AGREEMENT OF SETTLEMENT - HAESE

                  This Agreement of Settlement (the "Agreement") is entered into
this 31st day of March, 2003, by and between H&R Block, Inc., H&R Block and
Associates, L.P., H&R Block Tax Services, Inc., HRBO, Limited (erroneously named
as HRBO, Ltd.), H&R Block of South Texas, Inc., HRB-Delaware, Inc., H&R Block,
Ltd., HRBOI, Ltd., HRBO III, Ltd., HRBOII, Inc. (erroneously named as HRBOII,
Ltd.), H&R Block of Dallas, Inc., H&R Block of Houston, Ltd., Houston Block,
L.C., Block Management, Ltd., and STI-Block, L.C. (collectively "H&R Block"),
and Ronnie and Nancy Haese (the "Haeses" or "Plaintiffs") on behalf of
themselves individually and on behalf of the Class as defined below.

I.       DEFINITIONS

                  1.       The "Class" and "Class Members" means all persons who
         (1) obtained at any time a tax refund anticipation loan ("RAL") through
         an office operating under the trade name of H&R Block (including
         franchisee or sub franchisee offices of H&R Block or any H&R Block
         offices located in Sears stores) in the State of Texas during the
         period from 1992 through 1996 and (2) did not previously request
         exclusion from the litigation styled Ronnie and Nancy Haese v. H&R
         Block, Inc., et al., Cause No. 96-423, in the 105th District Court of
         Kleberg County, Texas (hereinafter referred to as the "Action.")

                  2.       "Settlement Administrator" means the entity
         designated by H&R Block to administer the settlement.

                  3.       "Preliminary Approval Order" means the order to be
         entered by the Court in the event that the Court grants preliminary
         approval to this Agreement.

                  4.       "Class Counsel" means Robert C. Hilliard and Hilliard
         & Munoz, LLP,

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         Darrell L. Barger and Hartline, Dacus, Barger, Dreyer & Kern, LLP,
         Edward Carstarphen and Ellis, Carstarphen, Dougherty & Goldenthal,
         P.C., and Craig Sico and Sico, White & Braugh, who are the attorneys
         and law firms representing the Haeses and Class Members.

                  5.       "Class Notice" means the notice that attached hereto
         as Exhibit A.

                  6.       "Class Representatives" means the Haeses.

                  7.       "Court" means the 105th District Court of Kleberg
         County.

                  8.       "Settled Claims" means any and all actual and
         potential claims, actions, lawsuits, and causes of action, known or
         unknown, that Plaintiffs and/or the Class asserted, may assert or could
         have asserted in the Action, including all claims and potential claims
         under the laws of Texas or under federal law or any other law arising
         out of or in any way relating to the tax refund anticipation loans
         ("RALs") (sometimes erroneously referred to as "Rapid Refunds")
         obtained by the Class at any time up to and through November 18, 2002,
         and/or participations in such RALs and/or arising out of or in any way
         relating to H&R Block's use of the term "Rapid Refund," and/or any
         sanctions or contempt penalties that have been sought, or could have
         been sought, against the Released Parties for any acts or omissions,
         known or unknown, that may have been committed by the Released Parties
         that might in any way be related to the Action, the Cause 99-314
         Action, or the Martinez Action.

                  9.       "Cause 99-314 Action" means the lawsuit defined in
         Section II, paragraph 1 of the Recitals set forth below.

                  10.      "Martinez Action" means the lawsuit defined in
         Section II, paragraph 2 of the Recitals set forth below.

                  11.      "Released Parties" means H&R Block, Block Financial
         Corporation, HRB

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         Texas Enterprises, Inc., H&R Block Texas Tax Company, LP, and H&R Block
         Texas Support Services, LP, and the respective parents, affiliates,
         subsidiaries, franchisees or sub-franchisees of any of them, all
         divisions, predecessors, successors, representatives and assignees of
         any of them, and the present and former officers, directors, employees,
         shareholders, insurers, underwriters, attorneys and agents of any of
         them.

                  12.      "Zawikowski Action" means the lawsuit defined in
         Section II, paragraph 4 of the Recitals set forth below.

                  13.      "Zawikowski Settlement" means the settlement defined
         in Section II, paragraph 4 of the Recitals set forth below.

II.      RECITALS

                  14.      WHEREAS, (i) in July, 1996, the Haeses filed the
         Action which was certified as a class action and (ii) in November,
         1999, certain claims in the Action were severed into a class action
         lawsuit pending in the same Court captioned Ronnie and Nancy Haese, et
         al. v. H&R Block, Inc., et al., No. CV-99-314-D (hereafter referred to
         as the "Cause 99-314 Action");

                  15.      WHEREAS, in July, 2002, Veronica I. Martinez filed a
         class action lawsuit in the 148th Judicial District Court of Nueces
         County, Texas, captioned Veronica I. Martinez, et al. v. H&R Block,
         Inc., et al., No. 02-3269-E (hereinafter the "Martinez Action");

                  16.      WHEREAS, all claims in all three cases arise out of
         the same set of operative facts;

                  17.      WHEREAS, in addition to the aforementioned cases, H&R
         Block is a defendant in other pending lawsuits in other jurisdictions
         arising out of the RAL program,

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         including an action pending in the United States District Court for the
         Northern District of Illinois captioned Zawikowski, et al. v.
         Beneficial National Bank, et al., No. 98-C-2178 ("Zawikowski Action")
         in which a nationwide settlement is currently pending approval
         ("Zawikowski Settlement"); but in which H&R Block has moved that the
         Texas Class Members be excluded.

                  18.      WHEREAS, H&R Block has at all times denied, and
         continues to deny, that it has committed any wrongful acts or
         violations of law of any nature whatsoever or that it has any liability
         to Plaintiffs or the persons they represent;

                  19.      WHEREAS, uncertainty exists as to the potential
         liability of H&R Block in the Action and as to the nature and amount of
         relief, if any, to which the Plaintiffs and Class Members may be
         entitled if liability is imposed on H&R Block;

                  20.      WHEREAS, after extensive arms' length negotiations,
         the parties hereto now wish to settle the Action, subject to the
         approval of the Court;

                  21.      WHEREAS, the parties hereto have entered into a
         Memorandum of Understanding on November 18, 2002;

                  22.      WHEREAS, the Plaintiffs represent the Class and H&R
         Block agrees not to contest certification of a Class for purposes of
         effectuating this settlement;

                  23.      WHEREAS, while denying any fault, wrongdoing or
         liability, H&R Block has agreed that a settlement of the Action on the
         terms and conditions set forth in this Agreement is desirable solely in
         order to avoid the further significant burden, expense and
         inconvenience of protracted litigation, and the distraction and
         diversion of personnel and resources, and thereby to put to rest this
         controversy;

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                  24.      WHEREAS, Class Counsel have conducted a thorough
         study and investigation of the facts and the law relating to the claims
         asserted in the Action, the Cause 99-314 Action, and the Martinez
         Action through extensive discovery and independent investigation and
         have concluded that, taking into account the substantial benefits that
         Class Members will receive as a result of this settlement and the
         considerable risks and delays of further litigation, the settlement
         provided herein is fair, adequate and reasonable and in the best
         interests of the Class.

         THEREFORE, the parties hereto agree to the following terms and
         conditions:

III.     TERMS AND CONDITIONS

                  1.       The Class Representatives (for themselves and on
         behalf of the Class), by their attorneys and subject to the approval of
         the Court pursuant to Texas Rule of Civil Procedure 42(e), hereby
         settle, release, discharge and dismiss all Settled Claims as against
         all the Released Parties with prejudice, upon and subject to the terms
         and conditions specified herein. Each Class Member who has not timely
         opted out shall covenant and agree that (s)he shall not hereafter
         assert or continue to assert any claim, suit, demand or cause of
         action, whether individually or on behalf of a class, based in whole or
         in part upon any of the Settled Claims against the Released Parties.
         Such release shall also extend to any sanctions or contempt penalties
         that have been sought, or could have been sought, against the Released
         Parties for any acts or omissions, known or unknown, that may have been
         committed by the Released Parties in the Action, the Cause 99-314
         Action, or the Martinez Action.

                  2.       The parties hereto and their counsel agree to take
         whatever reasonable

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         procedural steps may be required to permit the Court to obtain and
         retain jurisdiction over this settlement.

                  3.       For the benefits and consideration set forth herein
         and discussed below, the parties hereto will jointly request that the
         Court's rulings in the Action as to fiduciary duty, breach or the
         nature of the breach thereof, and for forfeiture of fees reflected in
         the Court's November 6, 2002, letter be withdrawn. In addition, H&R
         Block will seek the following orders from the Court: (1) an order
         granting H&R Block's Motion to Compel Arbitration, which would dismiss
         the claims of those persons who were a part of the class as defined in
         the August 28, 1997, class certification order, who a obtained a RAL
         for the first time in 1997 or thereafter; (2) an order granting summary
         judgment as to HRBO, Limited and HRBO III, Ltd.; and (3) an order
         granting summary judgment as to the claims of those persons who were
         part of the class as defined in the August 28, 1997, class
         certification order, who obtained RALs between 1988 and 1991, based
         upon the expiration of the applicable statutes of limitation, the
         non-receipt of license fees paid by H&R Block during that time period,
         or such other grounds as H&R Block may assert. Such orders being
         entered and actions taken by the Court shall be conditions subsequent
         for this settlement, each of which must occur before H&R Block shall
         have any obligation to make any payment of any of the benefits and/or
         consideration required herein to the Class or payment of attorneys'
         fees or expenses to Class Counsel.

                  4.       The parties hereto agree that after Court approval
         and exhaustion of all appeals, the parties hereto will jointly move for
         the following: (1) the Cause 99-314 Action shall be decertified and
         non-suited by the Court, with each party bearing its own costs,

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         expenses and attorneys' fees with respect thereto; (2) the Martinez
         Action shall also be non-suited by the court in the Martinez Action,
         with each party bearing its own costs, expenses and attorneys' fees
         with respect thereto; and (3) the mandamus proceeding pending before
         the Texas Supreme Court under Cause No. 02-1043 shall be dismissed.
         Such orders being entered and actions taken by the parties hereto, the
         Court and the court in the Martinez Action shall be conditions
         subsequent for this settlement, each of which must occur before H&R
         Block shall have any obligation to make any payment of any of the
         benefits and/or consideration required herein to the Class or payment
         of attorneys' fees or expenses to Class Counsel.

                  5.       While final approval of the settlement is pending and
         while awaiting approval and final exhaustion of all appeals, the
         parties hereto agree to jointly seek the abatement of all the
         proceedings identified in the previous paragraph. Such orders being
         entered and actions taken by the applicable courts shall be conditions
         subsequent to this settlement, each of which must occur before H&R
         Block shall have any obligation to make any payment of any of the
         benefits and/or consideration required herein to the Class or payment
         of any attorneys' fees or expenses to Class Counsel.

                  6.       In consideration for the release and dismissal of all
         Settled Claims, each Class Member shall be entitled to receive -
         irrespective of how many RALs he or she may have obtained - the
         following benefits and consideration:

                           a.  For each tax season over a five-consecutive-year
                               period, a fully transferable and alienable coupon
                               that, upon mailing to the Settlement
                               Administrator, shall entitle the person redeeming
                               such coupons to receive

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                               a TaxCut(R) Platinum Federal Filing Edition tax
                               preparation software package that currently has a
                               suggested retail price of $39.95, or an
                               equivalent product of equal value selected by H&R
                               Block. Such redemption shall occur between
                               January 5 and April 15 of the calendar year of
                               the tax season to which the software package
                               applies.

                           b.  For each tax season over a five-consecutive-year
                               period, a non-transferable and non-alienable
                               coupon that, upon mailing to the Settlement
                               Administrator, along with a receipt evidencing
                               payment, between January 5 and May 15 of the
                               calendar year in which the applicable tax season
                               occurs, shall entitle the Class Member to a $20
                               rebate on tax preparation or electronic filing
                               services provided in an H&R Block branded office
                               in the State of Texas; and

                         c.    For each tax season over a five-consecutive-year
                               period, a fully transferable and alienable coupon
                               that, upon mailing to the Settlement
                               Administrator, shall entitle the person redeeming
                               such coupon to receive a copy of Tax Planning
                               Advisor (of the H&R Block just plain smart
                               Advisor Series of books) that currently has a
                               suggested retail price of $14.95, or an
                               equivalent product of equal value selected by H&R
                               Block. Such redemption shall occur between
                               January 5 and April 15 of the tax season to which
                               the tax planning book applies.

                  7.       With respect to the foregoing benefits and
         consideration, the parties hereto

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         further agree that:

                           a.  Assuming final approval of the settlement by the
                               trial court, final exhaustion of all appeals and
                               satisfaction of all conditions subsequent
                               referred to above, the parties hereto anticipate
                               that the benefits and consideration set forth in
                               the preceding paragraph will pertain to the 2004,
                               2005, 2006, 2007 and 2008 tax seasons. If
                               approval, exhaustion of all appeals and
                               satisfaction of all conditions subsequent
                               referred to above occur within 90 days prior to
                               the beginning of a given tax season or during a
                               given tax season, H&R Block's obligation to
                               provide such benefits and consideration will not
                               arise until the tax season that immediately
                               follows such given tax season.

                           b.  For RALs obtained jointly due to the filing of a
                               joint income tax return by a married couple or
                               through other circumstances, such couple or joint
                               interest shall be treated as one Class Member for
                               purposes of the benefits and consideration
                               described above. Such joint filers' rights with
                               respect to those benefits and consideration shall
                               be governed by the applicable property laws
                               pertaining to such marriage or other
                               relationship, and neither H&R Block nor the
                               Settlement Administrator shall have any
                               liability, obligation or responsibility with
                               respect to any disputes arising from any joint
                               interest or common ownership in the benefits
                               provided herein, irrespective of whether such
                               dispute arises from divorce, death or otherwise.

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                           c.  All coupons provided pursuant to the terms of the
                               settlement and discussed above shall be mailed to
                               each Class Member for whom the parties hereto
                               possess a correct mailing address in one mailing
                               prior to the first applicable tax season in which
                               coupons may be redeemed, as described above. The
                               parties hereto shall be deemed to have a correct
                               mailing address for a Class Member if Class
                               Notice previously mailed was not returned as
                               undeliverable and/or if Class Notice mailed
                               subsequent to entry of a Preliminary Approval
                               Order is not returned as undeliverable and/or a
                               Class Member provides a correct mailing address
                               when requesting a copy of the Class Notice or in
                               response to the class notice. The cost of such
                               mailing of coupons, as well as any other expenses
                               associated with the creation, issuance and
                               redemption of the coupons shall be borne by H&R
                               Block. H&R Block shall have the right to control
                               the timing of such mailing of coupons, although
                               it must occur at some time after April 30 of the
                               year prior to the first applicable tax season,
                               but before December 31.

                  8.       The Final Judgment which will be submitted to the
         Court for approval of this settlement shall vacate the January 30, 1998
         Order of the Court concerning arbitration clauses and contacts with the
         Class. While the parties hereto are awaiting Court approval, the
         parties hereto agree to jointly seek the abatement of the January 30,
         1998 Order, with such abatement specifically providing that the January
         30, 1998 Order shall have no force or effect while the abatement
         remains in effect and therefore such will not be a basis for any

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         sanctions against H&R Block for its conduct while the abatement is in
         effect. However, any arbitration agreement signed or that may hereafter
         be signed by Class Members in 1997 and subsequent years will not be
         enforced against those Class Members with respect to the settled claims
         applicable to any RAL obtained in calendar years 1992 through 1996,
         inclusive. If the Court does not approve the settlement, the parties
         shall jointly request that the Court vacate the abatement. After the
         abatement has been vacated, the Court's January 30, 1998 Order shall
         thereafter again become effective (to the extent it remains effective
         in light of the Judgment and Opinion of the Corpus Christi Court of
         Appeals and H&R Block v. Haese, 82 S.W.3d 331 (Tex.App. - Corpus
         Christi, 2000, pet. denied) and subject to the limitation on the amount
         of any said sanctions set forth in Paragraph 9.

                  9.       If the settlement should ultimately fail due to
         non-approval by the Court or appellate reversal, the Class and Class
         Counsel agree that any sanctions sought or asserted against H&R Block
         for any past conduct - known or unknown - pertaining to or in any way
         connected with the Action, the Cause 99-314 Action, or the Martinez
         Action, collectively shall not exceed $10,000,000 against H&R Block.
         Should the settlement fail for some reason other than judicial
         non-approval or reversal, and such failure is not caused by H&R Block,
         the aforementioned sanctions collectively shall not exceed $20,000,000
         against H&R Block in the Action, the Cause 99-314 Action, or the
         Martinez Action. Nothing in this paragraph shall be construed as an
         admission that H&R Block engaged in any sanctionable conduct, which is
         expressly denied, nor construed as any agreement that any such sanction
         in any amount should be imposed by any court. Consideration for this
         provision consists of not only the benefits and consideration set forth
         herein and discussed above, but also H&R

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         Block's request for exclusion of Class Members from the proposed
         settlement in the Zawikowski Action. Plaintiffs and Class Counsel agree
         to withdraw their objections to Zawikowski Settlement and to make no
         objections to such Zawikowski Settlement in the future, provided that
         if either Plaintiffs and/or Class Counsel or H&R Block is enjoined or
         otherwise prevented from complying with this settlement by order of any
         Court or either is ordered by any Court to deposit any of the funds or
         property to be paid pursuant to the Agreement to any Court, trust, or
         other third party, then Plaintiffs and Class Counsel may object to the
         Zawikowski settlement and contest any such injunction or order. This
         provision shall survive termination or failure of this Agreement or
         this settlement.

                  10.      While approval of this settlement is being sought,
         H&R Block agrees to take no action to subject the Class or Class
         Members to the jurisdiction of any other Federal or State Court. If
         this settlement is finally approved and all appeals challenging same
         are exhausted, H&R Block agrees to comply with same even if the Texas
         Class is not carved out of the Zawikowski Action, provided that neither
         Plaintiffs and Class Counsel nor H&R Block is enjoined or otherwise
         prevented from doing so by order of any court, and further provided
         that H&R Block is not ordered by any court to deposit any of the funds
         or property to be paid pursuant to this Agreement to any court, trust
         or other third party. If either Plaintiffs and/or Class Counsel or H&R
         Block is enjoined or otherwise prevented from complying with this
         settlement or ordered by any Court to deposit any of the funds or
         property to be paid pursuant to the Agreement to any Court, trust, or
         other third party, then Plaintiffs and Class Counsel may contest any
         such injunction or order.

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                  11.      Unless otherwise agreed by all parties hereto, this
         Agreement shall be null and void unless finally approved by the Court,
         and affirmed on appeal if necessary, and unless all conditions
         subsequent are met. However, an award by the Court, as the same may be
         affirmed or reduced by an appellate court, of the attorneys' fees and
         expenses for an amount less than the maximum amounts specified and
         agreed upon in Article V below, shall not affect any of the other
         rights and obligations of the parties hereto under the Agreement.

                  12.      It is expressly agreed and understood that the
         Released Parties deny any fault, wrongdoing, or liability, and that
         this Agreement does not constitute an admission by any party and may
         not be admitted in evidence or appended to any pleadings, motions or
         briefs except in an action brought to enforce the terms hereof or as a
         defense to any causes of action barred or released by the terms hereof.

                  13.      This Agreement may be executed in separate
         counterparts.

                  14.      Each of the parties hereto agree to take all steps
         necessary, at their own costs, to effectuate the purposes and
         requirements of this Agreement.

                  15.      This Agreement shall be binding upon and inure to the
         benefit of the Class, the Released Parties and their respective heirs,
         administrators, successors and assigns.

                  16.      In determining whether any person is a Class Member,
         the Settlement Administrator shall be entitled to rely upon the list of
         persons to whom previous notice was sent in the Action and upon the
         computer records available to H&R Block from third parties. To the
         extent that relevant information is not contained therein, the
         determination may be based upon submission by a Class Member of
         corroborating documentation such as the customer copy of the RAL
         application. The Settlement Administrator may employ in its

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         discretion reasonable procedures necessary to verify information
         submitted by claiming Class Members.

                  17.      In the event that the settlement does not become
         final in accordance with the terms hereof, then this Agreement shall be
         of no force or effect, except as elsewhere expressly provided herein,
         and, in any event, the parties hereto agree that this Agreement,
         whether or not it shall become final, and any and all negotiations,
         documents and discussions associated with it, shall be without
         prejudice to the rights of any party, shall not be deemed or construed
         to be an admission or evidence of any violation of any statute, law or
         regulation or of any liability or wrongdoing by any of the Released
         Parties or of the truth of any of the claims or allegations made in the
         Complaints and/or pleadings in the Action, the Cause 99-314 Action or
         the Martinez Action or any other pleading, and evidence thereof shall
         not be discoverable or used directly or indirectly, in any way, in any
         action or proceeding. If the settlement does not become final in
         accordance with the terms of this Agreement, H&R Block expressly
         reserves all its rights, including but not limited to, its rights to
         compel arbitration and contest class certification in the Action, the
         Cause 99-314 Action and/or the Martinez Action. If the settlement does
         not become final in accordance with the terms of this Agreement,
         Plaintiffs and class members expressly reserve all their rights,
         including but not limited to, any available sanctions subject to the
         limitations set forth in paragraph 9, their rights to contest the
         validity of any arbitration clauses, and their rights to pursue
         approval of class certification in Cause No. 99-314-D and Cause No.
         02-3269-E (Martinez action).

                  18.      This Agreement contains an entire, complete, and
         integrated statement of each and every term and provision agreed to by
         and among the parties hereto; it is not subject to

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         any condition not provided for herein. This Agreement shall not be
         modified in any respect except by a writing executed by all the parties
         hereto. This Agreement supersedes all prior agreements between the
         parties hereto, including the Memorandum of Understanding dated
         November 18, 2002.

                  19.      None of the parties hereto shall be considered to be
         the drafter of this Agreement or any provision hereof for the purpose
         of any statute, case law or rule of interpretation or construction that
         would or might cause any provision to be construed against the drafter
         hereof.

                  20.      The Class and Class Counsel agree that all public
         communication regarding the settlement and this Agreement shall be made
         by H&R Block, except as may be required in court proceedings, or where
         necessary to protect the integrity of Class Counsel; provided, however,
         that public communication to protect the integrity of Class Counsel
         shall not include press releases or any communications to financial
         analysts or investment advisors. Any responses to media inquiries shall
         not disparage H&R Block or their statements and shall only state that
         the settlement is a compromise of disputed claims. Except as permitted
         in the previous two sentences, the Class and Class Counsel shall refer
         any media inquiries to the following representatives of H&R Block:
         Linda M. McDougall, 816-932-7542, Cyd Slayton, 816-932-8470 or Bob
         Schneider, 816-932-4835, or such other person(s) as H&R Block shall
         designate to Class Counsel. Further Class Counsel agree not to provide
         documents to or otherwise assist any party or anyone representing
         parties or anyone contemplating such representation in any other
         RAL-related case now existing or filed at any time in the future, with
         respect to this settlement or any other aspect of this litigation. The

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         Plaintiffs, Class, and Class Counsel shall, upon final and unappealable
         approval of the settlement, return to H&R Block any and all documents,
         discovery responses or other information produced or given to the Class
         and Class Counsel during the course of this litigation.

                  21.      Each of the undersigned attorneys hereby represents
         and warrants that he or she is authorized to execute this Agreement on
         behalf of his or her client(s).

IV.  CLASS NOTICE AND SETTLEMENT FAIRNESS HEARING

                  1.       Upon execution of this Agreement of Settlement,
         Plaintiffs will file, and H&R Block will not oppose, a Motion for
         Preliminary Approval of Settlement and for Approval of Class Notice
         pursuant to Texas Rule of Civil Procedure 42. A copy of the proposed
         Class Notice is attached hereto as EXHIBIT A.

                  2.       H&R Block shall pay all costs associated with
         dissemination of the Class Notice and the administration of the
         settlement.

                  3.       Class Members shall have the right to object to the
         settlement or the request by Class Counsel for an award of attorneys'
         fees and expenses by filing written objections with the Court not later
         than twenty (20) days before the hearing on final approval of the
         settlement, and serving copies of such papers on all counsel for the
         parties hereto. Failure to file such timely written objections will
         preclude a Class Member from objecting at the final approval hearing.

                  4.       Subject to the approval of the Court, Class Notice
         will also be disseminated to persons who obtained RALs in Texas prior
         to 1992, by publication, and subsequent to 1996,

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         by mail. Any opt-outs of the Action by such persons pursuant to the
         Class Notice must be in a writing signed by the individual person and
         not his or her counsel or other representative.

                           5. Class Counsel shall not solicit the representation
         of persons who have opted out from the class with respect to any of the
         Settled Claims that were or could have been raised in the Action, the
         Cause 99-314 Action or the Martinez Action.

V.       ATTORNEYS' FEES AND EXPENSES

                  1.       Defendants agree to pay Class Counsel up to
         $49,000,000 with respect to attorney's fees that may be awarded by the
         Court in connection with this settlement, provided that Class Counsel
         and/or their respective law firms shall not seek or accept an award of
         more than $49,000,000 in attorneys fees. Further, in the event the
         Court awards Class Counsel any recovery of expenses associated with the
         litigation of the Action, H&R Block agrees to reimburse Class Counsel
         up to $900,000 for such expenses incurred prior to execution of this
         Agreement. Plaintiffs shall provide a reasonable description of such
         expenses, but H&R Block shall not object to the reasonableness or
         necessity of such expenditures. Such fees and expenses shall be subject
         to Court approval, but in no event shall H&R Block be required to pay
         more than the amounts stated herein. Such payment shall be made to
         Class Counsel within 30 days after the Court's order approving the
         settlement becomes final, and any appeals have been exhausted and all
         conditions subsequent have been satisfied; provided, however, that any
         payment by H&R Block shall be made in accordance with a final Court
         order specifying the division of attorneys fees and expenses among
         Class Counsel in this case, and shall not be payable by H&R Block until
         such an

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         order specifying divisions has been entered.

                  2.       The Court order awarding attorneys' fees and expenses
         to Class Counsel shall be in an order which is separate from an order
         approving the settlement, so that any appeal from the attorneys' fees
         and expenses to Class Counsel shall not affect the finality of the
         approval of the settlement.

                  3.       Class Counsel may pay incentive awards to the
         Plaintiffs out of the aforesaid amounts paid to Class Counsel, in
         amounts to be approved by the Court.

VI.      TERMINATION

                  H&R Block, at its sole discretion, shall have the right but
         not the obligation to terminate this Agreement if:

                  1.       The Court declines to preliminarily approve the
         settlement and enter a Preliminary Approval Order except as expressly
         provided elsewhere in the Agreement; or

                  2.       The conditions subsequent discussed herein are not
         satisfied; or

                  3.       To the extent any Class Members have opted out of
         this Class, or may hereafter have the right to opt out of the Class or
         the Action, H&R Block shall have the option to withdraw from this
         Settlement if more than one percent (1%) of the persons receiving Class
         Notice opt out.

                  Plaintiffs and Class Members, at their sole discretion, shall
         have the right but not the obligation to terminate this Agreement if
         the Court declines to preliminarily approve the settlement and enter a
         Preliminary Approval Order approving all aspects of this Agreement of
         Settlement, or except as expressly provided in this Agreement.

                                       18

<PAGE>

                  Termination by either H&R Block or by Plaintiffs and Class
         Members pursuant to this Section VI shall mean that all obligations of
         the parties hereto shall terminate, except as expressly provided
         herein.

                  IN WITNESS WHEREOF, the undersigned parties hereto and their
         attorneys have caused this Agreement to be duly executed on the date
         first above written.

                               /s/ Nancy Haese
                               ----------------------
                               Nancy Haese, Plaintiff

                               /s/ Ronnie Haese
                               -----------------------
                               Ronnie Haese, Plaintiff

                               HILLIARD & MUNOZ, LLP

                               By: /s/ Robert C. Hilliard
                                   ----------------------
                                        Robert C. Hilliard

                               HARTLINE, DACUS, BARGER,
                               DREYER & KERN, L.L.P.

                               By: /s/ Darrell L. Barger by RCH
                                   ----------------------------
                                       Darrell L. Barger

                               ELLIS, CARSTARPHEN, DOUGHERTY &
                               GOLDENTHAL, P.C.

                               By: /s/ Edward M. Carstarphen by RCH
                                   --------------------------------

                                       19

<PAGE>

                                    Edward M. Carstarphen

                               SICO, WHITE & BRAUGH

                               By: /s/ Craig M. Sico by RCH
                                   ------------------------
                                        Craig M. Sico

                               ATTORNEYS FOR PLAINTIFFS

                               H&R BLOCK, INC.

                               By: /s/ Jeffery W. Yabuki
                                   ---------------------
                                       An Authorized Representative

                               H&R BLOCK TAX SERVICES, INC.

                               By: /s/ Jeffery W. Yabuki
                                   ---------------------------------
                                        An Authorized Representative

                               H&R BLOCK AND ASSOCIATES, L.P.

                               By: /s/ Jeffery W. Yabuki
                                   ---------------------------------
                                        An Authorized Representative

                               HRBO, LIMITED, ERRONEOUSLY NAMED AS
                               HRBO, LTD.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                               HRB-DELAWARE, INC. AS SUCCESSOR IN INTEREST
                               TO H&R BLOCK OF SOUTH TEXAS, INC.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                                       20

<PAGE>

                               HRB-DELAWARE, INC.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                               H&R BLOCK, LTD.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                               HRBOI, LTD.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                               HRBO III, LTD.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                               HRBOII, INC., ERRONEOUSLY NAMED AS HRBOII, LTD.

                               By: /s/ Garnett Walker
                                   --------------------------------
                                        An Authorized Representative

                               H&R BLOCK OF DALLAS, INC.

                               By: /s/ Jeffery W. Yabuki
                                   ---------------------------------
                                        An Authorized Representative

                               H&R BLOCK OF HOUSTON, LTD.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                               HOUSTON BLOCK, L.C.

                                       21

<PAGE>

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                               BLOCK MANAGEMENT, LTD.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                               STI-BLOCK, L.C.

                               By: /s/ Garnett Walker
                                   ---------------------------------
                                        An Authorized Representative

                                       22

<PAGE>

                               MEREDITH, DONNELL & ABERNETHY

                               By: ___________________________________
                                          Ben A. Donnell

                               BRYAN CAVE, LLP.

                               By:____________________________________
                                           N. Louise Ellingsworth

                               ATTORNEYS FOR DEFENDANTS

                                       23

Source: OneCLE Business Contracts.