FORM
      OF

    ADVANCE
      NANOTECH, INC. 

    DIRECTOR
      COMPENSATION AND 

    CONFIDENTIAL
      INFORMATION AGREEMENT

    


    This
      Director Compensation and Confidential Information Agreement (this “Agreement”),
      effective ________ (the “Effective
      Date”),
      is
      entered into by and between Advance Nanotech, Inc., a Colorado corporation
      (the
“Company”),
      having offices at 600 Lexington Avenue, New York, NY 10022 and ____________
      (the
“Director”),
      residing at ________________________________________.

    


    WHEREAS,
      the
      Company seeks to attract, retain and motivate qualified directors, to enhance
      the long-term mutuality of interest between directors and stockholders, and
      to
      protect the proprietary and confidential aspects of the Company’s business, and,
      therefore, sees fit to compensate the Director as described further
      herein;

    


    WHEREAS,
      as a
      member or prospective member of the Board of Directors of the Company (the
      “Board”),
      Director has or will have access to and receive information regarding the
      Company, it products, services, and business processes and business plans and
      other confidential and proprietary information, as described further
      herein;

    


    WHEREAS,
      execution of this Agreement is a condition of Director’s election, access to
      confidential and proprietary information of the Company and compensation
      hereunder; 

    


    NOW,
      THEREFORE,
      in
      consideration of the mutual promises and covenants contained herein, and other
      good and valid consideration that is mutually acceptable to the parties, the
      receipt and sufficiency of which are hereby acknowledged, the Company and
      Director (the “Parties”)
      hereby
      agree, and, if Director is currently a member of the Board, the terms and
      conditions of Director’s election to the Board are hereby amended and restated,
      as follows:

    


    1. Covenants
      of Company and Director. 

    


    a. In
      reliance upon the representations and warranties of Director as set forth
      herein, the Company agrees to provide certain Confidential Information (as
      hereinafter defined) to Director in his capacity as a member of the Board,
      from
      time to time.

    


    b. Director
      agrees, represents, and warrants to maintain the confidentiality of such
      Confidential Information (as hereinafter defined) as set forth
      herein.

    


    c. Director
      hereby affirms and agrees that the covenants contained herein are made by
      Director in consideration of Director (i) being elected to the Board; (ii)
      being
      granted access to and receiving Confidential Information (as hereinafter
      defined); and (iii) the compensation provided herein.

    


    2. Identification
      of Confidential Information.

    


    a. The
      term
“Confidential
      Information”
shall
      mean all financial, technical and other information pertaining to the business,
      plan, or operations of Company or as otherwise designated as Confidential
      Information by the Company at the time it is disclosed to Director pursuant
      to
      subparagraph 2(b) below, including all copies thereof (including, without
      limitation, all non-identical copies, regardless of origin or location),
      including but not limited to algorithms, books, brochures, pamphlets, memoranda
      (including those of telephone or oral conversations), letters, electronic mail,
      reports, charts, graphs, notes, telegrams, and records, photographic imaging,
      computer tapes and discs, and video and audio tapes, agreements, files, books,
      logs, charts, records, studies, reports, surveys, schedules, plans, maps,
      statistical information, and models which may be furnished or disclosed to
      Director by, or acquired by Director directly or indirectly from, the Company.
      Such term shall also include all memoranda, notes, reports, documents and other
      media containing Confidential Information, as well as any copies and extracts
      of
      Confidential Information and any computer-generated documents and data
      containing Confidential Information prepared by or for the benefit of
      Director.

    


    b. Information
      considered to be Confidential Information by the Company may be disclosed orally
      or in writing. Oral disclosures of Confidential Information shall be orally
      noted, at the time of disclosure, to comprise Confidential Information. Written
      disclosures of Confidential Information or summaries of Confidential Information
      need not be marked “Confidential” or “Secret” or contain terms of similar import
      in order to be deemed Confidential Information hereunder. All communications
      at
      all meetings of the Board, or any committee thereof, and all records of said
      communications shall be deemed Confidential Information.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Exceptions:
      Public Information.
      For
      purposes of this Agreement, Confidential Information shall not include, and
      the
      obligations herein shall not apply to, information that: (a) is now or
      subsequently becomes generally available to the public through no fault of
      Director; (b) Director can demonstrate, by clear and convincing evidence, was
      rightfully in his or her possession prior to disclosure to Director by Company;
      (c) Director rightfully obtains from a third party without restriction and
      without breach of this Agreement; (d) is released or approved for release by
      Company without restriction; or (e) is inherently disclosed in the use, lease,
      sale, or other distribution of any present or future product or service produced
      by, for, or under authorization of Company or in publicly available supporting
      documentation for any such product or service. 

    


    4. Director’s
      Obligations.
      

    


    a. Fiduciary
      Duties.
      Director acknowledges and agrees that he is subject to obligations to the
      Company as a member of the Board including a duty of loyalty which requires
      that
      Director exercise his powers in the interests of the Company, and not in the
      Directors’ own interest or in the interest of another person (e.g.,
      family
      members). Director’s duty of loyalty also incorporates a duty to maintain the
      confidentiality of all matters involving the Company until such time as there
      has been a general public disclosure. 

    


    b. General
      Standard of Care.
      Director agrees, represents, and warrants to use reasonable care, but in all
      events at least the same degree of care that he or she uses to protect his
      or
      her own confidential and proprietary information of similar importance, to
      prevent the unauthorized use, disclosure, or availability of Confidential
      Information of the Company. Director agrees to be responsible and liable for
      any
      negligent or willful act or omission by Director resulting in an unauthorized
      use or disclosure of the Confidential Information. 

    


    c. Specific
      Obligations of Director.
      Director agrees, represents, and warrants to take precautions to avoid any
      unauthorized use or disclosure of the Confidential Information. Such precautions
      shall include but not be limited to: (i) securing writings, documents,
      electronic communications and other media containing such Confidential
      Information in a safe or locked file cabinet or the equivalent; (ii) limiting
      Director’s copying of media or materials which contain Confidential Information
      to only those copies reasonably necessary under the standard of Paragraph 5
      of
      this Agreement; (iii) preventing his own distribution of such media or materials
      unless specifically authorized by Company to do so; (iv) maintaining a log
      of
      all persons, if applicable, who are given access to Confidential Information
      by
      Director after receiving the Company’s authorization to do so; and (v)
      maintaining a written agreement with each person, if applicable, who Director
      may give access to such Confidential Information sufficient to comply with
      the
      terms of this Agreement. 

    


    d. Acknowledgement.
      Director acknowledges and agrees that the confidentiality obligations contained
      in paragraph 4b and 4c above are in addition to, and not in substitution for,
      Director’s fiduciary obligations as a director of the Company described in
      paragraph 4a above. Any remedies specifically provided for in this Agreement
      for
      breach of Director’s obligations under paragraph 4b and 4c shall be cumulative
      and in addition to any other remedies available at law or in equity for breach
      of Director’s fiduciary obligations to the Company and any other provision of
      this Agreement. 

    


    e. Notice.
      Director shall advise the Company immediately in writing in the event he or
      she
      learns or has reason to believe any person to whom he or she has allowed access
      to the Confidential Information has violated, or intends to violate, any
      provision of this Agreement.

    


    5. Limitations
      on Use and Disclosure.
      

    


    a. Authorized
      Use.
      Director
      may use the Confidential Information only in connection with and for purposes
      of
      his acting as a member of the Board and as the Company, its officers and
      directors may direct.

    


    b. Authorized
      Disclosure.
      Director may disclose the Confidential Information only to persons, if
      applicable, who (i) have a “need to know” such Confidential Information in order
      to enable Director to use such Confidential Information for purposes in support
      of the Company’s products or services, and (ii) are legally bound to use and
      disclose such Confidential Information in accordance with the terms of this
      Agreement. Director may make a reasonable number of copies of materials or
      media
      containing such information as appropriate to accomplish the purpose agreed
      to
      by the Company. Director shall notify the Company in writing of any disclosures
      made pursuant to this paragraph.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    c. Compelled
      Disclosure.
      Director may, in addition, use or disclose Confidential Information if and
      to
      the extent: (i) required by any request or order of any government authority;
      (ii) otherwise required by law; or (iii) necessary to establish his or her
      rights under this Agreement; provided,
      however, that in each case, Director will first notify Company of such
      requirement, permit Company to contest such requirement if reasonably
      appropriate, and cooperate with Company in limiting the scope of the proposed
      use or disclosure and/or obtaining appropriate further means for protecting
      the
      confidentiality of the Confidential Information. 

    


    6. Return
      of Confidential Information.
      

    


    a. Upon
      the
      Company’s request, at any time, Director will either return or, if requested by
      the Company, destroy all copies of any media or materials containing
      Confidential Information. Upon the Company’s request, Director agrees to certify
      that it has completed such requested action. 

    


    b. Director’s
      obligations under Sections 5 and 6 shall survive termination of Director’s
      elected term and/or term of employment, or both, for any reason or the return
      of
      Confidential Information which is the subject of this Agreement.

    


    7. Remedies
      for Non-Compliance.
      It is
      agreed that the unauthorized use or disclosure of any Confidential Information
      by Director in violation of this Agreement or failure to disclose, hold in
      trust, and assign to the Company all Director’s right, title, and interest in
      and to any and all Inventions, as defined in Section 8a will cause severe and
      irreparable injury to the Company for which there is no adequate remedy at
      law
      and that it may not be possible to measure damages for such injury with
      reasonable certainty. In the event of any violation of this Agreement, Director
      agrees that the Company shall be authorized and entitled to obtain from any
      court of competent jurisdiction preliminary and/or permanent injunctive relief,
      as well as any other relief permitted by applicable law, restraining Director
      from engaging in activities prohibited by this Agreement. Director agrees to
      waive any requirement that the Company post bond as a condition for obtaining
      any such relief. Director shall notify the Company immediately, and cooperate
      with the Company at the Company’s reasonable request, upon Director’s discovery
      of any loss or compromise of the Company’s Confidential Information.
The
      Parties expressly agree that it shall not be a defense in such an injunction
      action that the Company had previously breached this Agreement. 

    


    8. Assignment
      of Inventions.

    


    a. Director
      agrees that Director has and will promptly make full written disclosure to
      the
      Company, will hold in trust for the sole right and benefit of the Company,
      and
      hereby assigns to the Company, or its designee, all Director’s right, title, and
      interest in and to any and all inventions, original works of authorship,
      developments, concepts, improvements, designs, discoveries, ideas, trademarks
      or
      trade secrets, whether or not patentable or registrable under copyright or
      similar laws, which Director has or may solely or jointly conceive or develop
      or
      reduce to practice, or cause to be conceived or developed or reduced to
      practice, and any patentable improvements thereto which Director may solely
      or
      jointly conceive or develop or reduce to practice, in his capacity as a director
      of the Company and during or in consequence of his performance of his duties
      as
      a director of the Company (collectively referred to as “Inventions”).
      Director further acknowledges that all original works of authorship which are
      made by Director (solely or jointly with others) in his capacity as a director
      of the Company and during or in consequence of his performance of his duties
      as
      a director of the Company and which are protectible by copyright are “works made
      for hire,” as that term is defined in the United States Copyright Act. Director
      understands and agrees that the decision whether or not to commercialize or
      market any Invention developed by Director solely or jointly with others is
      within the Company’s sole discretion and for the Company’s sole benefit and that
      no royalty will be due to Director as a result of the Company’s efforts to
      commercialize or market any such Invention.

    


    b. Notwithstanding
      any provision of clause (a) of Section 8 hereof to the contrary, the Parties
      hereby agree and acknowledge that “Inventions” (as used in such clause (a))
      shall not apply to, and Company shall have no right (ownership or otherwise)
      in
      or to, any invention which is developed by Director on his/her own time without
      using any trade secret or other intellectual property information, right or
      property of the Company unless the invention relates, at the time of conception
      or reduction to practice of the invention, directly to the business of Company,
      or actual or demonstrably anticipated research or development of the Company.
      


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    c. Director’s
      obligations under this Section 8 shall survive the expiration or termination
      of
      Director’s term of election or employment by the Company for any
      reason.

    


    9. Director
      Compensation and Benefits.

    


    a. Annual
      Retainer and Committee Compensation.
      Director shall be entitled to an annual retainer for his services in the amount
      of Twenty Thousand ($20,000.00) Dollars. In addition, each Chairman of the
      Company’s Compensation Committee, Audit Committee and Governance Committee shall
      be entitled to compensation for his services thereon in the amount of
      Twenty-Five Thousand ($25,000.00) Dollars, This annual retainer and compensation
      shall be payable in equal quarterly cash installments in arrears commencing
      ___________, consistent with the Company's standard payroll practices for its
      directors. Director compensation shall be reviewed annually by the Board and
      set
      by the Board.

    


    


    


    b. Expenses.
      Upon
      submission of appropriate invoices or vouchers, the Company shall pay or
      reimburse Director for all reasonable expenses incurred by him in the
      performance of his duties as a member of the Board, or any committee thereof,
      and in furthering the business, and in keeping with the policies, of the
      Company. 

    


    c. Stock
      Plans.
      As part
      of the annual retainer compensation provided in paragraph 9a above, during
      the
      Director’s term of election, Director may be included in any stock incentive,
      stock option, or stock compensation plan as the Board may determine. Such plans
      may be documented by the Board, the administrator of such a plan, if any, and
      Director from time to time.

     

    10. Miscellaneous.
      

    


    a. This
      Agreement will be governed by and construed in accordance with the laws of
      the
      State of Colorado, as it would apply to contracts negotiated, executed,
      delivered and performed solely in such jurisdiction. All issues and questions
      concerning the construction, validity, enforcement, and interpretation of this
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Colorado, without giving effect to any choice of law or conflict
      of
      law rules or provisions (whether of the State of Colorado or any other
      jurisdiction) that would cause the application of the laws of any jurisdiction
      other than those of the State of Colorado.

    


    b. This
      Agreement states the entire agreement between the Parties concerning the subject
      matter hereof and supersedes any prior and contemporaneous agreements between
      the Parties relating thereto. No amendment, modification or waiver of this
      Agreement shall be binding or effective for any purpose unless it is made in
      a
      writing signed by the party against which enforcement of such amendment,
      modification or waiver is sought. No failure or delay by a Party hereto in
      enforcing any right, power or privilege created hereunder shall operate as
      an
      implied waiver thereof, nor shall any single or partial enforcement thereof
      preclude any other or further enforcement thereof or the enforcement of any
      other right, power or privilege. 

    


    c. The
      parties acknowledge that the terms and conditions of this Agreement and the
      existence of the discussions between them are confidential, and shall not be
      disclosed, except as provided elsewhere in this Agreement, without the written
      consent of the other party.

    


    d. This
      Agreement may not be assigned by Director. This Agreement shall inure to the
      benefit of Company, its successors, and assigns. 

    


    e. In
      the
      event that any provision of this Agreement should be held to be void, voidable,
      or unenforceable, the remaining portions hereof shall remain in full force
      and
      effect.

    


    f. The
      captions used in this Agreement are for convenience of reference only and do
      not
      constitute a part of this Agreement and shall not be deemed to limit,
      characterize or in any way affect any provision of this Agreement, and all
      provisions of this Agreement shall be enforced and construed as if no caption
      had been used in this Agreement.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    g. This
      Agreement is a legally binding document. Director acknowledges that he or she
      has read and understands this Agreement, that he or she has had the opportunity
      to consult with and obtain independent legal advice from his attorneys
      concerning the terms and conditions of this Agreement, including but not limited
      to the scope and duration of this Agreement, that he or she is signing this
      Agreement voluntarily and that he or she intends to be bound by the Agreement
      and each of its terms. 

    


    h. The
      construction and interpretation of any clause or provision of this Agreement
      shall be construed without regard to the identity of the party that prepared
      this Agreement, and no presumption shall arise as a result that this Agreement
      was prepared by one party or the other.

    


    i. In
      the
      event a dispute arises regarding this Agreement, the prevailing party shall
      be
      entitled to recover all attorneys' fees and expenses incurred. 

    


    j. Subject
      to the terms and conditions herein provided, each of the parties hereto agrees
      to use all commercially reasonable efforts to take, or cause to be taken, all
      action and to do, or cause to be done, all things necessary, proper or advisable
      to consummate and make effective as promptly as practicable the transactions
      contemplated by this Agreement, including using all commercially reasonable
      efforts to remove any legal impediment to the consummation or effectiveness
      of
      such transactions and to obtain any consents and approvals required under this
      Agreement.

    


    k. This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which, when taken together, constitute one and
      the
      same document. The signature of any party to any counterpart shall be deemed
      a
      signature to, and may be appended to, any other counterpart.

    


    WHEREFORE,
      the Parties have executed this Agreement.

    


    
      	
               

              ADVANCE
                NANOTECH, INC.

            	 	
               

              DIRECTOR

            
	
              By:

            	  
	 	 	 
	
               

              Title:

            	 	 	 	
              Name:
                

            
	
               

              Date:

            	 	 	
               

              Date: