Exhibit 3.3

                            CERTIFICATE OF CORRECTION
                       FILED TO CORRECT A CERTAIN ERROR IN

                         THE CERTIFICATE OF DESIGNATION

                                       OF

                           CHINA MEDICINE CORPORATION

                             FILED IN THE OFFICE OF
                       THE SECRETARY OF STATE OF DELAWARE
                               ON FEBRUARY 8, 2006

            China Medicine Corporation, a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,

            Does hereby certify:

            1. The original name of the corporation was LOUNSBERRY HOLDINGS III,
INC.

            2. That a Certificate of Amendment of Certificate of Incorporation
of the corporation was filed by the Secretary of State of Delaware on May 10,
2006, changing the name of the corporation to CHINA MEDICINE CORPORATION.

            3. That a Certificate of Designation was filed by the Secretary of
State of Delaware on February 8, 2006 and that said Certificate required
correction as permitted by Section 103 of the General Corporation Law of the
State of Delaware.

            4. The inaccuracy or defect of said Certificate to be corrected is
as follows: The Conversion Price of the Series A Preferred Stock in Section 6(a)
of the Statement of Designations attached to said Certificate is corrected to be
equal to one and 25/100 dollars ($1.25) per share rather than twelve cents
($.12) per share.

            5. The Certificate of Designation is hereby corrected by replacing
the Statement of Designations attached to the Certificate of Designation in its
entirety with the Statement of Designations attached hereto as Exhibit A.


      IN WITNESS WHEREOF, said China Medicine Corporation has caused this
Certificate to be signed by it chief executive officer, this 18th day of May,
2006 .

                                       /s/ Senshan Yang
                                       -----------------------------------------
                                           Senshan Yang, Chief Executive Officer


<PAGE>


                                                                       Exhibit A

                            STATEMENT OF DESIGNATIONS

      Section 1. Definitions. Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement (as defined below) shall have
the meanings given such terms in the Purchase Agreement. For the purposes
hereof, the following terms shall have the following meanings:

            "Bankruptcy Event" means any of the following events: (a) the
      Company or any Significant Subsidiary (as such term is defined in Rule
      1.02(s) of Regulation S-X) thereof commences a case or other proceeding
      under any bankruptcy, reorganization, arrangement, adjustment of debt,
      relief of debtors, dissolution, insolvency or liquidation or similar law
      of any jurisdiction relating to the Company or any Significant Subsidiary
      thereof; (b) there is commenced against the Company or any Significant
      Subsidiary thereof any such case or proceeding that is not stayed or
      dismissed within 90 days after commencement; (c) the Company or any
      Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any
      order of relief or other order approving any such case or proceeding is
      entered; (d) the Company or any Significant Subsidiary thereof suffers any
      appointment of any custodian or the like for it or any substantial part of
      its property that is not discharged or stayed within 90 days; (e) the
      Company or any Significant Subsidiary thereof makes a general assignment
      for the benefit of creditors; (f) the Company or any Significant
      Subsidiary thereof calls a meeting of its creditors with a view to
      arranging a composition, adjustment or restructuring of its debts; or (g)
      the Company or any Significant Subsidiary thereof, by any act or failure
      to act, expressly indicates its consent to, approval of or acquiescence in
      any of the foregoing or takes any corporate or other action for the
      purpose of effecting any of the foregoing.

            "Closing Date" means the Closing Date, as defined in the Purchase
      Agreement.

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means the Company's common stock, par value $.0001
      per share, and stock of any other class into which such shares may
      hereafter have been reclassified or changed.

            "Common Stock Equivalents" means any securities of the Company or
      the Subsidiaries which would entitle the holder thereof to acquire at any
      time Common Stock, including without limitation, any debt, preferred
      stock, rights, options, warrants or other instrument that is at any time
      convertible into or exchangeable for, or otherwise entitles the holder
      thereof to receive, Common Stock.

            "Conversion Date" shall have the meaning set forth in Section 6(a).

            "Conversion Ratio" shall have the meaning set forth in Section 6(a).


<PAGE>


            "Conversion Price" shall mean the price paid for one share of
      Preferred Stock divided by the number of shares of Common Stock issuable
      upon conversion of one share of Preferred Stock.

            "Conversion Shares" means, collectively, the shares of Common Stock
      into which the shares of Series A Preferred Stock are convertible in
      accordance with the terms hereof.

            "Conversion Shares Registration Statement" means a registration
      statement that meets the requirements of the Registration Rights Agreement
      and registers the resale of all Conversion Shares by the Holder, who shall
      be named as a "selling stockholder" thereunder, all as provided in the
      Registration Rights Agreement.

            "Dilutive Issuance" shall have the meaning set forth in Section 7(b)
      hereof.

            "Effective Date" means the date that the Conversion Shares
      Registration Statement is declared effective by the Commission.

            "EBITDA" shall have the meaning set forth in the Purchase Agreement.

            "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

            "Exempt Issuance" shall have the meaning set forth in Section 1.3.10
      of the Purchase Agreement.

            "Fundamental Transaction" shall have the meaning set forth in
      Section 7(f)(iv) hereof.

            "Holder" shall have the meaning given such term in Section 2 hereof.

            "Investors" shall mean the persons named in Schedule A to the
      Purchase Agreement.

            "Junior Securities" means the Common Stock and all other equity or
      equity equivalent securities of the Company other than those securities
      that are explicitly senior in rights or liquidation preference to the
      Series A Preferred Stock.

            "Original Issue Date" shall mean the date of the first issuance of
      any shares of the Series A Preferred Stock regardless of the number of
      transfers of any particular shares of Series A Preferred Stock and
      regardless of the number of certificates which may be issued to evidence
      such Series A Preferred Stock.

            "Person" means a corporation, an association, a partnership, a
      limited liability company, a business association, an individual, a trust,
      a government or political subdivision thereof or a governmental agency.


<PAGE>


            "Purchase Agreement" means the Preferred Stock Purchase Agreement,
      dated as of the February 8, 2006, to which the Company and the original
      Holders are parties, as amended, modified or supplemented from time to
      time in accordance with its terms, a copy of which is on file at the
      principal offices of the Company.

            "Registration Rights Agreement" means the Registration Rights
      Agreement, dated as of the Closing Date, to which the Company and the
      original Holder are parties, as amended, modified or supplemented from
      time to time in accordance with its terms.

            "Securities" shall have the meaning set forth in Section 1.3.17 of
      the Purchase Agreement.

            "Securities Act" means the Securities Act of 1933, as amended, and
      the rules and regulations promulgated thereunder.

            "Series A Preferred Stock" shall have the meaning set forth in
      Section 2.

            "Subscription Amount" shall mean the three million nine hundred
      thousand dollars ($3,900,000) to be paid for the Preferred Stock and
      Warrants purchased pursuant to the Purchase Agreement, in United States
      Dollars and in immediately available funds.

            "Subsidiary" shall mean a corporation, limited liability company,
      partnership, joint venture or other business entity of which the Company
      owns beneficially or of record more than a majority of the equity
      interest.

            "Trading Day" means a day on which the Common Stock is traded on a
      Trading Market.

            "Trading Market" means the following markets or exchanges on which
      the Common Stock is listed or quoted for trading on the date in question:
      the Nasdaq SmallCap Market, the American Stock Exchange, the New York
      Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

            "Transaction Documents" shall have the meaning set forth in the
      Purchase Agreement.

            "VWAP" means, for any date, the price determined by the first of the
      following clauses that applies: (a) if the Common Stock is then listed or
      quoted on a Trading Market, the daily volume weighted average price of the
      Common Stock for such date (or the nearest preceding date) on the primary
      Trading Market on which the Common Stock is then listed or quoted as
      reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30
      a.m. EST to 4:02 p.m. Eastern Time) using the VAP function; (b) if the
      Common Stock is not then listed or quoted on the Trading Market and if
      prices for the Common Stock are then reported in the "Pink Sheets"
      published by the National Quotation Bureau Incorporated (or a similar
      organization or agency succeeding to its functions of reporting prices),
      the most recent bid price per share of the Common Stock so reported; or
      (c) in all other cases, the fair market value of a share of Common Stock
      as determined by a nationally recognized-independent appraiser selected in
      good faith by Purchasers holding a majority of the principal amount of
      Series A Preferred Stock then outstanding.


<PAGE>


            "Warrants" shall have the meaning set forth in the Purchase
      Agreement.

      Section 2. Designation, Amount and Par Value. The series of preferred
stock, par value $.0001 per share ("Preferred Stock") consisting of five million
(5,000,000 shares) shall be designated as the Company's Series A Convertible
Preferred Stock (the "Series A Preferred Stock") and the number of shares so
designated shall be (which shall not be subject to increase without the consent
of all of the holders of 75% of the then outstanding shares of Series A
Preferred Stock (each a "Holder" and collectively, the "Holders")). In the event
of the conversion of shares of Series A Preferred Stock into this Company's
Common Stock, pursuant to Section 6 hereof, or in the event that the Company
shall otherwise acquire and cancel any shares of Series A Preferred Stock, the
shares of Series A Preferred Stock so converted or otherwise acquired and
canceled shall have the status of authorized but unissued shares of preferred
stock, without designation as to series until such stock is once more designated
as part of a particular Series by the Company's Board of Directors. In addition,
if the Company shall not issue the maximum number of shares of Series A
Preferred Stock, the Company may, from time to time, by resolution of the Board
of Directors and the approval of the holders of a majority of the outstanding
shares of Series A Preferred Stock, reduce the number of shares of Series A
Preferred Stock authorized, provided, that no such reduction shall reduce the
number of authorized shares to a number which is less than the number of shares
of Series A Preferred Stock then issued or reserved for issuance. The number of
shares by which the Series A Preferred Stock is reduced shall have the status of
authorized but unissued shares of Preferred Stock, without designation as to
series, until such stock is once more designated as part of a particular Series
by the Company's Board of Directors. The Board of Directors shall cause to be
filed with the Secretary of State of the State of Delaware such certificate as
shall be necessary to reflect any reduction in the number of shares constituting
the Series A Preferred Stock.

      Section 3. Dividends and Other Distributions. No dividends shall be
payable with respect to the Series A Preferred Stock. No dividends shall be
payable with respect to the Common Stock while the Series A Preferred Stock is
outstanding. The Common Stock shall not be redeemed while the Series A Preferred
Stock is outstanding.

      Section 4. Voting Rights. The Series A Preferred Stock shall have no
voting rights. However, so long as any shares of Series A Preferred Stock are
outstanding, the Company shall not, without the affirmative approval of the
Holders of 75% of the shares of the Series A Preferred Stock then outstanding,
(a) alter or change adversely the powers, preferences or rights given to the
Series A Preferred Stock or alter or amend this Certificate of Designation, (b)
authorize or create any class of stock ranking as to dividends or distribution
of assets upon a Liquidation (as defined in Section 5) senior to or otherwise
pari passu with the Series A Preferred Stock, or any of preferred stock
possessing greater voting rights or the right to convert at a more favorable
price than the Series A Preferred Stock, (c) amend its certificate of
incorporation or other charter documents in breach of any of the provisions
hereof, (d) increase the authorized number of shares of Series A Preferred
Stock, or (e) enter into any agreement with respect to the foregoing. The
holders of the Series A Preferred Stock will not be entitled to vote as a class
with respect to the increase or decrease in the number of authorized shares of
preferred stock; provided, however, that the provisions of Section 6(c) of this
Certificate of Designation may not be amended or waived.


<PAGE>


      Section 5. Liquidation. Upon any liquidation, dissolution or winding-up of
the Company, whether voluntary or involuntary (a "Liquidation"), the Holders
shall be entitled to receive out of the assets of the Company, whether such
assets are capital or surplus, for each share of Series A Preferred Stock an
amount equal to one and 25/100 dollars ($1.25), which amount is referred to as
the "Liquidation Value," before any distribution or payment shall be made to the
holders of any Junior Securities and after any distributions or payments made to
holders of any class or series of securities which are senior to the Series A
Preferred Stock upon voluntary or involuntary liquidation, dissolution or
winding up, and if the assets of the Company shall be insufficient to pay in
full such amounts, then the entire assets to be distributed to the Holders shall
be distributed among the Holders ratably in accordance with the respective
amounts that would be payable on such shares if all amounts payable thereon were
paid in full. In the event the assets of the Company available for distribution
to the holders of shares of Series A Preferred Stock upon dissolution,
liquidation or winding up of the Company, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to Section 5, no such distribution shall be made on account of
any shares of any other class or series of capital stock of the Company ranking
on a parity with the shares of Series A Preferred Stock upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall be
paid on account of the shares of Series A Preferred Stock, ratably, in
proportion to the full distributable amounts for which holders of all such
parity shares are respectively entitled upon such dissolution, liquidation or
winding up. At the election of a Holder made by written notice delivered to the
Company at least two (2) business days prior to the effective date of the
subject transaction, as to the shares of Series A Preferred Stock held by such
Holder, a Fundamental Transaction (excluding for purposes of this Section 5 any
Fundamental Transaction described in Section 7(f)(iv)(A) or 7(f)(iv)(B)) or
Change of Control shall be treated as a Liquidation as to such Holder.

      Section 6. Conversion.

      a) Conversions at Option of Holder. Each share of Series A Preferred Stock
shall be initially  convertible (subject to the limitations set forth in Section
6(c)),  into one (1) share of Common Stock (as adjusted as provided  below,  the
"Conversion  Ratio") at the option of the Holders,  at any time and from time to
time from and after the Original Issue Date. Holders shall effect conversions by
providing  the Company with the form of  conversion  notice  attached  hereto as
Annex A (a "Notice  of  Conversion")  as fully and  originally  executed  by the
Holder,  together  with the  delivery  by the Holder to the Company of the stock
certificate(s)  representing the number of shares of Series A Preferred Stock so
converted, with such stock certificates being duly endorsed in full for transfer
to the Company or with an applicable  stock power duly executed by the Holder in
the manner and form as deemed  reasonable  by the  transfer  agent of the Common
Stock.  Each Notice of Conversion shall specify the number of shares of Series A
Preferred  Stock to be  converted,  the  number of shares of Series A  Preferred
Stock owned prior to the  conversion at issue,  the number of shares of Series A
Preferred  Stock  owned  subsequent  to  the  conversion  at  issue,  the  stock
certificate  number  and the  shares of  Series A  Preferred  Stock  represented
thereby which are accompanying  the Notice of Conversion,  and the date on which
such  conversion is to be effected,  which date may not be prior to the date the
Holder delivers such Notice of Conversion and the applicable stock  certificates
to the Company by overnight  delivery  service (the  "Conversion  Date").  If no
Conversion  Date is specified in a Notice of  Conversion,  the  Conversion  Date
shall be the  Trading  Day  immediately  following  the date that such Notice of
Conversion and applicable stock  certificates  are received by the Company.  The
calculations  and entries set forth in the Notice of Conversion shall control in
the  absence of  manifest or  mathematical  error.  Shares of Series A Preferred
Stock  converted into Common Stock in accordance  with the terms hereof shall be
canceled and may not be reissued. The Conversion Price of the Series A Preferred
Stock shall be equal to one and 25/100 dollars ($1.25) per share. If the initial
Conversion  Price is  adjusted  pursuant to Section 7 or as  otherwise  provided
herein,  the Conversion  Ratio shall likewise be adjusted and the new Conversion
Ratio shall equal the  Liquidation  Value divided by the new  Conversion  Price.
Thereafter,  subject to any further  adjustments in the Conversion  Price,  each
share of Series A  Preferred  Stock  shall be  initially  convertible  into that
number of shares of Common Stock equal to the new Conversion Ratio.


<PAGE>


      b) Automatic Conversion Upon Change of Control.  Subject to Section 5, all
of the  outstanding  shares of Series A Preferred  Stock shall be  automatically
converted into the Conversion  Shares upon the close of business on the business
day  immediately  preceding the date fixed for  consummation  of any transaction
resulting  in a Change of  Control  of the  Company  (an  "Automatic  Conversion
Event").  A "Change in Control" means a  consolidation  or merger of the Company
with or into another company or entity in which the Company is not the surviving
entity or the sale of all or  substantially  all of the assets of the Company to
another  company or entity not controlled by the then existing  stockholders  of
the Company in a transaction or series of transactions. The Company shall not be
obligated  to  issue  certificates   evidencing  the  Conversion  Shares  unless
certificates  evidencing the shares of Series A Preferred Stock so converted are
either delivered to the Company or its transfer agent or the holder notifies the
Company or its transfer agent in writing that such  certificates have been lost,
stolen,  or destroyed and executes an agreement  satisfactory  to the Company to
indemnify the Company from any loss incurred by it in connection therewith. Upon
the  conversion of the Series A Preferred  Stock  pursuant to this Section 6(b),
the Company shall promptly send written notice  thereof,  by hand delivery or by
overnight  delivery,  to the holder of record of all of the  Series A  Preferred
Stock at its address  then shown on the  records of the  Company,  which  notice
shall state that certificates evidencing shares of Series A Preferred Stock must
be  surrendered  at the office of the Company (or of its transfer  agent for the
Common Stock, if applicable).

      c) Beneficial Ownership Limitation.  Except as provided in Section 6(b) of
this  Statement  of  Designation,  which  shall  apply as stated  therein  if an
Automatic  Conversion  Event  shall  occur,  the  Company  shall not  effect any
conversion  of the Series A Preferred  Stock,  and the Holder shall not have the
right to convert any portion of the Series A Preferred  Stock to the extent that
after giving effect to such  conversion,  the Holder (together with the Holder's
affiliates),  as set  forth  on  the  applicable  Notice  of  Conversion,  would
beneficially  own in excess of 4.9% of the number of shares of the Common  Stock
outstanding immediately after giving effect to such conversion.  For purposes of
the foregoing sentence,  the number of shares of Common Stock beneficially owned
by the Holder and its  affiliates  shall  include the number of shares of Common
Stock issuable upon  conversion of the Series A Preferred  Stock with respect to
which the  determination  of such sentence is being made,  but shall exclude the
number of shares of Common Stock which would be issuable upon (A)  conversion of
the remaining,  non-converted  shares of Series A Preferred  Stock  beneficially
owned by the Holder or any of its affiliates, so long as such shares of Series A
Preferred Stock are not convertible within sixty (60) days from the date of such
determination,   and  (B)  exercise  or   conversion  of  the   unexercised   or
non-converted  portion of any other  securities  of the Company  (including  the
Warrants)  subject to a limitation on  conversion  or exercise  analogous to the
limitation  contained  herein  beneficially  owned by the  Holder  or any of its
affiliates,  so long as such other securities of the Company are not exercisable
nor convertible within sixty (60) days from the date of such determination.  For
purposes of this Section 6(c), in determining  the number of outstanding  shares
of Common  Stock,  the Holder may rely on the  number of  outstanding  shares of
Common Stock as reflected in the most recent of the following: (A) the Company's
most recent  quarterly  reports,  Form 10-Q, Form 10-QSB,  Annual Reports,  Form
10-K, or Form 10-KSB, as the case may be, as filed with the Commission under the
Exchange  Act (B) a more recent  public  announcement  by the Company or (C) any
other  written  notice by the Company or the  Company's  transfer  agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral
request of the Holder,  the Company  shall  within two (2) Trading  Days confirm
orally and in  writing  to the Holder the number of shares of Common  Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of
the  Company,  including  the  Series A  Preferred  Stock,  by the Holder or its
affiliates  since  the date as of which  such  number of  outstanding  shares of
Common Stock was publicly reported by the Company.  For purposes of this Section
6(c),  beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act. This Section 6(c) may be not be waived or amended.


<PAGE>


   d) Mechanics of Conversion

      i. Delivery of Certificate Upon Conversion.  Except as otherwise set forth
herein, not later than three Trading Days after each Conversion Date (the "Share
Delivery  Date"),  the Company shall deliver to the Holder (A) a certificate  or
certificates  which,  after the  Effective  Date,  shall be free of  restrictive
legends and trading  restrictions  (other  than those  required by the  Purchase
Agreement) representing the number of shares of Common Stock being acquired upon
the  conversion of shares of Series A Preferred  Stock,  and (B) a bank check in
the amount of accrued  and unpaid  dividends  (if the  Company has elected or is
required  to pay accrued  dividends  in cash).  After the  Effective  Date,  the
Company  shall,  upon  request  of  the  Holder,   deliver  any  certificate  or
certificates  required  to be  delivered  by  the  Company  under  this  Section
electronically  through  the  Depository  Trust  Company or another  established
clearing Company  performing  similar functions if the Company's  transfer agent
has the ability to deliver shares of Common Stock in such manner. If in the case
of any Notice of Conversion such  certificate or certificates  are not delivered
to or as directed by the  applicable  Holder by the third  Trading Day after the
Conversion  Date, the Holder shall be entitled to elect by written notice to the
Company at any time on or before its receipt of such certificate or certificates
thereafter,  to  rescind  such  conversion,  in which  event the  Company  shall
immediately  return  the  certificates  representing  the  shares  of  Series  A
Preferred Stock tendered for conversion.

      ii.  Obligation  Absolute;   Partial  Liquidated  Damages.  The  Company's
obligations to issue and deliver the Conversion Shares upon conversion of Series
A  Preferred  Stock in  accordance  with  the  terms  hereof  are  absolute  and
unconditional,  irrespective  of any action or inaction by the Holder to enforce
the same,  any  waiver or consent  with  respect to any  provision  hereof,  the
recovery of any  judgment  against any Person or any action to enforce the same,
or any setoff,  counterclaim,  recoupment,  limitation  or  termination,  or any
breach or alleged  breach by the Holder or any other Person of any obligation to
the Company or any  violation  or alleged  violation of law by the Holder or any
other person,  and irrespective of any other  circumstance which might otherwise
limit  such  obligation  of the  Company to the  Holder in  connection  with the
issuance of such Conversion Shares. In the event a Holder shall elect to convert
any or  all of its  Series  A  Preferred  Stock,  the  Company  may  not  refuse
conversion  based  on any  claim  that  such  Holder  or any one  associated  or
affiliated  with  the  Holder  of has  been  engaged  in any  violation  of law,
agreement  or for any other reason  (other than the  inability of the Company to
issue shares of Common Stock as a result of the  limitation set forth in Section
6(c) hereof) unless,  an injunction from a court, on notice,  restraining and or
enjoining  conversion of all or part of this Series A Preferred Stock shall have
been sought and obtained and the Company  posts a surety bond for the benefit of
the Holder in the amount of 150% of the  Conversion  Value of Series A Preferred
Stock outstanding,  which is subject to the injunction,  which bond shall remain
in effect until the completion of  arbitration/litigation of the dispute and the
proceeds  of which  shall be  payable  to such  Holder to the  extent it obtains
judgment. In the absence of an injunction precluding the same, the Company shall
issue  Conversion  Shares  or, if  applicable,  cash,  upon a  properly  noticed
conversion.  If the Company fails to deliver to the Holder such  certificate  or
certificates  pursuant to Section  6(d)(i)  within two Trading Days of the Share
Delivery  Date  applicable  to such  conversion,  the Company  shall pay to such
Holder, in cash, as liquidated damages and not as a penalty,  for each $5,000 of
Conversion  Value of Series A Preferred Stock being  converted,  $50 per Trading
Day  (increasing  to $100 per  Trading  Day  after  three (3)  Trading  Days and
increasing to $200 per Trading Day six (6) Trading Days after such damages begin
to  accrue)  for each  Trading  Day after the Share  Delivery  Date  until  such
certificates  are  delivered.  Nothing  herein  shall limit a Holder's  right to
pursue  actual  damages  for  the  Company's  failure  to  deliver  certificates
representing  shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies  available to
it hereunder,  at law or in equity including,  without  limitation,  a decree of
specific performance and/or injunctive relief.


<PAGE>


      iii.  Compensation  for Buy-In on Failure to Timely  Deliver  Certificates
Upon Conversion.  If the Company fails to deliver to the Holder such certificate
or  certificates  pursuant to Section  6(d)(i) by a Share  Delivery Date, and if
after  such  Share  Delivery  Date  the  Holder  purchases  (in an  open  market
transaction or otherwise)  Common Stock to deliver in  satisfaction of a sale by
such Holder of the  Conversion  Shares  which the Holder was entitled to receive
upon the conversion relating to such Share Delivery Date (a "Buy-In"),  then the
Company  shall pay in cash to the Holder  the  amount by which (x) the  Holder's
total purchase price (including  brokerage  commissions,  if any) for the Common
Stock so purchased exceeds (y) the product of (1) the aggregate number of shares
of Common Stock that such Holder was entitled to receive from the  conversion at
issue  multiplied  by (2) the price at which the sell order  giving rise to such
purchase  obligation was executed.  For example,  if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted  conversion  of shares of Series A Preferred  Stock with respect to
which the  aggregate  sale price  giving  rise to such  purchase  obligation  is
$10,000,  under  clause (A) of the  immediately  preceding  sentence the Company
shall be required to pay the Holder $1,000. The Holder shall provide the Company
written notice  indicating  the amounts  payable to the Holder in respect of the
Buy-In,  together with applicable  confirmations  and other evidence  reasonably
requested by the Company.  Nothing herein shall limit a Holder's right to pursue
any other  remedies  available to it hereunder,  at law or in equity  including,
without  limitation,  a decree of specific  performance and/or injunctive relief
with  respect  to  the  Company's   failure  to  timely   deliver   certificates
representing  shares of Common Stock upon  conversion  of the shares of Series A
Preferred Stock as required pursuant to the terms hereof.

      iv. Reservation of Shares Issuable Upon Conversion.  The Company covenants
that it will at all times reserve and keep  available out of its  authorized and
unissued  shares of  Common  Stock  solely  for the  purpose  of  issuance  upon
conversion of the Series A Preferred Stock,  each as herein provided,  free from
preemptive  rights or any other  actual  contingent  purchase  rights of persons
other than the Holders,  not less than such number of shares of the Common Stock
as  shall  (subject  to  any  additional  requirements  of  the  Company  as  to
reservation  of such  shares set forth in the  Purchase  Agreement)  be issuable
(taking into account the  adjustments  and  restrictions  of Section 7) upon the
conversion of all outstanding  shares of Series A Preferred  Stock.  The Company
covenants that all shares of Common Stock that shall be so issuable shall,  upon
issue, be duly and validly authorized, issued and fully paid, nonassessable and,
if the Conversion  Shares  Registration  Statement is then  effective  under the
Securities  Act,  registered for public sale in accordance  with such Conversion
Shares Registration Statement.

      v. Fractional Shares. Upon a conversion  hereunder,  the Company shall not
be required to issue stock certificates  representing fractions of shares of the
Common Stock. All fractional  shares shall be carried forward and any fractional
shares which remain after a Holder converts all of his or her Series A Preferred
Stock shall be dropped and eliminated.

      vi. Transfer Taxes.  The issuance of certificates for shares of the Common
Stock on conversion of the Series A Preferred Stock shall be made without charge
to the Holders  thereof for any  documentary  stamp or similar taxes that may be
payable in respect of the issue or delivery of such  certificate,  provided that
the Company  shall not be required to pay any tax that may be payable in respect
of any transfer  involved in the  issuance and delivery of any such  certificate
upon conversion in a name other than that of the Holder of such shares of Series
A Preferred Stock so converted and the Company shall not be required to issue or
deliver such certificates  unless or until the person or persons  requesting the
issuance  thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

      vii.  Absolute  Obligation.   Except  as  expressly  provided  herein,  no
provision  of  this  Certificate  of  Designation  shall  alter  or  impair  the
obligation  of the  Company,  which is absolute  and  unconditional,  to pay the
liquidated  damages (if any) on, the shares of Series A  Preferred  Stock at the
time, place, and rate, and in the coin or currency, herein prescribed.


<PAGE>


   Section 7. Certain Adjustments.

      a) Stock Dividends and Stock Splits. If the Company, at any time while the
Series A  Preferred  Stock is  outstanding:  (A) shall pay a stock  dividend  or
otherwise make a distribution or  distributions on shares of its Common Stock or
any other  equity or equity  equivalent  securities  payable in shares of Common
Stock  (which,  for  avoidance of doubt,  shall not include any shares of Common
Stock  issued by the Company  pursuant to this  Series A Preferred  Stock),  (B)
subdivide outstanding shares of Common Stock into a larger number of shares, (C)
combine  (including by way of reverse stock split)  outstanding shares of Common
Stock  into a smaller  number of  shares,  or (D) issue by  reclassification  of
shares of the Common Stock any shares of capital stock of the Company,  then the
Conversion  Value shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common  Stock  (excluding  treasury  shares,  if any)
outstanding  before such event and of which the denominator  shall be the number
of shares of Common Stock  outstanding  after such event.  Any  adjustment  made
pursuant to this Section  shall become  effective  immediately  after the record
date for the determination of stockholders  entitled to receive such dividend or
distribution and shall become effective  immediately after the effective date in
the case of a subdivision, combination or re-classification.

      b) Price Adjustment.  Until such time as the Investors hold no Securities,
except for (i) Exempt  Issuances,  (ii) issuances covered by Sections 7(a), 7(c)
and 7(d)  hereof or (iii) an  issuance  of Common  Stock upon  exercise  or upon
conversion of warrants,  options or other  convertible  securities  for which an
adjustment  has already been made pursuant to this Section 7, as to all of which
this Section 7(b) does not apply,  if the Company closes on the sale or issuance
of Common Stock at a price,  or warrants,  options,  convertible  debt or equity
securities  with a exercise price per share or exercise price per share which is
less  than  the  Conversion  Price  then in  effect  (such  lower  sales  price,
conversion  or  exercise  price,  as the case may be,  being  referred to as the
"Lower Price"),  the Conversion  Price in effect from and after the date of such
transaction  shall be reduced to the Lower Price. For purpose of determining the
exercise price of warrants  issued by the Company,  the price,  if any, paid per
share for the warrants shall be added to the exercise price of the warrants. The
"Conversion  Price" shall mean the price paid for one share of  Preferred  Stock
divided by the number of shares of Common Stock issuable upon  conversion of one
share of  Preferred  Stock.  The  "Conversion  Rate" is the  number of shares of
Common Stock issuable upon conversion of one (1) share of Preferred  Stock.  The
initial  Conversion Rate is one (1) share of Common Stock per share of Preferred
Stock and the initial Conversion Price is one and 25/100 dollars ($1.25).

      c)  Conversion  Price  Adjustment  Based on  Pre-Tax  Income Per Share and
Adjusted EBITDA.

            i.    In the event  Konzern's  Adjusted  EBITDA  for the year  ended
                  December 31, 2005 is less than $5,650,000, then the Conversion
                  Price shall be reduced by the  percentage  shortfall,  up to a
                  maximum  of  30%.  Thus,  if  Adjusted   EBITDA  for  2005  is
                  $3,955,000 or less, the  Conversion  Price shall be reduced by
                  30%. As used in this Section  7(c)(i),  Adjusted  EBITDA shall
                  mean shall mean earnings before interest,  taxes, depreciation
                  and  amortization,  determined in accordance  with U.S.  GAAP,
                  minus capital  expenditures.  Such reduction  shall be made at
                  the time the Company  files its Form 10-KSB for the year ended
                  March 31,  2006,  and shall  apply to the all of the  Series A
                  Preferred  Stock  which  is  outstanding  on the date the Form
                  10-KSB  is filed,  or, if not filed on time,  on the date that
                  filing was required.


<PAGE>


            ii.   In addition to any adjustment  pursuant to Section  7(c)(i) of
                  this Warrant, in the event the Company's fully-diluted Pre-Tax
                  Income,   as  defined  in  Section   1.3.14  of  the  Purchase
                  Agreement,  Per Share for the year ended  December 31, 2006 is
                  between   $0.40  and  $0.20  (50%  Decline)  per  share  on  a
                  fully-diluted  basis,  then  the  conversion  price  shall  be
                  reduced  proportionately  by 0% if the  fully-diluted  Pre Tax
                  Income  is  $0.40  per  share  or  greater  and  by 50% if the
                  fully-diluted Pre Tax Income is $0.20 per share (50% decrease)
                  or less.  For example if the earnings are $0.32 per share (20%
                  Decline)  then  the  Conversion   Price,  as  defined  in  the
                  Certificate  of  Designation,  shall be  reduced by 20% of the
                  then current conversion price per share. Fully-diluted Pre-Tax
                  Income Per Share  shall be based on the number of  outstanding
                  shares  of  Common  Stock  plus all  shares  of  Common  Stock
                  issuable  upon  conversion  of  all  outstanding   convertible
                  securities  and upon  exercise  of all  outstanding  warrants,
                  options  and  rights,  regardless  of whether  (i) such shares
                  would be included in  determining  diluted  earnings per share
                  and  (ii)  such  convertible   securities  are  subject  to  a
                  restriction  or limitation on exercise.  Thus,  for purpose of
                  determining  fully-diluted  Pre-Tax Income Per Share, the 4.9%
                  Limitation  shall  be  disregarded.   The  adjustment  to  the
                  conversion  price shall be made within five  business  days of
                  the audited  numbers being reported to the SEC and shall apply
                  to  the  all  of  the  Series  A  Preferred   Stock  which  is
                  outstanding  on the date the Form  10-KSB or Form 10-K for the
                  year ended  December  31,  2006 is filed,  or, if not filed on
                  time, on the date that filing was required.

      d) Pro Rata  Distributions.  If the  Company,  at any time while  Series A
Preferred Stock is outstanding,  shall distribute to all holders of Common Stock
(and not to  Holders)  evidences  of its  indebtedness  or  assets  or rights or
warrants to subscribe for or purchase any  security,  then in each such case the
Conversion  Price shall be determined by multiplying  such  Conversion  Price in
effect  immediately  prior  to  the  record  date  fixed  for  determination  of
stockholders  entitled to receive such  distribution  by a fraction of which the
denominator  shall be the VWAP determined as of the record date mentioned above,
and of which the numerator  shall be such VWAP on such record date less the then
fair market  value at such record date of the portion of such assets or evidence
of indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith.  In either case the
adjustments  shall be  described  in a statement  provided to the Holders of the
portion  of  assets  or  evidences  of   indebtedness  so  distributed  or  such
subscription  rights  applicable to one share of Common Stock.  Such  adjustment
shall be made whenever any such  distribution is made and shall become effective
immediately after the record date mentioned above.


<PAGE>


   e) Calculations.  All calculations  under this Section 7 shall be made to the
nearest cent or the nearest  1/100th of a share,  as the case may be. The number
of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the  Company or any of its  subsidiaries.
For  purposes of this  Section 7, the number of shares of Common Stock deemed to
be issued and  outstanding  as of a given date shall be the sum of the number of
shares  of  Common  Stock  (excluding   treasury  shares  and  shares  owned  by
subsidiaries, if any) actually issued and outstanding.

   f) Notice to Holders.

      i.  Adjustment  to  Conversion  Price.  Whenever the  Conversion  Price is
adjusted  pursuant to any of this Section 7, the Company shall  promptly mail to
each Holder a notice  setting forth the Conversion  Price after such  adjustment
and setting forth a brief statement of the facts requiring such  adjustment.  If
the Company issues a variable rate security,  despite the prohibition thereon in
the Purchase Agreement,  the Company shall be deemed to have issued Common Stock
or Common Stock Equivalents at the lowest possible  conversion or exercise price
at which such securities may be converted or exercised in the case of a Variable
Rate Transaction (as defined in the Purchase Agreement),  or the lowest possible
adjustment  price in the case of an MFN  Transaction (as defined in the Purchase
Agreement).

      ii.  Notices of Other Events.  If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare a
redemption of the Common Stock;  (C) the Company shall authorize the granting to
all holders of the Common Stock rights or warrants to subscribe  for or purchase
any shares of capital  stock of any class or of any rights;  (D) the approval of
any  stockholders  of the  Company  shall be  required  in  connection  with any
reclassification  of the Common Stock or any  Fundamental  Transaction,  (E) the
Company shall authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company;  then in each case,  the Company shall
cause to be  filed at each  office  or  agency  maintained  for the  purpose  of
conversion of the Series A Preferred  Stock, and shall cause to be mailed to the
Holders at their last addresses as they shall appear upon the stock books of the
Company,  at least 30 calendar days prior to the applicable  record or effective
date hereinafter  specified,  a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend,  distribution,  redemption, rights
or warrants, or if a record is not to be taken, the date as of which the holders
of the Common  Stock of record to be entitled to such  dividend,  distributions,
redemption,  rights or warrants  are to be  determined  or (y) the date on which
such  reclassification is expected to become effective or close, and the date as
of which it is  expected  that  holders of the Common  Stock of record  shall be
entitled to exchange  their shares of the Common Stock for  securities,  cash or
other   property   deliverable   upon  such   reclassification   or  Fundamental
Transaction;  provided,  that the  failure  to mail such  notice  or any  defect
therein or -------- in the mailing  thereof shall not affect the validity of the
corporate action required to be specified in such notice.


<PAGE>


      iii. Exempt Issuance.  Notwithstanding the foregoing, no adjustment in the
Conversion Price will be made in respect of an Exempt Issuance.

      iv. Fundamental Transaction. If, at any time while this Series A Preferred
Stock is outstanding, (A) the Company effects any merger or consolidation of the
Company with or into another Person,  (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,  (C)
any tender offer or exchange offer (whether by the Company or another Person) is
completed  pursuant to which  holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the Company
effects  any  reclassification  of the  Common  Stock  or any  compulsory  share
exchange  pursuant to which the Common Stock is  effectively  converted  into or
exchanged  for  other  securities,  cash  or  property  (in  any  such  case,  a
"Fundamental Transaction"), then upon any subsequent conversion of this Series A
Preferred Stock, the Holder shall have the right to receive, for each Conversion
Share that would have been issuable upon such conversion absent such Fundamental
Transaction,  the same kind and amount of  securities,  cash or  property  as it
would have been  entitled to receive  upon the  occurrence  of such  Fundamental
Transaction if it had been,  immediately prior to such Fundamental  Transaction,
the holder of one share of Common  Stock (the  "Alternate  Consideration").  For
purposes of any such conversion, the determination of the Conversion Price shall
be appropriately adjusted to apply to such Alternate  Consideration based on the
amount of  Alternate  Consideration  issuable  in respect of one share of Common
Stock in such  Fundamental  Transaction,  and the Company  shall  apportion  the
Conversion  Price  among the  Alternate  Consideration  in a  reasonable  manner
reflecting  the relative  value of any  different  components  of the  Alternate
Consideration.  If  holders  of Common  Stock  are  given  any  choice as to the
securities,  cash or property to be received in a Fundamental Transaction,  then
the Holder shall be given the same choice as to the Alternate  Consideration  it
receives upon any  conversion of this Series A Preferred  Stock  following  such
Fundamental  Transaction.  To the extent  necessary to effectuate  the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall file a new Certificate of Designations with the same terms and
conditions  and issue to the  Holder new  preferred  stock  consistent  with the
foregoing provisions and evidencing the Holder's right to convert such preferred
stock into Alternate Consideration. The terms of any agreement pursuant to which
a Fundamental  Transaction  is effected  shall include terms  requiring any such
successor or surviving  entity to comply with the  provisions of this  paragraph
(f)(iv) and insuring that this Series A Preferred Stock (or any such replacement
security) will be similarly adjusted upon any subsequent  transaction  analogous
to a  Fundamental  Transaction.  Notwithstanding  the  foregoing  or  any  other
provisions of this Certificate of Designations,  in the event that the agreement
relating to a Fundamental Transaction provides for the conversion or exchange of
the Series A  Preferred  Stock  into  equity or debt  securities,  cash or other
consideration and the agreement is approved by the holders of a majority of the.
then-outstanding  shares of Series A  Preferred  Stock,  then the holders of the
Series A Preferred Stock shall have only the rights set forth in such agreement.


<PAGE>


   Section 8. Miscellaneous.

   a) Notices.  Any and all notices or other  communications or deliveries to be
provided by the Holders hereunder,  including, without limitation, any Notice of
Conversion,  shall be in writing and delivered personally, by facsimile, sent by
a nationally recognized overnight courier service,  addressed to the Company, at
its  principal  address  as  reflected  in  its  most  recent  filing  with  the
Commission.  Any and all notices or other  communications  or  deliveries  to be
provided by the Company hereunder shall be in writing and delivered  personally,
by  facsimile,  sent  by  a  nationally  recognized  overnight  courier  service
addressed to each Holder at the  facsimile  telephone  number or address of such
Holder appearing on the books of the Company,  or if no such facsimile telephone
number or address appears, at the principal place of business of the Holder. Any
notice or other communication or deliveries hereunder shall be deemed given when
received,  and any notice by telecopier  shall be effective if  confirmation  of
receipt is given by the party to whom the notice is transmitted. -

   b) Lost or Mutilated  Preferred  Stock  Certificate.  If a Holder's  Series A
Preferred Stock certificate shall be mutilated,  lost, stolen or destroyed,  the
Company shall  execute and deliver,  in exchange and  substitution  for and upon
cancellation of a mutilated certificate,  or in lieu of or in substitution for a
lost,  stolen or  destroyed  certificate,  a new  certificate  for the shares of
Series A Preferred Stock so mutilated,  lost,  stolen or destroyed but only upon
receipt of evidence of such loss, theft or destruction of such certificate,  and
of  the  ownership  thereof,  and  indemnity,   if  requested,   all  reasonably
satisfactory to the Company.

   c) Next  Business  Day.  Whenever any payment or other  obligation  hereunder
shall be due on a day other than a Business  Day,  such payment shall be made on
the next succeeding Business Day.

   d) Headings.  The headings  contained herein are for convenience only, do not
constitute a part of this Certificate of Designations and shall not be deemed to
limit or affect any of the provisions hereof.

   e) Rank of Series. For purposes of this Certificate of Designation, any stock
of any series or class of the Company shall be deemed to rank

      (i) prior to the shares of Series A Preferred  Stock,  as to  dividends or
upon liquidation,  dissolution or winding up, as the case may be, if the holders
of such class or classes  shall be entitled to the  receipt of  dividends  or of
amounts  distributable  upon  dissolution,  liquidation  or  winding  up of  the
Company,  as the case may be, in preference or priority to the holders of shares
of Series A Preferred Stock;

      (ii) on a parity with shares of Series A Preferred  Stock, as to dividends
or upon  liquidation,  dissolution or winding up, as the case may be, whether or
not the dividend  rates,  dividend  payment dates or  redemption or  liquidation
prices per share or sinking fund provisions,  if any, be different from those of
Series A Preferred  Stock, if the holders of such stock shall be entitled to the
receipt of dividends or of amounts  distributable upon dissolution,  liquidation
or  winding  up of the  Company,  as the case  may be,  in  proportion  to their
respective dividend rates or liquidation prices, without preference or priority,
one over the other,  as  between  the  holders of such stock and the  holders of
shares of Series A Preferred Stock; and

      (iii) junior to shares of Series A Preferred Stock as to dividends or upon
liquidation,  dissolution or winding up, as the case may be, if such class shall
be Common Stock or if the holders of shares of Series A Preferred Stock shall be
entitled to receipt of dividends or of amounts  distributable  upon dissolution,
liquidation  or winding up of the Company,  as the case may be, in preference or
priority to the holders of shares of such class or classes.

   f)  Amendment.  This  Certificate  of  Designation  may be  amended  with the
approval of the  Company's  board of directors and the consent of the holders of
seventy-five  percent  (75%) of the  outstanding  shares of  Series A  Preferred
Stock,  except that the conversion  limitation set forth in Section 6.2(b) shall
not be amended.


<PAGE>


                                     ANNEX A

                              NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES
                              A PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of Series A
Convertible Preferred Stock indicated below, into shares of common stock, par
value $0.0001 per share (the "Common Stock"), of Lounsberry Holdings III, Inc.,
a Delaware corporation (the "Company"), according to the conditions hereof, as
of the date written below. If shares are to be issued in the name of a person
other than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Company in accordance therewith. No fee will be
charged to the Holder for any conversion, except for such transfer taxes, if
any.

Conversion calculations:

     Date to Effect Conversion:
                               -------------------------------------------------
     Number of shares of Common Stock owned prior to Conversion:
                                                                ----------------
     Number of shares of Series A Preferred Stock to be Converted:
                                                                  --------------
     Value of shares of Series A Preferred Stock to be Converted:
                                                                 ---------------
     Number of shares of Common Stock to be Issued:
                                                   -----------------------------
     Certificate Number of Series A Preferred Stock attached hereto:
                                                                    ------------
     Number of Shares of Series A Preferred Stock represented by attached
     certificate:
                 ---------------------------------------------------------------

     Number of shares of Series A Preferred Stock subsequent to Conversion:
                                                                           -----

                                    [HOLDER]

                                    By:
                                       -----------------------------------------
                                       Name:
                                       Title: