CONVERTIBLE NOTE

         FOR VALUE RECEIVED, ETERNAL TECHNOLOGIES GROUP, INC., a Nevada
corporation (hereinafter called "Borrower"), hereby promises to pay to PLATINUM
PARTNERS VALUE ARBITRAGE FUND LP, 152 West 57th Street, 54th Floor, New York, NY
10019 (Fax 212-581-0002) (the "Holder") or order, without demand, the sum of
Twenty-Two Thousand Five Hundred & Zero / One Hundreth Dollars ($22,500.00).

         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:________________________________________________________________________
b