SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                        Date of Report: January 25, 1999

                                 Eurotech, Ltd.
             (Exact name of registrant as specified in its charter)

     District of Columbia          000-22129              59-2855398
(State or other jurisdiction of    (Commission            (I.R.S. Employer
 incorporation or organization)    File Number)           Identification No.)

            1101 30th Street, N.W., Suite 500, Washington, D.C. 20007
                    (Address of principal executive offices)

                                 (202) 625-4382
               Registrant's telephone number, including area code
<PAGE>

Item 5. Other Events.

      A. Board of Directors.

      On January 10, 1999, the Board of Directors accepted the resignation of
Melvin Braun as a member of the Board of Eurotech, Ltd. (the "Company"). In a
letter to the Board of Directors, Mr. Braun cited health concerns as the reason
for his resignation.

      By resolution dated January 10, 1999, the remaining members of the Board
of Directors appointed Dr. Randolph Graves, Jr. to serve as a member of the
Board until the next meeting of shareholders at which directors are elected. Dr.
Graves previously had served as a Director and the Chairman and Chief Executive
Officer on the Board of Directors of the Company from 1995 through January 1998.

      During the last twelve months, Dr. Graves has acted as a technology
consultant for Graves Technology, Inc. focusing on the marketing of technologies
to overseas entities. From 1995 to early 1998, he served as a Director and the
Chairman and Chief Executive Officer of the Company and was responsible for
negotiating the acquisition of the Company's primary technologies and developing
a marketing plan with respect to such technologies. From November 1992 until
January 1995, Dr. Graves was the President and Chief Executive Officer of Mosaic
Multisoft Corp., a computer software company. From February 1991 until November
1992, Dr. Graves was President of Graves Technology, Inc., a technology
consulting company. From September 1989 to January 1991, Dr. Graves was the Vice
President-Applications of Super Computing Solutions, Inc., a computer software
development company. From June 1963 to September 1989, Dr. Graves was the
Research and Development Division Director of the National Aeronautics and Space
Administration in Washington, D.C. Dr. Graves received his Doctor of Science
degree from the George Washington University and a Masters degree in Business
From Stanford University.

      On January 7, 1999, the Board of Directors appointed David Wilkes as the
Chairman of the Board of the Company. A biography of Mr. Wilkes appears in the
Company's Current Report on Form 8-K filed with the Securities and Exchange
Commission ("SEC") on December 15, 1999.

      B. Appointment of President.

      On January 10, 1999, the Board of Directors appointed Frank Fawcett to
serve as the President and Chief Executive Officer of the Company for a period
of three months pursuant to the terms of a certain letter agreement dated
January 11, 1999 (the "Fawcett Agreement"). Mr. Fawcett was engaged to focus on
(i) developing a business and marketing plan, (ii) implementing the marketing
plan and (iii) securing financing for the Company. In accordance with the
Fawcett Agreement, the Company will pay to Mr. Fawcett a weekly salary of $2,000
plus expenses. At the conclusion of the term of Mr. Fawcett's employment under
the Fawcett Agreement, the Company and Mr. Fawcett will review his performance
and make a determination as to whether to execute a new agreement by which Mr.
Fawcett would be engaged on a continuing basis by the Company.


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<PAGE>

      Mr. Fawcett business experience has emphasized product marketing. Prior to
joining the Company, from 1995 to 1997, Mr. Fawcett served as the President of
Isbre Holdings Corporation, a holding company which imported bottled water from
Norway, where he was responsible for national and international distribution and
assisted the company in having its stock listed on the Nasdaq market. From 1993
to 1995, he was the President of Fawcett International Investment Corporation
providing business consulting services designed to increase a company's revenues
and streamline its operations. From 1991 to 1993, Mr. Fawcett serves as the
Director of International Investments of Newcomb & Company where he developed
new business for investments into US corporations including airlines and oil
companies. From 1987 to 1993, Mr. Fawcett was the Vice President-Operations and
later Vice President-Sales and Marketing of Eastern Technologies, Ltd., where he
was responsible for sales of aircraft and related technology to the United
States government. From 1985 to 1987, he served as the Executive Vice President
and a principal of Interactive Technologies, Ltd., where he developed and
implemented procedures to permit companies to act as prime contractors with the
US and foreign governments.. From 1983 to 1986, he served as the Executive Vice
President and as a principal of Siska Construction where he was responsible for
marketing, project development, bids, proposals, and insurance and bonding for
government projects in a business targeted at new construction and
rehabilitation of military bases, courthouses, embassies and alert crew
facilities. From 1965 to 1984, Mr. Fawcett served as the Program Materials
Manager of Lockheed/Sanders Associates where he was responsible for the
manufacture of flight line testers for the entire arsenal of the US Air Force.

      C. Material Agreements.

      The Company has entered into a series of agreements with two persons
pursuant to which it will borrow up to an aggregate of $500,000. In accordance
with a certain agreement dated January 6, 1999 between the Company and David
Wilkes (the "Wilkes Agreement"), a Director and the Chairman of the Board of the
Company ("Mr. Wilkes"), Mr. Wilkes agreed to loan the Company the sum of
$100,000 (the "Wilkes Loan"). To date, Mr. Wilkes has funded $50,000 of the
total amount to be loaned by him under the Wilkes Agreement, which sum is
evidenced by a secured promissory note dated January 7, 1999 (the "First Wilkes
Note"). Mr. Wilkes has agreed to deliver the remaining $50,000 required under
the Wilkes Agreement by March 31, 1999, which sum shall be evidenced by a
secured promissory note substantially similar to the First Wilkes Note (the
second promissory note to be delivered by the Company to Wilkes is herein
referred to as the "Second Wilkes Note" which, together with the First Wilkes
Note, are sometimes herein referred to as the "Wilkes Notes"). The Company is
entitled to use the proceeds derived from the Wilkes Notes in the discretion of
the Board of Directors. The First Wilkes Note is payable on January 7, 2000 and
the Second Wilkes Note will be payable one year from the date the Company
receives funding from Mr. Wilkes. The Wilkes Notes bear interest at the rate of
13% per annum and are prepayable by the Company at any time prior to maturity.
The Wilkes Notes are secured by all of the intangible property of the Company
pursuant to the terms of a Security Agreement (as hereafter defined), a summary
of which is set forth below.

      On January 6, 1999, JNC Strategic Fund Ltd. ("JNC") extended a loan to the
Company of $400,000 (the JNC Loan"), which loan is evidenced by a secured
promissory note dated January 6, 1999 in like amount (the "JNC Note" and the JNC
Note and the Wilkes Notes may sometime herein


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<PAGE>

be referred to as the "Notes"). The JNC Note is payable on January 6, 2000 or
such earlier date pursuant to the terms thereof, with interest accrued at the
rate of 13% per annum and is prepayable by the Company at any time prior to
maturity. The JNC Note is secured by all of the intangible property of the
Company pursuant to the terms of the Security Agreement, a summary of which is
set forth below. The JNC Note is convertible into the Company's 8% Secured
Convertible Debenture due three years from the date of issuance, a summary of
which is set forth below.

      The proceeds of the JNC Loan (the "JNC Loan Proceeds") were delivered into
escrow and will be released from such escrow in accordance with the provisions
of an escrow agreement dated as of January 6, 1999 (the "Escrow Agreement").
Pursuant to the terms of the Escrow Agreement, the Company is entitled to draw
upon the JNC Loan Proceeds by providing JNC with not more than fifteen nor less
than five business days' written notice of its desire to use some or all of the
then undistributed or unreturned JNC Loan Proceeds, which notice must describe
the purpose to which Company proposes to apply such funds (a "Use Notice"). JNC
shall have two business days from its receipt of such Use Notice to approve or
disapprove of the amount and use of the JNC Loan Proceeds as set forth therein.
The decision of JNC to approve or disapprove of the use of JNC Loan Proceeds set
forth in any Use Notice is at the sole discretion of JNC. Failure by the Company
to utilize the JNC Loan Proceeds requested in accordance with a Use Notice
constitutes a default under the terms of the Escrow Agreement. If JNC
disapproves of the amount or use of the JNC Loan Proceeds as set forth in a Use
Notice, the Company may thereafter deliver a second Use Notice for the use of
the JNC Loan Proceeds then held in escrow. If JNC again disapproves of such Use
Notice and the Company and JNC do not agree as to the use of such JNC Loan
Proceeds within twenty business days after the date of the last Use Notice
relating to the use of such proceeds, then JNC has the right to require the
escrow agent holding the JNC Loan Proceeds to deliver to JNC the full amount of
the JNC Loan Proceeds then held in escrow.

      As additional consideration for making the JNC Loan and the Wilkes Loan,
the Company issued common stock purchase warrants to each of Mr. Wilkes (the
"Wilkes Warrant") and JNC (the "JNC Warrant" and, together with the Wilkes
Warrants, the "Warrants"). The Company issued to Mr. Wilkes a warrant entitling
him to purchase up to 9,375 shares of Common Stock in connection with the First
Wilkes Note and will issue a like warrant upon funding of the Second Wilkes
Note. The Company issued to JNC a warrant to purchase up to 75,000 shares of
Common Stock. The Warrants entitle the holders to purchase the number of shares
of Common Stock specified therein for a period of five years from the date of
issuance at a price equal to 110% of the average of the closing bid price per
share of the Common Stock on the OTC Bulletin Board during the five (5) trading
days immediately preceding the date of issuance of such warrants. The holders of
the Warrants were granted "piggy-back" registration rights with respect to all
of the shares of Common Stock issuable upon exercise thereof (the "Warrant
Shares"), which obligates the Company to include the Warrant Shares (or any
portion thereof as the holder may elect) in any registration statement under the
Securities Act of 1933 (the "Act") that the Company files with the SEC (other
than registration statements on Form S-8 or Form S-4 covering securities issued
by the Company pursuant to an employee benefit plan or in connection with a
merger, acquisition or similar transaction, respectively). Further, the holders
of the Warrants, when the Warrant Shares are not registered pursuant to an
effective registration statement, may demand registration of the Warrant Shares
under the Act (a


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<PAGE>

"Demand Registration"). The right to cause such registration of the Warrant
Shares shall be limited to one such registration. The Company has agreed to pay
all expenses in connection with any Demand Registration.

      The JNC Note is convertible at any time after issuance until maturity into
the Company's 8% Secured Convertible Debenture due three years after the date of
issuance (the "JNC Debenture"). The JNC Debenture bears interest at the rate of
8% per annum, payable quarterly, in cash or Common Stock at the option of the
Company.

      The JNC Debenture is convertible into number of shares of Common Stock as
is determined by dividing the outstanding principal amount of the JNC Debenture,
plus all accrued but unpaid interest thereon, by the Conversion Price (as
hereafter defined), subject to adjustment as provided therein. The conversion
price (the "Conversion Price") in effect on the date of any conversion is equal
to the lesser of (a) the average of the closing bid price per share of the
Common Stock on the OTC Bulletin Board during the five trading days immediately
preceding the date of issuance of the JNC Debenture and (b) 75% of the average
of the closing bid price per share of the Common Stock on the OTC Bulletin Board
during the five trading day period immediately preceding the applicable date
upon which the holder seeks to convert the JNC Debenture. The Conversion Price
and consequently, the number of shares of Common Stock into which the JNC
Debenture is convertible, is subject to adjustment under certain circumstances,
including, among other things, in the event that the Company (i) issues
additional Common Stock as a dividend or otherwise, or subdivides or
reclassifies the class of Common Stock, (ii) issues securities or debt that is
convertible into or exchangeable for shares of Common Stock entitling any person
to acquire shares of Common Stock at a price per share less than the Conversion
Price, or (iii) reclassifies or agrees to exchange its stock for other
securities.

      The Company has agreed that it will file with the SEC, at its expense, a
registration statement covering the resale of the shares of Common Stock
underlying the JNC Debenture. The Company shall use its best efforts to keep
such registration statement continuously effective under the Act until the date
which is three years after the date that such registration statement is declared
effective by the SEC or such earlier date when all of the shares issuable upon
conversion of the JNC Debenture covered by the registration statement have been
sold or may be sold without volume restrictions pursuant to Rule 144(k)
promulgated under the Act.

      As an inducement for Wilkes and JNC to make the Wilkes Loan and the JNC
Loan, respectively, and to secure the timely payment of its obligations under
the Notes and under those certain 8% Secured Convertible Debentures due July 20,
2001 in an aggregate principal amount of $1,000,000 issued by the Company in
favor of JNC on July 20, 1998 (the Company's obligations under said debentures
are herein referred to as the "July Obligations"), the Company entered into a
Security Agreement dated as of January 6, 1999 (the "Security Agreement")
whereby it granted a security interest to each of Mr. Wilkes and JNC (for
purposes of the discussion relating to the Security Agreement, Mr. Wilkes and
JNC may sometimes be referred to as the "Secured Parties") in all of the
Company's right, title and interest in and to all trademarks, patents,
copyrights, and other general intangible property of the Company, all trade
secrets, intellectual property rights in computer


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<PAGE>

software and computer software products, design rights which may be available to
the Company, rights to proceeds arising from any and all claims for damages by
way of past, present and future infringement of any Collateral (as hereafter
defined) with the right but not the obligation to sue on behalf of and collect
such damages for said use or infringement, licenses to use any of the
copyrights, patents or trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights. The term
"Collateral" includes all of the foregoing items, whether presently owned or
existing or acquired or coming into existence after the date of the Security
Agreement, all additions and accessions thereto, all substitutions and
replacements thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the license, sale or other
transfer of Collateral and of insurance covering the same and of any tort claims
in connection therewith.

      In the event of any default under the Security Agreement, the Secured
Parties are entitled, among other things, to exercise all remedies conferred
under the JNC Note, the July Obligations, the JNC Debenture and the Escrow
Agreement and Mr. Wilkes has the right to exercise all remedies conferred under
the Wilkes Notes, and each Secured Party has all the rights and remedies of a
secured party under the UCC and/or any other applicable law (including the
Uniform Commercial Code of any jurisdiction in which any property subject to the
Security Agreement is then located). Without limitation, the Secured Parties
shall have the right to (i) take possession of all tangible manifestations or
embodiments of the Collateral, (ii) operate the business of the Company using
the Collateral and shall have the right to assign, sell, or otherwise dispose of
and deliver all or any part of the Collateral, at public or private sale or
otherwise in such ever manner and for such ever consideration as it they see
fit, including the right to purchase all or any part of the Collateral being
sold, free from and discharged of all trusts, claims, right of redemption and
equities of the Company: (iii) license or, to the same extent the Company is
permitted by law and contract to do so, sublicense, whether or an exclusive or
non-exclusive basis, any of the Collateral throughout the world for such term,
on such conditions and in such manner as the Secured Parties shall, in their
sole discretion, determine; (iv) (without assuming any obligations or
liabilities thereunder), at any time, enforce against any licensee or
sublicensee of the Collateral all rights and remedies of the Company in, to and
under any license agreement with respect to such Collateral; (v) in order to
implement the assignment, license, sale or other disposition of any of the
Collateral pursuant to the Security Agreement, execute and deliver on behalf of
the Company one or more instruments of assignment of the Collateral in form
suitable for filing, recording or registration in any jurisdictions as the
Secured Parties may determine advisable. The Secured Parties rights shall
continue in the Collateral until all obligations under the various agreements
and securities described above shall have been satisfied by the Company.

      Defaults under the Security Agreement include the following: (i) the
failure by the Company to pay any amounts of principal or interest when, as, and
in the amount due, pursuant to the Notes, the July Obligations or the JNC
Debenture; (ii) if any representation or warranty of the Company in the Security
Agreement shall prove to have been incorrect in any material respect when made;
(iii) the failure by the Company to observe or perform any of its obligations
under the Security Agreement for ten days after receipt by the Company of notice
of such failure from JNC or its assignee(s); and (iv) any default under the
Escrow Agreement, the July Obligations or the JNC Debenture.


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<PAGE>

      The Security Agreement appoints the Secured Parties, and their respective
officers, agents, successors or assigns with full power of substitution, as the
Company's true and lawful attorney-in-fact, with power, in their own name or in
the name of the Company, to, after the occurrence and during the continuance of
any default thereunder, (i) endorse any notes, checks, drafts, money orders, or
other instruments of payment (including payments payable under or in respect of
any policy of insurance) in respect of the Collateral that may come into
possession of the Secured Parties; (ii) to sign and endorse any UCC financing
statement or any other documents relating to the Collateral; (iii) to pay or
discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral; (iv) to demand,
collect, receipt for, compromise, settle and sue for monies due in respect of
the Collateral; and (v) generally, to do, at the option of the Secured Parties,
and at the Company's expense, at any time, or from time to time, all acts and
things which the Secure Parties deem necessary to protect, preserve and realize
upon the Collateral and the security interest granted therein in order to effect
the intent of the Security Agreement, the Notes, the July Obligations and the
JNC Debenture. The power of attorney is coupled with an interest and is
irrevocable for the term of the Security Agreement and thereafter until all of
the Company's obligations outstanding under the various agreements discussed
herein and the July Obligations are satisfied.

Item 7(c). Exhibits.

      (a) Agreement between the Company and David Wilkes dated January 6, 1999
pursuant to which Mr. Wilkes agrees to extend loans to the Company.

      (b) Secured promissory note in the principal amount of $400,000 made in
favor of JNC Strategic Fund Ltd. due January 6, 2000.

      (c) Secured promissory note in the principal amount of $50,000 made in
favor of David Wilkes due January 6, 2000.

      (d) Form of secured promissory note in the principal amount of $50,000 to
be issued in favor of David Wilkes upon the delivery of funds in like amount due
one year from the date of funding.

      (e) Form of Escrow Agreement dated as of January 6, 1999 among the
Company, JNC Strategic Fund Ltd. and Encore Capital Management, L.L.C. as escrow
agent.

      (f) Warrant to purchase 75,000 shares of Common Stock issued in favor of
JNC Strategic Fund Ltd.

      (g) Warrant to purchase 9,375 shares of Common Stock issued in favor of
David Wilkes.

      (h) Security Agreement dated as of January 6, 1998 among the Company, JNC
Strategic Fund Ltd. and David Wilkes.

      (i) Form of 8% Secured Convertible Debenture issuable upon conversion of
the promissory notes made in favor of JNC Strategic Fund Ltd.


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<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                            EUROTECH, LTD.


Dated: January 26, 1999                     By: /s/ Frank Fawcett
                                                ----------------------------
                                                Frank Fawcett, President and 
                                                Chief Executive Officer


                                        8
<PAGE>

                                                                    Confidential
                                                              Draft dated 1/4/99

                                    AGREEMENT

            This Agreement, dated as of January __, 1999, is made by and between
David Wilkes ("Wilkes") and Eurotech, Ltd. (the "Company").

            For valuable consideration, the receipt and sufficiency are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

      1. Wilkes shall, concurrently with his execution and delivery of this
Agreement, loan the Company the principal sum of $50,000. Such loan shall be
evidenced by a Secured Promissory Note of the Company, in the form of Exhibit A
attached hereto, and secured by a Security Agreement, in the form of Exhibit B
attached hereto (the "Security Agreement").

      2. By January 31, 1999, Wilkes shall loan the Company an additional
principal sum of $50,000. Such loan shall be evidenced by a Secured Promissory
Note of the Company, in the form of Exhibit A attached hereto, and secured by
the Security Agreement.

      3. This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York, without regard to the principal of
conflicts of laws thereof.

      4. The Company and Wilkes understand and acknowledge that JNC Strategic
Fund Ltd. is relying on the making of the loans contemplated in this Agreement
in determining whether to loan up to $400,000 to the Company.

      5. Each of Wilkes and the Company represent and warrant to the other that
it has the requisite power and authority to enter into and consummate the
transactions contemplated by this Agreement and that, when executed and
delivered in accordance with the terms hereof, this Agreement, the Promissory
Notes and the Security Agreement, shall be the legally valid and binding
obligations of such party, enforceable against such party in accordance with its
respective terms.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.


                                    EUROTECH, LTD.


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


                                    DAVID WILKES


                                    -----------------------------
<PAGE>

                             SECURED PROMISSORY NOTE

$400,000                                                         January 6, 1999

            FOR VALUE RECEIVED, EUROTECH, LTD., a corporation organized under
the laws of the District of Columbia ("Maker"), hereby promises to pay to JNC
Strategic Fund Ltd., or its successors and assigns ("Payee"), at its address c/o
Encore Capital Management, L.L.C., 12007 Sunrise Valley Drive, Suite 460,
Reston, VA 20191, or to such other address as Payee shall provide in writing to
Maker for such purpose, in lawful money of the United States of America, the
principal sum of FOUR HUNDRED THOUSAND DOLLARS ($400,000), on January 6, 2000
(the "Maturity Date") or on such earlier date as such principal amount may
become due and payable pursuant to the terms hereof.

            At the sole option of Payee, at any time after the date hereof and
prior to the Maturity Date the principal amount and any accrued and unpaid
interest due under this Secured Promissory Note (the "Promissory Note") may be
exchanged, in whole or in part, for an 8% Secured Convertible Debenture of the
Maker, substantially in the form of Exhibit A attached hereto. In the event of
such an exchange, the Maker shall, promptly thereafter and, in any event, within
fifteen (15) days thereafter, enter into (or where appropriate, amend)
definitive agreements and prepare, deliver and file all certificates, legal
opinions and consents substantially similar to those entered into, prepared,
delivered and filed in connection with sale to Payee of the Maker's 8%
Convertible Debentures due July 20, 2001and acceptable to Payee.

            This Promissory Note shall be subject to the terms and conditions of
each of the Escrow Agreement of even date herewith among Maker, Payee and Encore
Capital Management, L.L.C. (the "Escrow Agreement") and the Security Agreement,
effective as of the date hereof, among Maker, Payee and David Wilkes (the
"Security Agreement").

            The Payee shall have the right to declare immediately due and
payable all then unpaid principal and accrued interest due under this Promissory
Note if (a) Maker breaches any material term or condition of the Escrow
Agreement, or the Warrant of Maker of even date herewith, pursuant to which
Payee has the right to acquire 75,000 shares of the Maker's Common Stock, or (b)
there shall occur an Event of Default under the Security Agreement, or (c) the
Maker becomes obligated to make, prior to January 6, 2000, any payment under the
Maker's Secured Promissory Note to David Wilkes, due January 6, 2000, or (d) the
Maker makes, or becomes obligated to make, prior to January 7, 2000, any payment
under the Maker's Secured Promissory Note to David Wilkes, due January 7, 2000,
other than as permitted therein or (e) the Security Agreement is not executed by
January 20, 1999, or (f) the security interest granted by the Security Agreement
is not perfected by January 20, 1999.
<PAGE>

            Interest shall accrue on the unpaid principal amount of this
Promissory Note at the rate of 13% per annum from the date hereof until such
unpaid principal amount is paid in full. Interest shall be payable on the
Maturity Date, or such earlier date as such amounts may be due hereunder,
computed on the basis of a 365-day year for the actual number of days elapsed.

            All payments of principal and interest shall be made without setoff,
deduction or counterclaim. No delay or failure on the part of Payee in
exercising any of its options, powers or rights, nor any partial or single
exercise of its options, powers or rights shall constitute a waiver thereof or
of any other option, power or right, and no waiver on the part of Payee of any
of its options, powers or rights shall constitute a waiver of any other option,
power or right. Maker hereby waives presentment of payment, protest, and all
notices or demands in connection with the delivery, acceptance, performance,
default or endorsement of this Promissory Note. Acceptance by Payee of less than
the full amount due and payable hereunder shall in no way limit the right of
Payee to require full payment of all sums due and payable hereunder in
accordance with the terms hereof.

            No term or provision contained herein may be modified, amended or
waived except by written agreement or consent signed by the party to be bound
thereby.

            The rights and remedies of Payee expressed herein are cumulative and
not exclusive of any rights and remedies otherwise available.

            If this obligation is placed in the hands of an attorney for
collection after default, and provided Payee prevails on the merits in respect
to its claim of default, Maker shall pay (and shall indemnify and hold harmless
Payee from and against), all reasonable attorneys' fees and expenses incurred by
Payee in pursuing collection of this Promissory Note.

            This Promissory Note shall be binding upon the Maker and its
successors and shall inure to the benefit of the Payee and its successors and
assigns. The term "Payee," as used herein, shall also include any endorsee,
assignee or other holder of this Promissory Note.

            This Promissory Note has been duly authorized, executed and
delivered by Maker and is the legal obligation of Maker, enforceable against
Maker in accordance with its terms.

            If this Promissory Note is lost, stolen, mutilated or otherwise
destroyed, Maker shall execute and deliver to Payee a new promissory note
containing the same terms, and in the same form, as this Promissory Note. In
such event, Maker may require Payee to deliver to Maker an affidavit of lost
instrument and customary indemnity in respect thereof as a condition to the
delivery of any such new promissory note.

            This Promissory Note shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York without regard to
the principles of conflicts of law thereof. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or


                                       -2-
<PAGE>

proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Promissory Note and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.

                                  * * * * * * *


                                       -3-
<PAGE>

            IN WITNESS WHEREOF, Maker has caused this Promissory Note to be duly
executed and delivered as of the day and year first set forth above.

                        EUROTECH, LTD.


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


                                       -4-
<PAGE>

                             SECURED PROMISSORY NOTE

$50,000                                                          January 6, 1999

            FOR VALUE RECEIVED, EUROTECH, LTD., a corporation organized under
the laws of the District of Columbia ("Maker"), hereby promises to pay to David
Wilkes ("Payee"), at his address at 15 Somerset Drive South, Great Neck, NY
10020, or to such other address as Payee shall provide in writing to Maker for
such purpose, in lawful money of the United States of America, the principal sum
of FIFTY THOUSAND DOLLARS ($50,000), on the later to occur of January 6, 2000
and the date on which the Company's obligations under its $400,000 Secured
Promissory Note to JNC Strategic Fund Ltd. (the "Strategic Note") is repaid in
full or exchanged into the Company's debentures pursuant to its terms thereof
(the "Maturity Date").

            This Secured Promissory Note shall be subject to the terms and
conditions of the Security Agreement, effective as of the date hereof, among
Maker, JNC Strategic Fund Ltd. and Payee (the "Security Agreement"). This
Secured Promissory Note is one of the two Secured Promissory Notes contemplated
by the Agreement, dated as of January 6, 1999, between Payee and Maker.

            The Payee shall have the right to declare immediately due and
payable all then unpaid principal and accrued interest due under this Promissory
Note if (a) there shall occur an Event of Default under the Security Agreement,
or (b) the Security Agreement is not executed by January 20, 1999, or (c) the
security interest granted by the Security Agreement is not perfected by January
20, 1999.

            Interest shall accrue on the unpaid principal amount of this Secured
Promissory Note at the rate of 13% per annum from the date hereof until such
unpaid principal amount is paid in full. Interest shall be payable on the
Maturity Date, or such earlier date as such amounts may be due hereunder,
computed on the basis of a 365-day year for the actual number of days elapsed.

            All payments of principal and interest shall be made without setoff,
deduction or counterclaim. No delay or failure on the part of Payee in
exercising any of its options, powers or rights, nor any partial or single
exercise of its options, powers or rights shall constitute a waiver thereof or
of any other option, power or right, and no waiver on the part of Payee of any
of its options, powers or rights shall constitute a waiver of any other option,
power or right. Maker hereby waives presentment of payment, protest, and all
notices or demands in connection with the delivery, acceptance, performance,
default or endorsement of this Secured Promissory Note. Acceptance by Payee of
less than the full amount due and payable hereunder shall in no way limit the
right of Payee to require full payment of all sums due and payable hereunder in
accordance with the terms hereof.
<PAGE>

            Except with respect to the immediately following sentence, which may
not be modified, amended or waived, no term or provision contained herein may be
modified, amended or waived except by written agreement or consent signed by the
party to be bound thereby. Maker shall not pay any obligation under this Note
prior to the Maturity Date, or such earlier date as such payment shall become
due hereunder.

            The rights and remedies of Payee expressed herein are cumulative and
not exclusive of any rights and remedies otherwise available.

            If this obligation is placed in the hands of an attorney for
collection after default, and provided Payee prevails on the merits in respect
to its claim of default, Maker shall pay (and shall indemnify and hold harmless
Payee from and against), all reasonable attorneys' fees and expenses incurred by
Payee in pursuing collection of this Secured Promissory Note.

            This Secured Promissory Note shall be binding upon the Maker and its
successors and shall inure to the benefit of the Payee and its permitted
successors and assigns.

            This Secured Promissory Note has been duly authorized, executed and
delivered by Maker and is the legal obligation of Maker, enforceable against
Maker in accordance with its terms.

            If this Secured Promissory Note is lost, stolen, mutilated or
otherwise destroyed, Maker shall execute and deliver to Payee a new promissory
note containing the same terms, and in the same form, as this Secured Promissory
Note. In such event, Maker may require Payee to deliver to Maker an affidavit of
lost instrument and customary indemnity in respect thereof as a condition to the
delivery of any such new promissory note.

            This Secured Promissory Note shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Secured Promissory Note and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.

                                  * * * * * * *


                                       -2-
<PAGE>

            IN WITNESS WHEREOF, Maker has caused this Promissory Note to be duly
executed and delivered as of the day and year first set forth above.

                        EUROTECH, LTD.


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


                                       -3-
<PAGE>

                             SECURED PROMISSORY NOTE

$50,000                                                          January 7, 1999

            FOR VALUE RECEIVED, EUROTECH, LTD., a corporation organized under
the laws of the District of Columbia ("Maker"), hereby promises to pay to David
Wilkes ("Payee"), at his address at 15 Somerset Drive South, Great Neck, NY
10020, or to such other address as Payee shall provide in writing to Maker for
such purpose, in lawful money of the United States of America, the principal sum
of FIFTY THOUSAND DOLLARS ($50,000), on the later to occur of January 7, 2000
and the date on which the Company's obligations under its $400,000 Secured
Promissory Note to JNC Strategic Fund Ltd. (the "Strategic Note") is repaid in
full or exchanged into the Company's debentures (the "Strategic Debentures")
pursuant to its terms thereof (the "Maturity Date").

            This Secured Promissory Note shall be subject to the terms and
conditions of the Security Agreement, effective as of the date hereof, among
Maker, JNC Strategic Fund Ltd. and Payee (the "Security Agreement"). This
Secured Promissory Note is one of the two Secured Promissory Notes contemplated
by the Agreement, dated as of January 6, 1999, between Payee and Maker.

            The Payee shall have the right to declare immediately due and
payable all then unpaid principal and accrued interest due under this Promissory
Note if (a) there shall occur an Event of Default under the Security Agreement,
or (b) the Security Agreement is not executed by January 20, 1999, or (c) the
security interest granted by the Security Agreement is not perfected by January
20, 1999.

            Interest shall accrue on the unpaid principal amount of this Secured
Promissory Note at the rate of 13% per annum from the date hereof until such
unpaid principal amount is paid in full. Interest shall be payable on the
Maturity Date, or such earlier date as such amounts may be due hereunder,
computed on the basis of a 365-day year for the actual number of days elapsed.

            All payments of principal and interest shall be made without setoff,
deduction or counterclaim. No delay or failure on the part of Payee in
exercising any of its options, powers or rights, nor any partial or single
exercise of its options, powers or rights shall constitute a waiver thereof or
of any other option, power or right, and no waiver on the part of Payee of any
of its options, powers or rights shall constitute a waiver of any other option,
power or right. Maker hereby waives presentment of payment, protest, and all
notices or demands in connection with the delivery, acceptance, performance,
default or endorsement of this Secured Promissory Note. Acceptance by Payee of
less than the full amount due and payable hereunder shall in no way limit the
right of Payee to require full payment of all sums due and payable hereunder in
accordance with the terms hereof.
<PAGE>

            Except with respect to the immediately following sentence, which may
not be modified, amended or waived, no term or provision contained herein may be
modified, amended or waived except by written agreement or consent signed by the
party to be bound thereby. Maker shall not pay any obligation under this Note
prior to the Maturity Date, or such earlier date as such payment shall become
due hereunder.

            The Maker shall not have the right to pay any obligations under this
Note prior to the date on which either the Maker's obligations under either the
Strategic Note or the Strategic Debentures (as applicable) are repaid in full or
such earlier date as such payment shall become due and payable hereunder,
provided, that if at any time after the date hereof the Maker's obligations
under either the Strategic Note or the Strategic Debentures (as applicable) have
been partially repaid, then the Maker shall have the right to pay an equivalent
pro-rata portion of the obligations due under this Note (by way of example, if
the Maker shall repay an aggregate of $100,000 of the obligations due under the
Strategic Note, the Maker shall thereafter be permitted to repay an aggregate of
$12,500 of the obligations under this Note).

            The rights and remedies of Payee expressed herein are cumulative and
not exclusive of any rights and remedies otherwise available.

            If this obligation is placed in the hands of an attorney for
collection after default, and provided Payee prevails on the merits in respect
to its claim of default, Maker shall pay (and shall indemnify and hold harmless
Payee from and against), all reasonable attorneys' fees and expenses incurred by
Payee in pursuing collection of this Secured Promissory Note.

            This Secured Promissory Note shall be binding upon the Maker and its
successors and shall inure to the benefit of the Payee and its permitted
successors and assigns.

            This Secured Promissory Note has been duly authorized, executed and
delivered by Maker and is the legal obligation of Maker, enforceable against
Maker in accordance with its terms.

            If this Secured Promissory Note is lost, stolen, mutilated or
otherwise destroyed, Maker shall execute and deliver to Payee a new promissory
note containing the same terms, and in the same form, as this Secured Promissory
Note. In such event, Maker may require Payee to deliver to Maker an affidavit of
lost instrument and customary indemnity in respect thereof as a condition to the
delivery of any such new promissory note.

            This Secured Promissory Note shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Secured Promissory Note and


                                       -2-
<PAGE>

agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.

                                  * * * * * * *


                                       -3-
<PAGE>

            IN WITNESS WHEREOF, Maker has caused this Promissory Note to be duly
executed and delivered as of the day and year first set forth above.

                        EUROTECH, LTD.


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


                                       -4-
<PAGE>

                                ESCROW AGREEMENT

            ESCROW AGREEMENT (this "Agreement"), dated as of January 6, 1999, by
and among Eurotech, Ltd. (the "Company"), JNC Strategic Fund Ltd. (the
"Lender"), and Encore Capital Management, L.L.C. (the "Escrow Agent").

                                    Recitals

            A. The Company has made and delivered to the Lender a Secured
Promissory Note, due January 6, 2000, pursuant to which the Lender has agreed to
loan an aggregate principal amount of $400,000 to the Company (the "Note").
Capitalized terms that are used and not otherwise defined in this Agreement that
are defined in the Note shall have the meaning set forth in the Note.

            B. In order to induce the Lender into making the loan contemplated
by the Note, the Company agreed that the Lender will have the right to approve
each disbursement of proceeds under the Note.

            C. The Escrow Agent is willing to act as escrow agent pursuant to
the terms of this Agreement with respect to the disbursement of the proceeds of
the Note.

            NOW, THEREFORE, IT IS AGREED:

            1. Deposit of Proceeds.

                  a. Concurrently with the execution of this Agreement, the
Lender shall deposit with the Escrow Agent $390,000, representing the maximum
loan under the Note less the fees and disbursements incurred by Lender in
preparing this Agreement, the Note and certain other documents contemplated by
the transactions under the Note (as reduced from time to time in accordance with
the terms hereof, the "Proceeds"). The Proceeds shall be delivered by the Lender
to the Escrow Agent by wire transfer of immediately available funds to an
account designated for such purpose by the Escrow Agent.

                  b. The Lender and the Company understand that the Proceeds
delivered to the Escrow Agent pursuant to Section 1(a) shall be held in escrow
in an interest bearing account of the Escrow Agent until disbursed to the
Company or returned to the Lender in accordance with the terms of this
Agreement.
<PAGE>

            2. Terms of Escrow.

                  a. The Escrow Agent shall hold the Proceeds in escrow until
the earliest to occur of (i) the receipt by the Escrow Agent of instructions
from the Lender pursuant to Section 3(a), (ii) the receipt by the Escrow Agent
of a demand by the Lender of the return of the undisbursed Proceeds pursuant to
Section 3(b) or Section 3(c), and (iii) the receipt by the Escrow Agent of a
written notice, executed by both the Company and the Lender, jointly directing
the release of the Proceeds.

            b. If the Escrow Agent, prior to delivering or causing to be
delivered the Proceeds in accordance herewith, receives notice of objection,
dispute, or other assertion in accordance with any of the provisions of this
Agreement, the Escrow Agent shall continue to hold the Proceeds until such time
as the Escrow Agent shall receive (i) written instructions jointly executed by
the Lender and the Company, directing distribution of such Proceeds, or (ii) a
certified copy of a judgment, order or decree of a court of competent
jurisdiction, final beyond the right of appeal, directing the Escrow Agent to
distribute said Proceeds to any party hereto or as such judgment, order or
decree shall otherwise specify (including any such order directing the Escrow
Agent to deposit the Proceeds into the court rendering such order, pending
determination of any dispute between any of the parties). In addition, the
Escrow Agent shall have the right to deposit the Proceeds with a court of
competent jurisdiction pursuant to Section 1006 of the New York Civil Practice
Law and Rules without liability to any party if said dispute is not resolved
within 30 days of receipt of any such notice of objection, dispute or otherwise.

            3. Release of Proceeds.

                  a. The Company shall provide the Lender with not more than 15
nor less than 5 business days' written notice (such a notice, a "Use Notice") of
its desire to use some or all of the then undistributed or unreturned Proceeds
for the purpose set forth in such Use Notice. The Lender shall have 2 business
days from its receipt of a Use Notice to approve or disapprove of the amount and
use of the Proceeds as set forth in such Use Notice. Silence by the Lender shall
be deemed to be notice of its disapproval. The decision of the Lender to approve
or disapprove of the use of Proceeds set forth in any Use Notice shall be at the
sole discretion of the Lender and may be given or withheld for any or no reason
(which reason need not be communicated to the Company). Failure by the Company
to utilize the Proceeds in accordance with a Use Notice shall be a default
hereunder.

            b. If the Lender shall disapprove of the amount or use of the
Proceeds as set forth in a Use Notice, the Company may thereafter deliver a
second Use Notice for the use of such Proceeds. If the Lender shall again
disapprove of such Use Notice and the Company and the Lender shall not agree as
to the use of such Proceeds within 20 business days after the date of the second
Use Notice relating to the use of such Proceeds, then the Lender shall have the
right to require the Escrow Agent to deliver to the Lender the full amount of
the Proceeds then held in escrow hereunder. Furthermore, if David Wilkes fails
for any reason to loan, prior to March 31,


                                       -2-
<PAGE>

1999, an aggregate of $100,000 to the Company pursuant to the Agreement, dated
as of January 6, 1999 between the Company and David Wilkes, then the Lender
shall have the right to require the Escrow Agent to deliver to the Lender the
full amount of the Proceeds then held in escrow hereunder. In either case
contemplated by either of the immediately preceding two sentences, (x) the
principal due under the Note shall be reduced by the amount of Proceeds returned
to the Lender as a result of a demand by Lender and (y) the Lender shall have
the right, exercisable at its sole option, to accelerate the Maturity Date in
respect of the Proceeds, plus accrued and unpaid interest thereon, disbursed to
the Company in accordance with the terms hereof prior to the date of the
Lender's demand for the return of Proceeds pursuant to the immediately prior
sentence.

                  c. All Proceeds remaining in escrow hereunder on the Maturity
Date shall, at the request of the Lender, be returned to the Lender. In such
case only such principal, and the interest and other amounts accrued and unpaid
thereon through the Maturity Date shall be due and payable under the Note.

            4. Duties and Obligations of the Escrow Agent.

                  a. The parties hereto agree that the duties and obligations of
the Escrow Agent are only such as are herein specifically provided and no other.
The Escrow Agent's duties are as a depositary only, and the Escrow Agent shall
incur no liability whatsoever, except as a direct result of its willful
misconduct.

                  b. The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted by it in
accordance with the advice of such counsel.

                  c. The Escrow Agent shall not be bound in any way by the terms
of any other agreement to which the Lender or any affiliate thereof and the
Company are parties, whether or not it has knowledge thereof, and the Escrow
Agent shall not in any way be required to determine whether or not any other
agreement has been complied with by the Lender and the Company, or any other
party thereto. The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed by the Lender and the
Company, and agreed to in writing by the Escrow Agent.

                  d. In the event that the Escrow Agent shall be uncertain as to
its duties or rights hereunder or shall receive instructions, claims or demands
which, in its opinion, are in conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action, other than to
keep safely, the Proceeds then held in escrow until it shall jointly be directed
otherwise in writing by the Lender and the Company or by a final judgment of a
court of competent jurisdiction.


                                       -3-
<PAGE>

                  e. The Escrow Agent shall be fully protected in relying upon
any written notice, demand, certificate or document which it, in good faith,
believes to be genuine. The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of
documents or securities now or hereafter deposited hereunder, or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement.

                  f. The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to defend any legal
proceedings which may be instituted against it or in respect of the Proceeds.

                  g. If the Escrow Agent at any time, in its sole discretion,
deems it necessary or advisable to relinquish custody of the Proceeds, it may do
so by giving five (5) days written notice to the parties of its intention and
thereafter delivering the consideration to any other escrow agent mutually
agreeable to the Lender and the Company and, if no such escrow agent shall be
selected within three days of the Escrow Agent's notification to the Lender and
the Company of its desire to so relinquish custody of the Proceeds, then the
Escrow Agent may do so by delivering the Proceeds it then holds (a) to any bank
or trust company in the Borough of Manhattan, City and State of New York, which
is willing to act as escrow agent thereunder in place and instead of the Escrow
Agent, or (b) to the clerk or other proper officer of a court of competent
jurisdiction as may be permitted by law within the State, County and City of New
York. The fee of any such bank or trust company or court officer shall be borne
by the Company. Upon such delivery, the Escrow Agent shall be dis charged from
any and all responsibility or liability with respect to the Proceeds and the
Company shall promptly pay to the Escrow Agent all monies which may be owed it
for its services hereunder, including, but not limited to, reimbursement of its
out-of-pocket expenses pursuant to paragraph (i) below.

                  h. This Agreement shall not create any fiduciary duty on the
Escrow Agent's part to the Lender or the Company, nor disqualify the Escrow
Agent from acting on behalf of the Lender or any other party in any dispute with
the Company, including any dispute with respect to the Proceeds. The Company
understands and acknowledges that the Escrow Agent has acted and will continue
to act as investment adviser to the Lender and other parties who are parties to
transactions with the Company.

                  i. The reasonable out-of-pocket expenses paid or incurred by
the Escrow Agent in the administration of its duties hereunder, including, but
not limited to, all counsel and advisors' and agents' fees and all taxes or
other governmental charges, if any, shall be paid by the Company.

            5. Indemnification. The Lender and the Company, jointly and
severally, hereby indemnify and hold the Escrow Agent, its employees, partners,
members and 


                                      -4-
<PAGE>

representatives harmless from and against any and all losses, damages, taxes,
liabilities and expenses that may be incurred, directly or indirectly, by the
Escrow Agent and/or any such person, arising out of or in connection with its
acceptance of appointment as the Escrow Agent hereunder and/or the performance
of its duties pursuant to this Agreement, including, but not limited to, all
legal costs and expenses of the Escrow Agent and any such person incurred
defending itself against any claim or liability in connection with its
performance hereunder and the costs of recovery of amounts pursuant to this
Section 5.

            6. Miscellaneous.

                  a. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

      If to the Company:             Eurotech, Ltd.
                                     1101 30th Street, N.W., Suite 500
                                     Washington, D.C. 20007
                                     Facsimile No.: (202) 625-4369
                                     Attn:  Chief Financial Officer

      With copies to:                Ruffa & Ruffa, P.C.
                                     150 East 58th Street
                                     New York, NY 10155
                                     Facsimile No.: (212) 759-7696
                                     Attn: William P. Ruffa, Esq.

      If to the Lender:              JNC Strategic Fund Ltd.
                                     c/o Olympia Capital (Bermuda) Ltd.
                                     Williams House, 20 Reid Street
                                     Hamilton HM11, Bermuda
                                     Facsimile No.: (441) 295-2305
                                     Attn: Director

      With copies to:                Robinson Silverman Pearce Aronsohn
                                      & Berman LLP
                                     1290 Avenue of the Americas
                                     New York, NY 10104
                                     Facsimile: (212) 541-4630
                                     Attn:  Eric L. Cohen, Esq.


                                      -5-
<PAGE>

      If to the Escrow Agent         Encore Capital Management, L.L.C.
        (the Escrow Agent shall      12007 Sunrise Valley Drive, Suite 460
        receive copies of all        Reston, VA 20191
        communications under         Facsimile No.: (703) 476-7711
        this Agreement)              Attn: Managing Member

or at such other address as any of the parties to this Agreement may hereafter
designate in the manner set forth above to the others.

                  b. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

                  c. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

                  d. In case any one or more of the provisions of this Agreement
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGE FOLLOWS]


                                       -6-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be signed the day and year first above written.


                               EUROTECH, LTD.

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


                               JNC STRATEGIC FUND LTD.

                               By:
                                  ---------------------------
                                  Neil T. Chau
                                  Director


                               ENCORE CAPITAL MANAGEMENT, L.L.C.

                               By:
                                  ---------------------------
                                  Neil T. Chau
                                  Managing Member
<PAGE>

                               SECURITY AGREEMENT

            SECURITY AGREEMENT, dated as of January 6, 1999 (this "Agreement"),
by Eurotech, Ltd., a corporation organized under the laws of the District of
Columbia and having its principal place of business at 1130 30th Street, N.W.,
Suite 500, Washington, D.C. 20007 (the "Company"), in favor of JNC Strategic
Fund Ltd., a Cayman Islands corporation, and its successors, endorsees,
transferees and assigns ("JNC"), and David Wilkes, an individual, and his
endorsees, transferees, heirs and assigns ("Wilkes"). JNC and Wilkes are
sometimes collectively referred to in this Agreement as the "Secured Parties."

                              W I T N E S S E T H:

            WHEREAS, on July 20, 1998, the Company issued to JNC its 8%
Convertible Debentures due July 20, 2001 in an aggregate principal amount of
$1,000,000 (the "July Obligations"); and

            WHEREAS, JNC has agreed to extend a loan to the Company in the
amount of $400,000 (the "JNC Loan"), which is evidenced by a Secured Promissory
Note of the Company due January 6, 2000 (as amended, modified, or supplemented
from time to time, the "JNC Note"), which is exchangeable at the sole option of
JNC into the Company's to be created 8% Secured Convertible Debenture (the "JNC
Debenture") and, in connection therewith, the Company issued to JNC a warrant to
purchase 75,000 shares of the Company's common stock (the "Warrant"); and

            WHEREAS, concurrently herewith JNC, the Company and Encore Capital
Management, L.L.C. will enter into an Escrow Agreement, pursuant to which JNC
will have the right to consent to the use to be made of the principal amount of
the JNC Loan (the "Escrow Agreement"); and

            WHEREAS, Wilkes has agreed to extend a loan to the Company in the
amount of $50,000 (the "Initial Wilkes Loan"), which is evidenced by a Secured
Promissory Note of the Company due January 6, 2000 (the "Initial Wilkes Note");
and

            WHEREAS, pursuant to an Agreement between the Company and Wilkes,
Wilkes has agreed to extend an additional loan to the Company by March 31, 1999
in the amount of $50,000 (the "Second Wilkes Loan" and, collectively with the
Initial Wilkes Loan, the "Wilkes Loans"), which will be evidenced by a Secured
Promissory Note of the Company due January 6, 2000 (the "Second Wilkes Note"
and, collectively with the Initial Wilkes Note, the "Wilkes Notes"); and

            WHEREAS, in order to induce the Secured Parties to extend the JNC
Loan and the Wilkes Loans the Company has agreed to execute and deliver to the
Secured Parties this Agreement for the benefit of the Secured Parties and to
grant a first priority security interest in certain general intangible property
of the Company to secure the prompt payment, performance and discharge in full
of all of
<PAGE>

the Company's obligations under the July Obligations, the JNC Note, the JNC
Debenture, the Wilkes Notes and the Escrow Agreement.

      NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

      1. Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1.

            (a) "Collateral" means all of the Company's right, title and
interest in and to all of Trademarks, Patents, Copyrights, and other general
intangible property of the Company, all trade secrets, intellectual property
rights in computer software and computer software products, design rights which
may be available to the Company, rights to proceeds arising from any and all
claims for damages by way of past, present and future infringement of any
Collateral with the right but not the obligation to sue on behalf of and collect
such damages for said use or infringement, licenses to use any of the
Copyrights, Patents or Trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights. The term
"Collateral" shall include all of the foregoing items, whether presently owned
or existing or hereafter acquired or coming into existence, all additions and
accessions thereto, all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including without limitation all
proceeds from the licensing or sale or other transfer of Collateral and of
insurance covering the same and of any tort claims in connection therewith.

            (b) "Copyrights" means any and all copyrights, copyright
applications, copyright registration and like protections in each work or
authorship and derivative work thereof that is created by the Company, whether
published or unpublished and whether or not the same also constitutes a trade
secret, now or hereafter existing, created, acquired or held, including without
limitation, those set forth on Exhibit A attached hereto.

            (c) "Loans" means, collectively, the JNC Loan and the Wilkes Loans.

            (d) "Majority-in-Interest" means the Secured Party or Secured
Parties (as the case may be) holding in excess of 50% of the aggregate principal
amount outstanding under the Notes, the July Obligations and the JNC Debenture,
determined on a cumulative basis.

            (e) "Notes" means, collectively, the JNC Note and the Wilkes Notes.

            (f) "Obligations" means all of the Company's obligations under this
Agreement, the Notes, the July Obligations and the JNC Debenture, in each case,
whether now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later decreased, created or incurred, and all or any portion of such obligations
or


                                       -2-
<PAGE>

liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from the Secured Parties as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.

            (g) "Patents" means all of the Company's patents, patent
applications, letters patent and like protections of the United States or any
other country, including without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same, and including, without limitation, those set forth on Exhibit B attached
hereto.

            (h) "Trademarks" means any trademark, service mark right, whether or
not registered, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of the Company connected
with or symbolized by such trademarks, including, without limitation, those set
forth on Exhibit C attached hereto.

            (i) "UCC" means the Uniform Commercial Code, as currently in effect
in the State of New York.

            (h) Terms used but not otherwise defined in this Agreement that are
defined in Article 9 of the UCC (such as "general intangibles"and "proceeds")
shall have the respective meanings given such terms in Article 9 of the UCC.

      2. Grant of Security Interest. As an inducement for the Secured Parties to
extend the Loans to the Company, and to secure the complete and timely payment,
performance and discharge in full of all of the Obligations, the Company hereby,
unconditionally and irrevocably, pledges, grants and hypothecates to the Secured
Parties, a continuing security interest in, a first lien upon and a right of
set-off against all of the Company's right, title and interest of whatsoever
kind and nature in and to the Collateral (the "Security Interest").

      3. Representations, Warranties, Covenants and Agreements of the Company.
The Company represents and warrants to, and covenants and agrees with, the
Secured Parties as follows:

            (a) Except to the extent specified in the Exhibits hereto, the
Company is the sole owner of the Collateral (except for non-exclusive licenses
granted by the Company in the ordinary course of business), free and clear of
any liens, security interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the Collateral. There
is not on file in any governmental or regulatory authority, agency or recording
office an effective financing statement, security agreement, license or transfer
or any notice of any of the foregoing (other than those that have been filed in
favor of the Secured Parties pursuant to this Agreement) covering or affecting
any of the Collateral. So long as this Agreement shall be in effect, the Company
shall not execute and shall not knowingly permit to be on file in any such
office or agency any such financing statement or other document or instrument
(except to the extent filed or recorded in favor of the Secured Parties pursuant
to the terms of this Agreement).


                                       -3-
<PAGE>

            (b) Exhibit A sets forth a true and complete list of all Copyrights
in existence as of the date of this Agreement. Exhibit B sets forth a true and
complete list of all Patents that have been filed as of the date of this
Agreement. Exhibit C sets forth a true and complete list of all Trademarks filed
as of the date of this Agreement. The Company shall, within 10 days of obtaining
knowledge thereof, advise the Secured Parties in writing of any change in the
composition of the Collateral, including without limitation, any subsequent
ownership rights of the Company in or to any Copyright, Patent or Trademark.

            (c) Each of the Patents, Trademarks and Copyrights is valid and
enforceable, and no part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any of the Patents,
Trademarks or Copyrights or the Company's use of any Collateral violates the
rights of any third party. There has been no adverse decision to the Company's
claim of ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to the Company's right to keep and maintain such Collateral in
full force and effect, and there is no proceeding involving said rights pending
or, to the best knowledge of the Company, threatened before any court, judicial
body, administrative or regulatory agency, arbitrator or other governmental
authority.

            (d) The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and may
not relocate such books of account and records unless it delivers to the Secured
Parties at least 30 days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within the United States)
and (ii) evidence that appropriate financing statements and other necessary
documents have been filed and recorded and other steps have been taken to
perfect the Security Interest to create in favor of the Secured Parties valid,
perfected and continuing first priority liens in the Collateral. The principal
place of business of the Company is located at the address set forth in the
introduction to this Agreement.

            (e) This Agreement creates in favor of the Secured Parties a valid
security interest in the Collateral, including the Collateral listed on the
Exhibits hereto, securing the payment and performance of the Obligations, and,
upon making the filings described in the immediately following sentence, a
perfected first priority security interest in such Collateral. Except for (x)
the filing of this Agreement with the United States Patent and Trademark Office
with respect to the Patents and Trademarks and the filing of this Agreement with
the Register of Copyrights with respect to the Copyrights, and (y) the filing of
a financing statement on Form-1 under the UCC in the District of Columbia; no
authorization or approval of or filing with or notice to any governmental
authority or regulatory body is required either (i) for the grant by the Company
of, or the effectiveness of, the Security Interest granted hereby or for the
execution, delivery and performance of this Agreement by the Company or (ii) for
the perfection of or exercise by the Secured Parties of their rights and
remedies hereunder. The Company acknowledges and agrees that a copy of this
Agreement (or instruments executed and delivered pursuant hereto) will be filed
and recorded with each of the United States Patent and Trademark Office and the
Register of Copyrights with respect to the Patents, Trademarks and Copyrights
that are now or hereafter in existence.


                                      -4-
<PAGE>

            (f) The execution, delivery and performance of this Agreement does
not conflict with or cause a breach or default, or an event that with or without
the passage of time or notice, shall constitute a breach or default, under any
agreement to which the Company is a party or by the Company is bound. No consent
(including, without limitation, from stock holders or creditors of the Company)
is required for the Company to enter into and perform its obligations hereunder.

            (g) The Company shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first priority liens and
security interests in the Collateral in favor of the Secured Parties until the
Obligations are satisfied. The Company hereby agrees to defend the same against
any and all persons. The Company shall safeguard and protect all Collateral for
the account of the Secured Parties. At the request of the Secured Parties, the
Company will sign and deliver to the Secured Parties at any time or from time to
time one or more financing statements pursuant to the UCC (or any other
applicable statute) in form reasonably satisfactory to the Secured Parties and
will pay the cost of filing the same in all public offices wherever filing is,
or is deemed by the Secured Parties to be, necessary or desirable to effect the
rights and obligations provided for herein. Without limiting the generality of
the foregoing, the Company shall pay all fees, taxes and other amounts necessary
to maintain the Collateral and the Security Interest hereunder, and the Company
shall obtain and furnish to the Secured Parties from time to time, upon demand,
such releases and/or subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.

            (h) The Company (i) will not allow any Collateral to be abandoned,
forfeited or dedicated to the public without the prior written consent of the
Secured Parties. The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Parties.

            (i) The Company shall permit the Secured Parties and their
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Parties from time to time provided, that, to the extent any such request
shall be, in the Company's good faith opinion, for information which is of a
non-public nature, the Company shall inform the Secured Parties of such opinion
and it shall be a condition precedent to the divulgence of such confidential
information that the parties agree to enter into a customary confidentiality
agreement.

            (j) The Company shall at all times, maintain the liens and the
Security Interest provided for hereunder as valid and perfected first priority
liens and security interests in the Collateral hereby granted to the Secured
Parties. Within three (3) days after the date of this Agreement, the Company
will deliver to the Secured Parties one or more executed UCC financing
statements on Form-1 with respect to the Security Interest for filing in the
jurisdiction of the Company's principal place of business and in such other
jurisdictions as may be requested by the Secured Parties.


                                      -5-
<PAGE>

            (k) The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

            (l) The Company shall notify the Secured Parties in sufficient
detail upon becoming aware of any attachment, garnishment, execution or other
legal process levied against any Collateral and of any other information
received by the Company that may materially affect the value of the Collateral,
the Security Interest or the rights and remedies of the Secured Parties
hereunder.

            (m) All information heretofore, herein or hereafter supplied to the
Secured Parties by or on behalf of the Company with respect to the Collateral is
accurate and complete in all material respects as of the date furnished.

      4. Defaults. The following events shall be "Events of Default":

            (a) The failure by the Company to pay any amounts of principal or
interest when, as, and in the amount due, pursuant to the Notes, the July
Obligations or the JNC Debenture;

            (b) Any representation or warranty of the Company in this Agreement
shall prove to have been incorrect in any material respect when made;

            (c) The failure by the Company to observe or perform any of its
obligations hereunder for 10 days after receipt by the Company of notice of such
failure from a Majority-in- Interest; and

            (d) Any default under the Escrow Agreement, the July Obligations or
the JNC Debenture.

      5. Duty To Hold In Trust. Upon the occurrence of any Event of Default, the
Company shall, upon receipt by it of any revenue, income or other sums
(collectively, the "Sums") subject to the Security Interest, whether payable
pursuant to the Notes, the July Obligations, the JNC Debenture or otherwise, or
of any check, draft, note, trade acceptance or other instrument evidencing an
obligation to pay any such sum, hold the same in trust for the Secured Parties
and shall forthwith endorse and transfer any such sums or instruments, or both,
to the Secured Parties (on a pro rata basis in accordance with the principal
amount then outstanding and accrued and unpaid interest then due under such
Secured Party's respective Notes, July Obligations and JNC Debenture, determined
on a cumulative basis)for application to the satisfaction of the Obligations.

      6. Rights and Remedies Upon Default. Upon occurrence and continuance of
any Event of Default, the Secured Parties shall have the right to exercise all
of the remedies conferred hereunder, and JNC shall have the right to exercise
all remedies conferred under the JNC Note, the July Obligations, the JNC
Debenture and the Escrow Agreement and Wilkes shall have the right to exercise
all remedies conferred under the Wilkes Notes, and each Secured Party shall have
all the 


                                      -6-
<PAGE>

rights and remedies of a secured party under the UCC and/or any other applicable
law (including the Uniform Commercial Code of any jurisdiction in which any
Collateral is then located). Without limitation, the Secured Parties shall have
the following rights and powers:

            (a) The Secured Parties shall have the right to take possession of
all tangible manifestations or embodiments of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any premises where
the Collateral, or any part thereof, is or may be placed and remove the same,
and the Company shall assemble the Collateral and make it available to the
Secured Parties at places which the Secured Parties shall reasonably select,
whether at the Company's premises or elsewhere.

            (b) The Secured Parties shall have the right to operate the business
of the Company using the Collateral and shall have the right to assign, sell, or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Parties may deem commercially reasonable,
all without (except as shall be required by applicable statute and cannot be
waived) advertisement or demand upon or notice to the Company or right of
redemption of the Company, which are hereby expressly waived. Upon each such
sale, assignment or other transfer of Collateral, the Secured Parties may,
unless prohibited by applicable law which cannot be waived, purchase all or any
part of the Collateral being sold, free from and discharged of all trusts,
claims, right of redemption and equities of the Company, which are hereby waived
and released.

            (c) The Secured Parties may license or, to the same extent the
Company is permitted by law and contract to do so, sublicense, whether or an
exclusive or non-exclusive basis, any of the Collateral throughout the world for
such term, on such conditions and in such manner as the Secured Parties shall,
in their sole discretion, determine.

            (d) The Secured Parties may (without assuming any obligations or
liabilities thereunder), at any time, enforce (and shall have the exclusive
right to enforce) against licensee or sublicensee all rights and remedies of the
Company in, to and under any license agreement with respect to such Collateral,
and take or refrain from taking any action thereunder.

            (e) The Secured Parties may, in order to implement the assignment,
license, sale or other disposition of any of the Collateral pursuant to this
Section, pursuant to the authority provided for in Section 11, execute and
deliver on behalf of the Company one or more instruments of assignment of the
Collateral in form suitable for filing, recording or registration in any
jurisdictions as the Secured Parties may determine advisable.

      7. Applications of Proceeds; Expenses. (a) The proceeds of any such sale,
lease, license or other disposition of the Collateral hereunder shall be applied
first, to the expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like (including, without limitation, 


                                      -7-
<PAGE>

any taxes, fees and other costs incurred in connection therewith) of the
Collateral, to the reasonable attorneys' fees and expenses incurred by the
Secured Parties in enforcing their rights hereunder and in connection with
collecting, storing and disposing of the Collateral, and then to satisfaction of
the Obligations, and to the payment of any other amounts required by applicable
law, after which the Secured Parties shall pay to the Company any surplus
proceeds. If, upon the sale, lease or other disposition of the Collateral, the
proceeds thereof are insufficient to pay all amounts to which the Secured
Parties are legally entitled, each Secured Party will be entitled to their pro
rata portion of such proceeds (determined by reference to the aggregate amount
of principal and accrued and unpaid interest then due under each of their
respective Notes, July Obligations and JNC Debenture, determined on a cumulative
basis), and the Company will be liable for the deficiency, together with
interest thereon, at the rate of 11% per annum (the "Default Rate"), and the
reasonable fees of any attorneys employed by the Secured Parties to collect such
deficiency. To the extent permitted by applicable law, the Company waives all
claims, damages and demands against the Secured Parties arising out of the
repossession, removal, retention or sale of the Collateral, unless due to the
gross negligence or willful misconduct of the Secured Parties.

            (b) The Company agrees to pay all out-of-pocket fees, costs and
expenses incurred in connection with any filing required hereunder, including
without limitation, any financing statements, continuation statements, partial
releases and/or termination statements related thereto or any expenses of any
searches reasonably required by the Secured Parties. The Company shall also pay
all other claims and charges which in the reasonable opinion of the Secured
Parties might prejudice, imperil or otherwise affect the Collateral or the
Security Interest therein. The Company will also, upon demand, pay to the
Secured Parties the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Secured Parties may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Secured Parties under the Escrow
Agreement, the Notes, the July Obligations, the JNC Debenture or this Agreement.
Until so paid, any fees payable hereunder shall be added to the principal amount
of the Obligations and shall bear interest at the Default Rate.

      8. Responsibility for Collateral. The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligation of the
Company hereunder or under the Notes, the July Obligations and the JNC Debenture
shall in no way be affected or diminished by reason of the loss, destruction,
damage or theft of any of the Collateral or its unavailability for any reason.

      9. Security Interest Absolute. All rights of the Secured Parties and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
any Note, the July Obligations, the JNC Debenture, the Escrow Agreement or any
agreement entered into in connection with the foregoing, or any portion hereof
or thereof; (b) any change in the time, manner or place of payment or
performance of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the Notes, the
July Obligations, the JNC Debenture, the Escrow Agreement or any 


                                      -8-
<PAGE>

other agreement entered into in connection with the foregoing; (c) any exchange,
release or nonperfection of any of the Collateral, or any release or amendment
or waiver of or consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations; (d) any
action by the Secured Parties to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in connection with
the Collateral; or (e) any other circumstance which might otherwise constitute
any legal or equitable defense available to the Company, or a discharge of all
or any part of the Security Interest granted hereby. Until the Obligations shall
have been paid and performed in full, the rights of the Secured Parties shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or bankruptcy. The Company
expressly waives presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance. In the event that at any time any
transfer of any Collateral or any payment received by the Secured Parties
hereunder shall be deemed by final order of a court of competent jurisdiction to
have been a voidable preference or fraudulent conveyance under the bankruptcy or
insolvency laws of the United States, or shall be deemed to be otherwise due to
any party other than the Secured Parties, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Company waives all right
to require any Secured Party to proceed against any other person or to apply any
Collateral which the Secured Parties may hold at any time, or to marshal assets,
or to pursue any other remedy. The Company waives any defense arising by reason
of the application of the statute of limitations to any obligation secured
hereby.

      10. Term of Agreement. This Agreement shall terminate when all payments
under the Note have been made in full and all other Obligations have been paid
or discharged. Upon such termination, the Secured Parties, at the request and at
the expense of the Company, will join in executing any termination statement
with respect to any financing statement executed and filed pursuant to this
Agreement.

      11. Power of Attorney; Further Assurances. (a) The Company authorizes the
Secured Parties, and does hereby make, constitute and appoint them, and their
respective officers, agents, successors or assigns with full power of
substitution, as the Company's true and lawful attorney-in-fact, with power, in
its own name or in the name of the Company, to, after the occurrence and during
the continuance of an Event of Default, (i) endorse any notes, checks, drafts,
money orders, or other instruments of payment (including payments payable under
or in respect of any policy of insurance) in respect of the Collateral that may
come into possession of the Secured Parties; (ii) to sign and endorse any UCC
financing statement or any invoice, freight or express bill, bill of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents
relating to the Collateral; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened
against the Collateral; (iv) to demand, collect, receipt for, compromise, settle
and sue for monies due in respect of the Collateral; and (v) generally, to do,
at the option of the Secured Parties, and at the Company's expense, at any time,
or from time to time, all acts and things which the Secure Parties deem


                                      -9-
<PAGE>

necessary to protect, preserve and realize upon the Collateral and the Security
Interest granted therein in order to effect the intent of this Agreement, the
Notes, the July Obligations and the JNC Debenture all as fully and effectually
as the Company might or could do; and the Company hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for the term of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding.

            (b) On a continuing basis, the Company will make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in any jurisdiction, all such instruments, including appropriate
financing and continuation statements and collateral agreements and filings with
the United States Patent and Trademark Office and the Register of Copyrights,
and take all such action as may reasonably be deemed necessary or advisable, or
as reasonably requested by the Secured Parties, to perfect the Security Interest
granted hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Parties the grant or
perfection of a security interest in all the Collateral.

            (c) The Company hereby irrevocably appoints the Secured Parties as
the Company's attorneys-in-fact, with full authority in the place and stead of
the Company and in the name of the Company, from time to time in the Secured
Parties' discretion, to take any action and to execute any instrument which the
Secured Parties may deem necessary or advisable to accomplish the purposes of
this Agreement, including:

                  (i) To modify, in their sole discretion, this Agreement
without first obtaining the Company's approval of or signature to such
modification by amending Exhibit A, Exhibit B and Exhibit C, hereof, as
appropriate, to include reference to any right, title or interest in any
Copyrights, Patents or Trademarks acquired by the Company after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which the Company no longer has or claims
any right, title or interest; and

                  (ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of the Company where permitted by law.

      12. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

      If to the Company:            Eurotech, Ltd.
                                    1130 30th Street NW, Suite 500


                                      -10-
<PAGE>

                                    Washington, DC 20007
                                    Facsimile No.: (202) 625-4369
                                    Attn: Chief Financial Officer

      With copies to:               Ruffa & Ruffa, P.C.
                                    150 East 58th Street
                                    New York, NY 10155
                                    Facsimile No.: (212) 759-7696
                                    Attn: William P. Ruffa, Esq.

      If to JNC:                    JNC Strategic Fund Ltd.
                                    c/o Olympia Capital (Bermuda) Ltd.
                                    Williams House, 20 Reid Street
                                    Hamilton HM11, Bermuda
                                    Facsimile No.: (441) 295-2305
                                    Attn:  Director

      If to Wilkes:                 15 Somerset Drive South
                                    Great Neck, NY 11020
                                    Facsimile N0.: (516) 487-0975
                                    Attn: David Wilkes

      With copies to (for           Encore Capital Management, L.L.C.
        communications to           12007 Sunrise Valley Drive, Suite 460
        any Secured Party):         Reston, VA  20191
                                    Facsimile No.: (703) 476-7711
                                    Attn: Managing Member

                                                     -and-

                                    Robinson Silverman Pearce Aronsohn &
                                     Berman LLP
                                    1290 Avenue of the Americas
                                    New York, NY 10104
                                    Facsimile No.: (212) 541-4630
                                    Attn: Eric L. Cohen, Esq.

      13. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Parties shall have the right, in its sole discretion, to
pursue, relinquish, subordinate, modify or take any other action with respect
thereto, without in any way modifying or affecting any of the Secured Parties'
rights and remedies hereunder.


                                      -11-
<PAGE>

      14. Actions by Secured Parties. Any action required or permitted hereunder
to be taken by or on behalf of the Secured Parties shall, for such action to be
valid, require the approval of a Majority-in-Interest prior to the taking of
such action. If the consent, approval or disapproval of the Secured Parties is
required or permitted pursuant to this Agreement, such consent, approval or
disapproval shall only be valid if given by a Majority-in-Interest. Nothing
contained herein shall confer upon Wilkes any rights with respect to the JNC
Note, the July Obligations, the JNC Debenture or the Escrow Agreement.

      15. Miscellaneous.

            (a) No course of dealing between the Company and the Secured
Parties, nor any failure to exercise, nor any delay in exercising, on the part
of the Secured Parties, any right, power or privilege hereunder, or under the
Notes, the July Obligations, the JNC Debenture, the Warrant or the Escrow
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.

            (b) All of the rights and remedies of the Secured Parties with
respect to the Collateral, whether established hereby or by the Notes or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.

            (c) This Agreement and the JNC Debenture, constitute the entire
agreement of the parties with respect to the subject matter hereof and is
intended to supersede all prior negotiations, understandings and agreements with
respect thereto. Except as specifically set forth in this Agreement, no
provision of this Agreement may be modified or amended except by a written
agreement specifically referring to this Agreement and signed by the parties
hereto.

            (d) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.

            (e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.


                                      -12-
<PAGE>

            (f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.

            (g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in order to
carry out the provisions and purposes of this Agreement.

            (h) This Agreement shall be construed in accordance with the laws of
the State of New York, except to the extent the validity, perfection or
enforcement of a security interest hereunder in respect of any particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall govern. Each of the parties hereto irrevocably
submit to the exclusive jurisdiction of any New York State or United States
Federal court sitting in Manhattan county over any action or proceeding arising
out of or relating to this Agreement, and the parties hereto hereby irrevocably
agree that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereto further waive any objection to venue
in the State of New York and any objection to an action or proceeding in the
State of New York on the basis of forum non convenient.

            (i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF
ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER
OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of a
litigation, this agreement maybe filed as a written consent to a trial by the
court.

            (j) This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall 


                                      -13-
<PAGE>

constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.


                              * * * * * * * * * * *


                                      -14-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on the day and year first above written.


                                             EUROTECH, LTD.

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


                                             JNC STRATEGIC FUND LTD.

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


                                             DAVID WILKES


                                             --------------------------
<PAGE>

                                    EXHIBIT A

                                   Copyrights

Description                                 Registration            Registration
                                               Number                   Date
--------------------------------------------------------------------------------
<PAGE>

                                    EXHIBIT B

                                     Patents

Description                                 Registration            Registration
                                               Number                   Date
--------------------------------------------------------------------------------
<PAGE>

                                    EXHIBIT C

                                   Trademarks

Description                                 Registration            Registration
                                               Number                   Date
--------------------------------------------------------------------------------

<PAGE>

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

                                EUROTECH, LTD.

                                    WARRANT

                            Dated: January 6, 1999

      EUROTECH, LTD., a corporation organized under the laws of the District of
Columbia (the "Company"), hereby certifies that, for value received, JNC
Strategic Fund Ltd., or its registered assigns ("Holder"), is entitled, subject
to the terms set forth below, to purchase from the Company up to a total of
75,000 shares of Common Stock, $.00025 par value per share (the "Common Stock"),
of the Company (each such share, a "Warrant Share" and all such shares, the
"Warrant Shares") at an exercise price equal to $0.36 per share (as adjusted
from time to time as provided in Section 9, the "Exercise Price"), at any time
and from time to time from and after September 30, 1999 and through and
including January 6, 2004 (the "Expiration Date"), and subject to the following
terms and conditions:

            1. Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, and the Company shall not be affected by
notice to the contrary.

<PAGE>

            2. Registration of Transfers and Exchanges.

                  (a) The Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this Warrant, with the
Form of Assignment attached hereto duly completed and signed, to the Transfer
Agent or to the Company at the office specified in or pursuant to Section 3(b).
Upon any such registration or transfer, a new warrant to purchase Common Stock,
in substantially the form of this Warrant (any such new warrant, a "New
Warrant"), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this
Warrant not so transferred, if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance of such transferee of all of the rights and obligations of a holder
of a Warrant.

                  (b) This Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Section 3(b)
for one or more New Warrants, evidencing in the aggregate the right to purchase
the number of Warrant Shares which may then be purchased hereunder. Any such New
Warrant will be dated the date of such exchange.

            3. Duration and Exercise of Warrants.

                  (a) This Warrant shall be exercisable by the registered Holder
on any business day before 8:00 P.M., New York City time, at any time and from
time to time on or after the date hereof to and including the Expiration Date.
At 8:00 P.M., New York City time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value.
Prior to the Expiration Date, the Company may not call or otherwise redeem this
Warrant without the prior written consent of the Holder.

                  (b) Subject to Sections 2(b), 6 and 10, upon surrender of this
Warrant, with the Form of Election to Purchase attached hereto duly completed
and signed, to the Company at its address for notice set forth in Section 12 and
upon payment of the Exercise Price multiplied by the number of Warrant Shares
that the Holder intends to purchase hereunder, in the manner provided hereunder,
all as specified by the Holder in the Form of Election to Purchase, the Company
shall promptly (but in no event later than 3 business days after the Date of
Exercise (as defined herein)) issue or cause to be issued and cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate, a certificate for the Warrant Shares issuable upon
such exercise, free of restrictive legends except (i) either in the event that a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), or (ii) if this Warrant shall have been issued pursuant to a written
agreement between the original Holder and the Company, as required by such
agreement. Any person so designated by the Holder to receive Warrant Shares
shall be


                                      -2-
<PAGE>

deemed to have become holder of record of such Warrant Shares as of the Date of
Exercise of this Warrant.

                  A "Date of Exercise" means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the holder hereof to be
purchased.

                  (c) This Warrant shall be exercisable, either in its entirety
or, from time to time, for a portion of the number of Warrant Shares. If less
than all of the Warrant Shares which may be purchased under this Warrant are
exercised at any time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares for which no exercise has been evidenced by this Warrant.

            4. Piggyback Registration Rights. During the term of this Warrant,
the Company may not file any registration statement with the Securities and
Exchange Commission (other than registration statements of the Company filed on
Form S-8 or Form S-4, each as promulgated under the Securities Act, pursuant to
which the Company is registering securities pursuant to a Company employee
benefit plan or pursuant to a merger, acquisition or similar transaction
including supplements thereto, but not additionally filed registration
statements in respect of such securities) at any time when there is not an
effective registration statement covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder thereunder, unless the Company
provides the Holder with not less than 20 days notice of its intention to file
such registration statement and provides the Holder the option to include any or
all of the applicable Warrant Shares therein. The piggyback registration rights
granted to the Holder pursuant to this Section shall continue until all of the
Holder's Warrant Shares have been sold in accordance with an effective
registration statement or upon the Expiration Date. The Company will pay all
registration expenses in connection therewith.

            5. Demand Registration Rights. At any time after the ninetieth
(90th) day following the date of issuance of this Warrant, when the Warrant
Shares are not registered pursuant to an effective registration statement, the
Holder may make a written request for the registration under the Securities Act
(a "Demand Registration"), of all of the Warrant Shares (the "Registrable
Securities"), and the Company shall use its best efforts to effect such Demand
Registration as promptly as possible, but in any case within 90 days thereafter.
Any request for a Demand Registration shall specify the aggregate number of
Registrable Securities proposed to be sold and shall also specify the intended
method of disposition thereof. The right to cause a registration of the
Registrable Securities under this Section 5 shall be limited to one such
registration. In any registration initiated as a Demand Registration, the
Company will pay all of its registration expenses in connection therewith. A
Demand Registration shall not be counted as a Demand Registration hereunder
until the registration statement filed pursuant to the Demand Registration has
been declared effective by the Securities and Exchange Commission and


                                      -3-
<PAGE>

maintained continuously effective for a period of at least 360 days or such
shorter period when all Registrable Securities included therein have been sold
in accordance with such registration statement, provided, however that any days
on which such registration statement is not effective or on which the Holder is
not permitted by the Company or any governmental authority to sell Warrant
Shares under such registration statement shall not count towards such 360 day
period.

            6. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

            7. Replacement of Warrant. If this Warrant is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
indemnity, if requested, satisfactory to it. Applicants for a New Warrant under
such circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe.

            8. Reservation of Warrant Shares. The Company covenants that it will
at all times reserve and keep available out of the aggregate of its authorized
but unissued Common Stock, solely for the purpose of enabling it to issue
Warrant Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares which are then issuable and deliverable upon the exercise of this
entire Warrant, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holder (taking into account the
adjustments and restrictions of Section 9). The Company covenants that all
Warrant Shares that shall be so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and nonassessable.

            9. Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9. Upon each such adjustment of the
Exercise Price pursuant to this Section 9, the Holder shall thereafter prior to
the Expiration Date be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.


                                      -4-
<PAGE>

                  (a) If the Company, at any time while this Warrant is
outstanding, (i) shall pay a stock dividend (except scheduled dividends paid on
outstanding preferred stock as of the date hereof which contain a stated
dividend rate) or otherwise make a distribution or distributions on shares of
its Common Stock or on any other class of capital stock and not the Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock into a larger number of shares, or (iii) combine outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price 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
(excluding treasury shares, if any) 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 or combination, and shall apply to
successive subdivisions and combinations.

                  (b) In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the sale or
transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then the Holder shall have the right
thereafter to exercise this Warrant only into the shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such reclassification, consolidation, merger, sale,
transfer or share exchange, and the Holder shall be entitled upon such event to
receive such amount of securities or property equal to the amount of Warrant
Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification, consolidation, merger, sale,
transfer or share exchange. The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to continue to give to
the Holder the right to receive the securities or property set forth in this
Section 9(b) upon any exercise following any such reclassification,
consolidation, merger, sale, transfer or share exchange.

                  (c) If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to holders
of this Warrant) evidences of its indebtedness or assets or rights or warrants
to subscribe for or purchase any security (excluding those referred to in
Sections 9(a), (b) and (d)), then in each such case the Exercise Price shall be
determined by multiplying the Exercise 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 Exercise Price
determined as of the record date mentioned above, and of which the numerator
shall be such Exercise Price 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 Common Stock as determined by
the Company's independent certified public accountants that regularly examines
the financial statements of the Company (an "Appraiser").


                                      -5-
<PAGE>

                  (d) If, at any time while this Warrant is outstanding, the
Company shall issue or cause to be issued rights or warrants to acquire or
otherwise sell or distribute shares of Common Stock for a consideration per
share less than the Exercise Price then in effect, then, forthwith upon such
issue or sale, the Exercise Price shall be reduced to the price (calculated to
the nearest cent) determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of (i) the number of shares of Common Stock outstanding immediately prior to
such issuance, and (ii) the number of shares of Common Stock which the aggregate
consideration received (or to be received, assuming exercise or conversion in
full of such rights, warrants and convertible securities) for the issuance of
such additional shares of Common Stock would purchase at the Exercise Price, and
the denominator of which shall be the sum of the number of shares of Common
Stock outstanding immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an issuance is made.

                  (e) For the purposes of this Section 9, the following clauses
shall also be applicable:

                        (i) Record Date. In case the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in Common Stock or in
securities convertible or exchangeable into shares of Common Stock, or (B) to
subscribe for or purchase Common Stock or securities convertible or exchangeable
into shares of Common Stock, then such record date shall be deemed to be the
date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

                        (ii) Treasury Shares. 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, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

                  (f) All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.

                  (g) Whenever the Exercise Price is adjusted pursuant to
Section 9(c) above, the Holder, after receipt of the determination by the
Appraiser, shall have the right to select an additional appraiser (which shall
be a nationally recognized accounting firm), in which case the adjustment shall
be equal to the average of the adjustments recommended by each of the Appraiser
and such appraiser. The Holder shall promptly mail or cause to be mailed to the
Company, a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Such
adjustment shall become effective immediately after the record date mentioned
above.


                                      -6-
<PAGE>

                  (h) If:

                        (i)   the Company shall declare a dividend (or any other
                              distribution) on its Common Stock; or

                        (ii)  the Company shall declare a special nonrecurring
                              cash dividend on or a redemption of its Common
                              Stock; or

                        (iii) 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; or

                        (iv)  the approval of any stockholders of the Company
                              shall be required in connection with any
                              reclassification of the Common Stock of the
                              Company, any consolidation or merger to which the
                              Company is a party, any sale or transfer of all or
                              substantially all of the assets of the Company, or
                              any compulsory share exchange whereby the Common
                              Stock is converted into other securities, cash or
                              property; or

                        (v)   the Company shall authorize the voluntary
                              dissolution, liquidation or winding up of the
                              affairs of the Company,

then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, 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 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, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; provided, however, 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.


                                      -7-
<PAGE>

            10. Payment of Exercise Price. The Holder may pay the Exercise Price
in one of the following manners:

                  (a) Cash Exercise. The Holder shall deliver immediately
available funds; or

                  (b) Cashless Exercise. The Holder shall surrender this Warrant
to the Company together with a notice of cashless exercise, in which event the
Company shall issue to the Holder the number of Warrant Shares determined as
follows:

                        X = Y (A-B)/A 

      where:

                        X = the number of Warrant Shares to be issued to the
                        Holder.

                        Y = the number of Warrant Shares with respect to which
                        this Warrant is being exercised.

                        A = the average of the closing sale prices of the Common
                        Stock for the five (5) trading days immediately prior to
                        (but not including) the Date of Exercise.

                        B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have been
commenced, on the issue date.

            11. Fractional Shares. The Company shall not be required to issue or
cause to be issued fractional Warrant Shares on the exercise of this Warrant.
The number of full Warrant Shares which shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 11, be issuable
on the exercise of this Warrant, the Company shall pay an amount in cash equal
to the Exercise Price multiplied by such fraction.

            12. Notices. Any and all notices or other communications or
deliveries hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section prior to 8:00 p.m. (New York City time) on a business day, (ii) the
business day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section later than 8:00 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on 


                                      -8-
<PAGE>

such date, (iii) the business day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Company, to, at 1130 30th Street NW,
Suite 500, Washington, DC 20007, Attention: Chief Financial Officer, or to
facsimile no. (202) 625-4369, or (ii) if to the Holder, to the Holder at the
address or facsimile number appearing on the Warrant Register or such other
address or facsimile number as the Holder may provide to the Company in
accordance with this Section 12.

            13. Warrant Agent. The Company shall serve as warrant agent under
this Warrant. Upon thirty (30) days' notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant Register.

            14. Miscellaneous.

                  (a) This Warrant shall be binding on and inure to the benefit
of the parties hereto and their respective successors and assigns. This Warrant
may be amended only in writing signed by the Company and the Holder and their
successors and assigns.

                  (b) Subject to Section 14(a), above, nothing in this Warrant
shall be construed to give to any person or corporation other than the Company
and the Holder any legal or equitable right, remedy or cause under this Warrant.
This Warrant shall inure to the sole and exclusive benefit of the Company and
the Holder.

                  (c) This Warrant shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. The Company and the Holder
hereby irrevocably submit to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each of the Company and the Holder
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by receiving a copy thereof
sent to the Company at the address in effect for notices to it under this
instrument and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.


                                      -9-
<PAGE>

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

                  (e) In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]


                                      -10-
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                    EUROTECH, LTD.


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

<PAGE>

                         FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To Eurotech, Ltd.:

      In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of Common Stock ("Common Stock"), $.00025 par value per share, of
Eurotech, Ltd. and , if such Holder is not utilizing the cashless exercise
provisions set forth in this Warrant, encloses herewith $________ in cash,
certified or official bank check or checks, which sum represents the aggregate
Exercise Price (as defined in the Warrant) for the number of shares of Common
Stock to which this Form of Election to Purchase relates, together with any
applicable taxes payable by the undersigned pursuant to the Warrant.

      The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of

                                          PLEASE INSERT SOCIAL SECURITY OR
                                          TAX IDENTIFICATION NUMBER

                                          ______________________________________

________________________________________________________________________________
                         (Please print name and address)

      If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock which the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests that
a New Warrant (as defined in the Warrant) evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:

________________________________________________________________________________
                        (Please print name and address)

________________________________________________________________________________

________________________________________________________________________________

Dated:____________,____                   Name of Holder:

                                          (Print)_______________________________

                                          (By:)_________________________________
                                          (Name:)
                                          (Title:)
                                          (Signature must conform in all 
                                          respects to name of holder as 
                                          specified on the face of the Warrant)

<PAGE>

                              FORM OF ASSIGNMENT

          [To be completed and signed only upon transfer of Warrant]

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of Eurotech, Ltd. to
which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of Eurotech, Ltd. with full power of
substitution in the premises.

Dated:

_______________, ____

                              __________________________________________________
                              (Signature must conform in all respects to name 
                              of holder as specified on the face of the Warrant)

                              __________________________________________________
                              Address of Transferee

                              __________________________________________________

                              __________________________________________________

In the presence of:

______________________

<PAGE>

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

                                EUROTECH, LTD.

                                    WARRANT

                            Dated: January 6, 1999

      EUROTECH, LTD., a corporation organized under the laws of the District of
Columbia (the "Company"), hereby certifies that, for value received, David
Wilkes, or his registered assigns ("Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company up to a total of 9,375 shares of
Common Stock, $.00025 par value per share (the "Common Stock"), of the Company
(each such share, a "Warrant Share" and all such shares, the "Warrant Shares")
at an exercise price equal to $0.36 per share (as adjusted from time to time as
provided in Section 9, the "Exercise Price"), at any time and from time to time
from and after the date hereof and through and including January 6, 2004 (the
"Expiration Date"), and subject to the following terms and conditions:

            1. Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, and the Company shall not be affected by
notice to the contrary.

<PAGE>

            2. Registration of Transfers and Exchanges.

                  (a) The Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this Warrant, with the
Form of Assignment attached hereto duly completed and signed, to the Transfer
Agent or to the Company at the office specified in or pursuant to Section 3(b).
Upon any such registration or transfer, a new warrant to purchase Common Stock,
in substantially the form of this Warrant (any such new warrant, a "New
Warrant"), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this
Warrant not so transferred, if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance of such transferee of all of the rights and obligations of a holder
of a Warrant.

                  (b) This Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Section 3(b)
for one or more New Warrants, evidencing in the aggregate the right to purchase
the number of Warrant Shares which may then be purchased hereunder. Any such New
Warrant will be dated the date of such exchange.

            3. Duration and Exercise of Warrants.

                  (a) This Warrant shall be exercisable by the registered Holder
on any business day before 8:00 P.M., New York City time, at any time and from
time to time on or after the date hereof to and including the Expiration Date.
At 8:00 P.M., New York City time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value.
Prior to the Expiration Date, the Company may not call or otherwise redeem this
Warrant without the prior written consent of the Holder.

                  (b) Subject to Sections 2(b), 6 and 10, upon surrender of this
Warrant, with the Form of Election to Purchase attached hereto duly completed
and signed, to the Company at its address for notice set forth in Section 11 and
upon payment of the Exercise Price multiplied by the number of Warrant Shares
that the Holder intends to purchase hereunder, in the manner provided hereunder,
all as specified by the Holder in the Form of Election to Purchase, the Company
shall promptly (but in no event later than 3 business days after the Date of
Exercise (as defined herein)) issue or cause to be issued and cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate, a certificate for the Warrant Shares issuable upon
such exercise, free of restrictive legends except (i) either in the event that a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), or (ii) if this Warrant shall have been issued pursuant to a written
agreement between the original Holder and the Company, as required by such
agreement. Any person so designated by the Holder to receive Warrant Shares
shall be


                                      -2-
<PAGE>

deemed to have become holder of record of such Warrant Shares as of the Date of
Exercise of this Warrant.

                  A "Date of Exercise" means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the holder hereof to be
purchased.

                  (c) This Warrant shall be exercisable, either in its entirety
or, from time to time, for a portion of the number of Warrant Shares. If less
than all of the Warrant Shares which may be purchased under this Warrant are
exercised at any time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares for which no exercise has been evidenced by this Warrant.

            4. Piggyback Registration Rights. During the term of this Warrant,
the Company may not file any registration statement with the Securities and
Exchange Commission (other than registration statements of the Company filed on
Form S-8 or Form S-4, each as promulgated under the Securities Act, pursuant to
which the Company is registering securities pursuant to a Company employee
benefit plan or pursuant to a merger, acquisition or similar transaction
including supplements thereto, but not additionally filed registration
statements in respect of such securities) at any time when there is not an
effective registration statement covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder thereunder, unless the Company
provides the Holder with not less than 20 days notice of its intention to file
such registration statement and provides the Holder the option to include any or
all of the applicable Warrant Shares therein. The piggyback registration rights
granted to the Holder pursuant to this Section shall continue until all of the
Holder's Warrant Shares have been sold in accordance with an effective
registration statement or upon the Expiration Date. The Company will pay all
registration expenses in connection therewith.

            5. Fractional Shares. The Company shall not be required to issue or
cause to be issued fractional Warrant Shares on the exercise of this Warrant.
The number of full Warrant Shares which shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 5, be issuable
on the exercise of this Warrant, the Company shall pay an amount in cash equal
to the Exercise Price multiplied by such fraction.

            6. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability


                                      -3-
<PAGE>

that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof.

            7. Replacement of Warrant. If this Warrant is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
indemnity, if requested, satisfactory to it. Applicants for a New Warrant under
such circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe.

            8. Reservation of Warrant Shares. The Company covenants that it will
at all times reserve and keep available out of the aggregate of its authorized
but unissued Common Stock, solely for the purpose of enabling it to issue
Warrant Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares which are then issuable and deliverable upon the exercise of this
entire Warrant, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holder (taking into account the
adjustments and restrictions of Section 9). The Company covenants that all
Warrant Shares that shall be so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and nonassessable.

            9. Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9. Upon each such adjustment of the
Exercise Price pursuant to this Section 9, the Holder shall thereafter prior to
the Expiration Date be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.

                  (a) If the Company, at any time while this Warrant is
outstanding, (i) shall pay a stock dividend (except scheduled dividends paid on
outstanding preferred stock as of the date hereof which contain a stated
dividend rate) or otherwise make a distribution or distributions on shares of
its Common Stock or on any other class of capital stock and not the Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock into a larger number of shares, or (iii) combine outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price 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
(excluding treasury shares, if any) 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


                                      -4-
<PAGE>

effective immediately after the effective date in the case of a subdivision or
combination, and shall apply to successive subdivisions and combinations.

                  (b) In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the sale or
transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then the Holder shall have the right
thereafter to exercise this Warrant only into the shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such reclassification, consolidation, merger, sale,
transfer or share exchange, and the Holder shall be entitled upon such event to
receive such amount of securities or property equal to the amount of Warrant
Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification, consolidation, merger, sale,
transfer or share exchange. The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to continue to give to
the Holder the right to receive the securities or property set forth in this
Section 9(b) upon any exercise following any such reclassification,
consolidation, merger, sale, transfer or share exchange.

                  (c) If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to holders
of this Warrant) evidences of its indebtedness or assets or rights or warrants
to subscribe for or purchase any security (excluding those referred to in
Sections 9(a), (b) and (d)), then in each such case the Exercise Price shall be
determined by multiplying the Exercise 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 Exercise Price
determined as of the record date mentioned above, and of which the numerator
shall be such Exercise Price 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 Common Stock as determined by
the Company's independent certified public accountants that regularly examines
the financial statements of the Company (an "Appraiser").

                  (d) If, at any time while this Warrant is outstanding, the
Company shall issue or cause to be issued rights or warrants to acquire or
otherwise sell or distribute shares of Common Stock for a consideration per
share less than the Exercise Price then in effect, then, forthwith upon such
issue or sale, the Exercise Price shall be reduced to the price (calculated to
the nearest cent) determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of (i) the number of shares of Common Stock outstanding immediately prior to
such issuance, and (ii) the number of shares of Common Stock which the aggregate
consideration received (or to be received, assuming exercise or conversion in
full of such rights, warrants and convertible securities) for the issuance of
such additional shares of Common Stock would purchase at the Exercise Price, and
the denominator of which shall be the sum of the number of shares of Common
Stock outstanding immediately after the issuance of 


                                      -5-
<PAGE>

such additional shares. Such adjustment shall be made successively whenever such
an issuance is made.

                  (e) For the purposes of this Section 9, the following clauses
shall also be applicable:

                        (i) Record Date. In case the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in Common Stock or in
securities convertible or exchangeable into shares of Common Stock, or (B) to
subscribe for or purchase Common Stock or securities convertible or exchangeable
into shares of Common Stock, then such record date shall be deemed to be the
date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

                        (ii) Treasury Shares. 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, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

                  (f) All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.

                  (g) Whenever the Exercise Price is adjusted pursuant to
Section 9(c) above, the Holder, after receipt of the determination by the
Appraiser, shall have the right to select an additional appraiser (which shall
be a nationally recognized accounting firm), in which case the adjustment shall
be equal to the average of the adjustments recommended by each of the Appraiser
and such appraiser. The Holder shall promptly mail or cause to be mailed to the
Company, a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Such
adjustment shall become effective immediately after the record date mentioned
above.

                  (h) If:

                        (i)   the Company shall declare a dividend (or any other
                              distribution) on its Common Stock; or

                        (ii)  the Company shall declare a special nonrecurring
                              cash dividend on or a redemption of its Common
                              Stock; or

                        (iii) the Company shall authorize the granting to all
                              holders of the Common Stock rights or warrants to


                                      -6-
<PAGE>

                              subscribe for or purchase any shares of capital
                              stock of any class or of any rights; or

                        (iv)  the approval of any stockholders of the Company
                              shall be required in connection with any
                              reclassification of the Common Stock of the
                              Company, any consolidation or merger to which the
                              Company is a party, any sale or transfer of all or
                              substantially all of the assets of the Company, or
                              any compulsory share exchange whereby the Common
                              Stock is converted into other securities, cash or
                              property; or

                        (v)   the Company shall authorize the voluntary
                              dissolution, liquidation or winding up of the
                              affairs of the Company,

then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, 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 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, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; provided, however, 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.

            10. Payment of Exercise Price. The Holder may pay the Exercise Price
in one of the following manners:

                  (a) Cash Exercise. The Holder shall deliver immediately
available funds; or

                  (b) Cashless Exercise. The Holder shall surrender this Warrant
to the Company together with a notice of cashless exercise, in which event the
Company shall issue to the Holder the number of Warrant Shares determined as
follows:

                        X = Y (A-B)/A

      where:


                                      -7-
<PAGE>

                        X = the number of Warrant Shares to be issued to the
                        Holder.

                        Y = the number of Warrant Shares with respect to which
                        this Warrant is being exercised.

                        A = the average of the closing sale prices of the Common
                        Stock for the five (5) trading days immediately prior to
                        (but not including) the Date of Exercise.

                        B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have been
commenced, on the issue date.

            11. Notices. Any and all notices or other communications or
deliveries hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section prior to 8:00 p.m. (New York City time) on a business day, (ii) the
business day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section later than 8:00 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on such date, (iii) the business day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i) if to the Company,
to, at 1130 30th Street NW, Suite 500, Washington, DC 20007, Attention: Chief
Financial Officer, or to facsimile no. (202) 625-4369, or (ii) if to the Holder,
to the Holder at the address or facsimile number appearing on the Warrant
Register or such other address or facsimile number as the Holder may provide to
the Company in accordance with this Section 11.

            12. Warrant Agent. The Company shall serve as warrant agent under
this Warrant. Upon thirty (30) days' notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant Register.


                                      -8-
<PAGE>

            13. Miscellaneous.

                  (a) This Warrant shall be binding on and inure to the benefit
of the parties hereto and their respective successors and assigns. This Warrant
may be amended only in writing signed by the Company and the Holder and their
successors and assigns.

                  (b) Subject to Section 13(a), above, nothing in this Warrant
shall be construed to give to any person or corporation other than the Company
and the Holder any legal or equitable right, remedy or cause under this Warrant.
This Warrant shall inure to the sole and exclusive benefit of the Company and
the Holder.

                  (c) This Warrant shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. The Company and the Holder
hereby irrevocably submit to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each of the Company and the Holder
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by receiving a copy thereof
sent to the Company at the address in effect for notices to it under this
instrument and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

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

                  (e) In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]


                                      -9-
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                    EUROTECH, LTD.

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

<PAGE>

                         FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To Eurotech, Ltd.:

      In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of Common Stock ("Common Stock"), $.00025 par value per share, of
Eurotech, Ltd. and , if such Holder is not utilizing the cashless exercise
provisions set forth in this Warrant, encloses herewith $________ in cash,
certified or official bank check or checks, which sum represents the aggregate
Exercise Price (as defined in the Warrant) for the number of shares of Common
Stock to which this Form of Election to Purchase relates, together with any
applicable taxes payable by the undersigned pursuant to the Warrant.

      The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of

                                          PLEASE INSERT SOCIAL SECURITY OR
                                          TAX IDENTIFICATION NUMBER

                                          ______________________________________

________________________________________________________________________________
                         (Please print name and address)

      If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock which the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests that
a New Warrant (as defined in the Warrant) evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:

________________________________________________________________________________
                        (Please print name and address)

________________________________________________________________________________

________________________________________________________________________________

Dated:____________,____                   Name of Holder:

                                          (Print)_______________________________

                                          (By:)_________________________________
                                          (Name:)
                                          (Title:)
                                          (Signature must conform in all 
                                          respects to name of holder as 
                                          specified on the face of the Warrant)

<PAGE>

                              FORM OF ASSIGNMENT

          [To be completed and signed only upon transfer of Warrant]

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of Eurotech, Ltd. to
which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of Eurotech, Ltd. with full power of
substitution in the premises.

Dated:

_______________, ____

                              __________________________________________________
                              (Signature must conform in all respects to name 
                              of holder as specified on the face of the Warrant)

                              __________________________________________________
                              Address of Transferee

                              __________________________________________________

                              __________________________________________________

In the presence of:

______________________

<PAGE>

                                                                       Exhibit A

      NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

No. [ ]                                                                     $[ ]

                                EUROTECH, LTD.
                   8% SECURED CONVERTIBLE DEBENTURE DUE [ ](1)

      THIS DEBENTURE is one of a series of duly authorized issued debentures of
EUROTECH, LTD., a corporation organized under the laws of the District of
Columbia, having a principal place of business at 1130 30th Street NW, Suite
500, Washington, DC 20007 (the "Company"), designated as its 8% Convertible
Debentures, due [ ] (the "Debentures"), in an aggregate principal amount of 
$[ ].

      FOR VALUE RECEIVED, the Company promises to pay to JNC Strategic Fund
Ltd., or registered assigns (the "Holder"), the principal sum of [ ], on or
prior to [ ] or such earlier date as the Debentures are required to be repaid as
provided hereunder (the "Maturity Date") and to pay interest to the Holder on
the principal sum at the rate of 8% per annum, payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year during the term
hereof, commencing on [ ], but in no event later than the earlier to occur of a
Conversion Date (as defined in Section 5(a)(i)) for such principal amount or the
Maturity Date. Interest shall accrue daily commencing on the Original Issue Date
(as defined in Section 6) until payment in full of the principal sum, together
with all accrued and unpaid interest and other amounts which may become due
hereunder, has been made. Interest shall be calculated on the basis of a 360-day
year and for the actual number of days elapsed. Interest hereunder will be paid
to the Person (as defined in Section 6) in whose name this Debenture is
registered on the records of the Company regarding registration and transfers of
the Debentures (the "Debenture Register"). All overdue, accrued and unpaid
interest hereunder shall bear interest 

----------
(1) Three (3) years from the Original Issue Date.

<PAGE>

at the rate of 18% per annum (to accrue daily) from the date such interest is
due hereunder through and including the date of payment. The principal of, and
interest on, this Debenture are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, at the address of the Holder last appearing on the
Debenture Register, except that interest due on the principal amount (but not
overdue interest) may, at the Company's option, be paid in shares of Common
Stock (as defined in Section 6) calculated based upon the Conversion Price (as
defined below) on the date such interest was due. All amounts due hereunder
other than such interest shall be paid in cash. Notwithstanding anything to the
contrary contained herein, the Company may not issue shares of Common Stock in
payment of interest on the principal amount if: (i) the number of shares of
Common Stock at the time authorized, unissued and unreserved for all purposes,
or held as treasury stock, is insufficient to pay interest hereunder in shares
of Common Stock; (ii) such shares of Common Stock are not either registered for
resale pursuant to an Underlying Securities Registration Statement (as defined
in Section 1) or freely transferable without volume restrictions pursuant to
Rule 144(k) promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), as determined by counsel to the Company pursuant to a written
opinion letter addressed and in form and substance acceptable to the Holder and
the transfer agent for such shares; (iii) the Company has failed to timely
satisfy its conversion obligations hereunder;; or (iv) such shares are not
actively traded on the OTC Bulletin Board (or listed or quoted for trading on
the American Stock Exchange, Nasdaq National Market, Nasdaq SmallCap Market or
The New York Stock Exchange, and any other exchange on which the Common Stock is
then listed for trading (each, a "Subsequent Market")). Payment of interest on
the principal amount in shares of Common Stock is further subject to the
provisions of Section 5(a)(ii). For purposes hereof, the Common Stock shall be
deemed to be "actively traded" on the OTC Bulletin Board under this Debenture if
(a) no less than $400,000 of the Common Stock trades on the OTC Bulletin Board
in any one week and (b) there are no fewer than six (6) market makers actively
making a market in the Common Stock.

      This Debenture is subject to the following additional provisions:

      Section 1. On or prior to the 30th day following the Original Issue Date
(the "Filing Date"), the Company shall prepare and file with the Commission a
registration statement meeting the requirements set forth in the Registration
Rights Agreement (as defined in Section 6), covering, among other things, the
resale of the Underlying Shares (as defined in Section 6) and naming the Holder
as a "selling stockholder" thereunder (the "Underlying Securities Registration
Statement"). The Company shall use its best efforts to cause the Underlying
Securities Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event prior to
the 90th day following the Original Issue Date (the "Effectiveness Date"), and
shall use its best efforts to keep the Underlying Securities Registration
Statement continuously effective under the Securities Act until the date which
is three years after the date that the Underlying Securities Registration
Statement is declared effective by the Commission or such earlier date when all
Underlying Shares covered by the Underlying Securities Registration Statement
have been sold or may be sold without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act, as determined by the counsel to the
Company pursuant to


                                      -2-
<PAGE>

a written opinion letter to such effect, addressed and acceptable to the Holder
and the Company's transfer agent.

            Section 2. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations, as
requested by the Holder surrendering the same but shall not be issuable in
denominations of less than integral multiplies of Fifty Thousand Dollars
($50,000) unless such amount represents the full principal balance of Debentures
outstanding to such Holder. No service charge will be made for such registration
of transfer or exchange.

            Section 3. Prior to due presentment to the Company for transfer of
this Debenture, the Company and any agent of the Company may treat the Person in
whose name this Debenture is duly registered on the Debenture Register as the
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this Debenture is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.

            Section 4. Events of Default.

      (a) "Event of Default", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

            (i) any default in the payment of the principal of, interest on or
      liquidated damages in respect of this Debenture (free of any claim of
      subordination), as and when the same shall become due and payable (whether
      on the applicable quarterly interest payment date, a Conversion Date or
      the Maturity Date or by acceleration or otherwise);

            (ii) the Company shall fail to observe or perform any other
      covenant, agreement or warranty contained in, or otherwise commit any
      breach of, this Debenture or the Security Agreement, and such failure or
      breach shall not have been remedied within ten (10) days after the date on
      which notice of such failure or breach shall have been given;

            (iii) the Company or any of its subsidiaries shall commence, or
      there shall be commenced against the Company or any such subsidiary a case
      under any applicable bankruptcy or insolvency laws as now or hereafter in
      effect or any successor thereto, or the Company commences any other
      proceeding under any reorganization, arrangement, adjustment of debt,
      relief of debtors, dissolution, insolvency or liquidation or similar law
      of any jurisdiction whether now or hereafter in effect relating to the
      Company or any subsidiary thereof or there is commenced against the
      Company or any subsidiary thereof any such bankruptcy, insolvency or other
      proceeding which remains undismissed for a period of 60 days; or the
      Company or any subsidiary thereof is adjudicated insolvent or bankrupt; or
      any order of relief or other order approving any such case or proceeding
      is entered; or the Company or any subsidiary thereof suffers any
      appointment of any custodian or the like for


                                      -3-
<PAGE>

      it or any substantial part of its property which continues undischarged or
      unstayed for a period of 60 days; or the Company or any subsidiary thereof
      makes a general assignment for the benefit of creditors; or the Company
      shall fail to pay, or shall state that it is unable to pay, or shall be
      unable to pay, its debts generally as they become due; or the Company or
      any subsidiary thereof shall call a meeting of its creditors with a view
      to arranging a composition or adjustment of its debts; or the Company or
      any subsidiary thereof shall by any act or failure to act indicate its
      consent to, approval of or acquiescence in any of the foregoing; or any
      corporate or other action is taken by the Company or any subsidiary
      thereof for the purpose of effecting any of the foregoing;

            (iv) the Company shall default in any of its obligations under any
      mortgage, credit agreement or other facility, indenture agreement or other
      instrument under which there may be issued, or by which there may be
      secured or evidenced any indebtedness of the Company in an amount
      exceeding one hundred thousand dollars ($100,000), whether such
      indebtedness now exists or shall hereafter be created and such default
      shall result in such indebtedness becoming or being declared due and
      payable prior to the date on which it would otherwise become due and
      payable;

            (v) the Common Stock shall fail to be actively traded on the OTC
      Bulletin Board or fail to be listed or quoted for trading on any
      Subsequent Market if after the Original Issue Date the Common Stock shall
      be listed or quoted for trading on any such Subsequent Market, or if the
      Common Stock shall be suspended from trading thereon without being
      actively traded, relisted or having such suspension lifted, as the case
      may be, within three (3) Trading Days;

            (vi) the Company shall be a party to any Change of Control
      Transaction (as defined in Section 6), shall agree to sell or dispose all
      or in excess of 50% of its assets in one or more transactions (whether or
      not such sale would constitute a Change of Control Transaction), or shall
      redeem more than a de minimis number of shares of Common Stock or other
      equity securities of the Company (other than redemptions of Underlying
      Shares);

            (vii) an Underlying Securities Registration Statement shall not have
      been declared effective by the Commission on or prior to the 180th day
      after the Original Issue Date;

            (viii) an Event (as hereinafter defined) shall not have been cured
      prior to the expiration of thirty (30) days from the Event Date (as
      hereinafter defined) relating thereto (other than an Event resulting from
      a failure of an Underlying Securities Registration Statement to be
      declared effective by the Commission on or prior to the Effectiveness
      Date;

            (ix) the Company shall fail for any reason to deliver certificates
      to a Holder prior to the twentieth (20th) day after the Conversion Date
      pursuant to Section 5(b) or the Company shall provide notice to the
      Holder, including by way of public announcement,


                                      -4-
<PAGE>

      at any time, of its intention not to comply with requests for conversions
      of any Debentures in accordance with the terms hereof; or

            (x) the Company shall fail for any reason to deliver the payment in
      cash pursuant to a Buy-In (as defined below) within ten (10) days after
      notice is deemed delivered hereunder.

      (b) If any Event of Default occurs and is continuing, the full principal
amount of this Debenture (and, at the Holder's option, all other Debentures then
held by such Holder), together with interest and other amounts owing in respect
thereof, to the date of acceleration shall become, immediately due and payable
in cash. The aggregate amount payable upon an Event of Default shall be equal to
the sum of (i) the Mandatory Prepayment Amount (as defined below) plus (ii) the
product of (A) the number of Underlying Shares issued in respect of conversions
hereunder or as payment of interest hereunder, in either case, within thirty
(30) days of the date of a declaration of an Event of Default and then held by
the Holder and (B) the Per Share Market Value on the date prepayment is due or
the date the full prepayment price is paid, whichever is greater. Interest shall
accrue on the prepayment amount hereunder from the seventh (7th) day after such
amount is due (being the date of an Event of Default) through the date of
payment in full thereof at the rate of 18% per annum. All Debentures and
Underlying Shares for which the full repayment price hereunder shall have been
paid in accordance herewith shall be promptly surrendered to or as directed by
the Company. The Holder need not provide and the Company hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Holder at any
time prior to payment hereunder. No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.

            Section 5. Conversion.

            (a) (i) This Debenture shall be convertible into shares of Common
Stock (subject to the limitations set forth in Section 5(a)(ii) hereof) at the
option of the Holder, in whole or in part at any time and from time to time
after the seventy fifth (75th) day following the Original Issue Date. The number
of shares of Common Stock issuable upon a conversion hereunder shall be
determined by dividing the outstanding principal amount of this Debenture to be
converted, plus all accrued but unpaid interest thereon, by the Conversion
Price, each as subject to adjustment as provided hereunder. The Holder shall
effect conversions by surrendering the Debentures (or such portions thereof) to
be converted, together with the form of conversion notice attached hereto as
Exhibit A (a "Conversion Notice") to the Company. Each Conversion Notice shall
specify the principal amount of Debentures to be converted and the date on which
such conversion is to be effected, which date may not be prior to the date such
Conversion Notice is deemed to have been delivered hereunder (a "Conversion
Date"). If no Conversion Date is specified in a Conversion Notice, the
Conversion Date shall be the date that such Conversion Notice is deemed
delivered hereunder. Subject to Section 5(b)


                                      -5-
<PAGE>

hereof, each Conversion Notice, once given, shall be irrevocable. If the Holder
is converting less than all of the principal amount represented by the
Debenture(s) tendered by the Holder with the Conversion Notice, or if a
conversion hereunder cannot be effected in full for any reason, the Company
shall honor such conversion to the extent permissible hereunder and shall
promptly deliver to such Holder (in the manner and within the time set forth in
Section 5(b)) a new Debenture for such principal amount as has not been
converted.

                  (ii) Certain Conversion Restrictions.

                  (A)(1) A Holder may not convert Debentures or receive shares
of Common Stock as payment of interest hereunder to the extent such conversion
or receipt of such interest payment would result in the Holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules thereunder) in excess of 4.999% of the then issued and outstanding
shares of Common Stock, including shares issuable upon conversion of, and
payment of interest on, the Debentures held by such Holder after application of
this Section. The Holder shall have the sole authority and obligation to
determine whether the restriction contained in this Section applies and to the
extent that the Holder determines that the limitation contained in this Section
applies, the determination of which portion of the principal amount of such
Debentures is convertible shall be in the sole discretion of the Holder. The
provisions of this Section may be waived by a Holder (but only as to itself and
not to any other Holder) upon not less than 75 days prior notice to the Company.
Other Holders shall be unaffected by any such waiver.

                        (2) A Holder may not convert Debentures or receive
shares of Common Stock as payment of interest hereunder to the extent such
conversion or receipt of such interest payment would result in the Holder
beneficially owning (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder) in excess of 9.999% of the then issued
and outstanding shares of Common Stock, including shares issuable upon
conversion of, and payment of interest on, the Debentures held by such Holder
after application of this Section. The Holder shall have the sole authority and
obligation to determine whether the restriction contained in this Section
applies and to the extent that the Holder determines that the limitation
contained in this Section applies, the determination of which portion of the
principal amount of such Debentures is convertible shall be in the sole
discretion of the Holder. The provisions of this Section may be waived by a
Holder (but only as to itself and not to any other Holder) upon not less than 75
days prior notice to the Company. Other Holders shall be unaffected by any such
waiver.

            (b) (i) Not later than three (3) Trading Days after a Conversion
Date, the Company will deliver or cause to be delivered to the Holder (i) a
certificate or certificates which shall be free of restrictive legends and
trading restrictions [(other than those required by the Purchase Agreement)]
representing the number of shares of the Common Stock being acquired upon the
conversion of Debentures (subject to the limitations set forth in Section
5(a)(iii) hereof), (ii) Debentures in a principal amount equal to the principal
amount of Debentures not converted; (iii) a bank check in the amount of all
accrued and unpaid interest (if the Company has elected to pay accrued interest
in cash), together with all other amounts then due and payable in accordance
with


                                      -6-
<PAGE>

the terms hereof, in respect of Debentures tendered for conversion, and (iv) if
the Company has elected and is permitted hereunder to pay accrued interest in
shares of the Common Stock, certificates, which shall be free of restrictive
legends and trading restrictions [(other than those required by the Purchase
Agreement)], representing such number of shares of the Common Stock as equals
such interest divided by the Conversion Price calculated on the Conversion Date;
provided, however, that the Company shall not be obligated to issue certificates
evidencing the shares of the Common Stock issuable upon conversion of the
principal amount of Debentures until Debentures are delivered for conversion to
the Company or the Holder notifies the Company that such Debenture has been
mutilated, lost, stolen or destroyed and complies with Section 9 hereof. If in
the case of any Conversion Notice such certificate or certificates, including
for purposes hereof, any shares of the Common Stock to be issued on the
Conversion Date on account of accrued but unpaid interest hereunder, are not
delivered to or as directed by the Holder by the third (3rd) Trading Day after a
Conversion Date, the Holder shall be entitled 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 Debentures tendered for conversion. If the Company fails
to deliver to the Holder such certificate or certificates pursuant to this
Section, including for purposes hereof, any shares of the Common Stock to be
issued on the Conversion Date on account of accrued but unpaid interest
hereunder, prior to the fourth (4th) Trading Day after the Conversion Date, the
Company shall pay to such Holder, in cash, as liquidated damages and not as a
penalty, $1,500 for each day thereafter until the Company delivers such
certificates (such amount shall also be due for each Trading Day after the date
that the Holder may rescind such conversion until such date as the Holder shall
have received the return of the principal amount of Debentures relating to such
rescission).

            (ii) In addition to any other rights available to the Holder, if the
Company fails to deliver to the Holder such certificate or certificates pursuant
to Section 5(b)(i), including for purposes hereof, any shares of Common Stock to
be issued on the Conversion Date on account of accrued but unpaid interest
hereunder, prior to the fourth (4th) Trading Day after the Conversion Date, and
if after such the fourth (4th) Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Holder of the Underlying Shares which the Holder
anticipated receiving upon such conversion (a "Buy-In"), then the Company shall
pay in cash to the Holder (in addition to any remedies available to or elected
by the Holder) the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the aggregate principal amount of Debentures for which
such conversion was not timely honored. For example, if the Holder purchases
shares of Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of $10,000 aggregate principal
amount of Debentures, 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.

            (c) (i) The conversion price (the "Conversion Price") in effect on
any Conversion Date shall be the lesser of (a) the average of the Per Share
Market Values during the five (5) Trading Days immediately preceding the
Original Issue Date (the "Initial Conversion Price") and


                                      -7-
<PAGE>

(b) 75% (the "Discount Rate") of the average of the Per Share Market Values
during the five (5) Trading Day period immediately preceding the applicable
Conversion Date, provided, however, that such five (5) Trading Day period shall
be extended for the number of Trading Days during such period, if any, in which
(A) the shares of Common Stock were not actively traded on the OTC Bulletin
Board or trading in the Common Stock was suspended from a Subsequent Market, or
(B) after the date declared effective by the Commission, the Underlying
Securities Registration Statement is not effective, or (C) after the date
declared effective by the Commission, the Prospectus included in the Underlying
Securities Registration Statement may not be used by the Holder for the resale
of Underlying Shares.

                  If: (a) an Underlying Securities Registration Statement is not
filed on or prior to the Filing Date (if the Company files such Underlying
Securities Registration Statement without affording the Holder the opportunity
to review and comment on the same, the Company shall not be deemed to have
satisfied this clause (a)), or (b) the Company fails to file with the Commission
a request for acceleration in accordance with Rule 12d1-2 promulgated under the
Securities Exchange Act of 1934, as amended, within five (5) days of the date
that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that an Underlying Securities Registration Statement will not be
"reviewed," or not subject to further review or comment, or (c) the Underlying
Securities Registration Statement is not declared effective by the Commission on
or prior to the Effectiveness Date, or (d) such Underlying Securities
Registration Statement is filed with and declared effective by the Commission
but thereafter ceases to be effective as to all Registrable Securities (as
defined in the Registration Rights Agreement) at any time prior to the
expiration of the "Effectiveness Period" (as defined in the Registration Rights
Agreement), without being succeeded within ten (10) days by an amendment to such
Underlying Securities Registration Statement or a subsequent Underlying
Securities Registration Statement filed with and declared effective by the
Commission, or (e) trading in the Common Stock shall fail to be actively traded
on the OTC Bulletin Board or if the Common Stock shall be suspended or delisted
from trading on any Subsequent Market for any reason for more than three (3)
Trading Days, (f) the conversion rights of the Holders are suspended for any
reason or (g) an amendment to the Underlying Securities Registration Statement
is not filed by the Company with the Commission within ten (10) days of the
Commission's notifying the Company that such amendment is required in order for
the Underlying Securities Registration Statement to be declared effective (any
such failure or breach being referred to as an "Event," and for purposes of
clauses (a), (c), (f) the date on which such Event occurs, or for purposes of
clause (b) the date on which such five (5) day period is exceeded, or for
purposes of clauses (d) and (g) the date which such 10 day-period is exceeded,
or for purposes of clause (e) the date on which such three (3) Business
Day-period is exceeded, being referred to as "Event Date"), then each of the
Initial Conversion Price and the Discount Rate shall be decreased by 2.0% on the
Event Date and each monthly anniversary thereof until the earlier to occur of
the second month anniversary after the Event Date and such time as the
applicable Event is cured (i.e., the Discount Rate would be lowered to 73% as of
the Event Date and 71% as of the one month anniversary of such Event Date).
Commencing on the second month anniversary after the Event Date, the Holder
shall have the option to either (x) require further cumulative 2.0% discounts to
continue or (y) require the Company to pay to the Holder 2.0% of the aggregate
principal amount of Debentures then held by such Holder (which, for purposes
hereof shall


                                      -8-
<PAGE>

include all Debentures tendered for conversion by such Holder but for which
Underlying Shares due in respect thereof shall not have been received by such
Holder), in cash, as liquidated damages and not as a penalty, on the first day
of each monthly anniversary of the Event Date, until such time as the applicable
Event is cured. Any decrease in the Initial Conversion Price and the Discount
Rate pursuant to this Section shall remain in effect notwithstanding the fact
that the Event causing such decrease has been subsequently cured and further
monthly decreases have ceased.

                  (ii) If the Company, at any time while any Debentures are
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 the Common Stock, (b) subdivide
outstanding shares of the Common Stock into a larger number of shares, (c)
combine outstanding shares of the 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, the Initial Conversion Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of the Common
Stock outstanding before such event and of which the denominator shall be the
number of shares of the 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.

                  (iii) If the Company, at any time while any Debentures are
outstanding, shall issue rights, warrants or options to all holders of Common
Stock entitling them to subscribe for or purchase shares of Common Stock at a
price per share less than the Per Share Market Value at the record date
mentioned below, then the Initial Conversion Price shall be multiplied by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such rights, warrants or
options, plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares so offered would purchase at such Per Share
Market Value, and the denominator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to such issuance plus the
number of shares of Common Stock offered for subscription or purchase. Such
adjustment shall be made whenever such rights or warrants are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants. However, upon the
expiration of any right, warrant or option to purchase shares of Common Stock
the issuance of which resulted in an adjustment in the Conversion Price pursuant
to this Section 5(c)(iii), if any such right, warrant or option shall expire and
shall not have been exercised, the Conversion Price shall immediately upon such
expiration shall be recomputed and effective immediately upon such expiration
shall be increased to the price which it would have been (but reflecting any
other adjustments in the Conversion Price made pursuant to the provisions of
this Section 5 upon the issuance of other rights or warrants) had the adjustment
of the Conversion Price made upon the issuance of such rights, warrants, or
options been made on the basis of offering for subscription or purchase only
that number of shares of Common Stock actually purchased upon the exercise of
such rights, warrants or options actually exercised.


                                      -9-
<PAGE>

                  (iv) If the Company or any subsidiary thereof, as applicable
with respect to Common Stock Equivalents (as defined below), at any time while
Debentures are outstanding, shall issue shares of Common Stock or rights,
warrants, options or other securities or debt that is convertible into or
exchangeable for shares of Common Stock ("Common Stock Equivalents") entitling
any Person to acquire shares of Common Stock at a price per share less than the
Conversion Price, then the Conversion Price shall be multiplied by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of shares of Common Stock or such Common Stock
Equivalents plus the number of shares of Common Stock which the offering price
for such shares of Common Stock or Common Stock Equivalents would purchase at
the Conversion Price, and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to such issuance
plus the number of shares of Common Stock so issued or issuable, provided, that
for purposes hereof, all shares of Common Stock that are issuable upon
conversion, exercise or exchange of Common Stock Equivalents shall be deemed
outstanding immediately after the issuance of such Common Stock Equivalents.
Such adjustment shall be made whenever such shares of Common Stock or Common
Stock Equivalents are issued.

                  (v) If the Company, at any time while Debentures are
outstanding, shall distribute to all holders of the Common Stock (and not to
Holders of Debentures) evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any security, then in each such case the
Initial Conversion Price at which Debentures shall thereafter be convertible
shall be determined by multiplying the Initial 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 Per Share Market Value of the Common Stock determined as of the
record date mentioned above, and of which the numerator shall be such Per Share
Market Value of the Common Stock 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; provided, however,
that in the event of a distribution exceeding ten percent (10%) of the net
assets of the Company, if the Holders of a majority in interest of the
Debentures dispute such valuation, such fair market value shall be determined by
a nationally recognized or major regional investment banking firm or firm of
independent certified public accountants of recognized standing (which may be
the firm that regularly examines the financial statements of the Company) (an
"Appraiser") selected in good faith by the holders of a majority in interest of
Debentures then outstanding; provided, that one half of the fees of such
Appraiser shall be payable by the holders of a majority in interest of
Debentures then outstanding (to be allocated on a pro-rata basis) and one half
of the fees of such Appraiser shall be payable by the Company; provided,
further, that the Company, after receipt of the determination by such Appraiser
shall have the right to select an additional Appraiser, in good faith, in which
case the fair market value shall be equal to the average of the determinations
by each such Appraiser. In either case the adjustments shall be described in a
statement provided to the holders of Debentures of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of the Common


                                      -10-
<PAGE>

Stock. Such adjustment shall be made whenever any such distribution is made and
shall become effective immediately after the record date mentioned above.

                  (vi) In case of any reclassification of the Common Stock, or
any compulsory share exchange pursuant to which the Common Stock is converted
into other securities, cash or property (other than compulsory share exchanges
which constitute Change of Control Transactions), the Holders of the Debentures
then outstanding shall have the right thereafter to convert the then outstanding
principal amount, together with all accrued but unpaid interest and any other
amounts then owing hereunder in respect of this Debenture only into the shares
of stock and other securities, cash and property receivable upon or deemed to be
held by holders of Common Stock following such reclassification or share
exchange, and the Holders of the Debentures shall be entitled upon such event to
receive such amount of securities, cash or property as the shares of the Common
Stock of the Company into which the then outstanding principal amount, together
with all accrued but unpaid interest and any other amounts then owing hereunder
in respect of this Debenture could have been converted immediately prior to such
reclassification or share exchange would have been entitled. This provision
shall similarly apply to successive reclassifications or share exchanges.

                  (vii) All calculations under this Section 4 shall be made to
the nearest cent or the nearest 1/100th of a share, as the case may be.

                  (viii) Whenever the Initial Conversion Price is adjusted
pursuant to any of Section 4(c)(ii) - (v), the Company shall promptly mail to
each Holder of Debentures a notice setting forth the Initial Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.

                  (ix) If (A) the Company shall declare a dividend (or any other
distribution) on its Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of its 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 of
the Company, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, of
any compulsory share of exchange whereby the Common Stock is converted into
other securities, cash or property; (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company; then, and in each case, the Company shall cause to be filed at
each office or agency maintained for the purpose of conversion of the
Debentures, and shall cause to be mailed to the Holders of Debentures at their
last addresses as they shall appear upon the stock books of the Company, at
least 20 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,


                                      -11-
<PAGE>

distributions, redemption, rights or warrants are to be determined or (y)
the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange 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, consolidation, merger,
sale, transfer or share exchange; provided, however, 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.
Holders are entitled to convert Debentures during the 20-day period commencing
the date of such notice to the effective date of the event triggering such
notice.

                  (x) In case of any (1) merger or consolidation of the Company
with or into another Person that would constitute a Change of Control
Transaction, or (2) sale by the Company of more than one-half of the assets of
the Company (on an as valued basis) in one or a series of related transactions,
or (3) tender or other offer or exchange (whether by the Company or another
Person) pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, stock, cash or property of the
Company or another Person; then, if a Holder has not exercised its rights to
prepayment, if any, under Section 4, such Holder shall have the right thereafter
to (A) if permitted under Section 4 hereof, exercise its rights to prepayment
under Section 3 with respect to such event, (B) convert its principal amount of
Debentures into the shares of stock and other securities, cash and property
receivable upon or deemed to be held by holders of Common
Stock following such merger, consolidation or sale, and such Holder shall be
entitled upon such event or series of related events to receive such amount of
securities, cash and property as the shares of Common Stock into which such
principal amount of Debentures could have been converted immediately prior to
such merger, consolidation or sales would have been entitled, (C) in the case of
a merger or consolidation, (x) require the surviving entity to issue shares of
convertible preferred stock or convertible debentures with such aggregate stated
value or in such face amount, as the case may be, equal to the principal amount
of Debentures then held by such Holder, plus all accrued and unpaid interest and
other amounts owing thereon, which newly issued shares of preferred stock or
debentures shall have terms identical (including with respect to conversion) to
the terms of the Debentures (except, in the case of preferred stock, as may be
required to reflect the differences between debt and equity) and shall be
entitled to all of the rights and privileges of a Holder of Debentures set forth
herein and the agreements pursuant to which the Debentures were issued
(including, without limitation, as such rights relate to the acquisition,
transferability, registration and listing of such shares of stock other
securities issuable upon conversion thereof), and (y) simultaneously with the
issuance of such convertible preferred stock or convertible debentures, shall
have the right to convert such instrument only into shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger or consolidation, or (D) in the event of an
exchange or tender offer or other transaction contemplated by clause (3) of this
Section, tender or exchange its principal amount of Debentures for such
securities, stock, cash and other property receivable upon or deemed to be held
by holders of Common Stock that have tendered or exchanged their shares of
Common Stock following such tender or exchange, and such Holder shall be
entitled upon such exchange or tender to receive such amount of securities, cash
and property as the shares of Common Stock into which such principal


                                      -12-
<PAGE>

amount of Debentures would have been converted (taking into account all then
accrued and unpaid dividends) immediately prior to such tender or exchange would
have been entitled as would have been issued. In the case of clause (C), the
conversion price applicable for the newly issued shares of convertible preferred
stock or convertible debentures shall be based upon the amount of securities,
cash and property that each share of Common Stock would receive in such
transaction and the Conversion Price stated herein. The terms of any such
merger, sale, consolidation, tender or exchange shall include such terms so as
continue to give the Holders of Debentures the right to receive the securities,
cash and property set forth in this Section upon any conversion or redemption
following such event. This provision shall similarly apply to successive such
events.

            (d) The Company covenants that it will at all times reserve and keep
available out of its authorized and unissued shares of the Common Stock solely
for the purpose of issuance upon conversion of the Debentures and payment of
interest on the Debentures, 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 4(c)) upon the conversion of the
outstanding principal amount of the Debentures and payment of interest
hereunder. The Company covenants that all shares of the Common Stock that shall
be so issuable shall, upon issue, be duly and validly authorized, issued and
fully paid, nonassessable and, if the Underlying Securities Registration
Statement has been declared effective under the Securities Act, registered for
public sale in accordance with such Underlying Securities Registration
Statement.

            (e) Upon a conversion hereunder the Company shall not be required to
issue stock certificates representing fractions of shares of the Common Stock,
but may if otherwise permitted, make a cash payment in respect of any final
fraction of a share based on the Per Share Market Value at such time. If the
Company elects not, or is unable, to make such a cash payment, the Holder shall
be entitled to receive, in lieu of the final fraction of a share, one whole
share of Common Stock.

            (f) The issuance of certificates for shares of the Common Stock on
conversion of the Debentures 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 Debentures so converted.

            (g) Any and all notices or other communications or deliveries to be
provided by the Holders of the Debentures hereunder, including, without
limitation, any Conversion Notice, shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service or sent
by certified or registered mail, postage prepaid, addressed to the Company, at
1130 30th Street NW, Suite 500, Washington, DC 20007 (facsimile number (202)
625-4369, attention 


                                      -13-
<PAGE>

Chief Financial Officer, or such other address or facsimile number as the
Company may specify for such purposes by notice to the Holders delivered in
accordance with this Section. 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 or sent by certified or registered mail, postage prepaid,
addressed to each Holder of the Debentures 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 and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 8:00 p.m. (New
York City time), (ii) the date after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section later than 8:00 p.m. (New York City time) on any date
and earlier than 11:59 p.m. (New York City time) on such date, (iii) four days
after deposit in the United States mail, (iv) the Business Day following the
date of mailing, if send by nationally recognized overnight courier service, or
(v) upon actual receipt by the party to whom such notice is required to be
given.

            Section 6. Definitions. For the purposes hereof, the following terms
shall have the following meanings:

            "Average Price" on any date means the average Per Share Market Value
for the five (5) Trading Days immediately preceding such date.

            "Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

            "Change of Control Transaction" means the occurrence of any of (i)
an acquisition after the date hereof by an individual or legal entity or "group"
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 50% of the
voting securities of the Company, (ii) a replacement at one time or over time of
more than one-half of the members of the Company's board of directors which is
not approved by a majority of those individuals who are members of the board of
directors on the date hereof (or by those individuals who are serving as members
of the board of directors on any date whose nomination to the board of directors
was approved by a majority of the members of the board of directors who are
members on the date hereof), (iii) the merger of the Company with or into
another entity, consolidation or sale of all or substantially all of the assets
of the Company in one or a series of related transactions, or (iv) the execution
by the Company of an agreement to which the Company is a party or by which it is
bound, providing for any of the events set forth above in (i), (ii) or (iii).


                                      -14-
<PAGE>

            "Common Stock" means the common stock, $.00025 par value, of the
Company and stock of any other class into which such shares may hereafter have
been reclassified or changed.

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

            "Mandatory Prepayment Amount" for any Debentures shall equal the sum
of (i) the greater of (A) 120% of the principal amount of Debentures to be
prepaid, plus all accrued and unpaid interest thereon and (B) the principal
amount of Debentures to be prepaid, plus all accrued and unpaid interest
thereon, divided by the Conversion Price on (x) the date the Mandatory
Prepayment Amount is demanded or otherwise due or (y) the date the Mandatory
Prepayment Amount is paid in full, whichever is less, multiplied by the Average
Price on (x) the date the Mandatory Prepayment Amount is demanded or (y) the
date the Mandatory Prepayment Amount is paid in full, whichever is greater, and
(ii) all other amounts, costs, expenses and liquidated damages due in respect of
such Debentures.

            "Original Issue Date" shall mean the date of the first issuance of
the Debentures regardless of the number of transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence such
Debenture.

            "Per Share Market Value" on any particular date means (a) the
closing bid price per share of the Common Stock on such date on a Subsequent
Market, or (b) if the Common Stock is not then listed or quoted on a Subsequent
Market, the closing bid price per share of the Common Stock on such date on the
OTC Bulletin Board, or (c) if the Common Stock is not then listed or quoted on
the OTC Bulletin Board, the closing bid price per share of the Common Stock on
such date on the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding its
functions of reporting prices), or (d) if the Common Stock is not then reported
by the National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices), then the average of the "Pink
Sheet" quotes for the relevant conversion period, as determined in good faith by
the Holder, or (e) if the Common Stock is not then publicly traded, the fair
market value of a share of Common Stock as determined by an Appraiser selected
in good faith by the Holders of a majority interest of the principal amount of
Debentures.

            "Person" means a corporation, an association, a partnership,
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.

            ["Purchase Agreement" means a Securities Purchase Agreement between
the Company and the original Holder, as amended modified or supplemented from
time to time in accordance with its terms.]

            "Registration Rights Agreement" means the Registration Rights
Agreement between the Company and the original Holder, as amended, modified or
supplemented from time to time in accordance with its terms.


                                      -15-
<PAGE>

            "Security Agreement" means the Security Agreement, dated as of the
date hereof between the Company and the original Holder, as amended modified or
supplemented from time to time in accordance with its terms.

            "Trading Day" means (a) a day on which the Common Stock is traded on
a Subsequent Market, or (b) if the Common Stock is not listed or quoted on a
Subsequent Market, a day on which the Common Stock is traded on the
over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the
Common Stock is not then listed or quoted on the OTC Bulletin Board, a day on
which the Common Stock is quoted on the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, however, that in
the event that the Common Stock is not listed or quoted as set forth in (a), (b)
and (c) hereof, then Trading Day shall mean a Business Day.

            "Underlying Shares" means the shares of Common Stock issuable upon
conversion of Debentures or as payment of interest in accordance with the terms
hereof.

            Section 7. Except as expressly provided herein, no provision of this
Debenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of, interest and liquidated damages (if
any) on, this Debenture at the time, place, and rate, and in the coin or
currency, herein prescribed. This Debenture is a direct obligation of the
Company. This Debenture ranks pari passu with all other Debentures now or
hereafter issued under the terms set forth herein. The Company may not
voluntarily prepay the outstanding principal amount of the Debentures except
with the previous written consent of the Holders.

            Section 8. This Debenture shall not entitle the Holder to any of the
rights of a stockholder of the Company, including without limitation, the right
to vote, to receive dividends and other distributions, or to receive any notice
of, or to attend, meetings of stockholders or any other proceedings of the
Company, unless and to the extent converted into shares of Common Stock in
accordance with the terms hereof. As long as there are Debentures outstanding,
the Company shall not and shall cause it subsidiaries not to, without the
consent of the Holders, (i) amend its certificate of incorporation, bylaws or
other charter documents so as to adversely affect any rights of the Holders;
(ii) repay, repurchase or offer to repay, repurchase or otherwise acquire shares
of its Common Stock or other equity securities; or (iii) enter into any
agreement with respect to any of the foregoing

            Section 9. If this Debenture shall be mutilated, lost, stolen or
destroyed, the Company shall execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Debenture, or in lieu of or in
substitution for a lost, stolen or destroyed debenture, a new Debenture for the
principal amount of this Debenture so mutilated, lost, stolen or destroyed but
only upon receipt of evidence of such loss, theft or destruction of such
Debenture, and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Company.


                                      -16-
<PAGE>

            Section 10. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of laws thereof. The Company and the Holders hereby irrevocably submit
to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, or that such suit, action or proceeding is
improper. Each of the Company and the Holder hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by receiving a copy thereof sent to the Company at the address in
effect for notices to it under this instrument and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.

            Section 11. Any waiver by the Company or the Holder of a breach of
any provision of this Debenture shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Debenture. The failure of the Company or the Holder to insist
upon strict adherence to any term of this Debenture on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Debenture. Any waiver must be in writing.

            Section 12. If any provision of this Debenture is invalid, illegal
or unenforceable, the balance of this Debenture shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

            Section 13. 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 (or, if such next succeeding Business Day falls in
the next calendar month, the preceding Business


                                      -17-
<PAGE>

Day in the appropriate calendar month).

            Section 14. The payment obligations under this Debenture and the
obligations of the Company to the Holder arising upon the conversion of all or
any of the Debentures in accordance with the provisions hereof are secured
pursuant to the Security Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGE FOLLOWS]


                                      -18-
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Secured Convertible
Debenture to be duly executed by a duly authorized officer as of the date first
above indicated.

                              EUROTECH, LTD.


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

Attest:


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

<PAGE>

                                   EXHIBIT A

                             NOTICE OF CONVERSION

(To be Executed by the Registered Holder
in order to Convert the Debenture)

The undersigned hereby elects to convert the attached Debenture into shares of
common stock, $.00025 par value (the "Common Stock"), of EUROTECH, LTD. (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

                              __________________________________________________
                              Principal Amount of Debentures to be Converted
 
                              __________________________________________________
                              Number of shares of Common Stock to be Issued

                              __________________________________________________
                              Applicable Conversion Price

                              __________________________________________________
                              Signature

                              __________________________________________________
                              Name

                              __________________________________________________
                              Address
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 237828}]
{"company-data": {"conformed-name": "EUROTECH LTD", "cik": "0001033030", "assigned-sic": "4955", "irs-number": "592855398", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-22129", "film-number": "99515739"}, "business-address": {"street1": "1101 30TH STREET N W", "street2": "STE 500", "city": "WASHINGTON", "state": "DC", "zip": "20007", "phone": "6195516844"}, "mail-address": {"street1": "1200 PROSPECT STREET", "street2": "STE 425", "city": "LA JOLLA", "state": "CA", "zip": "92037"}}
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                        Date of Report: January 25, 1999

                                 Eurotech, Ltd.
             (Exact name of registrant as specified in its charter)

     District of Columbia          000-22129              59-2855398
(State or other jurisdiction of    (Commission            (I.R.S. Employer
 incorporation or organization)    File Number)           Identification No.)

            1101 30th Street, N.W., Suite 500, Washington, D.C. 20007
                    (Address of principal executive offices)

                                 (202) 625-4382
               Registrant's telephone number, including area code
Item 5. Other Events.

      A. Board of Directors.

      On January 10, 1999, the Board of Directors accepted the resignation of
Melvin Braun as a member of the Board of Eurotech, Ltd. (the "Company"). In a
letter to the Board of Directors, Mr. Braun cited health concerns as the reason
for his resignation.

      By resolution dated January 10, 1999, the remaining members of the Board
of Directors appointed Dr. Randolph Graves, Jr. to serve as a member of the
Board until the next meeting of shareholders at which directors are elected. Dr.
Graves previously had served as a Director and the Chairman and Chief Executive
Officer on the Board of Directors of the Company from 1995 through January 1998.

      During the last twelve months, Dr. Graves has acted as a technology
consultant for Graves Technology, Inc. focusing on the marketing of technologies
to overseas entities. From 1995 to early 1998, he served as a Director and the
Chairman and Chief Executive Officer of the Company and was responsible for
negotiating the acquisition of the Company's primary technologies and developing
a marketing plan with respect to such technologies. From November 1992 until
January 1995, Dr. Graves was the President and Chief Executive Officer of Mosaic
Multisoft Corp., a computer software company. From February 1991 until November
1992, Dr. Graves was President of Graves Technology, Inc., a technology
consulting company. From September 1989 to January 1991, Dr. Graves was the Vice
President-Applications of Super Computing Solutions, Inc., a computer software
development company. From June 1963 to September 1989, Dr. Graves was the
Research and Development Division Director of the National Aeronautics and Space
Administration in Washington, D.C. Dr. Graves received his Doctor of Science
degree from the George Washington University and a Masters degree in Business
From Stanford University.

      On January 7, 1999, the Board of Directors appointed David Wilkes as the
Chairman of the Board of the Company. A biography of Mr. Wilkes appears in the
Company's Current Report on Form 8-K filed with the Securities and Exchange
Commission ("SEC") on December 15, 1999.

      B. Appointment of President.

      On January 10, 1999, the Board of Directors appointed Frank Fawcett to
serve as the President and Chief Executive Officer of the Company for a period
of three months pursuant to the terms of a certain letter agreement dated
January 11, 1999 (the "Fawcett Agreement"). Mr. Fawcett was engaged to focus on
(i) developing a business and marketing plan, (ii) implementing the marketing
plan and (iii) securing financing for the Company. In accordance with the
Fawcett Agreement, the Company will pay to Mr. Fawcett a weekly salary of $2,000
plus expenses. At the conclusion of the term of Mr. Fawcett's employment under
the Fawcett Agreement, the Company and Mr. Fawcett will review his performance
and make a determination as to whether to execute a new agreement by which Mr.
Fawcett would be engaged on a continuing basis by the Company.

                                        2
Mr. Fawcett business experience has emphasized product marketing. Prior to
joining the Company, from 1995 to 1997, Mr. Fawcett served as the President of
Isbre Holdings Corporation, a holding company which imported bottled water from
Norway, where he was responsible for national and international distribution and
assisted the company in having its stock listed on the Nasdaq market. From 1993
to 1995, he was the President of Fawcett International Investment Corporation
providing business consulting services designed to increase a company's revenues
and streamline its operations. From 1991 to 1993, Mr. Fawcett serves as the
Director of International Investments of Newcomb & Company where he developed
new business for investments into US corporations including airlines and oil
companies. From 1987 to 1993, Mr. Fawcett was the Vice President-Operations and
later Vice President-Sales and Marketing of Eastern Technologies, Ltd., where he
was responsible for sales of aircraft and related technology to the United
States government. From 1985 to 1987, he served as the Executive Vice President
and a principal of Interactive Technologies, Ltd., where he developed and
implemented procedures to permit companies to act as prime contractors with the
US and foreign governments.. From 1983 to 1986, he served as the Executive Vice
President and as a principal of Siska Construction where he was responsible for
marketing, project development, bids, proposals, and insurance and bonding for
government projects in a business targeted at new construction and
rehabilitation of military bases, courthouses, embassies and alert crew
facilities. From 1965 to 1984, Mr. Fawcett served as the Program Materials
Manager of Lockheed/Sanders Associates where he was responsible for the
manufacture of flight line testers for the entire arsenal of the US Air Force.

      C. Material Agreements.

      The Company has entered into a series of agreements with two persons
pursuant to which it will borrow up to an aggregate of $500,000. In accordance
with a certain agreement dated January 6, 1999 between the Company and David
Wilkes (the "Wilkes Agreement"), a Director and the Chairman of the Board of the
Company ("Mr. Wilkes"), Mr. Wilkes agreed to loan the Company the sum of
$100,000 (the "Wilkes Loan"). To date, Mr. Wilkes has funded $50,000 of the
total amount to be loaned by him under the Wilkes Agreement, which sum is
evidenced by a secured promissory note dated January 7, 1999 (the "First Wilkes
Note"). Mr. Wilkes has agreed to deliver the remaining $50,000 required under
the Wilkes Agreement by March 31, 1999, which sum shall be evidenced by a
secured promissory note substantially similar to the First Wilkes Note (the
second promissory note to be delivered by the Company to Wilkes is herein
referred to as the "Second Wilkes Note" which, together with the First Wilkes
Note, are sometimes herein referred to as the "Wilkes Notes"). The Company is
entitled to use the proceeds derived from the Wilkes Notes in the discretion of
the Board of Directors. The First Wilkes Note is payable on January 7, 2000 and
the Second Wilkes Note will be payable one year from the date the Company
receives funding from Mr. Wilkes. The Wilkes Notes bear interest at the rate of
13% per annum and are prepayable by the Company at any time prior to maturity.
The Wilkes Notes are secured by all of the intangible property of the Company
pursuant to the terms of a Security Agreement (as hereafter defined), a summary
of which is set forth below.

      On January 6, 1999, JNC Strategic Fund Ltd. ("JNC") extended a loan to the
Company of $400,000 (the JNC Loan"), which loan is evidenced by a secured
promissory note dated January 6, 1999 in like amount (the "JNC Note" and the JNC
Note and the Wilkes Notes may sometime herein

                                        3
be referred to as the "Notes"). The JNC Note is payable on January 6, 2000 or
such earlier date pursuant to the terms thereof, with interest accrued at the
rate of 13% per annum and is prepayable by the Company at any time prior to
maturity. The JNC Note is secured by all of the intangible property of the
Company pursuant to the terms of the Security Agreement, a summary of which is
set forth below. The JNC Note is convertible into the Company's 8% Secured
Convertible Debenture due three years from the date of issuance, a summary of
which is set forth below.

      The proceeds of the JNC Loan (the "JNC Loan Proceeds") were delivered into
escrow and will be released from such escrow in accordance with the provisions
of an escrow agreement dated as of January 6, 1999 (the "Escrow Agreement").
Pursuant to the terms of the Escrow Agreement, the Company is entitled to draw
upon the JNC Loan Proceeds by providing JNC with not more than fifteen nor less
than five business days' written notice of its desire to use some or all of the
then undistributed or unreturned JNC Loan Proceeds, which notice must describe
the purpose to which Company proposes to apply such funds (a "Use Notice"). JNC
shall have two business days from its receipt of such Use Notice to approve or
disapprove of the amount and use of the JNC Loan Proceeds as set forth therein.
The decision of JNC to approve or disapprove of the use of JNC Loan Proceeds set
forth in any Use Notice is at the sole discretion of JNC. Failure by the Company
to utilize the JNC Loan Proceeds requested in accordance with a Use Notice
constitutes a default under the terms of the Escrow Agreement. If JNC
disapproves of the amount or use of the JNC Loan Proceeds as set forth in a Use
Notice, the Company may thereafter deliver a second Use Notice for the use of
the JNC Loan Proceeds then held in escrow. If JNC again disapproves of such Use
Notice and the Company and JNC do not agree as to the use of such JNC Loan
Proceeds within twenty business days after the date of the last Use Notice
relating to the use of such proceeds, then JNC has the right to require the
escrow agent holding the JNC Loan Proceeds to deliver to JNC the full amount of
the JNC Loan Proceeds then held in escrow.

      As additional consideration for making the JNC Loan and the Wilkes Loan,
the Company issued common stock purchase warrants to each of Mr. Wilkes (the
"Wilkes Warrant") and JNC (the "JNC Warrant" and, together with the Wilkes
Warrants, the "Warrants"). The Company issued to Mr. Wilkes a warrant entitling
him to purchase up to 9,375 shares of Common Stock in connection with the First
Wilkes Note and will issue a like warrant upon funding of the Second Wilkes
Note. The Company issued to JNC a warrant to purchase up to 75,000 shares of
Common Stock. The Warrants entitle the holders to purchase the number of shares
of Common Stock specified therein for a period of five years from the date of
issuance at a price equal to 110% of the average of the closing bid price per
share of the Common Stock on the OTC Bulletin Board during the five (5) trading
days immediately preceding the date of issuance of such warrants. The holders of
the Warrants were granted "piggy-back" registration rights with respect to all
of the shares of Common Stock issuable upon exercise thereof (the "Warrant
Shares"), which obligates the Company to include the Warrant Shares (or any
portion thereof as the holder may elect) in any registration statement under the
Securities Act of 1933 (the "Act") that the Company files with the SEC (other
than registration statements on Form S-8 or Form S-4 covering securities issued
by the Company pursuant to an employee benefit plan or in connection with a
merger, acquisition or similar transaction, respectively). Further, the holders
of the Warrants, when the Warrant Shares are not registered pursuant to an
effective registration statement, may demand registration of the Warrant Shares
under the Act (a

                                        4
"Demand Registration"). The right to cause such registration of the Warrant
Shares shall be limited to one such registration. The Company has agreed to pay
all expenses in connection with any Demand Registration.

      The JNC Note is convertible at any time after issuance until maturity into
the Company's 8% Secured Convertible Debenture due three years after the date of
issuance (the "JNC Debenture"). The JNC Debenture bears interest at the rate of
8% per annum, payable quarterly, in cash or Common Stock at the option of the
Company.

      The JNC Debenture is convertible into number of shares of Common Stock as
is determined by dividing the outstanding principal amount of the JNC Debenture,
plus all accrued but unpaid interest thereon, by the Conversion Price (as
hereafter defined), subject to adjustment as provided therein. The conversion
price (the "Conversion Price") in effect on the date of any conversion is equal
to the lesser of (a) the average of the closing bid price per share of the
Common Stock on the OTC Bulletin Board during the five trading days immediately
preceding the date of issuance of the JNC Debenture and (b) 75% of the average
of the closing bid price per share of the Common Stock on the OTC Bulletin Board
during the five trading day period immediately preceding the applicable date
upon which the holder seeks to convert the JNC Debenture. The Conversion Price
and consequently, the number of shares of Common Stock into which the JNC
Debenture is convertible, is subject to adjustment under certain circumstances,
including, among other things, in the event that the Company (i) issues
additional Common Stock as a dividend or otherwise, or subdivides or
reclassifies the class of Common Stock, (ii) issues securities or debt that is
convertible into or exchangeable for shares of Common Stock entitling any person
to acquire shares of Common Stock at a price per share less than the Conversion
Price, or (iii) reclassifies or agrees to exchange its stock for other
securities.

      The Company has agreed that it will file with the SEC, at its expense, a
registration statement covering the resale of the shares of Common Stock
underlying the JNC Debenture. The Company shall use its best efforts to keep
such registration statement continuously effective under the Act until the date
which is three years after the date that such registration statement is declared
effective by the SEC or such earlier date when all of the shares issuable upon
conversion of the JNC Debenture covered by the registration statement have been
sold or may be sold without volume restrictions pursuant to Rule 144(k)
promulgated under the Act.

      As an inducement for Wilkes and JNC to make the Wilkes Loan and the JNC
Loan, respectively, and to secure the timely payment of its obligations under
the Notes and under those certain 8% Secured Convertible Debentures due July 20,
2001 in an aggregate principal amount of $1,000,000 issued by the Company in
favor of JNC on July 20, 1998 (the Company's obligations under said debentures
are herein referred to as the "July Obligations"), the Company entered into a
Security Agreement dated as of January 6, 1999 (the "Security Agreement")
whereby it granted a security interest to each of Mr. Wilkes and JNC (for
purposes of the discussion relating to the Security Agreement, Mr. Wilkes and
JNC may sometimes be referred to as the "Secured Parties") in all of the
Company's right, title and interest in and to all trademarks, patents,
copyrights, and other general intangible property of the Company, all trade
secrets, intellectual property rights in computer

                                        5
software and computer software products, design rights which may be available to
the Company, rights to proceeds arising from any and all claims for damages by
way of past, present and future infringement of any Collateral (as hereafter
defined) with the right but not the obligation to sue on behalf of and collect
such damages for said use or infringement, licenses to use any of the
copyrights, patents or trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights. The term
"Collateral" includes all of the foregoing items, whether presently owned or
existing or acquired or coming into existence after the date of the Security
Agreement, all additions and accessions thereto, all substitutions and
replacements thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the license, sale or other
transfer of Collateral and of insurance covering the same and of any tort claims
in connection therewith.

      In the event of any default under the Security Agreement, the Secured
Parties are entitled, among other things, to exercise all remedies conferred
under the JNC Note, the July Obligations, the JNC Debenture and the Escrow
Agreement and Mr. Wilkes has the right to exercise all remedies conferred under
the Wilkes Notes, and each Secured Party has all the rights and remedies of a
secured party under the UCC and/or any other applicable law (including the
Uniform Commercial Code of any jurisdiction in which any property subject to the
Security Agreement is then located). Without limitation, the Secured Parties
shall have the right to (i) take possession of all tangible manifestations or
embodiments of the Collateral, (ii) operate the business of the Company using
the Collateral and shall have the right to assign, sell, or otherwise dispose of
and deliver all or any part of the Collateral, at public or private sale or
otherwise in such ever manner and for such ever consideration as it they see
fit, including the right to purchase all or any part of the Collateral being
sold, free from and discharged of all trusts, claims, right of redemption and
equities of the Company: (iii) license or, to the same extent the Company is
permitted by law and contract to do so, sublicense, whether or an exclusive or
non-exclusive basis, any of the Collateral throughout the world for such term,
on such conditions and in such manner as the Secured Parties shall, in their
sole discretion, determine; (iv) (without assuming any obligations or
liabilities thereunder), at any time, enforce against any licensee or
sublicensee of the Collateral all rights and remedies of the Company in, to and
under any license agreement with respect to such Collateral; (v) in order to
implement the assignment, license, sale or other disposition of any of the
Collateral pursuant to the Security Agreement, execute and deliver on behalf of
the Company one or more instruments of assignment of the Collateral in form
suitable for filing, recording or registration in any jurisdictions as the
Secured Parties may determine advisable. The Secured Parties rights shall
continue in the Collateral until all obligations under the various agreements
and securities described above shall have been satisfied by the Company.

      Defaults under the Security Agreement include the following: (i) the
failure by the Company to pay any amounts of principal or interest when, as, and
in the amount due, pursuant to the Notes, the July Obligations or the JNC
Debenture; (ii) if any representation or warranty of the Company in the Security
Agreement shall prove to have been incorrect in any material respect when made;
(iii) the failure by the Company to observe or perform any of its obligations
under the Security Agreement for ten days after receipt by the Company of notice
of such failure from JNC or its assignee(s); and (iv) any default under the
Escrow Agreement, the July Obligations or the JNC Debenture.

                                        6
The Security Agreement appoints the Secured Parties, and their respective
officers, agents, successors or assigns with full power of substitution, as the
Company's true and lawful attorney-in-fact, with power, in their own name or in
the name of the Company, to, after the occurrence and during the continuance of
any default thereunder, (i) endorse any notes, checks, drafts, money orders, or
other instruments of payment (including payments payable under or in respect of
any policy of insurance) in respect of the Collateral that may come into
possession of the Secured Parties; (ii) to sign and endorse any UCC financing
statement or any other documents relating to the Collateral; (iii) to pay or
discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral; (iv) to demand,
collect, receipt for, compromise, settle and sue for monies due in respect of
the Collateral; and (v) generally, to do, at the option of the Secured Parties,
and at the Company's expense, at any time, or from time to time, all acts and
things which the Secure Parties deem necessary to protect, preserve and realize
upon the Collateral and the security interest granted therein in order to effect
the intent of the Security Agreement, the Notes, the July Obligations and the
JNC Debenture. The power of attorney is coupled with an interest and is
irrevocable for the term of the Security Agreement and thereafter until all of
the Company's obligations outstanding under the various agreements discussed
herein and the July Obligations are satisfied.

Item 7(c). Exhibits.

      (a) Agreement between the Company and David Wilkes dated January 6, 1999
pursuant to which Mr. Wilkes agrees to extend loans to the Company.

      (b) Secured promissory note in the principal amount of $400,000 made in
favor of JNC Strategic Fund Ltd. due January 6, 2000.

      (c) Secured promissory note in the principal amount of $50,000 made in
favor of David Wilkes due January 6, 2000.

      (d) Form of secured promissory note in the principal amount of $50,000 to
be issued in favor of David Wilkes upon the delivery of funds in like amount due
one year from the date of funding.

      (e) Form of Escrow Agreement dated as of January 6, 1999 among the
Company, JNC Strategic Fund Ltd. and Encore Capital Management, L.L.C. as escrow
agent.

      (f) Warrant to purchase 75,000 shares of Common Stock issued in favor of
JNC Strategic Fund Ltd.

      (g) Warrant to purchase 9,375 shares of Common Stock issued in favor of
David Wilkes.

      (h) Security Agreement dated as of January 6, 1998 among the Company, JNC
Strategic Fund Ltd. and David Wilkes.

      (i) Form of 8% Secured Convertible Debenture issuable upon conversion of
the promissory notes made in favor of JNC Strategic Fund Ltd.

                                        7
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                            EUROTECH, LTD.

Dated: January 26, 1999                     By: /s/ Frank Fawcett
                                                ----------------------------
                                                Frank Fawcett, President and 
                                                Chief Executive Officer

                                        8
Confidential
                                                              Draft dated 1/4/99

                                    AGREEMENT

            This Agreement, dated as of January __, 1999, is made by and between
David Wilkes ("Wilkes") and Eurotech, Ltd. (the "Company").

            For valuable consideration, the receipt and sufficiency are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

      1. Wilkes shall, concurrently with his execution and delivery of this
Agreement, loan the Company the principal sum of $50,000. Such loan shall be
evidenced by a Secured Promissory Note of the Company, in the form of Exhibit A
attached hereto, and secured by a Security Agreement, in the form of Exhibit B
attached hereto (the "Security Agreement").

      2. By January 31, 1999, Wilkes shall loan the Company an additional
principal sum of $50,000. Such loan shall be evidenced by a Secured Promissory
Note of the Company, in the form of Exhibit A attached hereto, and secured by
the Security Agreement.

      3. This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York, without regard to the principal of
conflicts of laws thereof.

      4. The Company and Wilkes understand and acknowledge that JNC Strategic
Fund Ltd. is relying on the making of the loans contemplated in this Agreement
in determining whether to loan up to $400,000 to the Company.

      5. Each of Wilkes and the Company represent and warrant to the other that
it has the requisite power and authority to enter into and consummate the
transactions contemplated by this Agreement and that, when executed and
delivered in accordance with the terms hereof, this Agreement, the Promissory
Notes and the Security Agreement, shall be the legally valid and binding
obligations of such party, enforceable against such party in accordance with its
respective terms.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.

                                    EUROTECH, LTD.

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

                                    DAVID WILKES

                                    -----------------------------
SECURED PROMISSORY NOTE

$400,000                                                         January 6, 1999

            FOR VALUE RECEIVED, EUROTECH, LTD., a corporation organized under
the laws of the District of Columbia ("Maker"), hereby promises to pay to JNC
Strategic Fund Ltd., or its successors and assigns ("Payee"), at its address c/o
Encore Capital Management, L.L.C., 12007 Sunrise Valley Drive, Suite 460,
Reston, VA 20191, or to such other address as Payee shall provide in writing to
Maker for such purpose, in lawful money of the United States of America, the
principal sum of FOUR HUNDRED THOUSAND DOLLARS ($400,000), on January 6, 2000
(the "Maturity Date") or on such earlier date as such principal amount may
become due and payable pursuant to the terms hereof.

            At the sole option of Payee, at any time after the date hereof and
prior to the Maturity Date the principal amount and any accrued and unpaid
interest due under this Secured Promissory Note (the "Promissory Note") may be
exchanged, in whole or in part, for an 8% Secured Convertible Debenture of the
Maker, substantially in the form of Exhibit A attached hereto. In the event of
such an exchange, the Maker shall, promptly thereafter and, in any event, within
fifteen (15) days thereafter, enter into (or where appropriate, amend)
definitive agreements and prepare, deliver and file all certificates, legal
opinions and consents substantially similar to those entered into, prepared,
delivered and filed in connection with sale to Payee of the Maker's 8%
Convertible Debentures due July 20, 2001and acceptable to Payee.

            This Promissory Note shall be subject to the terms and conditions of
each of the Escrow Agreement of even date herewith among Maker, Payee and Encore
Capital Management, L.L.C. (the "Escrow Agreement") and the Security Agreement,
effective as of the date hereof, among Maker, Payee and David Wilkes (the
"Security Agreement").

            The Payee shall have the right to declare immediately due and
payable all then unpaid principal and accrued interest due under this Promissory
Note if (a) Maker breaches any material term or condition of the Escrow
Agreement, or the Warrant of Maker of even date herewith, pursuant to which
Payee has the right to acquire 75,000 shares of the Maker's Common Stock, or (b)
there shall occur an Event of Default under the Security Agreement, or (c) the
Maker becomes obligated to make, prior to January 6, 2000, any payment under the
Maker's Secured Promissory Note to David Wilkes, due January 6, 2000, or (d) the
Maker makes, or becomes obligated to make, prior to January 7, 2000, any payment
under the Maker's Secured Promissory Note to David Wilkes, due January 7, 2000,
other than as permitted therein or (e) the Security Agreement is not executed by
January 20, 1999, or (f) the security interest granted by the Security Agreement
is not perfected by January 20, 1999.
Interest shall accrue on the unpaid principal amount of this
Promissory Note at the rate of 13% per annum from the date hereof until such
unpaid principal amount is paid in full. Interest shall be payable on the
Maturity Date, or such earlier date as such amounts may be due hereunder,
computed on the basis of a 365-day year for the actual number of days elapsed.

            All payments of principal and interest shall be made without setoff,
deduction or counterclaim. No delay or failure on the part of Payee in
exercising any of its options, powers or rights, nor any partial or single
exercise of its options, powers or rights shall constitute a waiver thereof or
of any other option, power or right, and no waiver on the part of Payee of any
of its options, powers or rights shall constitute a waiver of any other option,
power or right. Maker hereby waives presentment of payment, protest, and all
notices or demands in connection with the delivery, acceptance, performance,
default or endorsement of this Promissory Note. Acceptance by Payee of less than
the full amount due and payable hereunder shall in no way limit the right of
Payee to require full payment of all sums due and payable hereunder in
accordance with the terms hereof.

            No term or provision contained herein may be modified, amended or
waived except by written agreement or consent signed by the party to be bound
thereby.

            The rights and remedies of Payee expressed herein are cumulative and
not exclusive of any rights and remedies otherwise available.

            If this obligation is placed in the hands of an attorney for
collection after default, and provided Payee prevails on the merits in respect
to its claim of default, Maker shall pay (and shall indemnify and hold harmless
Payee from and against), all reasonable attorneys' fees and expenses incurred by
Payee in pursuing collection of this Promissory Note.

            This Promissory Note shall be binding upon the Maker and its
successors and shall inure to the benefit of the Payee and its successors and
assigns. The term "Payee," as used herein, shall also include any endorsee,
assignee or other holder of this Promissory Note.

            This Promissory Note has been duly authorized, executed and
delivered by Maker and is the legal obligation of Maker, enforceable against
Maker in accordance with its terms.

            If this Promissory Note is lost, stolen, mutilated or otherwise
destroyed, Maker shall execute and deliver to Payee a new promissory note
containing the same terms, and in the same form, as this Promissory Note. In
such event, Maker may require Payee to deliver to Maker an affidavit of lost
instrument and customary indemnity in respect thereof as a condition to the
delivery of any such new promissory note.

            This Promissory Note shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York without regard to
the principles of conflicts of law thereof. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or

                                       -2-
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Promissory Note and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.

                                  * * * * * * *

                                       -3-
IN WITNESS WHEREOF, Maker has caused this Promissory Note to be duly
executed and delivered as of the day and year first set forth above.

                        EUROTECH, LTD.

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

                                       -4-
SECURED PROMISSORY NOTE

$50,000                                                          January 6, 1999

            FOR VALUE RECEIVED, EUROTECH, LTD., a corporation organized under
the laws of the District of Columbia ("Maker"), hereby promises to pay to David
Wilkes ("Payee"), at his address at 15 Somerset Drive South, Great Neck, NY
10020, or to such other address as Payee shall provide in writing to Maker for
such purpose, in lawful money of the United States of America, the principal sum
of FIFTY THOUSAND DOLLARS ($50,000), on the later to occur of January 6, 2000
and the date on which the Company's obligations under its $400,000 Secured
Promissory Note to JNC Strategic Fund Ltd. (the "Strategic Note") is repaid in
full or exchanged into the Company's debentures pursuant to its terms thereof
(the "Maturity Date").

            This Secured Promissory Note shall be subject to the terms and
conditions of the Security Agreement, effective as of the date hereof, among
Maker, JNC Strategic Fund Ltd. and Payee (the "Security Agreement"). This
Secured Promissory Note is one of the two Secured Promissory Notes contemplated
by the Agreement, dated as of January 6, 1999, between Payee and Maker.

            The Payee shall have the right to declare immediately due and
payable all then unpaid principal and accrued interest due under this Promissory
Note if (a) there shall occur an Event of Default under the Security Agreement,
or (b) the Security Agreement is not executed by January 20, 1999, or (c) the
security interest granted by the Security Agreement is not perfected by January
20, 1999.

            Interest shall accrue on the unpaid principal amount of this Secured
Promissory Note at the rate of 13% per annum from the date hereof until such
unpaid principal amount is paid in full. Interest shall be payable on the
Maturity Date, or such earlier date as such amounts may be due hereunder,
computed on the basis of a 365-day year for the actual number of days elapsed.

            All payments of principal and interest shall be made without setoff,
deduction or counterclaim. No delay or failure on the part of Payee in
exercising any of its options, powers or rights, nor any partial or single
exercise of its options, powers or rights shall constitute a waiver thereof or
of any other option, power or right, and no waiver on the part of Payee of any
of its options, powers or rights shall constitute a waiver of any other option,
power or right. Maker hereby waives presentment of payment, protest, and all
notices or demands in connection with the delivery, acceptance, performance,
default or endorsement of this Secured Promissory Note. Acceptance by Payee of
less than the full amount due and payable hereunder shall in no way limit the
right of Payee to require full payment of all sums due and payable hereunder in
accordance with the terms hereof.
Except with respect to the immediately following sentence, which may
not be modified, amended or waived, no term or provision contained herein may be
modified, amended or waived except by written agreement or consent signed by the
party to be bound thereby. Maker shall not pay any obligation under this Note
prior to the Maturity Date, or such earlier date as such payment shall become
due hereunder.

            The rights and remedies of Payee expressed herein are cumulative and
not exclusive of any rights and remedies otherwise available.

            If this obligation is placed in the hands of an attorney for
collection after default, and provided Payee prevails on the merits in respect
to its claim of default, Maker shall pay (and shall indemnify and hold harmless
Payee from and against), all reasonable attorneys' fees and expenses incurred by
Payee in pursuing collection of this Secured Promissory Note.

            This Secured Promissory Note shall be binding upon the Maker and its
successors and shall inure to the benefit of the Payee and its permitted
successors and assigns.

            This Secured Promissory Note has been duly authorized, executed and
delivered by Maker and is the legal obligation of Maker, enforceable against
Maker in accordance with its terms.

            If this Secured Promissory Note is lost, stolen, mutilated or
otherwise destroyed, Maker shall execute and deliver to Payee a new promissory
note containing the same terms, and in the same form, as this Secured Promissory
Note. In such event, Maker may require Payee to deliver to Maker an affidavit of
lost instrument and customary indemnity in respect thereof as a condition to the
delivery of any such new promissory note.

            This Secured Promissory Note shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Secured Promissory Note and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.

                                  * * * * * * *

                                       -2-
IN WITNESS WHEREOF, Maker has caused this Promissory Note to be duly
executed and delivered as of the day and year first set forth above.

                        EUROTECH, LTD.

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

                                       -3-
SECURED PROMISSORY NOTE

$50,000                                                          January 7, 1999

            FOR VALUE RECEIVED, EUROTECH, LTD., a corporation organized under
the laws of the District of Columbia ("Maker"), hereby promises to pay to David
Wilkes ("Payee"), at his address at 15 Somerset Drive South, Great Neck, NY
10020, or to such other address as Payee shall provide in writing to Maker for
such purpose, in lawful money of the United States of America, the principal sum
of FIFTY THOUSAND DOLLARS ($50,000), on the later to occur of January 7, 2000
and the date on which the Company's obligations under its $400,000 Secured
Promissory Note to JNC Strategic Fund Ltd. (the "Strategic Note") is repaid in
full or exchanged into the Company's debentures (the "Strategic Debentures")
pursuant to its terms thereof (the "Maturity Date").

            This Secured Promissory Note shall be subject to the terms and
conditions of the Security Agreement, effective as of the date hereof, among
Maker, JNC Strategic Fund Ltd. and Payee (the "Security Agreement"). This
Secured Promissory Note is one of the two Secured Promissory Notes contemplated
by the Agreement, dated as of January 6, 1999, between Payee and Maker.

            The Payee shall have the right to declare immediately due and
payable all then unpaid principal and accrued interest due under this Promissory
Note if (a) there shall occur an Event of Default under the Security Agreement,
or (b) the Security Agreement is not executed by January 20, 1999, or (c) the
security interest granted by the Security Agreement is not perfected by January
20, 1999.

            Interest shall accrue on the unpaid principal amount of this Secured
Promissory Note at the rate of 13% per annum from the date hereof until such
unpaid principal amount is paid in full. Interest shall be payable on the
Maturity Date, or such earlier date as such amounts may be due hereunder,
computed on the basis of a 365-day year for the actual number of days elapsed.

            All payments of principal and interest shall be made without setoff,
deduction or counterclaim. No delay or failure on the part of Payee in
exercising any of its options, powers or rights, nor any partial or single
exercise of its options, powers or rights shall constitute a waiver thereof or
of any other option, power or right, and no waiver on the part of Payee of any
of its options, powers or rights shall constitute a waiver of any other option,
power or right. Maker hereby waives presentment of payment, protest, and all
notices or demands in connection with the delivery, acceptance, performance,
default or endorsement of this Secured Promissory Note. Acceptance by Payee of
less than the full amount due and payable hereunder shall in no way limit the
right of Payee to require full payment of all sums due and payable hereunder in
accordance with the terms hereof.
Except with respect to the immediately following sentence, which may
not be modified, amended or waived, no term or provision contained herein may be
modified, amended or waived except by written agreement or consent signed by the
party to be bound thereby. Maker shall not pay any obligation under this Note
prior to the Maturity Date, or such earlier date as such payment shall become
due hereunder.

            The Maker shall not have the right to pay any obligations under this
Note prior to the date on which either the Maker's obligations under either the
Strategic Note or the Strategic Debentures (as applicable) are repaid in full or
such earlier date as such payment shall become due and payable hereunder,
provided, that if at any time after the date hereof the Maker's obligations
under either the Strategic Note or the Strategic Debentures (as applicable) have
been partially repaid, then the Maker shall have the right to pay an equivalent
pro-rata portion of the obligations due under this Note (by way of example, if
the Maker shall repay an aggregate of $100,000 of the obligations due under the
Strategic Note, the Maker shall thereafter be permitted to repay an aggregate of
$12,500 of the obligations under this Note).

            The rights and remedies of Payee expressed herein are cumulative and
not exclusive of any rights and remedies otherwise available.

            If this obligation is placed in the hands of an attorney for
collection after default, and provided Payee prevails on the merits in respect
to its claim of default, Maker shall pay (and shall indemnify and hold harmless
Payee from and against), all reasonable attorneys' fees and expenses incurred by
Payee in pursuing collection of this Secured Promissory Note.

            This Secured Promissory Note shall be binding upon the Maker and its
successors and shall inure to the benefit of the Payee and its permitted
successors and assigns.

            This Secured Promissory Note has been duly authorized, executed and
delivered by Maker and is the legal obligation of Maker, enforceable against
Maker in accordance with its terms.

            If this Secured Promissory Note is lost, stolen, mutilated or
otherwise destroyed, Maker shall execute and deliver to Payee a new promissory
note containing the same terms, and in the same form, as this Secured Promissory
Note. In such event, Maker may require Payee to deliver to Maker an affidavit of
lost instrument and customary indemnity in respect thereof as a condition to the
delivery of any such new promissory note.

            This Secured Promissory Note shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Secured Promissory Note and

                                       -2-
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.

                                  * * * * * * *

                                       -3-
IN WITNESS WHEREOF, Maker has caused this Promissory Note to be duly
executed and delivered as of the day and year first set forth above.

                        EUROTECH, LTD.

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

                                       -4-
ESCROW AGREEMENT

            ESCROW AGREEMENT (this "Agreement"), dated as of January 6, 1999, by
and among Eurotech, Ltd. (the "Company"), JNC Strategic Fund Ltd. (the
"Lender"), and Encore Capital Management, L.L.C. (the "Escrow Agent").

                                    Recitals

            A. The Company has made and delivered to the Lender a Secured
Promissory Note, due January 6, 2000, pursuant to which the Lender has agreed to
loan an aggregate principal amount of $400,000 to the Company (the "Note").
Capitalized terms that are used and not otherwise defined in this Agreement that
are defined in the Note shall have the meaning set forth in the Note.

            B. In order to induce the Lender into making the loan contemplated
by the Note, the Company agreed that the Lender will have the right to approve
each disbursement of proceeds under the Note.

            C. The Escrow Agent is willing to act as escrow agent pursuant to
the terms of this Agreement with respect to the disbursement of the proceeds of
the Note.

            NOW, THEREFORE, IT IS AGREED:

            1. Deposit of Proceeds.

                  a. Concurrently with the execution of this Agreement, the
Lender shall deposit with the Escrow Agent $390,000, representing the maximum
loan under the Note less the fees and disbursements incurred by Lender in
preparing this Agreement, the Note and certain other documents contemplated by
the transactions under the Note (as reduced from time to time in accordance with
the terms hereof, the "Proceeds"). The Proceeds shall be delivered by the Lender
to the Escrow Agent by wire transfer of immediately available funds to an
account designated for such purpose by the Escrow Agent.

                  b. The Lender and the Company understand that the Proceeds
delivered to the Escrow Agent pursuant to Section 1(a) shall be held in escrow
in an interest bearing account of the Escrow Agent until disbursed to the
Company or returned to the Lender in accordance with the terms of this
Agreement.
2. Terms of Escrow.

                  a. The Escrow Agent shall hold the Proceeds in escrow until
the earliest to occur of (i) the receipt by the Escrow Agent of instructions
from the Lender pursuant to Section 3(a), (ii) the receipt by the Escrow Agent
of a demand by the Lender of the return of the undisbursed Proceeds pursuant to
Section 3(b) or Section 3(c), and (iii) the receipt by the Escrow Agent of a
written notice, executed by both the Company and the Lender, jointly directing
the release of the Proceeds.

            b. If the Escrow Agent, prior to delivering or causing to be
delivered the Proceeds in accordance herewith, receives notice of objection,
dispute, or other assertion in accordance with any of the provisions of this
Agreement, the Escrow Agent shall continue to hold the Proceeds until such time
as the Escrow Agent shall receive (i) written instructions jointly executed by
the Lender and the Company, directing distribution of such Proceeds, or (ii) a
certified copy of a judgment, order or decree of a court of competent
jurisdiction, final beyond the right of appeal, directing the Escrow Agent to
distribute said Proceeds to any party hereto or as such judgment, order or
decree shall otherwise specify (including any such order directing the Escrow
Agent to deposit the Proceeds into the court rendering such order, pending
determination of any dispute between any of the parties). In addition, the
Escrow Agent shall have the right to deposit the Proceeds with a court of
competent jurisdiction pursuant to Section 1006 of the New York Civil Practice
Law and Rules without liability to any party if said dispute is not resolved
within 30 days of receipt of any such notice of objection, dispute or otherwise.

            3. Release of Proceeds.

                  a. The Company shall provide the Lender with not more than 15
nor less than 5 business days' written notice (such a notice, a "Use Notice") of
its desire to use some or all of the then undistributed or unreturned Proceeds
for the purpose set forth in such Use Notice. The Lender shall have 2 business
days from its receipt of a Use Notice to approve or disapprove of the amount and
use of the Proceeds as set forth in such Use Notice. Silence by the Lender shall
be deemed to be notice of its disapproval. The decision of the Lender to approve
or disapprove of the use of Proceeds set forth in any Use Notice shall be at the
sole discretion of the Lender and may be given or withheld for any or no reason
(which reason need not be communicated to the Company). Failure by the Company
to utilize the Proceeds in accordance with a Use Notice shall be a default
hereunder.

            b. If the Lender shall disapprove of the amount or use of the
Proceeds as set forth in a Use Notice, the Company may thereafter deliver a
second Use Notice for the use of such Proceeds. If the Lender shall again
disapprove of such Use Notice and the Company and the Lender shall not agree as
to the use of such Proceeds within 20 business days after the date of the second
Use Notice relating to the use of such Proceeds, then the Lender shall have the
right to require the Escrow Agent to deliver to the Lender the full amount of
the Proceeds then held in escrow hereunder. Furthermore, if David Wilkes fails
for any reason to loan, prior to March 31,

                                       -2-
1999, an aggregate of $100,000 to the Company pursuant to the Agreement, dated
as of January 6, 1999 between the Company and David Wilkes, then the Lender
shall have the right to require the Escrow Agent to deliver to the Lender the
full amount of the Proceeds then held in escrow hereunder. In either case
contemplated by either of the immediately preceding two sentences, (x) the
principal due under the Note shall be reduced by the amount of Proceeds returned
to the Lender as a result of a demand by Lender and (y) the Lender shall have
the right, exercisable at its sole option, to accelerate the Maturity Date in
respect of the Proceeds, plus accrued and unpaid interest thereon, disbursed to
the Company in accordance with the terms hereof prior to the date of the
Lender's demand for the return of Proceeds pursuant to the immediately prior
sentence.

                  c. All Proceeds remaining in escrow hereunder on the Maturity
Date shall, at the request of the Lender, be returned to the Lender. In such
case only such principal, and the interest and other amounts accrued and unpaid
thereon through the Maturity Date shall be due and payable under the Note.

            4. Duties and Obligations of the Escrow Agent.

                  a. The parties hereto agree that the duties and obligations of
the Escrow Agent are only such as are herein specifically provided and no other.
The Escrow Agent's duties are as a depositary only, and the Escrow Agent shall
incur no liability whatsoever, except as a direct result of its willful
misconduct.

                  b. The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted by it in
accordance with the advice of such counsel.

                  c. The Escrow Agent shall not be bound in any way by the terms
of any other agreement to which the Lender or any affiliate thereof and the
Company are parties, whether or not it has knowledge thereof, and the Escrow
Agent shall not in any way be required to determine whether or not any other
agreement has been complied with by the Lender and the Company, or any other
party thereto. The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed by the Lender and the
Company, and agreed to in writing by the Escrow Agent.

                  d. In the event that the Escrow Agent shall be uncertain as to
its duties or rights hereunder or shall receive instructions, claims or demands
which, in its opinion, are in conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action, other than to
keep safely, the Proceeds then held in escrow until it shall jointly be directed
otherwise in writing by the Lender and the Company or by a final judgment of a
court of competent jurisdiction.

                                       -3-
e. The Escrow Agent shall be fully protected in relying upon
any written notice, demand, certificate or document which it, in good faith,
believes to be genuine. The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of
documents or securities now or hereafter deposited hereunder, or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement.

                  f. The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to defend any legal
proceedings which may be instituted against it or in respect of the Proceeds.

                  g. If the Escrow Agent at any time, in its sole discretion,
deems it necessary or advisable to relinquish custody of the Proceeds, it may do
so by giving five (5) days written notice to the parties of its intention and
thereafter delivering the consideration to any other escrow agent mutually
agreeable to the Lender and the Company and, if no such escrow agent shall be
selected within three days of the Escrow Agent's notification to the Lender and
the Company of its desire to so relinquish custody of the Proceeds, then the
Escrow Agent may do so by delivering the Proceeds it then holds (a) to any bank
or trust company in the Borough of Manhattan, City and State of New York, which
is willing to act as escrow agent thereunder in place and instead of the Escrow
Agent, or (b) to the clerk or other proper officer of a court of competent
jurisdiction as may be permitted by law within the State, County and City of New
York. The fee of any such bank or trust company or court officer shall be borne
by the Company. Upon such delivery, the Escrow Agent shall be dis charged from
any and all responsibility or liability with respect to the Proceeds and the
Company shall promptly pay to the Escrow Agent all monies which may be owed it
for its services hereunder, including, but not limited to, reimbursement of its
out-of-pocket expenses pursuant to paragraph (i) below.

                  h. This Agreement shall not create any fiduciary duty on the
Escrow Agent's part to the Lender or the Company, nor disqualify the Escrow
Agent from acting on behalf of the Lender or any other party in any dispute with
the Company, including any dispute with respect to the Proceeds. The Company
understands and acknowledges that the Escrow Agent has acted and will continue
to act as investment adviser to the Lender and other parties who are parties to
transactions with the Company.

                  i. The reasonable out-of-pocket expenses paid or incurred by
the Escrow Agent in the administration of its duties hereunder, including, but
not limited to, all counsel and advisors' and agents' fees and all taxes or
other governmental charges, if any, shall be paid by the Company.

            5. Indemnification. The Lender and the Company, jointly and
severally, hereby indemnify and hold the Escrow Agent, its employees, partners,
members and 

                                      -4-
representatives harmless from and against any and all losses, damages, taxes,
liabilities and expenses that may be incurred, directly or indirectly, by the
Escrow Agent and/or any such person, arising out of or in connection with its
acceptance of appointment as the Escrow Agent hereunder and/or the performance
of its duties pursuant to this Agreement, including, but not limited to, all
legal costs and expenses of the Escrow Agent and any such person incurred
defending itself against any claim or liability in connection with its
performance hereunder and the costs of recovery of amounts pursuant to this
Section 5.

            6. Miscellaneous.

                  a. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

      If to the Company:             Eurotech, Ltd.
                                     1101 30th Street, N.W., Suite 500
                                     Washington, D.C. 20007
                                     Facsimile No.: (202) 625-4369
                                     Attn:  Chief Financial Officer

      With copies to:                Ruffa & Ruffa, P.C.
                                     150 East 58th Street
                                     New York, NY 10155
                                     Facsimile No.: (212) 759-7696
                                     Attn: William P. Ruffa, Esq.

      If to the Lender:              JNC Strategic Fund Ltd.
                                     c/o Olympia Capital (Bermuda) Ltd.
                                     Williams House, 20 Reid Street
                                     Hamilton HM11, Bermuda
                                     Facsimile No.: (441) 295-2305
                                     Attn: Director

      With copies to:                Robinson Silverman Pearce Aronsohn
                                      & Berman LLP
                                     1290 Avenue of the Americas
                                     New York, NY 10104
                                     Facsimile: (212) 541-4630
                                     Attn:  Eric L. Cohen, Esq.

                                      -5-
If to the Escrow Agent         Encore Capital Management, L.L.C.
        (the Escrow Agent shall      12007 Sunrise Valley Drive, Suite 460
        receive copies of all        Reston, VA 20191
        communications under         Facsimile No.: (703) 476-7711
        this Agreement)              Attn: Managing Member

or at such other address as any of the parties to this Agreement may hereafter
designate in the manner set forth above to the others.

                  b. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

                  c. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

                  d. In case any one or more of the provisions of this Agreement
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGE FOLLOWS]

                                       -6-
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be signed the day and year first above written.

                               EUROTECH, LTD.

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

                               JNC STRATEGIC FUND LTD.

                               By:
                                  ---------------------------
                                  Neil T. Chau
                                  Director

                               ENCORE CAPITAL MANAGEMENT, L.L.C.

                               By:
                                  ---------------------------
                                  Neil T. Chau
                                  Managing Member
SECURITY AGREEMENT

            SECURITY AGREEMENT, dated as of January 6, 1999 (this "Agreement"),
by Eurotech, Ltd., a corporation organized under the laws of the District of
Columbia and having its principal place of business at 1130 30th Street, N.W.,
Suite 500, Washington, D.C. 20007 (the "Company"), in favor of JNC Strategic
Fund Ltd., a Cayman Islands corporation, and its successors, endorsees,
transferees and assigns ("JNC"), and David Wilkes, an individual, and his
endorsees, transferees, heirs and assigns ("Wilkes"). JNC and Wilkes are
sometimes collectively referred to in this Agreement as the "Secured Parties."

                              W I T N E S S E T H:

            WHEREAS, on July 20, 1998, the Company issued to JNC its 8%
Convertible Debentures due July 20, 2001 in an aggregate principal amount of
$1,000,000 (the "July Obligations"); and

            WHEREAS, JNC has agreed to extend a loan to the Company in the
amount of $400,000 (the "JNC Loan"), which is evidenced by a Secured Promissory
Note of the Company due January 6, 2000 (as amended, modified, or supplemented
from time to time, the "JNC Note"), which is exchangeable at the sole option of
JNC into the Company's to be created 8% Secured Convertible Debenture (the "JNC
Debenture") and, in connection therewith, the Company issued to JNC a warrant to
purchase 75,000 shares of the Company's common stock (the "Warrant"); and

            WHEREAS, concurrently herewith JNC, the Company and Encore Capital
Management, L.L.C. will enter into an Escrow Agreement, pursuant to which JNC
will have the right to consent to the use to be made of the principal amount of
the JNC Loan (the "Escrow Agreement"); and

            WHEREAS, Wilkes has agreed to extend a loan to the Company in the
amount of $50,000 (the "Initial Wilkes Loan"), which is evidenced by a Secured
Promissory Note of the Company due January 6, 2000 (the "Initial Wilkes Note");
and

            WHEREAS, pursuant to an Agreement between the Company and Wilkes,
Wilkes has agreed to extend an additional loan to the Company by March 31, 1999
in the amount of $50,000 (the "Second Wilkes Loan" and, collectively with the
Initial Wilkes Loan, the "Wilkes Loans"), which will be evidenced by a Secured
Promissory Note of the Company due January 6, 2000 (the "Second Wilkes Note"
and, collectively with the Initial Wilkes Note, the "Wilkes Notes"); and

            WHEREAS, in order to induce the Secured Parties to extend the JNC
Loan and the Wilkes Loans the Company has agreed to execute and deliver to the
Secured Parties this Agreement for the benefit of the Secured Parties and to
grant a first priority security interest in certain general intangible property
of the Company to secure the prompt payment, performance and discharge in full
of all of
the Company's obligations under the July Obligations, the JNC Note, the JNC
Debenture, the Wilkes Notes and the Escrow Agreement.

      NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

      1. Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1.

            (a) "Collateral" means all of the Company's right, title and
interest in and to all of Trademarks, Patents, Copyrights, and other general
intangible property of the Company, all trade secrets, intellectual property
rights in computer software and computer software products, design rights which
may be available to the Company, rights to proceeds arising from any and all
claims for damages by way of past, present and future infringement of any
Collateral with the right but not the obligation to sue on behalf of and collect
such damages for said use or infringement, licenses to use any of the
Copyrights, Patents or Trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights. The term
"Collateral" shall include all of the foregoing items, whether presently owned
or existing or hereafter acquired or coming into existence, all additions and
accessions thereto, all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including without limitation all
proceeds from the licensing or sale or other transfer of Collateral and of
insurance covering the same and of any tort claims in connection therewith.

            (b) "Copyrights" means any and all copyrights, copyright
applications, copyright registration and like protections in each work or
authorship and derivative work thereof that is created by the Company, whether
published or unpublished and whether or not the same also constitutes a trade
secret, now or hereafter existing, created, acquired or held, including without
limitation, those set forth on Exhibit A attached hereto.

            (c) "Loans" means, collectively, the JNC Loan and the Wilkes Loans.

            (d) "Majority-in-Interest" means the Secured Party or Secured
Parties (as the case may be) holding in excess of 50% of the aggregate principal
amount outstanding under the Notes, the July Obligations and the JNC Debenture,
determined on a cumulative basis.

            (e) "Notes" means, collectively, the JNC Note and the Wilkes Notes.

            (f) "Obligations" means all of the Company's obligations under this
Agreement, the Notes, the July Obligations and the JNC Debenture, in each case,
whether now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later decreased, created or incurred, and all or any portion of such obligations
or

                                       -2-
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from the Secured Parties as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.

            (g) "Patents" means all of the Company's patents, patent
applications, letters patent and like protections of the United States or any
other country, including without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same, and including, without limitation, those set forth on Exhibit B attached
hereto.

            (h) "Trademarks" means any trademark, service mark right, whether or
not registered, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of the Company connected
with or symbolized by such trademarks, including, without limitation, those set
forth on Exhibit C attached hereto.

            (i) "UCC" means the Uniform Commercial Code, as currently in effect
in the State of New York.

            (h) Terms used but not otherwise defined in this Agreement that are
defined in Article 9 of the UCC (such as "general intangibles"and "proceeds")
shall have the respective meanings given such terms in Article 9 of the UCC.

      2. Grant of Security Interest. As an inducement for the Secured Parties to
extend the Loans to the Company, and to secure the complete and timely payment,
performance and discharge in full of all of the Obligations, the Company hereby,
unconditionally and irrevocably, pledges, grants and hypothecates to the Secured
Parties, a continuing security interest in, a first lien upon and a right of
set-off against all of the Company's right, title and interest of whatsoever
kind and nature in and to the Collateral (the "Security Interest").

      3. Representations, Warranties, Covenants and Agreements of the Company.
The Company represents and warrants to, and covenants and agrees with, the
Secured Parties as follows:

            (a) Except to the extent specified in the Exhibits hereto, the
Company is the sole owner of the Collateral (except for non-exclusive licenses
granted by the Company in the ordinary course of business), free and clear of
any liens, security interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the Collateral. There
is not on file in any governmental or regulatory authority, agency or recording
office an effective financing statement, security agreement, license or transfer
or any notice of any of the foregoing (other than those that have been filed in
favor of the Secured Parties pursuant to this Agreement) covering or affecting
any of the Collateral. So long as this Agreement shall be in effect, the Company
shall not execute and shall not knowingly permit to be on file in any such
office or agency any such financing statement or other document or instrument
(except to the extent filed or recorded in favor of the Secured Parties pursuant
to the terms of this Agreement).

                                       -3-
(b) Exhibit A sets forth a true and complete list of all Copyrights
in existence as of the date of this Agreement. Exhibit B sets forth a true and
complete list of all Patents that have been filed as of the date of this
Agreement. Exhibit C sets forth a true and complete list of all Trademarks filed
as of the date of this Agreement. The Company shall, within 10 days of obtaining
knowledge thereof, advise the Secured Parties in writing of any change in the
composition of the Collateral, including without limitation, any subsequent
ownership rights of the Company in or to any Copyright, Patent or Trademark.

            (c) Each of the Patents, Trademarks and Copyrights is valid and
enforceable, and no part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any of the Patents,
Trademarks or Copyrights or the Company's use of any Collateral violates the
rights of any third party. There has been no adverse decision to the Company's
claim of ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to the Company's right to keep and maintain such Collateral in
full force and effect, and there is no proceeding involving said rights pending
or, to the best knowledge of the Company, threatened before any court, judicial
body, administrative or regulatory agency, arbitrator or other governmental
authority.

            (d) The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and may
not relocate such books of account and records unless it delivers to the Secured
Parties at least 30 days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within the United States)
and (ii) evidence that appropriate financing statements and other necessary
documents have been filed and recorded and other steps have been taken to
perfect the Security Interest to create in favor of the Secured Parties valid,
perfected and continuing first priority liens in the Collateral. The principal
place of business of the Company is located at the address set forth in the
introduction to this Agreement.

            (e) This Agreement creates in favor of the Secured Parties a valid
security interest in the Collateral, including the Collateral listed on the
Exhibits hereto, securing the payment and performance of the Obligations, and,
upon making the filings described in the immediately following sentence, a
perfected first priority security interest in such Collateral. Except for (x)
the filing of this Agreement with the United States Patent and Trademark Office
with respect to the Patents and Trademarks and the filing of this Agreement with
the Register of Copyrights with respect to the Copyrights, and (y) the filing of
a financing statement on Form-1 under the UCC in the District of Columbia; no
authorization or approval of or filing with or notice to any governmental
authority or regulatory body is required either (i) for the grant by the Company
of, or the effectiveness of, the Security Interest granted hereby or for the
execution, delivery and performance of this Agreement by the Company or (ii) for
the perfection of or exercise by the Secured Parties of their rights and
remedies hereunder. The Company acknowledges and agrees that a copy of this
Agreement (or instruments executed and delivered pursuant hereto) will be filed
and recorded with each of the United States Patent and Trademark Office and the
Register of Copyrights with respect to the Patents, Trademarks and Copyrights
that are now or hereafter in existence.

                                      -4-
(f) The execution, delivery and performance of this Agreement does
not conflict with or cause a breach or default, or an event that with or without
the passage of time or notice, shall constitute a breach or default, under any
agreement to which the Company is a party or by the Company is bound. No consent
(including, without limitation, from stock holders or creditors of the Company)
is required for the Company to enter into and perform its obligations hereunder.

            (g) The Company shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first priority liens and
security interests in the Collateral in favor of the Secured Parties until the
Obligations are satisfied. The Company hereby agrees to defend the same against
any and all persons. The Company shall safeguard and protect all Collateral for
the account of the Secured Parties. At the request of the Secured Parties, the
Company will sign and deliver to the Secured Parties at any time or from time to
time one or more financing statements pursuant to the UCC (or any other
applicable statute) in form reasonably satisfactory to the Secured Parties and
will pay the cost of filing the same in all public offices wherever filing is,
or is deemed by the Secured Parties to be, necessary or desirable to effect the
rights and obligations provided for herein. Without limiting the generality of
the foregoing, the Company shall pay all fees, taxes and other amounts necessary
to maintain the Collateral and the Security Interest hereunder, and the Company
shall obtain and furnish to the Secured Parties from time to time, upon demand,
such releases and/or subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.

            (h) The Company (i) will not allow any Collateral to be abandoned,
forfeited or dedicated to the public without the prior written consent of the
Secured Parties. The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Parties.

            (i) The Company shall permit the Secured Parties and their
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Parties from time to time provided, that, to the extent any such request
shall be, in the Company's good faith opinion, for information which is of a
non-public nature, the Company shall inform the Secured Parties of such opinion
and it shall be a condition precedent to the divulgence of such confidential
information that the parties agree to enter into a customary confidentiality
agreement.

            (j) The Company shall at all times, maintain the liens and the
Security Interest provided for hereunder as valid and perfected first priority
liens and security interests in the Collateral hereby granted to the Secured
Parties. Within three (3) days after the date of this Agreement, the Company
will deliver to the Secured Parties one or more executed UCC financing
statements on Form-1 with respect to the Security Interest for filing in the
jurisdiction of the Company's principal place of business and in such other
jurisdictions as may be requested by the Secured Parties.

                                      -5-
(k) The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

            (l) The Company shall notify the Secured Parties in sufficient
detail upon becoming aware of any attachment, garnishment, execution or other
legal process levied against any Collateral and of any other information
received by the Company that may materially affect the value of the Collateral,
the Security Interest or the rights and remedies of the Secured Parties
hereunder.

            (m) All information heretofore, herein or hereafter supplied to the
Secured Parties by or on behalf of the Company with respect to the Collateral is
accurate and complete in all material respects as of the date furnished.

      4. Defaults. The following events shall be "Events of Default":

            (a) The failure by the Company to pay any amounts of principal or
interest when, as, and in the amount due, pursuant to the Notes, the July
Obligations or the JNC Debenture;

            (b) Any representation or warranty of the Company in this Agreement
shall prove to have been incorrect in any material respect when made;

            (c) The failure by the Company to observe or perform any of its
obligations hereunder for 10 days after receipt by the Company of notice of such
failure from a Majority-in- Interest; and

            (d) Any default under the Escrow Agreement, the July Obligations or
the JNC Debenture.

      5. Duty To Hold In Trust. Upon the occurrence of any Event of Default, the
Company shall, upon receipt by it of any revenue, income or other sums
(collectively, the "Sums") subject to the Security Interest, whether payable
pursuant to the Notes, the July Obligations, the JNC Debenture or otherwise, or
of any check, draft, note, trade acceptance or other instrument evidencing an
obligation to pay any such sum, hold the same in trust for the Secured Parties
and shall forthwith endorse and transfer any such sums or instruments, or both,
to the Secured Parties (on a pro rata basis in accordance with the principal
amount then outstanding and accrued and unpaid interest then due under such
Secured Party's respective Notes, July Obligations and JNC Debenture, determined
on a cumulative basis)for application to the satisfaction of the Obligations.

      6. Rights and Remedies Upon Default. Upon occurrence and continuance of
any Event of Default, the Secured Parties shall have the right to exercise all
of the remedies conferred hereunder, and JNC shall have the right to exercise
all remedies conferred under the JNC Note, the July Obligations, the JNC
Debenture and the Escrow Agreement and Wilkes shall have the right to exercise
all remedies conferred under the Wilkes Notes, and each Secured Party shall have
all the 

                                      -6-
rights and remedies of a secured party under the UCC and/or any other applicable
law (including the Uniform Commercial Code of any jurisdiction in which any
Collateral is then located). Without limitation, the Secured Parties shall have
the following rights and powers:

            (a) The Secured Parties shall have the right to take possession of
all tangible manifestations or embodiments of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any premises where
the Collateral, or any part thereof, is or may be placed and remove the same,
and the Company shall assemble the Collateral and make it available to the
Secured Parties at places which the Secured Parties shall reasonably select,
whether at the Company's premises or elsewhere.

            (b) The Secured Parties shall have the right to operate the business
of the Company using the Collateral and shall have the right to assign, sell, or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Parties may deem commercially reasonable,
all without (except as shall be required by applicable statute and cannot be
waived) advertisement or demand upon or notice to the Company or right of
redemption of the Company, which are hereby expressly waived. Upon each such
sale, assignment or other transfer of Collateral, the Secured Parties may,
unless prohibited by applicable law which cannot be waived, purchase all or any
part of the Collateral being sold, free from and discharged of all trusts,
claims, right of redemption and equities of the Company, which are hereby waived
and released.

            (c) The Secured Parties may license or, to the same extent the
Company is permitted by law and contract to do so, sublicense, whether or an
exclusive or non-exclusive basis, any of the Collateral throughout the world for
such term, on such conditions and in such manner as the Secured Parties shall,
in their sole discretion, determine.

            (d) The Secured Parties may (without assuming any obligations or
liabilities thereunder), at any time, enforce (and shall have the exclusive
right to enforce) against licensee or sublicensee all rights and remedies of the
Company in, to and under any license agreement with respect to such Collateral,
and take or refrain from taking any action thereunder.

            (e) The Secured Parties may, in order to implement the assignment,
license, sale or other disposition of any of the Collateral pursuant to this
Section, pursuant to the authority provided for in Section 11, execute and
deliver on behalf of the Company one or more instruments of assignment of the
Collateral in form suitable for filing, recording or registration in any
jurisdictions as the Secured Parties may determine advisable.

      7. Applications of Proceeds; Expenses. (a) The proceeds of any such sale,
lease, license or other disposition of the Collateral hereunder shall be applied
first, to the expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like (including, without limitation, 

                                      -7-
any taxes, fees and other costs incurred in connection therewith) of the
Collateral, to the reasonable attorneys' fees and expenses incurred by the
Secured Parties in enforcing their rights hereunder and in connection with
collecting, storing and disposing of the Collateral, and then to satisfaction of
the Obligations, and to the payment of any other amounts required by applicable
law, after which the Secured Parties shall pay to the Company any surplus
proceeds. If, upon the sale, lease or other disposition of the Collateral, the
proceeds thereof are insufficient to pay all amounts to which the Secured
Parties are legally entitled, each Secured Party will be entitled to their pro
rata portion of such proceeds (determined by reference to the aggregate amount
of principal and accrued and unpaid interest then due under each of their
respective Notes, July Obligations and JNC Debenture, determined on a cumulative
basis), and the Company will be liable for the deficiency, together with
interest thereon, at the rate of 11% per annum (the "Default Rate"), and the
reasonable fees of any attorneys employed by the Secured Parties to collect such
deficiency. To the extent permitted by applicable law, the Company waives all
claims, damages and demands against the Secured Parties arising out of the
repossession, removal, retention or sale of the Collateral, unless due to the
gross negligence or willful misconduct of the Secured Parties.

            (b) The Company agrees to pay all out-of-pocket fees, costs and
expenses incurred in connection with any filing required hereunder, including
without limitation, any financing statements, continuation statements, partial
releases and/or termination statements related thereto or any expenses of any
searches reasonably required by the Secured Parties. The Company shall also pay
all other claims and charges which in the reasonable opinion of the Secured
Parties might prejudice, imperil or otherwise affect the Collateral or the
Security Interest therein. The Company will also, upon demand, pay to the
Secured Parties the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Secured Parties may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Secured Parties under the Escrow
Agreement, the Notes, the July Obligations, the JNC Debenture or this Agreement.
Until so paid, any fees payable hereunder shall be added to the principal amount
of the Obligations and shall bear interest at the Default Rate.

      8. Responsibility for Collateral. The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligation of the
Company hereunder or under the Notes, the July Obligations and the JNC Debenture
shall in no way be affected or diminished by reason of the loss, destruction,
damage or theft of any of the Collateral or its unavailability for any reason.

      9. Security Interest Absolute. All rights of the Secured Parties and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
any Note, the July Obligations, the JNC Debenture, the Escrow Agreement or any
agreement entered into in connection with the foregoing, or any portion hereof
or thereof; (b) any change in the time, manner or place of payment or
performance of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the Notes, the
July Obligations, the JNC Debenture, the Escrow Agreement or any 

                                      -8-
other agreement entered into in connection with the foregoing; (c) any exchange,
release or nonperfection of any of the Collateral, or any release or amendment
or waiver of or consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations; (d) any
action by the Secured Parties to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in connection with
the Collateral; or (e) any other circumstance which might otherwise constitute
any legal or equitable defense available to the Company, or a discharge of all
or any part of the Security Interest granted hereby. Until the Obligations shall
have been paid and performed in full, the rights of the Secured Parties shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or bankruptcy. The Company
expressly waives presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance. In the event that at any time any
transfer of any Collateral or any payment received by the Secured Parties
hereunder shall be deemed by final order of a court of competent jurisdiction to
have been a voidable preference or fraudulent conveyance under the bankruptcy or
insolvency laws of the United States, or shall be deemed to be otherwise due to
any party other than the Secured Parties, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Company waives all right
to require any Secured Party to proceed against any other person or to apply any
Collateral which the Secured Parties may hold at any time, or to marshal assets,
or to pursue any other remedy. The Company waives any defense arising by reason
of the application of the statute of limitations to any obligation secured
hereby.

      10. Term of Agreement. This Agreement shall terminate when all payments
under the Note have been made in full and all other Obligations have been paid
or discharged. Upon such termination, the Secured Parties, at the request and at
the expense of the Company, will join in executing any termination statement
with respect to any financing statement executed and filed pursuant to this
Agreement.

      11. Power of Attorney; Further Assurances. (a) The Company authorizes the
Secured Parties, and does hereby make, constitute and appoint them, and their
respective officers, agents, successors or assigns with full power of
substitution, as the Company's true and lawful attorney-in-fact, with power, in
its own name or in the name of the Company, to, after the occurrence and during
the continuance of an Event of Default, (i) endorse any notes, checks, drafts,
money orders, or other instruments of payment (including payments payable under
or in respect of any policy of insurance) in respect of the Collateral that may
come into possession of the Secured Parties; (ii) to sign and endorse any UCC
financing statement or any invoice, freight or express bill, bill of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents
relating to the Collateral; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened
against the Collateral; (iv) to demand, collect, receipt for, compromise, settle
and sue for monies due in respect of the Collateral; and (v) generally, to do,
at the option of the Secured Parties, and at the Company's expense, at any time,
or from time to time, all acts and things which the Secure Parties deem

                                      -9-
necessary to protect, preserve and realize upon the Collateral and the Security
Interest granted therein in order to effect the intent of this Agreement, the
Notes, the July Obligations and the JNC Debenture all as fully and effectually
as the Company might or could do; and the Company hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for the term of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding.

            (b) On a continuing basis, the Company will make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in any jurisdiction, all such instruments, including appropriate
financing and continuation statements and collateral agreements and filings with
the United States Patent and Trademark Office and the Register of Copyrights,
and take all such action as may reasonably be deemed necessary or advisable, or
as reasonably requested by the Secured Parties, to perfect the Security Interest
granted hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Parties the grant or
perfection of a security interest in all the Collateral.

            (c) The Company hereby irrevocably appoints the Secured Parties as
the Company's attorneys-in-fact, with full authority in the place and stead of
the Company and in the name of the Company, from time to time in the Secured
Parties' discretion, to take any action and to execute any instrument which the
Secured Parties may deem necessary or advisable to accomplish the purposes of
this Agreement, including:

                  (i) To modify, in their sole discretion, this Agreement
without first obtaining the Company's approval of or signature to such
modification by amending Exhibit A, Exhibit B and Exhibit C, hereof, as
appropriate, to include reference to any right, title or interest in any
Copyrights, Patents or Trademarks acquired by the Company after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which the Company no longer has or claims
any right, title or interest; and

                  (ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of the Company where permitted by law.

      12. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

      If to the Company:            Eurotech, Ltd.
                                    1130 30th Street NW, Suite 500

                                      -10-
Washington, DC 20007
                                    Facsimile No.: (202) 625-4369
                                    Attn: Chief Financial Officer

      With copies to:               Ruffa & Ruffa, P.C.
                                    150 East 58th Street
                                    New York, NY 10155
                                    Facsimile No.: (212) 759-7696
                                    Attn: William P. Ruffa, Esq.

      If to JNC:                    JNC Strategic Fund Ltd.
                                    c/o Olympia Capital (Bermuda) Ltd.
                                    Williams House, 20 Reid Street
                                    Hamilton HM11, Bermuda
                                    Facsimile No.: (441) 295-2305
                                    Attn:  Director

      If to Wilkes:                 15 Somerset Drive South
                                    Great Neck, NY 11020
                                    Facsimile N0.: (516) 487-0975
                                    Attn: David Wilkes

      With copies to (for           Encore Capital Management, L.L.C.
        communications to           12007 Sunrise Valley Drive, Suite 460
        any Secured Party):         Reston, VA  20191
                                    Facsimile No.: (703) 476-7711
                                    Attn: Managing Member

                                                     -and-

                                    Robinson Silverman Pearce Aronsohn &
                                     Berman LLP
                                    1290 Avenue of the Americas
                                    New York, NY 10104
                                    Facsimile No.: (212) 541-4630
                                    Attn: Eric L. Cohen, Esq.

      13. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Parties shall have the right, in its sole discretion, to
pursue, relinquish, subordinate, modify or take any other action with respect
thereto, without in any way modifying or affecting any of the Secured Parties'
rights and remedies hereunder.

                                      -11-
14. Actions by Secured Parties. Any action required or permitted hereunder
to be taken by or on behalf of the Secured Parties shall, for such action to be
valid, require the approval of a Majority-in-Interest prior to the taking of
such action. If the consent, approval or disapproval of the Secured Parties is
required or permitted pursuant to this Agreement, such consent, approval or
disapproval shall only be valid if given by a Majority-in-Interest. Nothing
contained herein shall confer upon Wilkes any rights with respect to the JNC
Note, the July Obligations, the JNC Debenture or the Escrow Agreement.

      15. Miscellaneous.

            (a) No course of dealing between the Company and the Secured
Parties, nor any failure to exercise, nor any delay in exercising, on the part
of the Secured Parties, any right, power or privilege hereunder, or under the
Notes, the July Obligations, the JNC Debenture, the Warrant or the Escrow
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.

            (b) All of the rights and remedies of the Secured Parties with
respect to the Collateral, whether established hereby or by the Notes or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.

            (c) This Agreement and the JNC Debenture, constitute the entire
agreement of the parties with respect to the subject matter hereof and is
intended to supersede all prior negotiations, understandings and agreements with
respect thereto. Except as specifically set forth in this Agreement, no
provision of this Agreement may be modified or amended except by a written
agreement specifically referring to this Agreement and signed by the parties
hereto.

            (d) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.

            (e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.

                                      -12-
(f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.

            (g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in order to
carry out the provisions and purposes of this Agreement.

            (h) This Agreement shall be construed in accordance with the laws of
the State of New York, except to the extent the validity, perfection or
enforcement of a security interest hereunder in respect of any particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall govern. Each of the parties hereto irrevocably
submit to the exclusive jurisdiction of any New York State or United States
Federal court sitting in Manhattan county over any action or proceeding arising
out of or relating to this Agreement, and the parties hereto hereby irrevocably
agree that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereto further waive any objection to venue
in the State of New York and any objection to an action or proceeding in the
State of New York on the basis of forum non convenient.

            (i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF
ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER
OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of a
litigation, this agreement maybe filed as a written consent to a trial by the
court.

            (j) This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall 

                                      -13-
constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.

                              * * * * * * * * * * *

                                      -14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on the day and year first above written.

                                             EUROTECH, LTD.

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

                                             JNC STRATEGIC FUND LTD.

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

                                             DAVID WILKES

                                             --------------------------
EXHIBIT A

                                   Copyrights

Description                                 Registration            Registration
                                               Number                   Date
--------------------------------------------------------------------------------
EXHIBIT B

                                     Patents

Description                                 Registration            Registration
                                               Number                   Date
--------------------------------------------------------------------------------
EXHIBIT C

                                   Trademarks

Description                                 Registration            Registration
                                               Number                   Date
--------------------------------------------------------------------------------
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

                                EUROTECH, LTD.

                                    WARRANT

                            Dated: January 6, 1999

      EUROTECH, LTD., a corporation organized under the laws of the District of
Columbia (the "Company"), hereby certifies that, for value received, JNC
Strategic Fund Ltd., or its registered assigns ("Holder"), is entitled, subject
to the terms set forth below, to purchase from the Company up to a total of
75,000 shares of Common Stock, $.00025 par value per share (the "Common Stock"),
of the Company (each such share, a "Warrant Share" and all such shares, the
"Warrant Shares") at an exercise price equal to $0.36 per share (as adjusted
from time to time as provided in Section 9, the "Exercise Price"), at any time
and from time to time from and after September 30, 1999 and through and
including January 6, 2004 (the "Expiration Date"), and subject to the following
terms and conditions:

            1. Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, and the Company shall not be affected by
notice to the contrary.
2. Registration of Transfers and Exchanges.

                  (a) The Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this Warrant, with the
Form of Assignment attached hereto duly completed and signed, to the Transfer
Agent or to the Company at the office specified in or pursuant to Section 3(b).
Upon any such registration or transfer, a new warrant to purchase Common Stock,
in substantially the form of this Warrant (any such new warrant, a "New
Warrant"), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this
Warrant not so transferred, if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance of such transferee of all of the rights and obligations of a holder
of a Warrant.

                  (b) This Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Section 3(b)
for one or more New Warrants, evidencing in the aggregate the right to purchase
the number of Warrant Shares which may then be purchased hereunder. Any such New
Warrant will be dated the date of such exchange.

            3. Duration and Exercise of Warrants.

                  (a) This Warrant shall be exercisable by the registered Holder
on any business day before 8:00 P.M., New York City time, at any time and from
time to time on or after the date hereof to and including the Expiration Date.
At 8:00 P.M., New York City time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value.
Prior to the Expiration Date, the Company may not call or otherwise redeem this
Warrant without the prior written consent of the Holder.

                  (b) Subject to Sections 2(b), 6 and 10, upon surrender of this
Warrant, with the Form of Election to Purchase attached hereto duly completed
and signed, to the Company at its address for notice set forth in Section 12 and
upon payment of the Exercise Price multiplied by the number of Warrant Shares
that the Holder intends to purchase hereunder, in the manner provided hereunder,
all as specified by the Holder in the Form of Election to Purchase, the Company
shall promptly (but in no event later than 3 business days after the Date of
Exercise (as defined herein)) issue or cause to be issued and cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate, a certificate for the Warrant Shares issuable upon
such exercise, free of restrictive legends except (i) either in the event that a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), or (ii) if this Warrant shall have been issued pursuant to a written
agreement between the original Holder and the Company, as required by such
agreement. Any person so designated by the Holder to receive Warrant Shares
shall be

                                      -2-
deemed to have become holder of record of such Warrant Shares as of the Date of
Exercise of this Warrant.

                  A "Date of Exercise" means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the holder hereof to be
purchased.

                  (c) This Warrant shall be exercisable, either in its entirety
or, from time to time, for a portion of the number of Warrant Shares. If less
than all of the Warrant Shares which may be purchased under this Warrant are
exercised at any time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares for which no exercise has been evidenced by this Warrant.

            4. Piggyback Registration Rights. During the term of this Warrant,
the Company may not file any registration statement with the Securities and
Exchange Commission (other than registration statements of the Company filed on
Form S-8 or Form S-4, each as promulgated under the Securities Act, pursuant to
which the Company is registering securities pursuant to a Company employee
benefit plan or pursuant to a merger, acquisition or similar transaction
including supplements thereto, but not additionally filed registration
statements in respect of such securities) at any time when there is not an
effective registration statement covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder thereunder, unless the Company
provides the Holder with not less than 20 days notice of its intention to file
such registration statement and provides the Holder the option to include any or
all of the applicable Warrant Shares therein. The piggyback registration rights
granted to the Holder pursuant to this Section shall continue until all of the
Holder's Warrant Shares have been sold in accordance with an effective
registration statement or upon the Expiration Date. The Company will pay all
registration expenses in connection therewith.

            5. Demand Registration Rights. At any time after the ninetieth
(90th) day following the date of issuance of this Warrant, when the Warrant
Shares are not registered pursuant to an effective registration statement, the
Holder may make a written request for the registration under the Securities Act
(a "Demand Registration"), of all of the Warrant Shares (the "Registrable
Securities"), and the Company shall use its best efforts to effect such Demand
Registration as promptly as possible, but in any case within 90 days thereafter.
Any request for a Demand Registration shall specify the aggregate number of
Registrable Securities proposed to be sold and shall also specify the intended
method of disposition thereof. The right to cause a registration of the
Registrable Securities under this Section 5 shall be limited to one such
registration. In any registration initiated as a Demand Registration, the
Company will pay all of its registration expenses in connection therewith. A
Demand Registration shall not be counted as a Demand Registration hereunder
until the registration statement filed pursuant to the Demand Registration has
been declared effective by the Securities and Exchange Commission and

                                      -3-
maintained continuously effective for a period of at least 360 days or such
shorter period when all Registrable Securities included therein have been sold
in accordance with such registration statement, provided, however that any days
on which such registration statement is not effective or on which the Holder is
not permitted by the Company or any governmental authority to sell Warrant
Shares under such registration statement shall not count towards such 360 day
period.

            6. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

            7. Replacement of Warrant. If this Warrant is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
indemnity, if requested, satisfactory to it. Applicants for a New Warrant under
such circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe.

            8. Reservation of Warrant Shares. The Company covenants that it will
at all times reserve and keep available out of the aggregate of its authorized
but unissued Common Stock, solely for the purpose of enabling it to issue
Warrant Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares which are then issuable and deliverable upon the exercise of this
entire Warrant, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holder (taking into account the
adjustments and restrictions of Section 9). The Company covenants that all
Warrant Shares that shall be so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and nonassessable.

            9. Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9. Upon each such adjustment of the
Exercise Price pursuant to this Section 9, the Holder shall thereafter prior to
the Expiration Date be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.

                                      -4-
(a) If the Company, at any time while this Warrant is
outstanding, (i) shall pay a stock dividend (except scheduled dividends paid on
outstanding preferred stock as of the date hereof which contain a stated
dividend rate) or otherwise make a distribution or distributions on shares of
its Common Stock or on any other class of capital stock and not the Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock into a larger number of shares, or (iii) combine outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price 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
(excluding treasury shares, if any) 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 or combination, and shall apply to
successive subdivisions and combinations.

                  (b) In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the sale or
transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then the Holder shall have the right
thereafter to exercise this Warrant only into the shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such reclassification, consolidation, merger, sale,
transfer or share exchange, and the Holder shall be entitled upon such event to
receive such amount of securities or property equal to the amount of Warrant
Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification, consolidation, merger, sale,
transfer or share exchange. The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to continue to give to
the Holder the right to receive the securities or property set forth in this
Section 9(b) upon any exercise following any such reclassification,
consolidation, merger, sale, transfer or share exchange.

                  (c) If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to holders
of this Warrant) evidences of its indebtedness or assets or rights or warrants
to subscribe for or purchase any security (excluding those referred to in
Sections 9(a), (b) and (d)), then in each such case the Exercise Price shall be
determined by multiplying the Exercise 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 Exercise Price
determined as of the record date mentioned above, and of which the numerator
shall be such Exercise Price 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 Common Stock as determined by
the Company's independent certified public accountants that regularly examines
the financial statements of the Company (an "Appraiser").

                                      -5-
(d) If, at any time while this Warrant is outstanding, the
Company shall issue or cause to be issued rights or warrants to acquire or
otherwise sell or distribute shares of Common Stock for a consideration per
share less than the Exercise Price then in effect, then, forthwith upon such
issue or sale, the Exercise Price shall be reduced to the price (calculated to
the nearest cent) determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of (i) the number of shares of Common Stock outstanding immediately prior to
such issuance, and (ii) the number of shares of Common Stock which the aggregate
consideration received (or to be received, assuming exercise or conversion in
full of such rights, warrants and convertible securities) for the issuance of
such additional shares of Common Stock would purchase at the Exercise Price, and
the denominator of which shall be the sum of the number of shares of Common
Stock outstanding immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an issuance is made.

                  (e) For the purposes of this Section 9, the following clauses
shall also be applicable:

                        (i) Record Date. In case the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in Common Stock or in
securities convertible or exchangeable into shares of Common Stock, or (B) to
subscribe for or purchase Common Stock or securities convertible or exchangeable
into shares of Common Stock, then such record date shall be deemed to be the
date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

                        (ii) Treasury Shares. 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, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

                  (f) All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.

                  (g) Whenever the Exercise Price is adjusted pursuant to
Section 9(c) above, the Holder, after receipt of the determination by the
Appraiser, shall have the right to select an additional appraiser (which shall
be a nationally recognized accounting firm), in which case the adjustment shall
be equal to the average of the adjustments recommended by each of the Appraiser
and such appraiser. The Holder shall promptly mail or cause to be mailed to the
Company, a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Such
adjustment shall become effective immediately after the record date mentioned
above.

                                      -6-
(h) If:

                        (i)   the Company shall declare a dividend (or any other
                              distribution) on its Common Stock; or

                        (ii)  the Company shall declare a special nonrecurring
                              cash dividend on or a redemption of its Common
                              Stock; or

                        (iii) 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; or

                        (iv)  the approval of any stockholders of the Company
                              shall be required in connection with any
                              reclassification of the Common Stock of the
                              Company, any consolidation or merger to which the
                              Company is a party, any sale or transfer of all or
                              substantially all of the assets of the Company, or
                              any compulsory share exchange whereby the Common
                              Stock is converted into other securities, cash or
                              property; or

                        (v)   the Company shall authorize the voluntary
                              dissolution, liquidation or winding up of the
                              affairs of the Company,

then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, 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 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, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; provided, however, 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.

                                      -7-
10. Payment of Exercise Price. The Holder may pay the Exercise Price
in one of the following manners:

                  (a) Cash Exercise. The Holder shall deliver immediately
available funds; or

                  (b) Cashless Exercise. The Holder shall surrender this Warrant
to the Company together with a notice of cashless exercise, in which event the
Company shall issue to the Holder the number of Warrant Shares determined as
follows:

                        X = Y (A-B)/A 

      where:

                        X = the number of Warrant Shares to be issued to the
                        Holder.

                        Y = the number of Warrant Shares with respect to which
                        this Warrant is being exercised.

                        A = the average of the closing sale prices of the Common
                        Stock for the five (5) trading days immediately prior to
                        (but not including) the Date of Exercise.

                        B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have been
commenced, on the issue date.

            11. Fractional Shares. The Company shall not be required to issue or
cause to be issued fractional Warrant Shares on the exercise of this Warrant.
The number of full Warrant Shares which shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 11, be issuable
on the exercise of this Warrant, the Company shall pay an amount in cash equal
to the Exercise Price multiplied by such fraction.

            12. Notices. Any and all notices or other communications or
deliveries hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section prior to 8:00 p.m. (New York City time) on a business day, (ii) the
business day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section later than 8:00 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on 

                                      -8-
such date, (iii) the business day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Company, to, at 1130 30th Street NW,
Suite 500, Washington, DC 20007, Attention: Chief Financial Officer, or to
facsimile no. (202) 625-4369, or (ii) if to the Holder, to the Holder at the
address or facsimile number appearing on the Warrant Register or such other
address or facsimile number as the Holder may provide to the Company in
accordance with this Section 12.

            13. Warrant Agent. The Company shall serve as warrant agent under
this Warrant. Upon thirty (30) days' notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant Register.

            14. Miscellaneous.

                  (a) This Warrant shall be binding on and inure to the benefit
of the parties hereto and their respective successors and assigns. This Warrant
may be amended only in writing signed by the Company and the Holder and their
successors and assigns.

                  (b) Subject to Section 14(a), above, nothing in this Warrant
shall be construed to give to any person or corporation other than the Company
and the Holder any legal or equitable right, remedy or cause under this Warrant.
This Warrant shall inure to the sole and exclusive benefit of the Company and
the Holder.

                  (c) This Warrant shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. The Company and the Holder
hereby irrevocably submit to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each of the Company and the Holder
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by receiving a copy thereof
sent to the Company at the address in effect for notices to it under this
instrument and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

                                      -9-
(d) The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.

                  (e) In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]

                                      -10-
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                    EUROTECH, LTD.

                                    By:
                                       --------------------------------------
                                    Name:
                                         ------------------------------------
                                    Title:
                                          -----------------------------------
FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To Eurotech, Ltd.:

      In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of Common Stock ("Common Stock"), $.00025 par value per share, of
Eurotech, Ltd. and , if such Holder is not utilizing the cashless exercise
provisions set forth in this Warrant, encloses herewith $________ in cash,
certified or official bank check or checks, which sum represents the aggregate
Exercise Price (as defined in the Warrant) for the number of shares of Common
Stock to which this Form of Election to Purchase relates, together with any
applicable taxes payable by the undersigned pursuant to the Warrant.

      The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of

                                          PLEASE INSERT SOCIAL SECURITY OR
                                          TAX IDENTIFICATION NUMBER

                                          ______________________________________

________________________________________________________________________________
                         (Please print name and address)

      If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock which the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests that
a New Warrant (as defined in the Warrant) evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:

________________________________________________________________________________
                        (Please print name and address)

________________________________________________________________________________

________________________________________________________________________________

Dated:____________,____                   Name of Holder:

                                          (Print)_______________________________

                                          (By:)_________________________________
                                          (Name:)
                                          (Title:)
                                          (Signature must conform in all 
                                          respects to name of holder as 
                                          specified on the face of the Warrant)
FORM OF ASSIGNMENT

          [To be completed and signed only upon transfer of Warrant]

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of Eurotech, Ltd. to
which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of Eurotech, Ltd. with full power of
substitution in the premises.

Dated:

_______________, ____

                              __________________________________________________
                              (Signature must conform in all respects to name 
                              of holder as specified on the face of the Warrant)

                              __________________________________________________
                              Address of Transferee

                              __________________________________________________

                              __________________________________________________

In the presence of:

______________________
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

                                EUROTECH, LTD.

                                    WARRANT

                            Dated: January 6, 1999

      EUROTECH, LTD., a corporation organized under the laws of the District of
Columbia (the "Company"), hereby certifies that, for value received, David
Wilkes, or his registered assigns ("Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company up to a total of 9,375 shares of
Common Stock, $.00025 par value per share (the "Common Stock"), of the Company
(each such share, a "Warrant Share" and all such shares, the "Warrant Shares")
at an exercise price equal to $0.36 per share (as adjusted from time to time as
provided in Section 9, the "Exercise Price"), at any time and from time to time
from and after the date hereof and through and including January 6, 2004 (the
"Expiration Date"), and subject to the following terms and conditions:

            1. Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, and the Company shall not be affected by
notice to the contrary.
2. Registration of Transfers and Exchanges.

                  (a) The Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this Warrant, with the
Form of Assignment attached hereto duly completed and signed, to the Transfer
Agent or to the Company at the office specified in or pursuant to Section 3(b).
Upon any such registration or transfer, a new warrant to purchase Common Stock,
in substantially the form of this Warrant (any such new warrant, a "New
Warrant"), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this
Warrant not so transferred, if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance of such transferee of all of the rights and obligations of a holder
of a Warrant.

                  (b) This Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Section 3(b)
for one or more New Warrants, evidencing in the aggregate the right to purchase
the number of Warrant Shares which may then be purchased hereunder. Any such New
Warrant will be dated the date of such exchange.

            3. Duration and Exercise of Warrants.

                  (a) This Warrant shall be exercisable by the registered Holder
on any business day before 8:00 P.M., New York City time, at any time and from
time to time on or after the date hereof to and including the Expiration Date.
At 8:00 P.M., New York City time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value.
Prior to the Expiration Date, the Company may not call or otherwise redeem this
Warrant without the prior written consent of the Holder.

                  (b) Subject to Sections 2(b), 6 and 10, upon surrender of this
Warrant, with the Form of Election to Purchase attached hereto duly completed
and signed, to the Company at its address for notice set forth in Section 11 and
upon payment of the Exercise Price multiplied by the number of Warrant Shares
that the Holder intends to purchase hereunder, in the manner provided hereunder,
all as specified by the Holder in the Form of Election to Purchase, the Company
shall promptly (but in no event later than 3 business days after the Date of
Exercise (as defined herein)) issue or cause to be issued and cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate, a certificate for the Warrant Shares issuable upon
such exercise, free of restrictive legends except (i) either in the event that a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), or (ii) if this Warrant shall have been issued pursuant to a written
agreement between the original Holder and the Company, as required by such
agreement. Any person so designated by the Holder to receive Warrant Shares
shall be

                                      -2-
deemed to have become holder of record of such Warrant Shares as of the Date of
Exercise of this Warrant.

                  A "Date of Exercise" means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the holder hereof to be
purchased.

                  (c) This Warrant shall be exercisable, either in its entirety
or, from time to time, for a portion of the number of Warrant Shares. If less
than all of the Warrant Shares which may be purchased under this Warrant are
exercised at any time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares for which no exercise has been evidenced by this Warrant.

            4. Piggyback Registration Rights. During the term of this Warrant,
the Company may not file any registration statement with the Securities and
Exchange Commission (other than registration statements of the Company filed on
Form S-8 or Form S-4, each as promulgated under the Securities Act, pursuant to
which the Company is registering securities pursuant to a Company employee
benefit plan or pursuant to a merger, acquisition or similar transaction
including supplements thereto, but not additionally filed registration
statements in respect of such securities) at any time when there is not an
effective registration statement covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder thereunder, unless the Company
provides the Holder with not less than 20 days notice of its intention to file
such registration statement and provides the Holder the option to include any or
all of the applicable Warrant Shares therein. The piggyback registration rights
granted to the Holder pursuant to this Section shall continue until all of the
Holder's Warrant Shares have been sold in accordance with an effective
registration statement or upon the Expiration Date. The Company will pay all
registration expenses in connection therewith.

            5. Fractional Shares. The Company shall not be required to issue or
cause to be issued fractional Warrant Shares on the exercise of this Warrant.
The number of full Warrant Shares which shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 5, be issuable
on the exercise of this Warrant, the Company shall pay an amount in cash equal
to the Exercise Price multiplied by such fraction.

            6. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability

                                      -3-
that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof.

            7. Replacement of Warrant. If this Warrant is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
indemnity, if requested, satisfactory to it. Applicants for a New Warrant under
such circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe.

            8. Reservation of Warrant Shares. The Company covenants that it will
at all times reserve and keep available out of the aggregate of its authorized
but unissued Common Stock, solely for the purpose of enabling it to issue
Warrant Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares which are then issuable and deliverable upon the exercise of this
entire Warrant, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holder (taking into account the
adjustments and restrictions of Section 9). The Company covenants that all
Warrant Shares that shall be so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and nonassessable.

            9. Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9. Upon each such adjustment of the
Exercise Price pursuant to this Section 9, the Holder shall thereafter prior to
the Expiration Date be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.

                  (a) If the Company, at any time while this Warrant is
outstanding, (i) shall pay a stock dividend (except scheduled dividends paid on
outstanding preferred stock as of the date hereof which contain a stated
dividend rate) or otherwise make a distribution or distributions on shares of
its Common Stock or on any other class of capital stock and not the Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock into a larger number of shares, or (iii) combine outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price 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
(excluding treasury shares, if any) 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

                                      -4-
effective immediately after the effective date in the case of a subdivision or
combination, and shall apply to successive subdivisions and combinations.

                  (b) In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the sale or
transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then the Holder shall have the right
thereafter to exercise this Warrant only into the shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such reclassification, consolidation, merger, sale,
transfer or share exchange, and the Holder shall be entitled upon such event to
receive such amount of securities or property equal to the amount of Warrant
Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification, consolidation, merger, sale,
transfer or share exchange. The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to continue to give to
the Holder the right to receive the securities or property set forth in this
Section 9(b) upon any exercise following any such reclassification,
consolidation, merger, sale, transfer or share exchange.

                  (c) If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to holders
of this Warrant) evidences of its indebtedness or assets or rights or warrants
to subscribe for or purchase any security (excluding those referred to in
Sections 9(a), (b) and (d)), then in each such case the Exercise Price shall be
determined by multiplying the Exercise 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 Exercise Price
determined as of the record date mentioned above, and of which the numerator
shall be such Exercise Price 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 Common Stock as determined by
the Company's independent certified public accountants that regularly examines
the financial statements of the Company (an "Appraiser").

                  (d) If, at any time while this Warrant is outstanding, the
Company shall issue or cause to be issued rights or warrants to acquire or
otherwise sell or distribute shares of Common Stock for a consideration per
share less than the Exercise Price then in effect, then, forthwith upon such
issue or sale, the Exercise Price shall be reduced to the price (calculated to
the nearest cent) determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of (i) the number of shares of Common Stock outstanding immediately prior to
such issuance, and (ii) the number of shares of Common Stock which the aggregate
consideration received (or to be received, assuming exercise or conversion in
full of such rights, warrants and convertible securities) for the issuance of
such additional shares of Common Stock would purchase at the Exercise Price, and
the denominator of which shall be the sum of the number of shares of Common
Stock outstanding immediately after the issuance of 

                                      -5-
such additional shares. Such adjustment shall be made successively whenever such
an issuance is made.

                  (e) For the purposes of this Section 9, the following clauses
shall also be applicable:

                        (i) Record Date. In case the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in Common Stock or in
securities convertible or exchangeable into shares of Common Stock, or (B) to
subscribe for or purchase Common Stock or securities convertible or exchangeable
into shares of Common Stock, then such record date shall be deemed to be the
date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

                        (ii) Treasury Shares. 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, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

                  (f) All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.

                  (g) Whenever the Exercise Price is adjusted pursuant to
Section 9(c) above, the Holder, after receipt of the determination by the
Appraiser, shall have the right to select an additional appraiser (which shall
be a nationally recognized accounting firm), in which case the adjustment shall
be equal to the average of the adjustments recommended by each of the Appraiser
and such appraiser. The Holder shall promptly mail or cause to be mailed to the
Company, a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Such
adjustment shall become effective immediately after the record date mentioned
above.

                  (h) If:

                        (i)   the Company shall declare a dividend (or any other
                              distribution) on its Common Stock; or

                        (ii)  the Company shall declare a special nonrecurring
                              cash dividend on or a redemption of its Common
                              Stock; or

                        (iii) the Company shall authorize the granting to all
                              holders of the Common Stock rights or warrants to

                                      -6-
subscribe for or purchase any shares of capital
                              stock of any class or of any rights; or

                        (iv)  the approval of any stockholders of the Company
                              shall be required in connection with any
                              reclassification of the Common Stock of the
                              Company, any consolidation or merger to which the
                              Company is a party, any sale or transfer of all or
                              substantially all of the assets of the Company, or
                              any compulsory share exchange whereby the Common
                              Stock is converted into other securities, cash or
                              property; or

                        (v)   the Company shall authorize the voluntary
                              dissolution, liquidation or winding up of the
                              affairs of the Company,

then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, 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 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, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; provided, however, 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.

            10. Payment of Exercise Price. The Holder may pay the Exercise Price
in one of the following manners:

                  (a) Cash Exercise. The Holder shall deliver immediately
available funds; or

                  (b) Cashless Exercise. The Holder shall surrender this Warrant
to the Company together with a notice of cashless exercise, in which event the
Company shall issue to the Holder the number of Warrant Shares determined as
follows:

                        X = Y (A-B)/A

      where:

                                      -7-
X = the number of Warrant Shares to be issued to the
                        Holder.

                        Y = the number of Warrant Shares with respect to which
                        this Warrant is being exercised.

                        A = the average of the closing sale prices of the Common
                        Stock for the five (5) trading days immediately prior to
                        (but not including) the Date of Exercise.

                        B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have been
commenced, on the issue date.

            11. Notices. Any and all notices or other communications or
deliveries hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section prior to 8:00 p.m. (New York City time) on a business day, (ii) the
business day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section later than 8:00 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on such date, (iii) the business day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i) if to the Company,
to, at 1130 30th Street NW, Suite 500, Washington, DC 20007, Attention: Chief
Financial Officer, or to facsimile no. (202) 625-4369, or (ii) if to the Holder,
to the Holder at the address or facsimile number appearing on the Warrant
Register or such other address or facsimile number as the Holder may provide to
the Company in accordance with this Section 11.

            12. Warrant Agent. The Company shall serve as warrant agent under
this Warrant. Upon thirty (30) days' notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant Register.

                                      -8-
13. Miscellaneous.

                  (a) This Warrant shall be binding on and inure to the benefit
of the parties hereto and their respective successors and assigns. This Warrant
may be amended only in writing signed by the Company and the Holder and their
successors and assigns.

                  (b) Subject to Section 13(a), above, nothing in this Warrant
shall be construed to give to any person or corporation other than the Company
and the Holder any legal or equitable right, remedy or cause under this Warrant.
This Warrant shall inure to the sole and exclusive benefit of the Company and
the Holder.

                  (c) This Warrant shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. The Company and the Holder
hereby irrevocably submit to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each of the Company and the Holder
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by receiving a copy thereof
sent to the Company at the address in effect for notices to it under this
instrument and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

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

                  (e) In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]

                                      -9-
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                    EUROTECH, LTD.

                                    By:
                                       --------------------------------------
                                    Name:
                                         ------------------------------------
                                    Title:
                                          -----------------------------------
FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To Eurotech, Ltd.:

      In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of Common Stock ("Common Stock"), $.00025 par value per share, of
Eurotech, Ltd. and , if such Holder is not utilizing the cashless exercise
provisions set forth in this Warrant, encloses herewith $________ in cash,
certified or official bank check or checks, which sum represents the aggregate
Exercise Price (as defined in the Warrant) for the number of shares of Common
Stock to which this Form of Election to Purchase relates, together with any
applicable taxes payable by the undersigned pursuant to the Warrant.

      The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of

                                          PLEASE INSERT SOCIAL SECURITY OR
                                          TAX IDENTIFICATION NUMBER

                                          ______________________________________

________________________________________________________________________________
                         (Please print name and address)

      If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock which the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests that
a New Warrant (as defined in the Warrant) evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:

________________________________________________________________________________
                        (Please print name and address)

________________________________________________________________________________

________________________________________________________________________________

Dated:____________,____                   Name of Holder:

                                          (Print)_______________________________

                                          (By:)_________________________________
                                          (Name:)
                                          (Title:)
                                          (Signature must conform in all 
                                          respects to name of holder as 
                                          specified on the face of the Warrant)
FORM OF ASSIGNMENT

          [To be completed and signed only upon transfer of Warrant]

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of Eurotech, Ltd. to
which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of Eurotech, Ltd. with full power of
substitution in the premises.

Dated:

_______________, ____

                              __________________________________________________
                              (Signature must conform in all respects to name 
                              of holder as specified on the face of the Warrant)

                              __________________________________________________
                              Address of Transferee

                              __________________________________________________

                              __________________________________________________

In the presence of:

______________________
Exhibit A

      NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

No. [ ]                                                                     $[ ]

                                EUROTECH, LTD.
                   8% SECURED CONVERTIBLE DEBENTURE DUE [ ](1)

      THIS DEBENTURE is one of a series of duly authorized issued debentures of
EUROTECH, LTD., a corporation organized under the laws of the District of
Columbia, having a principal place of business at 1130 30th Street NW, Suite
500, Washington, DC 20007 (the "Company"), designated as its 8% Convertible
Debentures, due [ ] (the "Debentures"), in an aggregate principal amount of 
$[ ].

      FOR VALUE RECEIVED, the Company promises to pay to JNC Strategic Fund
Ltd., or registered assigns (the "Holder"), the principal sum of [ ], on or
prior to [ ] or such earlier date as the Debentures are required to be repaid as
provided hereunder (the "Maturity Date") and to pay interest to the Holder on
the principal sum at the rate of 8% per annum, payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year during the term
hereof, commencing on [ ], but in no event later than the earlier to occur of a
Conversion Date (as defined in Section 5(a)(i)) for such principal amount or the
Maturity Date. Interest shall accrue daily commencing on the Original Issue Date
(as defined in Section 6) until payment in full of the principal sum, together
with all accrued and unpaid interest and other amounts which may become due
hereunder, has been made. Interest shall be calculated on the basis of a 360-day
year and for the actual number of days elapsed. Interest hereunder will be paid
to the Person (as defined in Section 6) in whose name this Debenture is
registered on the records of the Company regarding registration and transfers of
the Debentures (the "Debenture Register"). All overdue, accrued and unpaid
interest hereunder shall bear interest 

----------
(1) Three (3) years from the Original Issue Date.
at the rate of 18% per annum (to accrue daily) from the date such interest is
due hereunder through and including the date of payment. The principal of, and
interest on, this Debenture are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, at the address of the Holder last appearing on the
Debenture Register, except that interest due on the principal amount (but not
overdue interest) may, at the Company's option, be paid in shares of Common
Stock (as defined in Section 6) calculated based upon the Conversion Price (as
defined below) on the date such interest was due. All amounts due hereunder
other than such interest shall be paid in cash. Notwithstanding anything to the
contrary contained herein, the Company may not issue shares of Common Stock in
payment of interest on the principal amount if: (i) the number of shares of
Common Stock at the time authorized, unissued and unreserved for all purposes,
or held as treasury stock, is insufficient to pay interest hereunder in shares
of Common Stock; (ii) such shares of Common Stock are not either registered for
resale pursuant to an Underlying Securities Registration Statement (as defined
in Section 1) or freely transferable without volume restrictions pursuant to
Rule 144(k) promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), as determined by counsel to the Company pursuant to a written
opinion letter addressed and in form and substance acceptable to the Holder and
the transfer agent for such shares; (iii) the Company has failed to timely
satisfy its conversion obligations hereunder;; or (iv) such shares are not
actively traded on the OTC Bulletin Board (or listed or quoted for trading on
the American Stock Exchange, Nasdaq National Market, Nasdaq SmallCap Market or
The New York Stock Exchange, and any other exchange on which the Common Stock is
then listed for trading (each, a "Subsequent Market")). Payment of interest on
the principal amount in shares of Common Stock is further subject to the
provisions of Section 5(a)(ii). For purposes hereof, the Common Stock shall be
deemed to be "actively traded" on the OTC Bulletin Board under this Debenture if
(a) no less than $400,000 of the Common Stock trades on the OTC Bulletin Board
in any one week and (b) there are no fewer than six (6) market makers actively
making a market in the Common Stock.

      This Debenture is subject to the following additional provisions:

      Section 1. On or prior to the 30th day following the Original Issue Date
(the "Filing Date"), the Company shall prepare and file with the Commission a
registration statement meeting the requirements set forth in the Registration
Rights Agreement (as defined in Section 6), covering, among other things, the
resale of the Underlying Shares (as defined in Section 6) and naming the Holder
as a "selling stockholder" thereunder (the "Underlying Securities Registration
Statement"). The Company shall use its best efforts to cause the Underlying
Securities Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event prior to
the 90th day following the Original Issue Date (the "Effectiveness Date"), and
shall use its best efforts to keep the Underlying Securities Registration
Statement continuously effective under the Securities Act until the date which
is three years after the date that the Underlying Securities Registration
Statement is declared effective by the Commission or such earlier date when all
Underlying Shares covered by the Underlying Securities Registration Statement
have been sold or may be sold without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act, as determined by the counsel to the
Company pursuant to

                                      -2-
a written opinion letter to such effect, addressed and acceptable to the Holder
and the Company's transfer agent.

            Section 2. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations, as
requested by the Holder surrendering the same but shall not be issuable in
denominations of less than integral multiplies of Fifty Thousand Dollars
($50,000) unless such amount represents the full principal balance of Debentures
outstanding to such Holder. No service charge will be made for such registration
of transfer or exchange.

            Section 3. Prior to due presentment to the Company for transfer of
this Debenture, the Company and any agent of the Company may treat the Person in
whose name this Debenture is duly registered on the Debenture Register as the
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this Debenture is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.

            Section 4. Events of Default.

      (a) "Event of Default", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

            (i) any default in the payment of the principal of, interest on or
      liquidated damages in respect of this Debenture (free of any claim of
      subordination), as and when the same shall become due and payable (whether
      on the applicable quarterly interest payment date, a Conversion Date or
      the Maturity Date or by acceleration or otherwise);

            (ii) the Company shall fail to observe or perform any other
      covenant, agreement or warranty contained in, or otherwise commit any
      breach of, this Debenture or the Security Agreement, and such failure or
      breach shall not have been remedied within ten (10) days after the date on
      which notice of such failure or breach shall have been given;

            (iii) the Company or any of its subsidiaries shall commence, or
      there shall be commenced against the Company or any such subsidiary a case
      under any applicable bankruptcy or insolvency laws as now or hereafter in
      effect or any successor thereto, or the Company commences any other
      proceeding under any reorganization, arrangement, adjustment of debt,
      relief of debtors, dissolution, insolvency or liquidation or similar law
      of any jurisdiction whether now or hereafter in effect relating to the
      Company or any subsidiary thereof or there is commenced against the
      Company or any subsidiary thereof any such bankruptcy, insolvency or other
      proceeding which remains undismissed for a period of 60 days; or the
      Company or any subsidiary thereof is adjudicated insolvent or bankrupt; or
      any order of relief or other order approving any such case or proceeding
      is entered; or the Company or any subsidiary thereof suffers any
      appointment of any custodian or the like for

                                      -3-
it or any substantial part of its property which continues undischarged or
      unstayed for a period of 60 days; or the Company or any subsidiary thereof
      makes a general assignment for the benefit of creditors; or the Company
      shall fail to pay, or shall state that it is unable to pay, or shall be
      unable to pay, its debts generally as they become due; or the Company or
      any subsidiary thereof shall call a meeting of its creditors with a view
      to arranging a composition or adjustment of its debts; or the Company or
      any subsidiary thereof shall by any act or failure to act indicate its
      consent to, approval of or acquiescence in any of the foregoing; or any
      corporate or other action is taken by the Company or any subsidiary
      thereof for the purpose of effecting any of the foregoing;

            (iv) the Company shall default in any of its obligations under any
      mortgage, credit agreement or other facility, indenture agreement or other
      instrument under which there may be issued, or by which there may be
      secured or evidenced any indebtedness of the Company in an amount
      exceeding one hundred thousand dollars ($100,000), whether such
      indebtedness now exists or shall hereafter be created and such default
      shall result in such indebtedness becoming or being declared due and
      payable prior to the date on which it would otherwise become due and
      payable;

            (v) the Common Stock shall fail to be actively traded on the OTC
      Bulletin Board or fail to be listed or quoted for trading on any
      Subsequent Market if after the Original Issue Date the Common Stock shall
      be listed or quoted for trading on any such Subsequent Market, or if the
      Common Stock shall be suspended from trading thereon without being
      actively traded, relisted or having such suspension lifted, as the case
      may be, within three (3) Trading Days;

            (vi) the Company shall be a party to any Change of Control
      Transaction (as defined in Section 6), shall agree to sell or dispose all
      or in excess of 50% of its assets in one or more transactions (whether or
      not such sale would constitute a Change of Control Transaction), or shall
      redeem more than a de minimis number of shares of Common Stock or other
      equity securities of the Company (other than redemptions of Underlying
      Shares);

            (vii) an Underlying Securities Registration Statement shall not have
      been declared effective by the Commission on or prior to the 180th day
      after the Original Issue Date;

            (viii) an Event (as hereinafter defined) shall not have been cured
      prior to the expiration of thirty (30) days from the Event Date (as
      hereinafter defined) relating thereto (other than an Event resulting from
      a failure of an Underlying Securities Registration Statement to be
      declared effective by the Commission on or prior to the Effectiveness
      Date;

            (ix) the Company shall fail for any reason to deliver certificates
      to a Holder prior to the twentieth (20th) day after the Conversion Date
      pursuant to Section 5(b) or the Company shall provide notice to the
      Holder, including by way of public announcement,

                                      -4-
at any time, of its intention not to comply with requests for conversions
      of any Debentures in accordance with the terms hereof; or

            (x) the Company shall fail for any reason to deliver the payment in
      cash pursuant to a Buy-In (as defined below) within ten (10) days after
      notice is deemed delivered hereunder.

      (b) If any Event of Default occurs and is continuing, the full principal
amount of this Debenture (and, at the Holder's option, all other Debentures then
held by such Holder), together with interest and other amounts owing in respect
thereof, to the date of acceleration shall become, immediately due and payable
in cash. The aggregate amount payable upon an Event of Default shall be equal to
the sum of (i) the Mandatory Prepayment Amount (as defined below) plus (ii) the
product of (A) the number of Underlying Shares issued in respect of conversions
hereunder or as payment of interest hereunder, in either case, within thirty
(30) days of the date of a declaration of an Event of Default and then held by
the Holder and (B) the Per Share Market Value on the date prepayment is due or
the date the full prepayment price is paid, whichever is greater. Interest shall
accrue on the prepayment amount hereunder from the seventh (7th) day after such
amount is due (being the date of an Event of Default) through the date of
payment in full thereof at the rate of 18% per annum. All Debentures and
Underlying Shares for which the full repayment price hereunder shall have been
paid in accordance herewith shall be promptly surrendered to or as directed by
the Company. The Holder need not provide and the Company hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Holder at any
time prior to payment hereunder. No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.

            Section 5. Conversion.

            (a) (i) This Debenture shall be convertible into shares of Common
Stock (subject to the limitations set forth in Section 5(a)(ii) hereof) at the
option of the Holder, in whole or in part at any time and from time to time
after the seventy fifth (75th) day following the Original Issue Date. The number
of shares of Common Stock issuable upon a conversion hereunder shall be
determined by dividing the outstanding principal amount of this Debenture to be
converted, plus all accrued but unpaid interest thereon, by the Conversion
Price, each as subject to adjustment as provided hereunder. The Holder shall
effect conversions by surrendering the Debentures (or such portions thereof) to
be converted, together with the form of conversion notice attached hereto as
Exhibit A (a "Conversion Notice") to the Company. Each Conversion Notice shall
specify the principal amount of Debentures to be converted and the date on which
such conversion is to be effected, which date may not be prior to the date such
Conversion Notice is deemed to have been delivered hereunder (a "Conversion
Date"). If no Conversion Date is specified in a Conversion Notice, the
Conversion Date shall be the date that such Conversion Notice is deemed
delivered hereunder. Subject to Section 5(b)

                                      -5-
hereof, each Conversion Notice, once given, shall be irrevocable. If the Holder
is converting less than all of the principal amount represented by the
Debenture(s) tendered by the Holder with the Conversion Notice, or if a
conversion hereunder cannot be effected in full for any reason, the Company
shall honor such conversion to the extent permissible hereunder and shall
promptly deliver to such Holder (in the manner and within the time set forth in
Section 5(b)) a new Debenture for such principal amount as has not been
converted.

                  (ii) Certain Conversion Restrictions.

                  (A)(1) A Holder may not convert Debentures or receive shares
of Common Stock as payment of interest hereunder to the extent such conversion
or receipt of such interest payment would result in the Holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules thereunder) in excess of 4.999% of the then issued and outstanding
shares of Common Stock, including shares issuable upon conversion of, and
payment of interest on, the Debentures held by such Holder after application of
this Section. The Holder shall have the sole authority and obligation to
determine whether the restriction contained in this Section applies and to the
extent that the Holder determines that the limitation contained in this Section
applies, the determination of which portion of the principal amount of such
Debentures is convertible shall be in the sole discretion of the Holder. The
provisions of this Section may be waived by a Holder (but only as to itself and
not to any other Holder) upon not less than 75 days prior notice to the Company.
Other Holders shall be unaffected by any such waiver.

                        (2) A Holder may not convert Debentures or receive
shares of Common Stock as payment of interest hereunder to the extent such
conversion or receipt of such interest payment would result in the Holder
beneficially owning (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder) in excess of 9.999% of the then issued
and outstanding shares of Common Stock, including shares issuable upon
conversion of, and payment of interest on, the Debentures held by such Holder
after application of this Section. The Holder shall have the sole authority and
obligation to determine whether the restriction contained in this Section
applies and to the extent that the Holder determines that the limitation
contained in this Section applies, the determination of which portion of the
principal amount of such Debentures is convertible shall be in the sole
discretion of the Holder. The provisions of this Section may be waived by a
Holder (but only as to itself and not to any other Holder) upon not less than 75
days prior notice to the Company. Other Holders shall be unaffected by any such
waiver.

            (b) (i) Not later than three (3) Trading Days after a Conversion
Date, the Company will deliver or cause to be delivered to the Holder (i) a
certificate or certificates which shall be free of restrictive legends and
trading restrictions [(other than those required by the Purchase Agreement)]
representing the number of shares of the Common Stock being acquired upon the
conversion of Debentures (subject to the limitations set forth in Section
5(a)(iii) hereof), (ii) Debentures in a principal amount equal to the principal
amount of Debentures not converted; (iii) a bank check in the amount of all
accrued and unpaid interest (if the Company has elected to pay accrued interest
in cash), together with all other amounts then due and payable in accordance
with

                                      -6-
the terms hereof, in respect of Debentures tendered for conversion, and (iv) if
the Company has elected and is permitted hereunder to pay accrued interest in
shares of the Common Stock, certificates, which shall be free of restrictive
legends and trading restrictions [(other than those required by the Purchase
Agreement)], representing such number of shares of the Common Stock as equals
such interest divided by the Conversion Price calculated on the Conversion Date;
provided, however, that the Company shall not be obligated to issue certificates
evidencing the shares of the Common Stock issuable upon conversion of the
principal amount of Debentures until Debentures are delivered for conversion to
the Company or the Holder notifies the Company that such Debenture has been
mutilated, lost, stolen or destroyed and complies with Section 9 hereof. If in
the case of any Conversion Notice such certificate or certificates, including
for purposes hereof, any shares of the Common Stock to be issued on the
Conversion Date on account of accrued but unpaid interest hereunder, are not
delivered to or as directed by the Holder by the third (3rd) Trading Day after a
Conversion Date, the Holder shall be entitled 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 Debentures tendered for conversion. If the Company fails
to deliver to the Holder such certificate or certificates pursuant to this
Section, including for purposes hereof, any shares of the Common Stock to be
issued on the Conversion Date on account of accrued but unpaid interest
hereunder, prior to the fourth (4th) Trading Day after the Conversion Date, the
Company shall pay to such Holder, in cash, as liquidated damages and not as a
penalty, $1,500 for each day thereafter until the Company delivers such
certificates (such amount shall also be due for each Trading Day after the date
that the Holder may rescind such conversion until such date as the Holder shall
have received the return of the principal amount of Debentures relating to such
rescission).

            (ii) In addition to any other rights available to the Holder, if the
Company fails to deliver to the Holder such certificate or certificates pursuant
to Section 5(b)(i), including for purposes hereof, any shares of Common Stock to
be issued on the Conversion Date on account of accrued but unpaid interest
hereunder, prior to the fourth (4th) Trading Day after the Conversion Date, and
if after such the fourth (4th) Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Holder of the Underlying Shares which the Holder
anticipated receiving upon such conversion (a "Buy-In"), then the Company shall
pay in cash to the Holder (in addition to any remedies available to or elected
by the Holder) the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the aggregate principal amount of Debentures for which
such conversion was not timely honored. For example, if the Holder purchases
shares of Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of $10,000 aggregate principal
amount of Debentures, 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.

            (c) (i) The conversion price (the "Conversion Price") in effect on
any Conversion Date shall be the lesser of (a) the average of the Per Share
Market Values during the five (5) Trading Days immediately preceding the
Original Issue Date (the "Initial Conversion Price") and

                                      -7-
(b) 75% (the "Discount Rate") of the average of the Per Share Market Values
during the five (5) Trading Day period immediately preceding the applicable
Conversion Date, provided, however, that such five (5) Trading Day period shall
be extended for the number of Trading Days during such period, if any, in which
(A) the shares of Common Stock were not actively traded on the OTC Bulletin
Board or trading in the Common Stock was suspended from a Subsequent Market, or
(B) after the date declared effective by the Commission, the Underlying
Securities Registration Statement is not effective, or (C) after the date
declared effective by the Commission, the Prospectus included in the Underlying
Securities Registration Statement may not be used by the Holder for the resale
of Underlying Shares.

                  If: (a) an Underlying Securities Registration Statement is not
filed on or prior to the Filing Date (if the Company files such Underlying
Securities Registration Statement without affording the Holder the opportunity
to review and comment on the same, the Company shall not be deemed to have
satisfied this clause (a)), or (b) the Company fails to file with the Commission
a request for acceleration in accordance with Rule 12d1-2 promulgated under the
Securities Exchange Act of 1934, as amended, within five (5) days of the date
that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that an Underlying Securities Registration Statement will not be
"reviewed," or not subject to further review or comment, or (c) the Underlying
Securities Registration Statement is not declared effective by the Commission on
or prior to the Effectiveness Date, or (d) such Underlying Securities
Registration Statement is filed with and declared effective by the Commission
but thereafter ceases to be effective as to all Registrable Securities (as
defined in the Registration Rights Agreement) at any time prior to the
expiration of the "Effectiveness Period" (as defined in the Registration Rights
Agreement), without being succeeded within ten (10) days by an amendment to such
Underlying Securities Registration Statement or a subsequent Underlying
Securities Registration Statement filed with and declared effective by the
Commission, or (e) trading in the Common Stock shall fail to be actively traded
on the OTC Bulletin Board or if the Common Stock shall be suspended or delisted
from trading on any Subsequent Market for any reason for more than three (3)
Trading Days, (f) the conversion rights of the Holders are suspended for any
reason or (g) an amendment to the Underlying Securities Registration Statement
is not filed by the Company with the Commission within ten (10) days of the
Commission's notifying the Company that such amendment is required in order for
the Underlying Securities Registration Statement to be declared effective (any
such failure or breach being referred to as an "Event," and for purposes of
clauses (a), (c), (f) the date on which such Event occurs, or for purposes of
clause (b) the date on which such five (5) day period is exceeded, or for
purposes of clauses (d) and (g) the date which such 10 day-period is exceeded,
or for purposes of clause (e) the date on which such three (3) Business
Day-period is exceeded, being referred to as "Event Date"), then each of the
Initial Conversion Price and the Discount Rate shall be decreased by 2.0% on the
Event Date and each monthly anniversary thereof until the earlier to occur of
the second month anniversary after the Event Date and such time as the
applicable Event is cured (i.e., the Discount Rate would be lowered to 73% as of
the Event Date and 71% as of the one month anniversary of such Event Date).
Commencing on the second month anniversary after the Event Date, the Holder
shall have the option to either (x) require further cumulative 2.0% discounts to
continue or (y) require the Company to pay to the Holder 2.0% of the aggregate
principal amount of Debentures then held by such Holder (which, for purposes
hereof shall

                                      -8-
include all Debentures tendered for conversion by such Holder but for which
Underlying Shares due in respect thereof shall not have been received by such
Holder), in cash, as liquidated damages and not as a penalty, on the first day
of each monthly anniversary of the Event Date, until such time as the applicable
Event is cured. Any decrease in the Initial Conversion Price and the Discount
Rate pursuant to this Section shall remain in effect notwithstanding the fact
that the Event causing such decrease has been subsequently cured and further
monthly decreases have ceased.

                  (ii) If the Company, at any time while any Debentures are
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 the Common Stock, (b) subdivide
outstanding shares of the Common Stock into a larger number of shares, (c)
combine outstanding shares of the 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, the Initial Conversion Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of the Common
Stock outstanding before such event and of which the denominator shall be the
number of shares of the 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.

                  (iii) If the Company, at any time while any Debentures are
outstanding, shall issue rights, warrants or options to all holders of Common
Stock entitling them to subscribe for or purchase shares of Common Stock at a
price per share less than the Per Share Market Value at the record date
mentioned below, then the Initial Conversion Price shall be multiplied by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such rights, warrants or
options, plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares so offered would purchase at such Per Share
Market Value, and the denominator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to such issuance plus the
number of shares of Common Stock offered for subscription or purchase. Such
adjustment shall be made whenever such rights or warrants are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants. However, upon the
expiration of any right, warrant or option to purchase shares of Common Stock
the issuance of which resulted in an adjustment in the Conversion Price pursuant
to this Section 5(c)(iii), if any such right, warrant or option shall expire and
shall not have been exercised, the Conversion Price shall immediately upon such
expiration shall be recomputed and effective immediately upon such expiration
shall be increased to the price which it would have been (but reflecting any
other adjustments in the Conversion Price made pursuant to the provisions of
this Section 5 upon the issuance of other rights or warrants) had the adjustment
of the Conversion Price made upon the issuance of such rights, warrants, or
options been made on the basis of offering for subscription or purchase only
that number of shares of Common Stock actually purchased upon the exercise of
such rights, warrants or options actually exercised.

                                      -9-
(iv) If the Company or any subsidiary thereof, as applicable
with respect to Common Stock Equivalents (as defined below), at any time while
Debentures are outstanding, shall issue shares of Common Stock or rights,
warrants, options or other securities or debt that is convertible into or
exchangeable for shares of Common Stock ("Common Stock Equivalents") entitling
any Person to acquire shares of Common Stock at a price per share less than the
Conversion Price, then the Conversion Price shall be multiplied by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of shares of Common Stock or such Common Stock
Equivalents plus the number of shares of Common Stock which the offering price
for such shares of Common Stock or Common Stock Equivalents would purchase at
the Conversion Price, and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to such issuance
plus the number of shares of Common Stock so issued or issuable, provided, that
for purposes hereof, all shares of Common Stock that are issuable upon
conversion, exercise or exchange of Common Stock Equivalents shall be deemed
outstanding immediately after the issuance of such Common Stock Equivalents.
Such adjustment shall be made whenever such shares of Common Stock or Common
Stock Equivalents are issued.

                  (v) If the Company, at any time while Debentures are
outstanding, shall distribute to all holders of the Common Stock (and not to
Holders of Debentures) evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any security, then in each such case the
Initial Conversion Price at which Debentures shall thereafter be convertible
shall be determined by multiplying the Initial 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 Per Share Market Value of the Common Stock determined as of the
record date mentioned above, and of which the numerator shall be such Per Share
Market Value of the Common Stock 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; provided, however,
that in the event of a distribution exceeding ten percent (10%) of the net
assets of the Company, if the Holders of a majority in interest of the
Debentures dispute such valuation, such fair market value shall be determined by
a nationally recognized or major regional investment banking firm or firm of
independent certified public accountants of recognized standing (which may be
the firm that regularly examines the financial statements of the Company) (an
"Appraiser") selected in good faith by the holders of a majority in interest of
Debentures then outstanding; provided, that one half of the fees of such
Appraiser shall be payable by the holders of a majority in interest of
Debentures then outstanding (to be allocated on a pro-rata basis) and one half
of the fees of such Appraiser shall be payable by the Company; provided,
further, that the Company, after receipt of the determination by such Appraiser
shall have the right to select an additional Appraiser, in good faith, in which
case the fair market value shall be equal to the average of the determinations
by each such Appraiser. In either case the adjustments shall be described in a
statement provided to the holders of Debentures of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of the Common

                                      -10-
Stock. Such adjustment shall be made whenever any such distribution is made and
shall become effective immediately after the record date mentioned above.

                  (vi) In case of any reclassification of the Common Stock, or
any compulsory share exchange pursuant to which the Common Stock is converted
into other securities, cash or property (other than compulsory share exchanges
which constitute Change of Control Transactions), the Holders of the Debentures
then outstanding shall have the right thereafter to convert the then outstanding
principal amount, together with all accrued but unpaid interest and any other
amounts then owing hereunder in respect of this Debenture only into the shares
of stock and other securities, cash and property receivable upon or deemed to be
held by holders of Common Stock following such reclassification or share
exchange, and the Holders of the Debentures shall be entitled upon such event to
receive such amount of securities, cash or property as the shares of the Common
Stock of the Company into which the then outstanding principal amount, together
with all accrued but unpaid interest and any other amounts then owing hereunder
in respect of this Debenture could have been converted immediately prior to such
reclassification or share exchange would have been entitled. This provision
shall similarly apply to successive reclassifications or share exchanges.

                  (vii) All calculations under this Section 4 shall be made to
the nearest cent or the nearest 1/100th of a share, as the case may be.

                  (viii) Whenever the Initial Conversion Price is adjusted
pursuant to any of Section 4(c)(ii) - (v), the Company shall promptly mail to
each Holder of Debentures a notice setting forth the Initial Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.

                  (ix) If (A) the Company shall declare a dividend (or any other
distribution) on its Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of its 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 of
the Company, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, of
any compulsory share of exchange whereby the Common Stock is converted into
other securities, cash or property; (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company; then, and in each case, the Company shall cause to be filed at
each office or agency maintained for the purpose of conversion of the
Debentures, and shall cause to be mailed to the Holders of Debentures at their
last addresses as they shall appear upon the stock books of the Company, at
least 20 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,

                                      -11-
distributions, redemption, rights or warrants are to be determined or (y)
the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange 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, consolidation, merger,
sale, transfer or share exchange; provided, however, 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.
Holders are entitled to convert Debentures during the 20-day period commencing
the date of such notice to the effective date of the event triggering such
notice.

                  (x) In case of any (1) merger or consolidation of the Company
with or into another Person that would constitute a Change of Control
Transaction, or (2) sale by the Company of more than one-half of the assets of
the Company (on an as valued basis) in one or a series of related transactions,
or (3) tender or other offer or exchange (whether by the Company or another
Person) pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, stock, cash or property of the
Company or another Person; then, if a Holder has not exercised its rights to
prepayment, if any, under Section 4, such Holder shall have the right thereafter
to (A) if permitted under Section 4 hereof, exercise its rights to prepayment
under Section 3 with respect to such event, (B) convert its principal amount of
Debentures into the shares of stock and other securities, cash and property
receivable upon or deemed to be held by holders of Common
Stock following such merger, consolidation or sale, and such Holder shall be
entitled upon such event or series of related events to receive such amount of
securities, cash and property as the shares of Common Stock into which such
principal amount of Debentures could have been converted immediately prior to
such merger, consolidation or sales would have been entitled, (C) in the case of
a merger or consolidation, (x) require the surviving entity to issue shares of
convertible preferred stock or convertible debentures with such aggregate stated
value or in such face amount, as the case may be, equal to the principal amount
of Debentures then held by such Holder, plus all accrued and unpaid interest and
other amounts owing thereon, which newly issued shares of preferred stock or
debentures shall have terms identical (including with respect to conversion) to
the terms of the Debentures (except, in the case of preferred stock, as may be
required to reflect the differences between debt and equity) and shall be
entitled to all of the rights and privileges of a Holder of Debentures set forth
herein and the agreements pursuant to which the Debentures were issued
(including, without limitation, as such rights relate to the acquisition,
transferability, registration and listing of such shares of stock other
securities issuable upon conversion thereof), and (y) simultaneously with the
issuance of such convertible preferred stock or convertible debentures, shall
have the right to convert such instrument only into shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger or consolidation, or (D) in the event of an
exchange or tender offer or other transaction contemplated by clause (3) of this
Section, tender or exchange its principal amount of Debentures for such
securities, stock, cash and other property receivable upon or deemed to be held
by holders of Common Stock that have tendered or exchanged their shares of
Common Stock following such tender or exchange, and such Holder shall be
entitled upon such exchange or tender to receive such amount of securities, cash
and property as the shares of Common Stock into which such principal

                                      -12-
amount of Debentures would have been converted (taking into account all then
accrued and unpaid dividends) immediately prior to such tender or exchange would
have been entitled as would have been issued. In the case of clause (C), the
conversion price applicable for the newly issued shares of convertible preferred
stock or convertible debentures shall be based upon the amount of securities,
cash and property that each share of Common Stock would receive in such
transaction and the Conversion Price stated herein. The terms of any such
merger, sale, consolidation, tender or exchange shall include such terms so as
continue to give the Holders of Debentures the right to receive the securities,
cash and property set forth in this Section upon any conversion or redemption
following such event. This provision shall similarly apply to successive such
events.

            (d) The Company covenants that it will at all times reserve and keep
available out of its authorized and unissued shares of the Common Stock solely
for the purpose of issuance upon conversion of the Debentures and payment of
interest on the Debentures, 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 4(c)) upon the conversion of the
outstanding principal amount of the Debentures and payment of interest
hereunder. The Company covenants that all shares of the Common Stock that shall
be so issuable shall, upon issue, be duly and validly authorized, issued and
fully paid, nonassessable and, if the Underlying Securities Registration
Statement has been declared effective under the Securities Act, registered for
public sale in accordance with such Underlying Securities Registration
Statement.

            (e) Upon a conversion hereunder the Company shall not be required to
issue stock certificates representing fractions of shares of the Common Stock,
but may if otherwise permitted, make a cash payment in respect of any final
fraction of a share based on the Per Share Market Value at such time. If the
Company elects not, or is unable, to make such a cash payment, the Holder shall
be entitled to receive, in lieu of the final fraction of a share, one whole
share of Common Stock.

            (f) The issuance of certificates for shares of the Common Stock on
conversion of the Debentures 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 Debentures so converted.

            (g) Any and all notices or other communications or deliveries to be
provided by the Holders of the Debentures hereunder, including, without
limitation, any Conversion Notice, shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service or sent
by certified or registered mail, postage prepaid, addressed to the Company, at
1130 30th Street NW, Suite 500, Washington, DC 20007 (facsimile number (202)
625-4369, attention 

                                      -13-
Chief Financial Officer, or such other address or facsimile number as the
Company may specify for such purposes by notice to the Holders delivered in
accordance with this Section. 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 or sent by certified or registered mail, postage prepaid,
addressed to each Holder of the Debentures 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 and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 8:00 p.m. (New
York City time), (ii) the date after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section later than 8:00 p.m. (New York City time) on any date
and earlier than 11:59 p.m. (New York City time) on such date, (iii) four days
after deposit in the United States mail, (iv) the Business Day following the
date of mailing, if send by nationally recognized overnight courier service, or
(v) upon actual receipt by the party to whom such notice is required to be
given.

            Section 6. Definitions. For the purposes hereof, the following terms
shall have the following meanings:

            "Average Price" on any date means the average Per Share Market Value
for the five (5) Trading Days immediately preceding such date.

            "Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

            "Change of Control Transaction" means the occurrence of any of (i)
an acquisition after the date hereof by an individual or legal entity or "group"
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 50% of the
voting securities of the Company, (ii) a replacement at one time or over time of
more than one-half of the members of the Company's board of directors which is
not approved by a majority of those individuals who are members of the board of
directors on the date hereof (or by those individuals who are serving as members
of the board of directors on any date whose nomination to the board of directors
was approved by a majority of the members of the board of directors who are
members on the date hereof), (iii) the merger of the Company with or into
another entity, consolidation or sale of all or substantially all of the assets
of the Company in one or a series of related transactions, or (iv) the execution
by the Company of an agreement to which the Company is a party or by which it is
bound, providing for any of the events set forth above in (i), (ii) or (iii).

                                      -14-
"Common Stock" means the common stock, $.00025 par value, of the
Company and stock of any other class into which such shares may hereafter have
been reclassified or changed.

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

            "Mandatory Prepayment Amount" for any Debentures shall equal the sum
of (i) the greater of (A) 120% of the principal amount of Debentures to be
prepaid, plus all accrued and unpaid interest thereon and (B) the principal
amount of Debentures to be prepaid, plus all accrued and unpaid interest
thereon, divided by the Conversion Price on (x) the date the Mandatory
Prepayment Amount is demanded or otherwise due or (y) the date the Mandatory
Prepayment Amount is paid in full, whichever is less, multiplied by the Average
Price on (x) the date the Mandatory Prepayment Amount is demanded or (y) the
date the Mandatory Prepayment Amount is paid in full, whichever is greater, and
(ii) all other amounts, costs, expenses and liquidated damages due in respect of
such Debentures.

            "Original Issue Date" shall mean the date of the first issuance of
the Debentures regardless of the number of transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence such
Debenture.

            "Per Share Market Value" on any particular date means (a) the
closing bid price per share of the Common Stock on such date on a Subsequent
Market, or (b) if the Common Stock is not then listed or quoted on a Subsequent
Market, the closing bid price per share of the Common Stock on such date on the
OTC Bulletin Board, or (c) if the Common Stock is not then listed or quoted on
the OTC Bulletin Board, the closing bid price per share of the Common Stock on
such date on the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding its
functions of reporting prices), or (d) if the Common Stock is not then reported
by the National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices), then the average of the "Pink
Sheet" quotes for the relevant conversion period, as determined in good faith by
the Holder, or (e) if the Common Stock is not then publicly traded, the fair
market value of a share of Common Stock as determined by an Appraiser selected
in good faith by the Holders of a majority interest of the principal amount of
Debentures.

            "Person" means a corporation, an association, a partnership,
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.

            ["Purchase Agreement" means a Securities Purchase Agreement between
the Company and the original Holder, as amended modified or supplemented from
time to time in accordance with its terms.]

            "Registration Rights Agreement" means the Registration Rights
Agreement between the Company and the original Holder, as amended, modified or
supplemented from time to time in accordance with its terms.

                                      -15-
"Security Agreement" means the Security Agreement, dated as of the
date hereof between the Company and the original Holder, as amended modified or
supplemented from time to time in accordance with its terms.

            "Trading Day" means (a) a day on which the Common Stock is traded on
a Subsequent Market, or (b) if the Common Stock is not listed or quoted on a
Subsequent Market, a day on which the Common Stock is traded on the
over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the
Common Stock is not then listed or quoted on the OTC Bulletin Board, a day on
which the Common Stock is quoted on the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, however, that in
the event that the Common Stock is not listed or quoted as set forth in (a), (b)
and (c) hereof, then Trading Day shall mean a Business Day.

            "Underlying Shares" means the shares of Common Stock issuable upon
conversion of Debentures or as payment of interest in accordance with the terms
hereof.

            Section 7. Except as expressly provided herein, no provision of this
Debenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of, interest and liquidated damages (if
any) on, this Debenture at the time, place, and rate, and in the coin or
currency, herein prescribed. This Debenture is a direct obligation of the
Company. This Debenture ranks pari passu with all other Debentures now or
hereafter issued under the terms set forth herein. The Company may not
voluntarily prepay the outstanding principal amount of the Debentures except
with the previous written consent of the Holders.

            Section 8. This Debenture shall not entitle the Holder to any of the
rights of a stockholder of the Company, including without limitation, the right
to vote, to receive dividends and other distributions, or to receive any notice
of, or to attend, meetings of stockholders or any other proceedings of the
Company, unless and to the extent converted into shares of Common Stock in
accordance with the terms hereof. As long as there are Debentures outstanding,
the Company shall not and shall cause it subsidiaries not to, without the
consent of the Holders, (i) amend its certificate of incorporation, bylaws or
other charter documents so as to adversely affect any rights of the Holders;
(ii) repay, repurchase or offer to repay, repurchase or otherwise acquire shares
of its Common Stock or other equity securities; or (iii) enter into any
agreement with respect to any of the foregoing

            Section 9. If this Debenture shall be mutilated, lost, stolen or
destroyed, the Company shall execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Debenture, or in lieu of or in
substitution for a lost, stolen or destroyed debenture, a new Debenture for the
principal amount of this Debenture so mutilated, lost, stolen or destroyed but
only upon receipt of evidence of such loss, theft or destruction of such
Debenture, and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Company.

                                      -16-
Section 10. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of laws thereof. The Company and the Holders hereby irrevocably submit
to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, or that such suit, action or proceeding is
improper. Each of the Company and the Holder hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by receiving a copy thereof sent to the Company at the address in
effect for notices to it under this instrument and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.

            Section 11. Any waiver by the Company or the Holder of a breach of
any provision of this Debenture shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Debenture. The failure of the Company or the Holder to insist
upon strict adherence to any term of this Debenture on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Debenture. Any waiver must be in writing.

            Section 12. If any provision of this Debenture is invalid, illegal
or unenforceable, the balance of this Debenture shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

            Section 13. 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 (or, if such next succeeding Business Day falls in
the next calendar month, the preceding Business

                                      -17-
Day in the appropriate calendar month).

            Section 14. The payment obligations under this Debenture and the
obligations of the Company to the Holder arising upon the conversion of all or
any of the Debentures in accordance with the provisions hereof are secured
pursuant to the Security Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGE FOLLOWS]

                                      -18-
IN WITNESS WHEREOF, the Company has caused this Secured Convertible
Debenture to be duly executed by a duly authorized officer as of the date first
above indicated.

                              EUROTECH, LTD.

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

Attest:

By:
   --------------------------
   Name:
   Title:
EXHIBIT A

                             NOTICE OF CONVERSION

(To be Executed by the Registered Holder
in order to Convert the Debenture)

The undersigned hereby elects to convert the attached Debenture into shares of
common stock, $.00025 par value (the "Common Stock"), of EUROTECH, LTD. (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

                              __________________________________________________
                              Principal Amount of Debentures to be Converted
 
                              __________________________________________________
                              Number of shares of Common Stock to be Issued

                              __________________________________________________
                              Applicable Conversion Price

                              __________________________________________________
                              Signature

                              __________________________________________________
                              Name

                              __________________________________________________
                              Address