Exhibit 10.37
OPERATIONS AGREEMENT
          THIS OPERATIONS AGREEMENT (the “Agreement”), dated as of August 2,
1999 is made by and among MCGLADREY & PULLEN, LLP (“M&P”), an Iowa limited
liability partnership, MP ACTIVE PARTNERS TRUST, Clifford Newman, Trustee
(“Trust”), MARK W. SCALLY, a resident of Minneapolis, Minnesota (“Scally”),
THOMAS G. ROTHERHAM, a resident of Eden Prairie, Minnesota (“Rotherham”), RSM
MCGLADREY, INC., a Delaware corporation (“RSM”), HRB BUSINESS SERVICES, INC., a
Delaware corporation (“HRB”) and H&R BLOCK, INC., a Missouri corporation
(“Block”). Capitalized terms used and not otherwise defined herein shall have
the meaning ascribed to them in the Purchase Agreement (hereinafter defined).
RECITALS
          WHEREAS, M&P, Trust, Scally, Rotherham, RSM, Block and certain other
persons and entities are parties to the Asset Purchase Agreement dated as of
June 28, 1999 (the “Purchase Agreement”) providing for, among other things, the
purchase of certain assets of M&P by RSM; and
          WHEREAS, M&P and RSM are parties to the Administrative Services
Agreement dated as of August 2, 1999 (“Administrative Services Agreement”)
providing for, among other things, the provision by RSM to M&P of certain
administrative and other services; and
          WHEREAS, Block is the ultimate parent corporation of RSM and HRB, and
RSM is a direct subsidiary of HRB; and
          WHEREAS, Scally and Rotherham were formerly appointed to the Office of
Managing Partner of and were partners of M&P, but effective the date hereof have
resigned such positions and partnership and are parties to respective Managing
Director Employment Agreements with RSM dated the date hereof (the “Employment
Agreements”); and
          WHEREAS, the parties hereto desire to set forth certain understandings
and agreements regarding the respective business operations of M&P and RSM after
the Closing, as set forth herein.
AGREEMENT
          NOW, THEREFORE, in consideration of the mutual premises and the
covenants, representations and warranties herein contained, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
          1. Board of Directors of RSM. Effective the date hereof and for the
duration of the Earnout Period but subject to Section 16 hereof, HRB will cause
the Board of

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Directors of RSM to be comprised of five (5) directors, consisting of (1) the
Chief Executive Officer of RSM, (2) the Chief Operating Officer of RSM and
(3) three other directors nominated by Block (such three nominees, the “Block
Nominees”).
          2. Chief Executive Officer and Chief Operating Officer of RSM.
Effective the date hereof and for the duration of the Earnout Period but subject
to Section 16 hereof, Block will cause the Block Nominees to vote in favor of
the appointment of Scally as the Chief Executive Officer, and Rotherham as the
Chief Operating Officer, of RSM, provided that Scally’s and/or Rotherham’s
respective Employment Agreement has not then been terminated or expired. In the
event that such employment of Scally or Rotherham is terminated prior to the end
of the Earnout Period, the Executive Management Committee shall recommend his or
their replacement, subject to the good faith approval of Block, which shall not
be unreasonably withheld or delayed.
          3. Executive Management Committee.
          a) Formation. Effective the date hereof and for the duration of the
Earnout Period but subject to Section 16 hereof, Block or HRB will use its best
efforts to cause the Block Nominees to, and Scally and Rotherham shall as
directors of RSM, vote in favor:
          i) of the establishment and maintenance of the Executive Management
Committee of the RSM Board of Directors (the “Committee”), which Committee shall
initially consist of the Chief Executive Officer of RSM (as sole voting member),
the Chief Operating Officer of RSM, and up to seven (7) other persons (each a
“Committee Member”) who are selected on the basis set forth in Schedule 3
hereof. The resolution of the RSM Board initially establishing such Committee
and the initial members thereof is attached hereto as Schedule 3.
          ii) of the RSM Board’s authorization and direction of the Committee to
(i) establish, on an annual basis, the allocation of the Annual Compensation
among the Senior Managing Directors and Managing Directors of RSM as provided in
Schedule 5 of each of the forms of Managing Director Employment Agreement and
the Senior Managing Director Employment Agreement, respectively, dated of even
date hereof, (ii) promote or terminate Managing Directors and Senior Managing
Directors, (iii) allocate Closing Block Options and Post Closing Block Options
and (iv) recommend any replacement for Scally or Rotherham in the event of
termination of their employment with RSM during the Earnout Period, as provided
in Section 2. The resolution of the RSM Board making such authorization and
direction is included within Schedule 3 hereof.

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          4. Capital for Acquisitions. Subject to Section 16 hereof, the parties
acknowledge that:
          a) Block management has set a strategic goal of building a national
accounting and consulting firm. In pursuing this strategy. Block has to date
acquired non-attest assets of accounting firms with aggregate revenues of
approximately $102,000,000 for an approximate aggregate base purchase price of
$102,000,000. Upon consummation of the transaction contemplated by the Purchase
Agreement (the “Transactions”), Block shall have acquired non-attest assets of
accounting firms with aggregate revenues of approximately $342,000,000 for an
approximate aggregate minimum base price of $342,000,000.
          b) After consummation of the Transactions, Block intends to continue
to build a national accounting and consulting firm by expanding Buyer through
the acquisition of non-attest assets of other accounting, tax and consulting
firms. Block expects to consummate between $300,000,000 to $400,000,000 (in base
purchase price) of such acquisitions during the two-year period following the
Closing Date. Block anticipates that it will continue to make similar
acquisitions after such two-year period.
          c) The foregoing expressed goals, intentions, expectations and
anticipations of Block are not, and do not constitute, legally binding
obligations of Block or its affiliates and Block may, by decision of its Board
of Directors (the “Board”), change such goals, intentions, expectations and
anticipations because of a number of factors, including (without limitation)
concerns regarding the performance of Buyer, increased costs of capital, adverse
economic, regulatory or industry trends or events, and the good faith exercise
of fiduciary and other duties owed by the Board to the shareholders of Block.
          5. Working Capital Funds. Effective the date hereof and for the
duration of the Earnout Period, Block or a subsidiary or affiliate of Block will
provide working capital funds to RSM, bearing interest at the Prime Rate quoted
in The Wall Street Journal (adjusted quarterly based upon the Prime Rate
reported for the first business day of such quarter and applied against the
average of the beginning and closing balance for each month within such quarter)
during the Earnout Period. Such working capital funds shall be in such amounts
as are reasonably required by the business of RSM (including the purchase of
fixed assets), consistent with that funded in past practice and for similarly
situated firms, and agreed by Block in its good faith, reasonable discretion
considering the foregoing.
          6. Post-Closing Development Expenditures. Block either directly or
through any direct or indirect subsidiary of Block agrees to provide capital to
M&P for development expenditures in an amount not to exceed Six Million Dollars
($6,000,000) per year for each of the one year periods commencing on the Closing
Date and each of the first four anniversary dates of the Closing Date,
respectively, regardless of whether such development expenditures are
capitalized or expensed for accounting purposes. Such capital shall be used for
the development of RSM’s infrastructure, mergers, integration resources,
branding or related

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promotional efforts, acquisitions or similar purposes (“Development Purposes”)
set forth in an annual preliminary budget (for each such annual period) and for
which a year end (for each such annual period) accounting is prepared by RSM and
delivered to Block. For purposes of this Section 1.6, it is assumed that such
$6,000,000 annual amount is expended ratably over the course of such year.
          7. Certain Acquisitions. Effective the date hereof and for the
duration of the Earnout Period, the acquisition of accounting, consulting or
financial services businesses to be integrated into RSM, shall be subject to the
prior written approval of both Block (whether directly or through HRB) and the
Executive Management Committee.
          8. Allocation of Costs to Foundation Firms. Effective the date hereof
and for the duration of the Earnout Period, RSM shall not allocate to any
Foundation Firm or Prior Add-On Firm any costs for services provided by RSM
unless and only to the extent that the Foundation Firm or Prior Add-On Firm has
a tangible cost reduction or revenue enhancement derived or resulting from such
services; provided however, this Section shall not prohibit M&P from charging
Foundation Firms or Prior Add-On Firms for services rendered by M&P for or on
behalf of clients of Foundation Firms or Prior Add-On Firms and which services
are billed or are billable to such clients.
          9. Use of Block Corporate Services; Reimbursement of Certain Costs.
Effective the date hereof and for the duration of the Earnout Period:
          a) RSM shall not be charged an overhead or similar charge by Block or
HRB (or any Block Entity not within Group) for use of general administrative,
legal, marketing or similar services unless and only to the extent that RSM’s
use of such services results or demands incremental costs relating to the hiring
of additional personnel, use of additional office space or material,
out-of-pocket supply or independent contractor costs; and
          b) Block shall pay, or reimburse M&P, for its reasonable and necessary
out of pocket incremental costs incurred by TP Services, LLC (“TPS”), including
but not limited to the legal organization of TPS in Delaware, ongoing
filing/qualification costs (in Delaware and as a foreign company in other states
in which it does business) and annual state franchise taxes or fees (excluding,
however, any taxes or fees or portions of taxes or fees representing tax on
income or profits of TPS).
          10. Putney Compensation. Effective the date hereof and for the
duration of the Earnout Period, the employment and compensation of Terrence E.
Putney, an officer of HRB, shall be the obligation and expense of HRB (or
another Block Entity not within Group). Terrence E. Putney shall perform work
under the direction and on behalf of Block, HRB or RSM.

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          11. Professional Liability Insurance Expense.
          a) RSM and M&P shall each have, and pay for, separate professional
liability insurance on a “claims made” coverage basis. Since it is anticipated
that professional liability claims made after the Closing will, on a declining
basis over time, relate to services performed prior to Closing (for which the
Trust has assumed liability), the parties agree that Trust shall have certain
obligations regarding the reimbursement of professional liability insurance
costs after Closing, as set forth in subsection (b), below.
          b) The professional liability insurance costs (including premiums and
payments of deductible and copay amounts) of RSM and M&P (for themselves and
their respective employees/partners) shall be allocated as follows, with RSM/M&P
paying the insurer(s) directly for their respective entire costs and being
reimbursed by Trust for Trust’s respective portion, upon demand from RSM/M&P:

                  M&P/RSM Year   Trust (%)   Portion (%) 1   60     40 2   50  
  50 3   40     60 4     0   100

          12. New Partners. M&P shall require that all persons acquiring equity
or capital or rights to equity or capital in M&P or rights similar thereto,
agree as a condition to becoming a partner of M&P to be bound by the terms of
the Amended Partnership Agreement and a Managing Director Employment Agreement
or a Senior Managing Director Employment Agreement. RSM intends to, but shall
have no obligation to, enter into any employment agreement with any person who
becomes a partner of M&P.
          13. Non-Solicitation/Non-Disclosure Covenants.
          a) Certain Acknowledgments. M&P acknowledges and agrees as follows in
exchange for valuable consideration, the receipt and sufficiency of which M&P
acknowledges:
          i) RSM and Block have obtained and will maintain an advantage over
their respective competitors as a result of name, location and reputation
developed at great expense;
          ii) M&P’s relationship with RSM involves the understanding of and
access to certain trade secrets and confidential information pertaining to the
property, business and operations of RSM and its Affiliates;
          iii) M&P’s recognition of the value of the special, unique and
extraordinary knowledge and skill required to accept, undertake and perform the

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type of work normally undertaken and performed by M&P, RSM, the Partners and
RSM’s other employees and agents;
          iv) All clients/customers of RSM, regardless of when or by whom
acquired, are RSM assets and not assets of M&P;
          v) M&P has carefully considered the restrictions contained herein, and
M&P specifically agrees that same are reasonable and necessary and essential to
the preservation of the business of RSM; and
          vi) M&P’s agreements and covenants under this Section 13 are an
essential part of the inducement to RSM to enter into this Agreement.
          b) Scope. Until the later to occur of (i) August 2, 2004 or (ii) that
date which is three (3) years after the expiration or termination of this
Agreement (the “Covenant Period”), for any reason or for no reason except as set
forth in Section 13(d), M&P agrees as follows in consideration for entering into
the Asset Purchase Agreement.
          i) Except with the prior written consent of RSM, M&P shall not
directly or indirectly, either individually or as a principal, partner, member,
manager, agent, employee, employer, consultant, stockholder, joint venturer, or
investor, or as a director or officer of any corporation, company, partnership
or association, or in any other manner or capacity whatsoever, engage in, assist
or have any active interest in a business located anywhere in the United States,
on its own behalf or for others, that provides, sells, develops, markets,
designs, distributes, coordinates, conducts or publishes, to or for the benefit
of any person or entity, investment advisory services, asset management
services, financial planning services or products, estate planning services or
products, seminars, training materials, industry newsletters, practice
development tools or programs, accounting services (not including Public
Accountancy services), consulting services, tax preparation services, management
advisory services or such other service or product that otherwise competes with
or is substantially similar in concept, design, format or otherwise to the
business conducted by the RSM on the date hereof, or at any time during the
Covenant Period. Notwithstanding the above, this paragraph shall not be
construed to prohibit M&P from mere ownership of less than three percent (3%) of
the outstanding securities of a corporation which is publicly traded on a
securities exchange or through Nasdaq.
          ii) Except with the prior written consent of RSM, M&P shall not,
directly or indirectly, either individually, or as a principal, partner, member,
manager, agent, employer, consultant, stockholder, joint venturer, or investor,
or in any other manner or capacity whatsoever,
          (1) solicit, divert or take away, or attempt to solicit, divert or
take away, from RSM, or any direct or indirect subsidiary or

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Affiliate of RSM, any business with any client of RSM or any of its direct or
indirect subsidiaries or Affiliates,
          (2) solicit, divert or take away, or attempt to solicit, divert or
take away, from RSM or any direct or indirect subsidiary or Affiliate of RSM,
any business with any person or entity who was being solicited as a potential
client by RSM or any of its direct or indirect subsidiaries or Affiliates (other
than for the provision of Public Accounting Services), within one year prior to
the commencement of this Agreement and during the Covenant Period,
          (3) induce or cause, or attempt to induce or cause, any salesperson,
distributor, supplier, vendor, manufacturer, representative, agent, or other
person transacting business with RSM or any of its direct or indirect
subsidiaries or Affiliates to terminate or modify such relationship or
association,
          (4) induce or cause, or attempt to induce or cause, any employee,
accountant, member, manager, shareholder, partner, director or officer of RSM or
any of its direct or indirect subsidiaries or Affiliates to leave the employ of
RSM or any of its direct or indirect subsidiaries or Affiliates, or
          (5) For purposes of this Agreement, an “Affiliate” shall mean, with
respect to any person, (a) any person which, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, such person, or (b) any person which RSM or any of its Affiliates (as
determined pursuant to (a) above) provides Services of the type contemplated in
this Agreement, or other similar agreements. For purposes of this definition
“control” of a person shall mean the power, direct or indirect to, (x) vote or
direct the voting of 50% or more of the outstanding shares of voting stock or
similar interests of such person, or (y) direct or cause the direction of the
management of such person, whether by contract or otherwise.
          iii) If M&P violates any of the provisions of Section 16(b)(i) or
Section 16(b)(ii) after the date hereof, the Covenant Period shall be extended
for a period of time equal to the period of any such violation.
          iv) In addition to any other rights or remedies RSM may possess, RSM
shall be entitled to injunctive and other equitable relief to prevent any
breach, threatened breach, or continuing breach of any part of this Agreement.
          c) Limitations On Enforcement. If any restriction set forth in this
Section 13 is found by any court of competent jurisdiction to be unenforceable
because it extends for too long a period of time, over too great a range of
activities or in too broad a

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geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which such court shall
consider enforceable.
          d) Termination of Restrictive Covenants. The restrictive covenants set
forth in Section 13(b)(i) and 13(b)(ii) hereof shall expire if a Payment Event
of Default (defined below) occurs under the Guaranty dated August
                    , 1999 by Block in favor of McGladrey (the “Guaranty”). For
purposes of this Section, a “Payment Event of Default” shall be deemed to occur
if (i) any undisputed Guaranteed Obligation (as defined in the Guaranty) is not
timely paid by RSM McGladrey when due and owing and (ii) Block fails to pay the
amount of any such Guaranteed Obligation (provided that RSM McGladrey’s
nonpayment then exists and is continuing) within thirty (30) days after delivery
of written notice thereof to Block pursuant to the notice provisions of the
Guaranty. Any expiration of such restrictive covenants pursuant to this Section
shall not, however, act or be deemed to work on or effect any expiration,
termination, waiver, forfeiture, or release of such restrictive covenants or in
any way affect their enforcement for any period prior to the occurrence of the
applicable Payment Event of Default.
          14. Network Firm Mergers.
          a) The parties agree that until a Foundation Firm is merged into M&P
then a Network Firm (as defined below) operating in the Territory of a
Foundation Firm may continue as a Network Firm. At such time that an agreement
is executed with a Foundation Firm to merge into M&P, then the Network Firm in
the same Territory will have ninety (90) days to determine if it also wants to
merge or terminate its Network Firm membership. If a Network Firm determines not
to merge with M&P, then (i) such Network Firm shall have an additional ninety
(90) days to continue in the Network until Network services are suspended; and
(ii) the Network Firm will have the option to continue as a Subscriber Firm (as
defined below) and thereafter be entitled to the services provided a Subscriber
Firm.
          b) Definitions. For purposes of this Section 14, the following
definitions shall have the following meanings.
          i) “Territory” of a Foundation Firm shall mean a circle with a 50 mile
radius around a Foundation Firm with its office at the center.
          ii) “Network Firm” shall mean an entity that has entered into an
agreement with M&P to be a member of M&P’s network.
          iii) “Subscriber Firm” shall mean an entity that subscribes to certain
services provided by M&P.
          15. Compliance with Independence Policies. RSM, HRB and Block agree
that subsequent to closing M&P retains the right and authority to (i) establish
the independence policies of the attest practice and that such policies will be
binding upon RSM and HRB, and (ii) monitor and enforce the compliance with such
policies within RSM and HRB organizations

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through the methodology deemed reasonably necessary by the attest firm to
accomplish such objectives and to ensure that independence exists between the
clients of the attest firm and the non-attest firm and HRB and their respective
officers, directors and employees, as appropriate. M&P will resign from any
engagement where a satisfactory resolution cannot be achieved whereby M&P can
retain its independence.
          16. Obligations Contingent. Except upon occurrence of a Force Majeure
Event (as defined below), in the event that (i) RSM fails to have at least 80%
of the projected proforma pretax earnings levels set forth in Schedule 16 to
this Agreement for any fiscal period during the Earnout Period and (ii) Block,
HRB and RSM are otherwise in compliance in all material respects with the
provisions of this Agreement and the Employment Agreements, Block, HRB, RSM and
the Block Nominees may, in Block’s sole discretion, unilaterally and without
liability terminate, modify, amend or ignore any of the provisions, rights,
obligations, and/or duties under Sections 1 through 4 hereof (effective the
first day of the fiscal annual period immediately following the annual period in
which such earnings were deficient or such other later date as designated by
Block), by providing written notice of same to M&P, Scally and Rotherham. “Force
Majeure Event” shall mean any inability of M&P or RSM to provide service to
their clients due to any strike, lockout or other labor or industrial
disturbance, civil disturbance, lightning, earthquake, fire, storm, hurricane,
tornado, flood, washout, explosion, regulatory action or any other similar cause
beyond the reasonable control of M&P or RSM or any of their contractors or other
representatives.
          17. Miscellaneous.
          a) Amendment and Modification. This Agreement may be amended, modified
and supplemented only by written agreement of the parties hereto.
          b) Waiver of Compliance; Consents. Any failure of any party to comply
with any obligation, covenant, agreement or condition herein may be waived in
writing by other benefited parties, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
          c) Notices. Any notice, request, consent or communication
(collectively, a “Notice”) under this Agreement shall be effective only if it is
in writing and (a) personally delivered, (b) sent by certified or registered
mail, return receipt requested, postage prepaid, (c) sent by a nationally
recognized overnight delivery service, with delivery confirmed, or (d) telexed
or telecopied, with receipt confirmed, addressed as follows:

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  (i)   If to M&P:         Bill Travis
McGladrey & Pullen, LLP
3600 West 80th Street
Suite 500
Bloomington, MN 55431     (ii)   If to Rotherham or Scally:         McGladrey &
Pullen, LLP
3600 West 80th Street
Suite 500
Bloomington, MN 55431     (iii)   If to the Block, HRB or RSM, to:         Bret
G. Wilson
H&R Block, Inc.
4400 Main Street
Kansas City, MO 64111
Facsimile: (816) 753-8628         with a copy to:         James H. Ingraham,
Esq.
H&R Block, Inc.
4400 Main Street
Kansas City, MO 64111
Facsimile: (816) 753-8628
        and         Gregory G. Johnson, Esq.
Bryan Cave LLP
One Kansas City Place
1200 Main, Suite 3500
Kansas City, MO 64105
Facsimile: (816) 374-3300

or such other persons or addresses as shall be furnished in writing by any party
to the other party. A Notice shall be deemed to have been given as of the date
when (i) personally delivered, (ii) three (3) days after the date when deposited
with the United States mail properly addressed, (iii) when receipt of a Notice
sent by an overnight delivery service is confirmed by such

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overnight delivery service, or (4) when receipt of the telex or telecopy is
confirmed, as the case may be.
          d) Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any party without the prior written consent of other parties.
          e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
          f) Neutral Interpretation. This Agreement constitutes the product of
the negotiation of the parties hereto and the enforcement hereof shall be
interpreted in a neutral manner, and not more strongly for or against any party
based upon the source of the draftsmanship hereof.
          g) Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
          h) Governing Law. The provisions hereof shall be governed and
interpreted in all respects pursuant to the internal and substantive laws of the
State of Missouri without regard to conflict of laws principles which might
cause the law of another jurisdiction to apply.
          i) Arbitration. Any controversy, claim, or dispute arising out of or
relating to this Agreement or any breach thereof, including without limitation
any dispute concerning the scope of the arbitration clause set forth below,
shall be resolved as set forth below. Any party may seek injunctive relief
pending the completion of mediation and arbitration under this Agreement.
          i) In the event a dispute arises relating to this Agreement, any party
may demand mediation by notifying the American Arbitration Association (“AAA”)
in the location where any arbitration would be conducted as set forth below, in
writing with copies to all other parties involved in the dispute. The
notification will state with specificity the nature of the dispute and the
amount of any claims. Upon receipt of the mediation demand, the AAA will
immediately convene a pre-mediation telephone conference of the parties hereto.
The parties will make a representative, with full authority to settle, available
for such a conference within five (5) business days of being contacted by the
AAA or its designated mediator (“Mediator”). During the pre-mediation telephone
conference, the parties will agree on mediation procedures or, in the event they
cannot agree, Mediator will set the mediation procedures. The mediation
procedures will provide for the mediation to be completed within thirty (30)

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business days of the date of the initial demand for mediation. The parties will
participate in good faith in the mediation and will use their best efforts to
reach a resolution within the thirty (30) day time period. Each party will make
available in a timely fashion a representative with authority to resolve the
dispute. In the event that the dispute has not been resolved within thirty
(30) days, the mediation may continue if the parties so desire. If not, the
Mediator will so notify the parties and declare the mediation terminated. In the
event that the mediation continues beyond thirty (30) days, but is not resolved
within what Mediator believes is a reasonable time thereafter, the Mediator will
so notify the parties, and declare the mediation terminated. Fees of the
mediator shall be split equally between Block, HRB and RSM, on the one hand, and
M&P, Scally and Rotherham, on the other hand.
          ii) After the mediation has been declared terminated, the matters in
dispute shall be settled by binding arbitration in accordance with the
Commercial Arbitration Rules (the “Rules”) of the AAA as supplemented herein and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The governing law of this Agreement shall be the
law used by the arbitrators in rendering their award, except that the Federal
Rules of Evidence shall apply. There shall be three arbitrators. Each party
shall choose one arbitrator, and the two chosen arbitrators shall choose the
third arbitrator. Pending final award, the arbitrators’ compensation and
expenses shall be advanced equally by the parties. The AAA shall hold an
administrative conference with counsel for the parties within twenty (20) days
after the filing of the demand for arbitration by any one or more of the
parties. The parties and the AAA shall thereafter cooperate in order to complete
the appointment of three arbitrators as quickly as possible. Within 15 days
after all three arbitrators have been appointed, an initial meeting (which, if
the arbitrators so determine, may be by phone) among the arbitrators and counsel
for the parties shall be held for the purpose of establishing a plan for
administration of the arbitration, including: (1) definition of issues;
(2) scope, timing, and types of discovery, which may at the discretion of the
arbitrators include production of documents in the possession of the parties,
but may not without consent of all parties include depositions; (3) exchange of
documents and filing of detailed statements of claims, prehearing memoranda and
dispositive motions; (4) schedule and place of hearings; and (5) any other
matters that may promote the efficient, expeditious, and cost-effective conduct
of the proceeding. Each party shall have the right to request the arbitrator to
make specific findings of fact.
          iii) The majority decision of the arbitrators shall contain findings
of facts on which the decision is based, including any specific factual findings
requested by either party, and shall further contain the reasons for the
decision with reference to the legal principles on which the arbitrators relied.
Such decision of the arbitrators shall be final and binding upon the parties.
The arbitration shall take place in Chicago, Illinois. The final award shall
award to the

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prevailing party its reasonable attorneys’ fees and costs incurred in connection
with the arbitration (but if the prevailing party is not awarded all of the
damages sought, only to the extent, pro rata, of its award compared to the
damages sought) and may grant such other, further, and different relief as
authorized by the Rules, including damages and out-of-pocket costs but which may
not include exemplary, consequential or punitive damages.
          j) Entire Agreement. This Agreement, which term as used throughout
includes the Schedules hereto, embodies the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There
are no restrictions, promises, representations, warranties, covenants or
undertakings other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
[SIGNATURES ON THE FOLLOWING PAGE]

13

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THIS AGREEMENT IS SUBJECT TO AN ARBITRATION PROVISION THAT IS
BINDING ON THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the date first herein above set forth.

          RSM MCGLADREY, INC.
 
        /s/ Bret G. Wilson       Bret G. Wilson, Vice President
 
        H&R BLOCK, INC.
 
       
By:

Name:
  /s/ Bret G. Wilson
 
Bret G. Wilson    
Title:
  Vice President, Corporate Development    
 
        HRB BUSINESS SERVICES, INC.
 
       
By:

Name:
  /s/ Bret G. Wilson
 
Bret G. Wilson    
Title:
  Vice President    
 
        MCGLADREY & PULLEN, LLP
 
       
By:
  /s/ Mark W. Scally
 
Mark W. Scally    
 
       
By:
  /s/ Thomas G. Rotherham
 
Thomas G. Rotherham    

BEING ALL THE MEMBERS OF THE OFFICE OF MANAGING PARTNER