERSION PRICE.
      Whenever
      the Conversion Price is adjusted as herein provided, the Corporation shall
      forthwith file with any transfer agent or agents for the Series B Preferred
      Stock, if any, and at the principal office of the Corporation, a statement
      signed by the Chief Executive Officer, President or a Vice President and by
      the
      Chief Financial Officer or the Secretary of the Corporation setting forth the
      adjusted Conversion Price. The statement so filed shall be open to inspection
      by
      any holder of record of shares of Series B Preferred Stock. The Corporation
      shall also, at the time of filing any such statement, mail notice to the same
      effect to the holders of shares of Series B Preferred Stock at their addresses
      appearing on the books of the Corporation or supplied by such holder to the
      Corporation for the purpose of notice.

     

    
      
         

      

      
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    12.  FRACTIONAL
      SHARES IN CONVERSION.
      The
      Corporation shall not be required to issue fractions of shares of Common Stock
      on the conversion of Series B Preferred Stock. If any fraction of a share of
      Common Stock would be issuable upon the conversion of a share, except for the
      provisions hereof, the Corporation shall purchase such fraction for an amount
      in
      cash equal to the Conversion Price multiplied by such fraction. If more than
      one
      certificate for shares of Series B Preferred Stock shall be presented for
      conversion at any one time by the same registered holder, the number of shares
      of Common Stock which shall be issuable upon conversion thereof shall be
      computed on the basis of the aggregate number of shares of Common Stock issuable
      upon conversion of the shares so presented. All calculations under this
      Paragraph 13 shall be made to the nearest one-hundredth of a share.

     

    13.  MUTILATED
      OR MISSING PREFERRED STOCK CERTIFICATES.
      If any
      of the Series B Preferred Stock certificates shall be mutilated, lost, stolen
      or
      destroyed, the Corporation shall issue, in exchange and substitution for and
      upon cancellation of the mutilated Series B Preferred Stock certificate, or
      in
      lieu of and in substitution for the Series B Preferred Stock certificate lost,
      stolen or destroyed, a new Series B Preferred Stock certificate of like tenor
      and representing an equivalent amount of shares of Series B Preferred Stock,
      but
      only upon receipt of evidence of such loss, theft or destruction of such Series
      B Preferred Stock certificate and indemnity, if requested by the transfer agent
      for the Series B Preferred Stock or the Corporation.

     

    14.  REISSUANCE
      OF PREFERRED STOCK. Any
      shares of Series B Preferred Stock acquired by the Corporation by reason of
      purchase, conversion or otherwise shall be canceled, retired and eliminated
      from
      the shares of Series B Preferred Stock that the Corporation shall be authorized
      to issue. All such shares shall upon their cancellation become authorized but
      unissued shares of Preferred Stock, and may be reissued as part of a new series
      of Preferred Stock subject to the conditions and restrictions on issuance set
      forth in the Articles of Incorporation or in any Certificate of Designation
      creating a series of Preferred Stock or any similar stock or as otherwise
      required by law.

     

    15.  BUSINESS
      DAY.
      If any
      payment, redemption or exchange shall be required by the terms hereof to be
      made
      on a day that banks are not open in the State of California, such payment,
      redemption or exchange shall be made on the immediately succeeding day on which
      such banks are open.

     

    16.  HEADINGS
      OF SUBDIVISIONS.
      The
      headings of various subdivisions hereof are for convenience of reference only
      and shall not affect the interpretation of any of the provisions
      hereof.

     

    17.  SEVERABILITY
      OF PROVISIONS.
      If any
      right, preference or limitation of the Series B Preferred Stock set forth in
      these resolutions and the Certificate of Designations filed pursuant hereto
      (as
      such resolution may be amended from time to time) is invalid, unlawful or
      incapable of being enforced by reason of any rule of law or public policy,
      all
      other rights, preferences and limitations set forth in this resolution (as
      so
      amended) which can be given effect without the invalid, unlawful or
      unenforceable right, preference or limitation shall, nevertheless, remain in
      full force and effect, and no right, preference or limitation herein set forth
      shall be deemed dependent upon any other such right, preference or limitation
      unless so expressed herein.

     

    
      
         

      

      
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    18.  NOTICE
      TO THE COMPANY. All
      notices and other communications required or permitted to be given to the
      Corporation hereunder shall be made by courier to the Corporation at its
      principal executive offices located at 6033 W. Century Blvd, Suite 1090, Los
      Angeles, 90045, Attention: Chief Executive Officer. Minor imperfections in
      any
      such notice shall not affect the validity thereof.

     

    19.  LIMITATIONS.
      Except
      as
      may otherwise be required by law, the shares of Series B Preferred Stock shall
      not have any powers, preferences or relative, participating, optional or other
      special rights other than those specifically set forth in this Certificate
      of
      Designation or otherwise in the Articles of Incorporation of the
      Corporation.

     

    IN
      WITNESS WHEREOF, Medical Discoveries, Inc. has caused this certificate to be
      executed by David Walker, Chairman of the Board of Directors and Treasurer,
      this
      __th
      of
      November 2007.

     

    
      	 	 	 
	 	MEDICAL
              DISCOVERIES, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
              David Walker
	 	
              Title:
                Chairman of the Board of Directors and Treasurer

            


    

     

    
      
         

      

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