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, 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 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

1.         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&RBlock, Inc., et al., No. CV-99-314-D (hereafter referred to as The "Cause 99-314 Action");

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