Table of Contents

To allow the Ordering Agency greater flexibility in attending to their loan servicing and asset management needs, RER Solutions, Inc.(RER) offers two fee structures. An hourly fee structure (See Option 1) is provided to allow the Ordering Agency to engage RER in instances where loan servicing and asset management services are needed on a limited or interim basis. In cases where a limited scope of services is defined at the task order level, RER's hourly fee structure may provide a more appropriate fee arrangement and provide a better value to the Agency.

The hourly fee structure is also provided to give the Agency flexibility where special requirements and considerations are not specifically covered in the standard description of asset services. In these cases, RER's hourly fee structure would be used to compute additional fees for tasks not specifically defined in the description of services outlined by GSA.

OPTION 1
2% yearly escalation factor on hourly rates

OPTION 2
In consideration for providing the services outlined in the standard description of asset services, RER shall be compensated through a three (3) part fee structure comprised of a Management Fee, Disposition Fee and Incentive Fee. The following terms are used to compute the fees:

Initial Targeted Cash Value (ITCV) - the gross amount of cash expected to be realized by the Ordering Agency through liquidation of the assets

Current Targeted Cash Value (CTCV) - ITCV less gross collections and less the fair market value, based upon current appraisals, of owned real estate that has been in the portfolio for more than thirty months

Liquidated - represents the full reduction of the Book Value by means of collections and/or write down under delegated authority.

The Ordering Agency will pay all direct asset expenses including Net Operating Losses, appraisals, environmental studies, legal expenses and taxes. RER will be responsible for all its own internal organizational expenses of performing its asset management and disposition services, such as internal accounting systems, salary expense of RER personnel, and corporate overhead.

Within 90 days of the assignment, RER will develop an ITCV for each asset, group of assets, or for the entire portfolio of assets, as determined to be appropriate by RER and the Ordering Agency. Each business plan will be developed by RER outlining the asset status, collection strategy, and expense and budget projections. In addition, the business plan will establish the ITCV and will provide supporting calculations. The business plans will be submitted to the Ordering Agency for review and approval. RER will reserve the right to amend the ITCV within 12 months of assignment, in the event of unforeseen circumstances, subject to the Ordering Agency's reasonable approval.

Management Fee:
A monthly Management Fee equal to 0.104% of the Current Targeted Cash Value (CTCV) of the asset pool as of the last day of the prior month.

The Disposition Fee provides an incentive for RER to maximize collections for the Ordering Agency.

Disposition Fee:
Shall be calculated and payable monthly in arrears.

1. 2.6% of the Cumulative Net Collections up to 37% of ITCV;
   
2. 4.6% of the Cumulative Net Collections in excess of 37% but
   less than or equal to 60% of ITCV;
3. 6.4% of the Cumulative Net Collections in excess of 60% but less than or equal to 78% of ITCV;
4. 11.2% of the Cumulative Net Collections in excess of 78% but less than or equal to 93% of ITCV; and,
5. 16.2% of the Cumulative Net Collections in excess of 93% of ITCV.

The Incentive Fee provides an incentive for RER to achieve maximum collections in an expedited manner.

Incentive Fee

1. An Incentive Fee equal to the sum of:
   1. 4.5% of the Net Collections in excess of 33% of ITCV through the first 12 months of the agreement;
   2. 5.0% of the Net Collections in excess of 54% of the ITCV through the first 24 months of the agreement; and
   3. 9.0% of the Net Collections in excess of 70% of ITCV through the first 36 months of the agreement.

2. Incentive Fees shall be payable as follows:
   
   1. 50% shall be paid semi-annually and 50% shall be credited to the Deferred Incentive Fee Account. Said Account shall be an interest bearing account maintained by the Ordering Agency at an insured financial institution.
   2. The Deferred Incentive Fee shall be payable as follows:
      
      
      1. 20% of the then current balance, if any, in the Deferred Incentive Fee Account shall be paid to RER when portfolio assets amounting to 90% of the Book Value of the initial portfolio assets has been liquidated;
      2. 25% of the then current balance when 92% of the Book Value of the initial portfolio assets has been liquidated;
      3. 33-1/3% of the then current balance when 94% of the Book Value of the initial portfolio assets has been liquidated;
      4. 50% of the then current balance when 96% of the Book Value of the initial portfolio assets has been liquidated;
      5. the remainder when 98% of the Book Value of the initial portfolio assets has been liquidated.