VELOCITY HOMES, INC.

MASTER RESIDENTIAL 1SUBCONTRACT AGREEMENT VERSION I THIS MASTER RESIDENTIAL SUBCONTRACT AGREEMENT, VERSION I, ("Agreement") is entered into effective as of the day of ___________, 2008 ("Effective Date") by and between VELOCITY HOMES, INC., a Utah corporation ("Contractor"), and ("Subcontractor"). RECITALS A. Contractor is in the business of building and constructing improvements to real property for the purpose of completing residential dwelling units (Project) and Subcontractor desires to provide Subcontractors services to Contractor on the Project with all terms and conditions as set forth herein. B. Subcontractor has experience in the construction and installation of parts of construction projects, including, but not limited to, the construction, installation and improvement of _______________________ on regular, fast-track and/or design-build schedules, and has the expertise and know-how required for Subcontractor Work, as hereinafter defined, to be successfully performed as provided herein. C. Contractor and Subcontractor desire to enter into this Agreement under which Subcontractor shall perform certain work with regard to the Project pursuant to the terms and conditions set forth in this Agreement and as defined herein or by subsequent amendments or exhibits hereto. D. Contractor and Subcontractor mutually desire that all terms and conditions set forth in this Agreement become the terms and conditions governing future projects for a period of six months from the date of execution hereof and that upon receipt by Subcontractor of a written Notice to Proceed, in similar form as Exhibit G attached hereto, from Contractor that the terms, conditions, and pricing set forth in this Agreement, including all Exhibits attached hereto, become the terms, conditions, and pricing binding Contractor and Subcontractor on future projects as identified in the Notice to Proceed. E. It is the express and mutual intent of Contractor and Subcontractor to use this Agreement and the terms herein as the Agreement terms, conditions, and pricing, for future projects between Contractor and Subcontractor; Contractor may provide a written Notice to Proceed to Subcontractor as set forth on Exhibit G hereto, with said Exhibit G identifying the scope of the project and the pertinent terms and price of the project based on the plans, specifications, and prices submitted by Subcontractor to Contractor as part of the Subcontractor Bid Form identified as Exhibit A.. F. Contractor and Subcontractor understand that after receipt by Subcontractor of a written Notice to Proceed from Contractor based on the bid received by Contractor from Subcontractor including the plans, specifications, and prices as prepared by Subcontractor that a mutually enforceable and legally binding agreement will be formed thereby with the terms hereof included therein and incorporated by reference thereto. NOW, THEREFORE, in consideration of the recitals, covenants, conditions and undertakings set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Contractor and Subcontractor agree as follows: SECTION 1 SUBCONTRACTOR WORK 1.1. Scope of Work. Subcontractor shall furnish all labor, supervision, equipment, materials, and services as may be required to properly and timely complete the improvements as set forth in Recital B hereof for the Project and for any future Project identified through Exhibit or addendum hereto, pursuant to the Subcontract Documents and Contractors directives, and pursuant to any detail further set forth on Exhibit G attached hereto or future Exhibit Gs incorporating the terms hereof, which by this reference is incorporated and made a part of this Agreement (Subcontract Work). Subcontractor shall complete all work necessary to resolve related issues and tie into the work of adjoining trades. Anything which is not shown or detailed in the Subcontract Documents, but which is implied and
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required to carry out the Scope of Subcontract Work or intended by the Subcontract Documents, shall be the responsibility of the Subcontractor as though it were specifically detailed. 1.2. Subcontract Documents. The Subcontract Documents include only this Subcontract Agreement, any attachments signed by Contractor, the Plans and Specifications relating to the Prime Contract (between the Owner and the Contractor), and any and all written changes, exhibits, amendments or revisions thereto (Subcontract Documents). The Subcontract Documents are by this reference incorporated and made a part hereof. Subcontractor hereby admits and confirms that it received a current copy of all Subcontract Documents, for the Project at the time of bidding, and Subcontractor shall have the sole responsibility to regularly inquire about, obtain, review, and comply with all Subcontract Documents. The Subcontract Documents shall also be made available at Contractors address upon Subcontractors written request. SECTION 2 CONSTRUCTION SCHEDULE 2.1 Construction Schedule. Subcontractor is aware of and agrees to comply with Contractors construction schedule as set forth on Exhibit B attached hereto and made a part hereof. Contractor may, from time to time, revise or update the schedule or change the time, order or priority of various portions of the Project or the Subcontractor Work as deemed necessary by Contractor as the Project progresses. The schedule and all subsequent changes shall be provided to the Subcontractor promptly and reasonably in advance of the Subcontractors required performance on Contractors website (www.velocitycommunities.com). Contractor may in Contractors discretion post a revised and updated Construction Schedule on Contractors website. It is the sole responsibility of the Subcontractor to check the website for updates and Contractor shall post all updates to the website by 7:30 a.m. Monday morning of each week. In the event that the Subcontractor, in the sole discretion of the Contractors designee, fails to comply with the Contractors building schedule, the Contractor may terminate this Agreement and secure another person or entity to complete the Subcontractor Work. In such event, the Contractor shall be liable to the Subcontractor only for such Subcontractor Work actually completed by Subcontractor prior to the time of termination. The Subcontractor shall be liable for all costs and expenses of any nature over and above the Subcontract Price incurred by the Contractor in obtaining a replacement subcontractor or in completing the Subcontract Work.. 2.2 Timely Completion. The Subcontractor shall prosecute the Subcontractor Work in a prompt and diligent manner whenever such work, or any part of it, becomes available, or at such other time or times as the Contractor may direct, and so as to promote the general progress of the Project. Subcontractor shall not, by delay or otherwise, interfere with or hinder the work of the Contractor or any other subcontractor. In the event that the Subcontractor, in the sole and absolute discretion of Contractor, (a) neglects and/or fails to supply the necessary labor and/or materials, tools, implements, equipment, etc. for the timely completion of Project; (b) is unable to perform because of strikes, picketing, or boycotting of any kind which result in Subcontractor's employee's, suppliers, or subcontractor's being unable or unwilling to enter on the job and complete the work; or (c) the Subcontractor or Subcontractors employees refuse to work after having been requested by Contractor to proceed with the work, then Contractor shall notify the Subcontractor in writing setting forth the deficiency and/or delinquencies. Forty-eight (48) hours after delivery of such written notice, the Contractor shall have the right, if it so desires, to take over the Subcontractor Work in full and exclude the Subcontractor from any further participation in the Subcontractor Work. If, pursuant to this Section Contractor takes over the Subcontractor Work, Subcontractor agrees to release to the Contractor, for Contractors use, without recourse, any materials, tools, implements, equipment, or other items on or off the Project site, belonging to or in the possession of the Subcontractor, for the benefit of the Contractor, in completing the Subcontractor Work. Any costs incurred by the Contractor in doing any portion of the Subcontractor Work shall be charged against any monies due or to become due to the Subcontractor under the terms of this Agreement. In the event the total amount due or to become due under the terms of this Agreement shall be insufficient to cover the costs incurred by the Contractor in completing the Subcontractor Work, then the Subcontractor and its sureties, if any, shall be bound and liable to the Contractor for the difference. SECTION 3 PRICE

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3.1. Subcontract Price. As full compensation for the timely, complete and approved performance of the Subcontract, Subcontractor agrees to perform the Subcontractor Work for the Project at the price as prepared by Subcontractor and provided to Contractor pursuant to the plans, specifications, requests for proposals, upgrades, and options as set forth in detail on Exhibit A attached hereto and incorporated herein (Subcontract Price). The Subcontract Price includes all charges for repairs, corrections, sales tax, touch-up work necessary to render the project acceptable to Contractor, any and all delivery or fuel surcharges, and any and all miscellaneous costs incurred by Subcontractor. The total amount of the Subcontract Price, pursuant to Exhibit A attached hereto, shall be as set forth in Exhibit A and shall also be noted on any Notice to proceed pursuant hereto. Subcontract Work shall be deemed completed only after inspection and written acceptance of all Subcontract requirements by Contractor. It is agreed to by the Parties hereto that the Subcontract Price as set forth herein shall be valid and enforceable for a period of six months from the date of execution hereof. Except for changes in the Subcontractor Work as requested by Contractor or Owner and as approved as set forth in this Agreement, the Subcontract Price shall not, under any circumstances or for any reason, be increased, including but not limited to, any increases in labor rates, transportation charges, fuel charges, cost of materials or any other change in pricing or availability of labor or materials or similar changes. Subcontractor agrees that as a material part of the consideration for this Agreement and as a material inducement to the Contractors execution hereof, the Subcontract Price shall not be increased through the duration of the Subcontractor Work, other than as provided hereafter. The Subcontract Price may only be changed or amended by a written Notice to Proceed from Contractor to Subcontractor as set forth herein.
3.2. Payment in Full. Payment of the Subcontract Price constitutes full and complete compensation for all equipment, materials and tools, and all of Subcontractor's installation costs, labor, services, overhead, profit, handling costs and other costs and expenses necessary for the completion of the Subcontractor Work. SECTION 4 PAYMENTS 4.1. Application for Payment. To receive payment hereunder, Subcontractor shall submit to Contractor, in the form attached hereto as Exhibit D, an itemized application for payment supported by data substantiating Subcontractor's right to payment. Without fail, Subcontractor shall deliver said application for payment to the Contractor on or before the 20th of each month, or as otherwise requested by Contractor in order to comply with this Agreement and based on the plans, specifications, requests for proposals, upgrades, and options specific to the Project. Subcontractor warrants and Contractor may rely upon the fact that each application for payment shall detail the cost of all work and all materials incurred to the date of each application for payment. Payment shall be made to the Subcontractor and material supplier of Subcontractor, if any, in the form of Joint Checks which will be executed and acknowledged by the Subcontractor and then paid to the material supplier or 2nd tier subcontractor. The payments due to a 2nd tier subcontractor or supplier shall have priority preceding the subcontractor, the remaining balance requested by the subcontractor shall be paid after outstanding amounts paid to any material supplier, or 2 nd tier subcontractor. Payments shall be due from Contractor to Subcontractor on the 25th of the month following the month Subcontractor submits its payment request to Contractor, unless, Contractor has not received corresponding payment from the Owner, and in such case Contractor shall pay Subcontractor within ten (10) days after receiving payment from the Owner. 4.2. Waivers. With each monthly progress billing, Subcontractor shall provide to Contractor valid lien and bond claim waivers for all labor, materials and supplies provided through the billing date. Such lien and bond claim waivers shall be signed by Subcontractor, its sub-subcontractors and the Subcontractors and sub-subcontractors material suppliers and shall be for specified dollar amounts paid for the previous pay period, for work completed or materials supplied through a specified date, and shall be in the form attached hereto as Exhibit E. In addition to the foregoing, at any time before final payment, Subcontractor shall, on request of Contractor, furnish to Contractor evidence satisfactory to Contractor as may be reasonably requested by Contractor of payment for all materials,
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taxes, or expenses related to the Project that Contractor deems necessary related to potential liens on the Project. Failure by the Contractor to require any lien or bond waivers or evidence described in this Section on one or more occasions shall not constitute a waiver by Contractor of its rights hereunder. 4.3. Lien Indemnification. Subcontractor shall at all times indemnify and save Contractor, Lender, and Owner harmless against all liability for claims and liens for labor performed or materials used or furnished to be used in connection with the Subcontractor Work, including any costs and expenses for reasonable attorney fees and all incidental and consequential damages resulting to Contractor or Owner from such claims or liens. If a lien is filed against the Project, which lien arises out of the Subcontractor Work or the work of the Subcontractors subsubcontractors or suppliers, Subcontractor agrees to within ten (10) days after written demand to cause the lien to be removed from the Project. If Subcontractor fails or refuses to do so, Contractor and Owner are authorized to use whatever means they individually or collectively may deem appropriate to cause the lien to be removed and the cost thereof, together with reasonable attorney fees, shall be immediately due and payable to the Contractor or Owner by Subcontractor. Together with execution of this Agreement, an authorized agent of Subcontractor acceptable to Contractor shall execute personally and individually the Guaranty attached hereto. 4.4. Right to Withhold Payment. The Contractor may, in Contractors absolute discretion, withhold, or on account of subsequently discovered evidence nullify, the whole or part of any payment to Subcontractor as set forth in this Agreement or to the extent necessary to protect the Contractor or the Owner from loss, including, but not limited to, costs and attorney fees, on account of any work, claim, lien, or other item as may be related to this Subcontract Agreement that is deemed defective by Contractor or otherwise not in compliance with the Subcontract Agreement or any Exhibits, addenda, or Notice to Proceed produced pursuant hereto. 4.5. Payments to Others. In the event it appears to the Contractor that the labor, material, and other bills incurred in the performance of the Subcontractor Work are not being currently paid, the Contractor may take such steps as it deems necessary to assure absolutely that the money paid with any progress payment will be utilized to the full extent necessary to pay labor, material, and all other bills incurred in the performance of the Subcontractor Work. 4.6. Final Payment. Upon complete and satisfactory performance of the Subcontractor Work by Subcontractor and final approval and acceptance of the Subcontractor Work by Contractor, Contractor will make final payment to Subcontractor of the balance due under this Agreement. As a condition to receiving such payment, Subcontractor, upon the request of Contractor, will provide to Contractor all evidence and documents reasonably requested by Contractor including affidavits, consents of surety (if any), other data establishing payment or satisfaction of all Subcontractor obligations, a general release in favor of Contractor and Owner, a final lien waiver in the form attached hereto as Exhibit E, waivers and/or release of liens, any other information in form satisfactory to Contractor or required by law, and all other documents required by the Subcontract Documents as a condition to final payment. If any sub-subcontractor refuses to furnish a release or waiver required by Owner or Contractor, Subcontractor shall, upon the request of Contractor, furnish a bond satisfactory to Contractor to indemnify Contractor and Owner against any such claim or lien. Should the existence of any unsatisfied or undischarged claim, obligation or lien arising in conjunction with the Subcontractor Work become known after final payment is received from Contractor, Subcontractor shall promptly pay on demand all amounts Contractor and/or Owner pay in bonding around, satisfying, discharging or defending any such claim, obligation or lien, including all costs and reasonable attorneys' fees incurred in connection therewith. SECTION 5 SUBCONTRACTOR WORK QUALITY, WARRANTY, AND GUARANTY 5.1. Subcontractor Qualification. Subcontractor has been retained as and hereby represents that it is an expert and a specialist, uniquely qualified to complete the Subcontract Work and to assure that all related Project work required of Contractor is strictly and properly completed. As an expert in the field, Subcontractor is deemed to know all requirements of the law and the building codes for the Subcontract Work. The Subcontract Work will be performed in a professional and workmanlike manner in accordance with the Subcontract Documents. Subcontract Work shall pass all applicable inspections and strictly comply with all laws enforceable now or in the future, including but not limited to, federal laws, state laws, local laws and ordinances, OSHA (Occupational Safety and Health Administration) regulations, labor laws and regulations, licensing laws and codes, workers compensation laws and regulations, DOPL (Utah Department of Professional Licensing) rules and regulations and meet all building code requirements. Subcontractor agrees to hold Contractor harmless and indemnify Contractor from any claim, citation,
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or violation, of any kind made against or naming Contractor as a party related to the Subcontract Work and the violation of any federal law, state law, local law or ordinance, OSHA regulations, labor laws and regulations, workers compensation laws and regulations, and DOPL rules and regulations, including, but not limited to, (1) paying all damages incurred by Contractor, including down time; (2) paying all costs and fees incurred by Contractor in defending any claim made against Contractor; (3) paying reasonable attorneys fees incurred by Contractor; and (4) all fines and fee imposed or levied against Contractor. 5.2.kkWarranty and Correction. All Subcontract Work, and any portion thereof, shall not be deemed complete until approved by Contractor. Subcontractor guarantees, warrants, and represents to Contractor that the workmanship of the Subcontractor Work, all materials and equipment furnished for the Subcontractor Work, and all other aspects regarding the Subcontractor Work to be performed under this Agreement shall be in strict conformance with this Agreement and the Subcontract Documents, be of the finest quality, and be free from all faults, defects, inadequacies, or failures of material and workmanship for a period of one (1) year from the later of the following: (a) the completion of all work to be performed on the Project and the Project being complete as approved by Owner; (b) the date a certificate of occupancy is granted by the appropriate governmental authority; or (c) such longer period as may be required by applicable governmental authorities Subcontractor guarantees and warrants all work as provided by Utah law, and additionally, for a period of at least one (1) year after the Owner or the Contractor discover any defect, including latent and patent defects, and provide written notice to Subcontractor. If any Subcontract Work is not performed pursuant to Subcontract Documents, if Subcontract Work is not approved by Contractor, or upon receipt of written notice from Contractor, Subcontractor agrees to promptly correct such Subcontract Work at Subcontractors own cost and pursuant to the Subcontract Documents or other written directives of Contractor. In addition to the above guaranty and warranty, Subcontractor agrees as follows: (1) there shall be a one-year correction period for the exclusive use and benefit of the Contractor and Owner of the Project, beginning upon the issuance of a Certificate of Occupancy (during this correction period if the Owner or Contractor notifies the Subcontractor, in writing, of any Defective Work the Subcontractor shall cause the same to be corrected, but only if and after this Agreement has been paid in full); (2) the Owner of the Project or Contractor shall as soon as reasonably possible notify the Subcontractor of any Defective Work or suspected defect upon discovery of the same; and (3) if the Owner of the Project or Contractor fails to notify the Subcontractor said failure does not constitute a waiver or acceptance of any kind and Subcontractor shall comply with all warranties and guarantees as provided herein. The parties agree that no legal action of any kind, whether in contract, tort, misrepresentation, fraud, warranty, or otherwise, and whether relating to the Project, performance of the Subcontract Work, any latent or patent construction defect, or this Agreement, shall be commenced more than thirty (30) days after the one year correction period. For purposes of this Agreement, a Construction Defect or Defective Work is any portion of the Subcontract Work which is both required by the Subcontract Documents and which is materially and detrimentally inconsistent with the safe and reasonable use of the Subcontract Work. If Subcontractor does not commence to correct any and all Defective Work as identified by Contractor within fourteen (14) days from the date of receipt of written notice of the same, Contractor may bring an action in court for Specific Performance of the same, notwithstanding other available remedies to Contractor at law or in equity. 5.3 Guaranty. The undersigned party executing this Agreement on behalf of Subcontractor, additionally acknowledges, individually and not in any corporate capacity, that he is a principal of Subcontractor and as such will benefit from this Agreement and therefore as an inducement to Contractor to enter into this Agreement with Subcontractor hereby agrees to individually and personally guarantee Subcontractors performance and obligations pursuant to this Agreement, including (1) to unconditionally, absolutely, and irrevocably guarantee to Contractor as follows: (a) the prompt performance of all Subcontractors obligations and duties pursuant to the terms of the Agreement, including, when applicable, payment in full of all amounts due and owing pursuant to the Agreement; (b) the repayment to Contractor of any and all advances made or expenses incurred by Contractor pursuant to the provisions of the Agreement; and (c) the performance of all conditions and obligations of the Subcontractor under the Agreement; (2) to pay any and all costs or fees of collection incurred by Contractor to enforce its rights hereunder including reasonable attorneys fees. Contractor may choose, in Contractors discretion, to seek recourse against either the Subcontractor or the individual executing this agreement. This guaranty provision of the Agreement shall be the primary obligation of the undersigned. The undersigned agrees that Contractor may proceed under the Agreement or this Guaranty separately or collectively without prejudicing or waiving any of its rights under the Agreement or this Guaranty. It is the intent of the parties that this Guaranty is binding on the undersigned and his personal representatives, successors, and assigns and shall inure to the benefit of Contractor and its successors and assigns. This Guaranty shall continue in force for a period of two years from the date of execution

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hereof or any extension hereof made by a Notice to Proceed provided to Subcontractor by Contractor. By execution hereof, the undersigned certifies to Contractor, that pursuant to the Agreement the undersigned is an authorized representative of Subcontractor and will benefit substantially from the performance of said Agreement and this Guaranty is made with the intent of securing said benefit for the undersigned as guarantor. SECTION 6 COMPLETION OF WORK 6.1. Time of the Essence. Subcontractor agrees that time is of the essence in the performance of the Subcontractor Work and that such work must be completed in accordance with the Contractors schedule. Subcontractor shall commence the Subcontract Work within one week of Contractors request and shall continue the work without delay until completed. Subcontractor shall supply adequate crews and employees on the project, sufficient to make proportionate daily progress, and Subcontractor shall at Subcontractors expense, hire and oversee additional crews or employees, temporary or otherwise, in order to comply with this provision. If for any reason (1) any part of the contract between Owner and Contractor that forms the basis for this Subcontract Agreement is terminated, or (2) Subcontractor defaults in any part this Subcontract Agreement, this Subcontract Agreement shall likewise terminate, and Subcontractor shall be entitled only to payment for work actually performed by Subcontractor as of the date of termination and for which Contractor has been paid, without further penalty or damage to Contractor. 6.2. Execution of Work. Subcontractor shall be solely liable for all work identified herein. It shall be solely liable for the work of its employees. It shall perform all Subcontract Work itself, unless a licensed sub-subcontractor is approved by Contractor in writing, and then Subcontractor shall remain liable for any and all Subcontract Work performed by any sub-subcontractor, reserving in Contractor all rights of subrogation against the sub-subcontractor with Subcontractors complete cooperation and indemnification therefore. 6.3 Clean Site. Subcontractor agrees to remove all debris and leave the Project premises in broom clean condition each day by approximately 4:30 p.m. and in an as new condition upon the completion of the Subcontract Work. In the event Subcontractor does not leave the site clean, Contractor, in Contractors sole and absolute discretion, may charge seventy five dollars ($75) per man hour to have such work performed to the satisfaction of Contractor. SECTION 7 LICENSES, PERMITS AND TAXES 7.1. Subcontractor License. Subcontractor represents that it is fully experienced, properly qualified, and validly licensed to perform the Subcontractor Work. A copy of the Subcontractors license(s) shall be provided to Contractor as part of this Agreement. 7.2. Permits. If requested by Contractor, Subcontractor shall, at its own cost and expense, assist the Contractor in obtaining required governmental permits, with the costs of such permits paid for by the Contractor. 7.3. Independent Contractor. Subcontractor warrants that it is an independent contractor in fact, and also within the scope of the United States Internal Revenue Code, the Federal Social Security Act, and state statutes, together with present and future amendments thereto, and any and all unemployment insurance laws. The Subcontract Price includes, and Subcontractor shall promptly pay, all of its sub-subcontractors and all costs of performing its obligations hereunder and all taxes, including sales or use tax, assessments, fees and charges, unemployment insurance, old age benefits, pensions or annuities imposed or required by any government, or by any labor agreement to which Subcontractor is a party, levied, incurred or payable on or in respect to Subcontractor's acts or transactions or things used by it in performing such obligations. Subcontractor shall not represent or hold itself out to be an agent of Contractor. Neither the Subcontract Documents nor any course of conduct between Contractor and Subcontractor creates any contractual relationship between any parties other than Contractor and Subcontractor, and to the extent applicable, the Owner. SECTION 8 INSURANCE
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8.1. Required Insurance. Subcontractor represents and warrants that it has and shall maintain all required business and contractors licenses, adequate statutory Workers Compensation Insurance, Employers Liability Insurance, General Liability Insurance with $1,000,000.00 per occurrence / $2,000,000.00 aggregate, Bodily Injury, Automobile, and Property Damage Liability Insurance, as required by law, and additionally, as necessary to insure all Subcontract Work at the Subcontract Price, employees, and potential injury to persons or damage to property. All such insurance shall name Contractor an additional insured and shall also name Developer, Lender, and Owner of the Project as additional insureds as applicable and as directed by Contractor. 8.2. Evidence of Insurance. Upon execution of this Agreement and as may be theretofore requested by Contractor, Subcontractor shall furnish a certificate, satisfactory to Contractor, from each insurance company providing coverage to Subcontractor showing that the required insurance coverage is in force, stating policy numbers, dates of expiration, limits of liability thereunder, and further providing that the insurance will not be canceled, modified or changed until the expiration of at least thirty (30) days after written notice of such cancellation, modification or change has been mailed by certified mail return receipt requested to Contractor. In the event of threatened or actual cancellation, Contractor may, at its sole discretion, terminate this Agreement or procure such insurance on such terms as Contractor may determine and deduct the premium from amounts then or subsequently owing to Subcontractor hereunder. SECTION 9 LIABILITY FOR INJURY AND DAMAGES 9.1. Indemnification. To the fullest extent permitted by law, Subcontractor shall and does hereby agree to indemnify, defend and hold harmless Contractor, Owner, Architect, and their respective directors, officers, agents, employees, successors and assigns, individually and collectively, (the "Indemnified Parties"), from, against and in respect of any and all claims, demands, suits, proceedings, attachments, levies, penalties, damages and losses, liabilities, liens, claims for indemnification or contribution, and any other matter whatsoever, and all damages, costs and expenses incurred in connection therewith, including attorney's fees (collectively, the "Claims"), arising out of or resulting from (a) injuries to, or sickness, disease or death of, any person and for damage, injury, destruction or loss of property, arising directly or indirectly, in whole or in part, out of or in any way relating to the performance of the Subcontractor Work or the Subcontract Documents by Subcontractor or any of its sub-subcontractors, employees, agents, successors or assigns, or anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable (collectively, the "Subcontractor Parties"), or (b) any act or omission of Subcontractor or any of Subcontractor Parties, or (c) any breach of the provisions or covenants of the Subcontract Documents. The indemnity set forth above shall not be limited in any way by any limitation on the amount or type of proceeds, damages, compensation or benefits payable under insurance policies, workers compensation acts, disability benefit or other employee benefit acts. Subcontractor shall defend all Claims and pay all costs and expenses incidental thereto, but any of the Indemnified Parties shall have the right, at its option, to participate in such defense without relieving Subcontractor of any obligation hereunder. 9.2. Limitation on Indemnification. Notwithstanding anything in the foregoing Section 9.1 or elsewhere in the Subcontract Documents to the contrary, no covenant, promise, agreement or understanding in, in connection with, or collateral to, the Subcontract Documents shall be construed to require Subcontractor to indemnify any Indemnified Party for the fault of such Indemnified Party or others, or their agents or employees, to the extent Utah law governs and such indemnification is prohibited under Utah Code Ann. 13-8-1, as amended. 9.3. Severability. The obligations for indemnification herein required are severable. The unenforceability of any portion of the obligation for indemnification hereunder due to the effect of any statute, court decision, or any other reason, shall not nullify, reduce or limit other obligations set forth herein. All other obligations arising under this Article 8 shall remain in full force and effect. 9.4. Waiver of Damages. Except as expressly reserved in this Agreement, Subcontractor waives all rights Subcontractor might have against Owner and Contractor for loss or damage to Subcontractor's work, property or materials.

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SECTION 10 CHANGES, ADDITIONS, AND DEDUCTIONS At any time, the Contractor may issue written Directives making changes and additions to and/or omissions from the Subcontract Work. The Contractor and the Subcontractor may also jointly issue written Change Orders making changes and additions to and/or omissions from the Subcontract Work. Absolutely no Directive or Change Order shall modify the Subcontract Price, unless and until such is detailed in writing, including the changes in Subcontract Work and Price, and is executed by the Contractor, all prior to the commencement of the extra work. SECTION 11 TERMINATION 11.1. Termination Due to Acts of Owner. If Owner, as defined in the Subcontract Documents, for any cause or without cause (including force majeure events) terminates or suspends or substantially changes the scope of the Subcontractor Work under the Contract, Contractor may order Subcontractor to terminate or suspend its performance of the Subcontractor Work and Contractor shall not be liable in any way for any such termination or suspension, provided, however, that in the event that Contractor is compensated by Owner by reason of such termination or suspension, then in such event Contractor shall pay to Subcontractor an equitable portion of said sum based upon the Subcontractor Work performed. 11.2. Termination by Contractor. In addition to Contractor's right to terminate or suspend the Subcontractor Work under Section 11.1 hereof, Contractor may, by notice to Subcontractor, at any time terminate or suspend performance of the Subcontractor Work if Subcontractor: (a) refuses or fails to supply enough properly skilled workers or proper materials; (b) fails to maintain the Contractors schedule; (c) fails to make prompt payment to its workers, subcontractors or suppliers; (d) fails to comply with any laws, ordinances, rules, regulations or orders of any public authority having jurisdiction; (e) fails to maintain the jobsite clean as provided herein; or (f) is otherwise guilty of a material breach of this Agreement or the Subcontract Documents. In addition, Contractor shall be entitled to terminate this Agreement and the Subcontract Documents at any time for the Contractors convenience by giving notice of such termination to Subcontractor; said notice shall take effect fifteen (15) days after the date on which Contractor gives notice of such termination to Subcontractor at the address provided in this Agreement or by confirmation of facsimile sent to the fax number provided by Subcontractor. In the event Contractor terminates this Agreement for the Contractors convenience, then Subcontractor shall be paid for all work completed and approved by Contractor pursuant to this Agreement prior to the termination date; Subcontractor shall not be paid for any future work hereunder or for any lost or expected profits. 11.3. Remedy for Termination. Upon termination under either Sections 11.1 or 11.2, as its exclusive remedy, Subcontractor shall only be entitled to be paid for all work completed and approved by Contractor pursuant to this Agreement prior to the termination date and Subcontractor shall not be paid for any future work hereunder or for any lost or expected profits. Termination costs, if any, to be paid to Subcontractor shall be subject to Contractor's right to withhold as set forth herein, and subject to all other terms of the Subcontract Documents. In no event shall the Contractor be liable to the Subcontractor for any amount for which the Contractor has not been paid by the Owner. SECTION 12 ADDITIONAL PROVISIONS 12.1 Compliance with Laws. Subcontractor shall, at no extra cost to the Contractor, conform strictly to the laws (both state and federal), building codes, and other laws and ordinances in force in the locality where the Subcontractor Work is being performed, insofar as applicable to the Subcontractor Work. 12.2. No Assignment. Subcontractor shall not delegate, transfer, sublet, subcontract, or assign this agreement or any part thereof without the written consent of Contractor in each instance. 12.3. Bankruptcy. It is agreed that the Subcontractor, at the option of the Contractor, may be considered as disabled from complying with the terms of this Agreement if the Subcontractor becomes insolvent, shall make an

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assignment for the benefit of creditors, shall be subject to any proceeding in bankruptcy, or if a receiver is appointed for the Subcontractor. 12.4. Interpretation. This Agreement and the Subcontract Documents shall be interpreted in accordance with the laws of the State of Utah. Subcontractor hereby consents to the personal jurisdiction and venue of the Fifth District Court of Utah, Iron County. 12.5. Third Party Beneficiary. To the extent rights and obligations herein are granted to or due the Owner, the provisions of this Agreement are enforceable by the Owner as an intended third party beneficiary. 12.6. Notices. All notices required or desired under or in connection with the Subcontract Documents shall be sufficient if given by certified mail, return receipt requested, or receipted facsimile transmission directed to parties set forth below. 12.7. No Waiver. Any failure by Contractor to enforce or require the strict keeping and performance of any of the terms or conditions of the Subcontract Documents shall not constitute a waiver of such terms or conditions and shall not affect or impair such terms or conditions in any way or the right of Contractor at any time to avail itself of such remedies as it may have for any breach or breaches of such terms or conditions. 12.8. Limitation of Claims Period. All claims for payment and all actions to collect any amounts claimed due, must be commenced within sixty (60) days of the date on which payment was due from Contractor to Subcontractor. 12.9. Attorney Fees. In the event that any action is commenced to enforce this Agreement, the prevailing party shall be entitled to an award of its attorney fees and costs incurred, whether with or without trial and at trial or on appeal. 1210. Bolded Provisions. Certain provisions of this Agreement have been bolded for the purpose of drawing specific attention to such provisions. However, such bolding shall have no effect whatsoever upon the interpretation or effect upon this Agreement or any provisions thereof. 12.11. No Business Relationship. Nothing in this Subcontract Agreement or any of the Subcontract Documents shall be deemed to create the relationship of partners, partnership, joint venture, or any other business relationship between the parties hereto. The only relationship intended between the parties to this Subcontract Agreement shall be as Contractor and Subcontractor as set forth herein. 12.12 Authorized Persons. Contractor and Subcontractor shall both set forth in Exhibit A attached hereto the names of any and all persons authorized to act on behalf of Contractor and Subcontractor. Contractor and Subcontractor agree that only said authorized persons shall be able to bind Contractor and Subcontractor and therefore any and all modifications, or amendments hereto shall be authorized and signed only by said authorized parties. Any other attempt to modify or amend any Subcontract Document that is not signed by the named authorized parties shall be deemed void ab initio. Notwithstanding the limitations contained herein in section 12.12, in the event Contractor relies, in good faith, on a person with apparent authority to act on behalf of Subcontractor, Subcontractor agrees to be bound by the terms, modifications, or amendments entered into on behalf of Subcontractor by Subcontractors agent with apparent authority.

12.13. Confidentiality. Subcontractor agrees, during and after the term provided for herein and any extensions or renewals thereof, not to reveal any confidential information, proprietary information, or trade secrets related to Contractor to any person, firm, corporation, or entity except Contractors authorized agents, officers, and directors. Should Subcontractor reveal or threaten to reveal this information or share the Subcontract Documents, then Contractor shall be entitled to an injunction restraining Subcontractor from disclosing same, or from rendering any services to any entity to whom said information has been or is threatened to be disclosed. The right to secure an injunction is not exclusive, and the Contractor may pursue any other remedies it has against Subcontractor for a breach or threatened breach of this condition, including the recovery of damages from Subcontractor. All work product and information produced, developed, or used by Subcontractor within the scope of the Subcontract Documents and the Subcontract with Contractor shall be deemed to contain confidential information and trade
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secrets of Contractor and the use and disclosure of same shall be governed by this Section. This Section 12.13 regarding confidential matters and trade secrets shall not terminate upon the termination of the Subcontract or the Subcontract Documents. The terms and conditions hereof shall be binding upon Subcontractor following termination or completion of the Subcontract Work, regardless of the reason for such termination or completion. For purposes of this Section 12.13, confidential information shall mean any and all information, ideas, plans, trade secrets, or materials of Contractor, including this Subcontract Agreement and all Exhibits and attachements thereto, that is not generally known to the public.

IN WITNESS WHEREOF, the Contractor and Subcontractor signify their understanding and agreement with the terms hereof by affixing their signatures hereunto. This Agreement is entered into as of the date entered on page one of this Agreement. CONTRACTOR: Velocity Homes, Inc. P.O. Box 1977 Cedar City, Utah 84720 Phone: 435-586-0843 Fax:435-586-4968 SUBCONTRACTOR ______________________________________ ______________________________________ ______________________________________ Phone: ______________________________ Fax: ________________________________ Contractor's License #: __________________ Expiration Date: _______________________ Federal Tax ID No.: ____________________ By: _________________________________ Print Name: __________________________ Title: _______________________________ Date: _______________________________

By: Print Name: Title: Date: Exhibits Attached:

A Subcontractor Bid Form B - Construction Schedule (Schedule to Follow) C Schedule of Values D - Application for Payment E - Lien Waiver (Second Tier Subcontractor/Supplier) F - One Year Warranty G Notice to Proceed

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