CONVERTIBLE NOTE

         FOR VALUE RECEIVED, ETERNAL TECHNOLOGIES GROUP, INC., a Nevada
corporation (hereinafter called "Borrower"), hereby promises to pay to GREENWICH
GROWTH FUND LIMITED c/o CONSOLIDATED FUND MANAGEMENT LTD., P.O. Box HM 2257,
Hamilton, HM JX, Bermuda (the "Holder") or order, without demand, the sum of
Twenty-One Thousand Five-Hundred Sixty-Nine & Zero / One Hundreth Dollars
($21,569.00).

         This Note has been entered into in lieu of the payment of liquidated
damages due to Holder from Borrower for the period of January 24, 2004 through
May 24, 2005. The following terms shall apply to this Note:

                                    ARTICLE I
                               GENERAL PROVISIONS


         The Holder shall have the right to convert the principal due under this
Note into Shares of the Borrower's Common Stock, $.001 par value per share
("Common Stock") as set forth below.

                  1.1. Conversion into the Borrower's Common Stock.

     (a) The Holder shall have the right from and after the date of the issuance
of this Note and then at any time until this Note is fully paid,  to convert any
outstanding  and unpaid  principal  portion of this Note, at the election of the
Holder  (the date of giving of such  notice of  conversion  being a  "Conversion
Date") into fully paid and  nonassessable  shares of Common  Stock as such stock
exists on the date of issuance of this Note,  or any shares of capital  stock of
Borrower   into  which  such  Common   Stock  shall   hereafter  be  changed  or
reclassified,  at the conversion  price as defined in Section 1.1(b) hereof (the
"Conversion  Price"),  determined  as  provided  herein.  Upon  delivery  to the
Borrower of a completed Notice of Conversion, a form of which is annexed hereto,
Borrower  shall issue and deliver to the Holder  within ten (10)  business  days
from the Conversion Date (such tenth day being the "Delivery  Date") that number
of shares of Common Stock for the portion of the Note  converted  in  accordance
with the foregoing.  The number of shares of Common Stock to be issued upon each
conversion  of this Note shall be  determined  by dividing  that  portion of the
principal of the Note to be converted, by the Conversion Price.

     (b)  Subject to  adjustment  as  provided  in Section  2.1(c)  hereof,  the
Conversion  Price per share shall be eighty  percent (80%) of the average of the
five (5) closing  prices of the Common Stock as reported by  Bloomberg  L.P. for
the  Principal  Market for the five (5) trading days  preceding the date of this
Note.

     (c) The Conversion  Price and number and kind of shares or other securities
to be issued upon conversion  determined  pursuant to Section  1.1(a),  shall be
subject to  adjustment  from time to time upon the  happening of certain  events
while this conversion right remains outstanding, as follows:

     A.  Merger,  Sale  of  Assets,  etc.  If the  Borrower  at any  time  shall
consolidate  with or merge into or sell or convey all or  substantially  all its
assets to any other  corporation,  this Note, as to the unpaid principal portion
thereof shall thereafter be deemed to evidence the right to purchase such number
and kind of shares or other  securities and property as would have been issuable
or distributable on account of such  consolidation,  merger, sale or conveyance,
upon or with respect to the  securities  subject to the  conversion  or purchase
right immediately prior to such consolidation,  merger, sale or conveyance.  The
foregoing  provision  shall  similarly  apply to  successive  transactions  of a
similar  nature  by any  such  successor  or  purchaser.  Without  limiting  the
generality of the foregoing,  the anti-dilution provisions of this Section shall
apply  to  such  securities  of such  successor  or  purchaser  after  any  such
consolidation, merger, sale or conveyance.
<PAGE>

     B.   Reclassification,   etc.  If  the  Borrower  at  any  time  shall,  by
reclassification  or  otherwise,  change  the  Common  Stock  into the same or a
different  number of  securities  of any class or classes  that may be issued or
outstanding,  this  Note,  as to the  unpaid  principal  portion  thereof  shall
thereafter  be deemed to evidence  the right to  purchase an adjusted  number of
such securities and kind of securities as would have been issuable as the result
of such  change  with  respect to the  Common  Stock  immediately  prior to such
reclassification or other change.

     C. Stock Splits,  Combinations and Dividends. If the shares of Common Stock
are  subdivided or combined into a greater or smaller number of shares of Common
Stock,  or if a dividend is paid on the Common Stock in shares of Common  Stock,
the Conversion Price shall be proportionately  reduced in case of subdivision of
shares or stock dividend or proportionately increased in the case of combination
of shares,  in each such case by the ratio  which the total  number of shares of
Common Stock outstanding  immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such event..

     D. Share  Issuance.  So long as this Note is  outstanding,  if the Borrower
shall  offer,  issue  or agree  to  issue  any  shares  of  Common  Stock  for a
consideration  less  than the  Conversion  Price in  effect  at the time of such
issue,  then, and thereafter  successively  upon each such issue, the Conversion
Price  shall be reduced to such other lower issue  price.  For  purposes of this
adjustment,  the  subsequent  issuance  of any  security  carrying  the right to
convert such  security  into shares of Common Stock or of any warrant,  right or
option to purchase  Common Stock shall result in an adjustment to the Conversion
Price  upon the  issuance  of the  above-described  security  and again upon the
issuance of shares of Common Stock upon exercise of such  conversion or purchase
rights if such issuance is at a price lower than the then applicable  Conversion
Price.  The reduction of the Conversion  Price described in this paragraph is in
addition to other rights of the Holder described in this Note.

     (d) Whenever the  Conversion  Price is adjusted  pursuant to Section 1.1(c)
above, the Borrower shall promptly mail to the Holder a notice setting forth the
Conversion  Price after such  adjustment  and setting  forth a statement  of the
facts requiring such adjustment.

                  (e) During the period the conversion right exists, Borrower
will reserve from its authorized and unissued Common Stock not less than one
hundred percent (100%) of the number of shares to provide for the issuance of
Common Stock upon the full conversion of this Note. Borrower represents that
upon issuance, such shares will be duly and validly issued, fully paid and
non-assessable. Borrower agrees that its issuance of this Note shall constitute
full authority to its officers, agents, and transfer agents who are charged with
the duty of executing and issuing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon the conversion of this
Note.

                  1.2 Method of Conversion. This Note may be converted by the
Holder in whole or in part as described in Section 1.1(a) hereof. Upon partial
conversion of this Note, a new Note containing the same date and provisions of
this Note shall, at the request of the Holder, be issued by the Borrower to the
Holder for the principal balance of this Note which shall not have been
converted or paid.

                  1.3 Mandatory Conversion. Commencing after the actual
effective date of the Registration Statement described in Article 3 hereunder
that includes the shares underlying this Note, the Borrower will have the option
by written notice to the Holder ("Notice of Mandatory Conversion") of compelling
the Holder to convert all or a portion of the outstanding and unpaid principal
of the Note thereon, into Common Stock at the Conversion Price then in affect
("Mandatory Conversion"). The Notice of Mandatory Conversion, which notice must
be given on the first day following a consecutive ten (10) day trading period
during which the closing price for the Company's Common Stock as reported by
Bloomberg, LP for the Principal Market shall be more than $0.60 each day with an
average daily volume in excess of 150,000 shares. The date the Notice of
Mandatory Conversion is given is the "Mandatory Conversion Date." The Notice of
Mandatory Conversion shall specify the aggregate principal amount of the Note
which is subject to Mandatory Conversion. Mandatory Conversion Notices must be
given proportionately to all Holders of Notes who received Notes similar in term
and tenure as this Note. The Borrower shall reduce the amount of Note principal
subject to a Notice of Mandatory Conversion by the amount of Note Principal for
which the Holder had delivered a Notice of Conversion to the Borrower during the
twenty (20) trading days preceding the Mandatory Conversion Date. Each Mandatory
Conversion Date shall be a deemed Conversion Date and the Borrower will be
required to deliver the Common Stock issuable pursuant to a Mandatory Conversion
Notice in the same manner and time period as described in Section 1.2 above.

<PAGE>


                                   ARTICLE II
                       REGISTRATION AND LIQUIDATED DAMAGES

                  2 Registration Rights. The registration rights granted to the
Holder pursuant to Section 11.1(ii) of the Subscription Agreement are hereby
granted to the Holder in connection with the Shares issuable upon conversion of
this Note ("Shares").


                                   ARTICLE III
                                  MISCELLANEOUS

                  3.1 Failure or Indulgence Not Waiver. No failure or delay on
the part of Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

                  3.2 Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Borrower to: Eternal Technologies
Group, Inc., Section D, 5/F, Block A, Innotech Tower, 235 Nanjing Road, Heping
District, Tianjin 300052, Attn: XingJing Ma, CEO, telecopier number:
011-86-22-2721-7030, with an additional copy by telecopier only to: Hank
Vanderkam, Esq., 1301 Travis, #1200, Suite 1200, Houston, TX 77002 (Fax
713-547-8910), and (ii) if to the Holder, to the name, address and telecopy
number set forth on the front page of this Note, with a copy by telecopier only
to Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
10176, telecopier number: (212) 697-3575.
<PAGE>

                  3.3 Amendment Provision. The term "Note" and all reference
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented.

                  3.4 Assignability. This Note shall be binding upon the
Borrower and its successors and assigns, and shall inure to the benefit of the
Holder and its successors and assigns.

                  3.5 Cost of Collection. If default is made in the payment of
this Note, Borrower shall pay the Holder hereof reasonable costs of collection,
including reasonable attorneys' fees.

                  3.6 Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of New York. Any action
brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of New
York or in the federal courts located in the State of New York. Both parties and
the individual signing this Agreement on behalf of the Borrower agree to submit
to the jurisdiction of such courts. The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs.

         5.7 Shareholder Status. The Holder shall not have rights as a
shareholder of the Borrower with respect to unconverted portions of this Note.
However, the Holder will have all the rights of a shareholder of the Borrower
with respect to the shares of Common Stock to be received by Holder after
delivery by the Holder of a Conversion Notice to the Borrower.

         IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its
name by an authorized officer as of the 24th day of May, 2005.

                                        ETERNAL TECHNOLOGIES GROUP, INC.



                                        By:________________________________
                                                 Name:
                                                 Title:

WITNESS:



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


<PAGE>



                              NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)


         The undersigned hereby elects to convert $_________ of the principal
due on the Note issued by ETERNAL TECHNOLOGIES GROUP, INC. on May 24, 2005 into
Shares of Common Stock of ETERNAL TECHNOLOGIES GROUP, INC. (the "Borrower")
according to the conditions set forth in such Note, as of the date written
below.



Date of Conversion:_____________________________________________________________


Conversion Price:_______________________________________________________________


Shares To Be Delivered:_________________________________________________________


Signature:______________________________________________________________________


Print Name:_____________________________________________________________________


Address:________________________________________________________________________