If you obtained a Rapid Refund or Refund Anticipation Loan (RAL) from H & R Block in the State of Texas, this notice may affect your rights. A class action lawsuit is now pending in the 105th Judicial District Court of Kleburg County, Texas titled: Ronnie Haese and Nancy Haese v. H & R Block, Inc., et al, Case No. CV-96-423. This case involves claims that H&R Block improperly received undisclosed revenue from each RAL that they arranged in conjunction with their tax preparation services in Texas. This Notice is directed to all members of the Texas Class, defined as: Any individual in Texas who was, at any time, a debtor on a refund anticipation loan ("RAL") for which an H & R Block entity acted as a facilitator. A refund anticipation loan is a loan that a creditor arranges to be repaid directly from the proceeds of the debtor's income tax refund. H & R Block entities means those entities which use "H & R Block" or initials "HRB" in its business, whether or not it is owned by one of the defendants in this lawsuit. Facilitator means any individual, partnership, corporation or other business entity, who individually, or in conjunction or cooperation with another processes, receives, or accepts for delivery any application for a refund anticipation loan, or a check in payment of refund anticipation loan proceeds, or in any other manner facilitates the making of a refund anticipation loan.

Notice of this lawsuit is given by order of the Court, to inform you of the Court's decision to certify a Plaintiff Class, the nature of Plaintiffs' claims, your right to participate in or exclude yourself from the Class, and other critical issues which may affect your rights.

Plaintiffs Ronnie and Nancy Haese of Kingsville, Texas have been appointed by the Court to function as representatives of the Plaintiff Class. Plaintiffs complain in this case that the Defendants received an undisclosed license fee from the lending bank for each RAL they "facilitate" in violation of their fiduciary duties and in violation of the Texas Deceptive Trade Practices Act. Plaintiffs have asked the Court to order Defendants to pay each class member an amount equal to the kick back Defendants obtained on each class member's RALs. Plaintiffs seek actual damages, restitution, statutory additional damages, attorney's fees, and punitive damages. The Defendants deny that they have done anything wrong, deny that they breached any contract or duty, deny that they violated any laws, deny that they have been in any way misleading and have raised a number of defenses to these claims.

The Court has certified for trial the Texas Class described above. The Court's class certification order does not decide the merits of Plaintiffs' claims or Defendants' defenses. Plaintiffs will be required to prove the Class claims at trial to be held in Kingsville, Texas. Trial is currently set to begin November 4, 2002.

Class Counsel have been appointed by the Court to represent the interests of the Texas Class. Counsel for the Texas Class include Robert Hilliard, Darrell Barger, Craig Sico and Edward Carstarphen. You will not be charged for Class Counsel's services. Instead, if they obtain a recovery for the Class, Class Counsel may apply to the Court for payment of their reasonable attorneys' fees and costs by the Defendants or out of any funds recovered before distribution of the net proceeds to the Class. You have the right to hire your own attorney to appear on your behalf in this case. If you hire your own attorney, you will be responsible for paying that attorney's fee. You also have the right to seek to intervene or appear in the action.

You are also notified that there are other class actions currently pending in other jurisdictions that may affect the rights of Texas class members in this action. In particular, you may have received a notice of proposed settlement regarding a proposed nationwide class settlement in a case pending in the United States District Court for the Northern District of Illinois titled Zawikowski v. Beneficial Natl. Bank, et al., Cause No. 98 C 2178. Based upon that notice, you may have elected to participate in the proposed nationwide settlement. That proposed nationwide settlement was recently reversed and remanded in part because Texas class members were prevented from receiving notice about this Texas class action. The settling parties in the Illinois federal suit have given notice that they will again attempt to gain final approval of that settlement in the trial court in Illinois, and to rely on the responses to their previous notice campaign to determine the participants in the settlement. If you elected to participate in that attempted nationwide settlement, and you wish to continue to participate in that settlement even after reviewing this class notice, you must exclude yourself from this Texas class action. On the other hand, if you no longer wish to participate in the proposed nationwide settlement in Illinois after reviewing the notice of this Texas action, you may evidence that intention by remaining a member of this Texas class action pursuant to the terms of this notice.

If you wish to remain a member of this Texas Class Action, YOU NEED NOT DO ANYTHING AT THIS TIME. As Texas Class members, you will be bound by all orders and judgments of the Texas Court, and your claims will be determined by whatever judgment is entered by the Court in this case. In addition, by remaining as a member of the Texas Class, you authorize the Texas Class Counsel to take whatever action they deem necessary to exclude you from (opt you out of) the proposed nationwide settlement class in Illinois. If for any reason you do not wish to remain a member of the Texas Class you may exclude yourself from the Class by writing to the address below, and expressly stating in a letter that you wish to be excluded from the Texas Class. If you exclude yourself from the Texas Class, you cannot participate in any recovery for the Texas Class, and you will not be bound by any Court orders or judgments. If you wish to remain a Texas Class member, DO NOT send an exclusion letter. If you wish to be excluded, your letter excluding yourself from the class must be postmarked no later than October 4, 2002, which is 30 days prior to the current trial setting in this matter of November 4, 2002.

If you have questions regarding the Texas Class Action, you may write to: Hilliard & Munoz, 719 S. Shoreline Blvd., Ste. 600, Corpus Christi, TX 78401-3548.

Honorable Manuel Banales, District Judge.