Document:

exv10w13

 

Exhibit 10.13

 

 

CREDIT AND GUARANTEE AGREEMENT

dated as of

January 10, 2008

among

BLOCK FINANCIAL LLC,

as Borrower,

H&R BLOCK, INC.,

as Guarantor,

and

HSBC FINANCE CORPORATION,

as Lender

$3,000,000,000 REVOLVING CREDIT FACILITY

 

 

NOTE: CERTAIN MATERIAL HAS BEEN OMMITTED FROM THIS AGREEMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2. THE LOCATIONS OF THESE OMISSIONS ARE INDICATED THROUGHOUT THE AGREEMENT
BY THE FOLLOWING MARKINGS: [***].

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.1. Defined Terms
	 	 	1	 
	SECTION 1.2. Terms Generally
	 	 	14	 
	SECTION 1.3. Accounting Terms; GAAP
	 	 	14	 
	 
	 	 	 	 
	ARTICLE II THE CREDITS
	 	 	15	 
	 
	 	 	 	 
	SECTION 2.1. Commitment
	 	 	15	 
	SECTION 2.2. Loans
	 	 	15	 
	SECTION 2.3. Funding of Loans
	 	 	15	 
	SECTION 2.4. Termination and Reduction of Commitment
	 	 	15	 
	SECTION 2.5. Repayment of Loans; Evidence of Debt
	 	 	16	 
	SECTION 2.6. Prepayment of Loans
	 	 	16	 
	SECTION 2.7. Interest
	 	 	17	 
	SECTION 2.8. Alternate Rate of Interest
	 	 	18	 
	SECTION 2.9. Increased Costs
	 	 	18	 
	SECTION 2.10. Taxes
	 	 	19	 
	SECTION 2.11. Payments Generally
	 	 	20	 
	SECTION 2.12. Mitigation Obligations
	 	 	20	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	20	 
	 
	 	 	 	 
	SECTION 3.1. Organization; Powers
	 	 	21	 
	SECTION 3.2. Authorization; Enforceability
	 	 	21	 
	SECTION 3.3. Governmental Approvals; No Conflicts
	 	 	21	 
	SECTION 3.4. Financial Condition; No Material Adverse Change
	 	 	21	 
	SECTION 3.5. Properties
	 	 	22	 
	SECTION 3.6. Litigation and Environmental Matters
	 	 	22	 
	SECTION 3.7. Compliance with Laws and Agreements
	 	 	22	 
	SECTION 3.8. Investment Company Status
	 	 	23	 
	SECTION 3.9. Taxes
	 	 	23	 
	SECTION 3.10. ERISA
	 	 	23	 
	SECTION 3.11. Disclosure
	 	 	23	 
	SECTION 3.12. Federal Regulations
	 	 	23	 
	SECTION 3.13. Subsidiaries
	 	 	23	 
	SECTION 3.14. Insurance
	 	 	23	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS
	 	 	24	 
	 
	 	 	 	 
	SECTION 4.1. Effective Date
	 	 	24	 
	SECTION 4.2. Closing Date
	 	 	24	 

-i-

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 4.3. Each Loan
	 	 	25	 
	 
	 	 	 	 
	ARTICLE V AFFIRMATIVE COVENANTS
	 	 	25	 
	 
	 	 	 	 
	SECTION 5.1. Financial Statements and Other Information
	 	 	25	 
	SECTION 5.2. Notices of Material Events
	 	 	27	 
	SECTION 5.3. Existence; Conduct of Business
	 	 	27	 
	SECTION 5.4. Payment of Taxes
	 	 	27	 
	SECTION 5.5. Maintenance of Properties; Insurance
	 	 	27	 
	SECTION 5.6. Books and Records; Inspection Rights
	 	 	28	 
	SECTION 5.7. Compliance with Laws
	 	 	28	 
	SECTION 5.8. Use of Proceeds
	 	 	28	 
	SECTION 5.9 Additional Collateral
	 	 	29	 
	 
	 	 	 	 
	ARTICLE VI NEGATIVE COVENANTS
	 	 	28	 
	 
	 	 	 	 
	SECTION 6.1. Adjusted Net Worth
	 	 	28	 
	SECTION 6.2. Indebtedness
	 	 	29	 
	SECTION 6.3. Liens
	 	 	31	 
	SECTION 6.4. Fundamental Changes; Sale of Assets
	 	 	33	 
	SECTION 6.5. Transactions with Affiliates
	 	 	33	 
	SECTION 6.6. Restrictive Agreements.
	 	 	34	 
	 
	 	 	 	 
	ARTICLE VII GUARANTEE
	 	 	34	 
	 
	 	 	 	 
	SECTION 7.1. Guarantee
	 	 	34	 
	SECTION 7.2. Delay of Subrogation
	 	 	35	 
	SECTION 7.3. Amendments, etc. with respect to the Obligations; Waiver of Rights
	 	 	36	 
	SECTION 7.4. Guarantee Absolute and Unconditional
	 	 	36	 
	SECTION 7.5. Reinstatement
	 	 	37	 
	SECTION 7.6. Payments
	 	 	37	 
	 
	 	 	 	 
	ARTICLE VIII EVENTS OF DEFAULT
	 	 	37	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	40	 
	 
	 	 	 	 
	[RESERVED]
	 	 	40	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	40	 
	 
	 	 	 	 
	SECTION 10.1. Notices
	 	 	40	 
	SECTION 10.2. Waivers; Amendments
	 	 	41	 
	SECTION 10.3. Expenses; Indemnity; Damage Waiver
	 	 	41	 
	SECTION 10.4. Successors and Assigns
	 	 	42	 
	SECTION 10.5. Survival
	 	 	43	 

-ii-

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 10.6. Counterparts; Integration; Effectiveness
	 	 	43	 
	SECTION 10.7. Severability
	 	 	43	 
	SECTION 10.8. Right of Setoff
	 	 	44	 
	SECTION 10.9. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	44	 
	SECTION 10.10. WAIVER OF JURY TRIAL
	 	 	44	 
	SECTION 10.11. Headings
	 	 	45	 
	SECTION 10.12. Confidentiality
	 	 	45	 
	SECTION 10.13. Interest Rate Limitation
	 	 	45	 
	SECTION 10.14. USA Patriot Act.
	 	 	46	 

SCHEDULES:

	 	 	 
	Schedule 3.4(a)

	 	Guarantee Obligations
	Schedule 3.6

	 	Disclosed Matters
	Schedule 3.13

	 	Subsidiaries
	Schedule 6.2

	 	Existing Indebtedness
	Schedule 6.3

	 	Existing Liens
	Schedule 6.4(b)

	 	Additional Businesses
	Schedule 6.6

	 	Existing Restrictions
	 
	 	 
	EXHIBITS:
	 	 
	 
	 	 
	Exhibit A

	 	Form of Security Agreement
	Exhibit B

	 	Form of Control Agreement
	Exhibit C

	 	Form of HSBC TFS Letter
	Exhibit D

	 	Form of Opinion of Stinson Morrison Hecker LLP

-iii-

 

CREDIT AND GUARANTEE AGREEMENT

          CREDIT AND GUARANTEE AGREEMENT, dated as of January 10, 2008, among BLOCK FINANCIAL LLC, a
Delaware limited liability company, as Borrower, H&R BLOCK, INC., a Missouri corporation, as
Guarantor, and HSBC FINANCE CORPORATION, a Delaware corporation, as Lender.

          WHEREAS, the Borrower has requested that the Lender provide a short-term revolving credit
facility in an amount of $3,000,000,000;

          WHEREAS, the Guarantor has agreed to guarantee all of the Borrower’s obligations hereunder;
and

          WHEREAS, the Lender is willing to provide a short-term revolving credit facility to the
Borrower on the terms and conditions set forth herein.

          NOW, THEREFORE, in consideration of the agreements herein and in reliance upon the
representations and warranties set forth herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

          SECTION 1.1.   Defined Terms. Capitalized terms used in this Agreement that are not
defined below or otherwise herein shall have the meanings set forth in the Appendix of Defined
Terms and Rules of Construction attached as Appendix A to the Retail Settlement Products
Distribution Agreement. As used in this Agreement, the following terms have the meanings specified
below:

     “Adjusted Net Worth” means, at any time, Consolidated Net Worth of the
Guarantor without giving effect to reductions in stockholders’ equity as a result of
repurchases by the Guarantor of its own Capital Stock subsequent to April 30, 2005 in an
aggregate amount not exceeding $350,000,000.

     “Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. For the avoidance of doubt, neither the
Guarantor nor any of its Subsidiaries shall be deemed to Control any of its franchisees by
virtue of provisions in the relevant franchise agreement regulating the business and
operations of such franchisee.

     “Agreement” means this Credit and Guarantee Agreement.

     “Availability Period” means the period from and including the first day in 2008
on which the U.S. Internal Revenue Service accepts electronic filings of personal tax
returns (or, if later, the Closing Date) to but excluding the earlier of the Revolving
Termination Date and the date of termination of the Commitments.

 

2

     “Average Weekly LIBOR” means [***] .

     “Bank Revolvers” means, collectively, (i) the Five-Year Credit and Guarantee
Agreement dated as of August 10, 2005 among the Borrower, the Guarantor, various financial
institutions and JPMorgan Chase Bank N.A., as Administrative Agent, as amended by the First
Amendment thereto dated as of November 28, 2006 and the Second Amendment thereto dated as of
November 19, 2007, and any restatement, extension, renewal and replacement thereof
(regardless of whether the amount available thereunder is changed or the term thereof is
modified) and (ii) the Amended and Restated Five-Year Credit and Guarantee Agreement, dated
as of August 10, 2005, among the Borrower, the Guarantor, various financial institutions and
JPMorgan Chase Bank, N.A., as Administrative Agent, as amended by the First Amendment
thereto dated as of November 28, 2006 and the Second Amendment thereto dated as of November
19, 2007, and any restatement, extension, renewal and replacement thereof (regardless of
whether the amount available thereunder is changed or the term thereof is modified).

     “Board” means the Board of Governors of the Federal Reserve System of the
United States of America.

     “Borrower” means Block Financial LLC, a Delaware limited liability company and
a wholly-owned indirect Subsidiary of the Guarantor.

     “Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to remain closed;
provided that, when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.

     “Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such Person under
GAAP, and the amount of such obligations shall be the capitalized amount thereof determined
in accordance with GAAP.

     “Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.

     “Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case maturing within
one year from the date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities of six months or
less from the date of acquisition issued by (i) any “Lender” as defined in a Bank Revolver,
(ii) any commercial bank organized under the laws of the United States or any

 

3

state thereof
having combined capital and surplus of not less than $500,000,000 or (iii) any other bank
if, and to the extent, covered by FDIC insurance; (c) commercial paper of an issuer rated at
least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease publishing ratings
of commercial paper issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any “Lender” as defined in a Bank Revolver or of
any commercial bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days, with respect to securities issued or fully guaranteed or
insured by the United States government; (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A2 by Moody’s; (f) securities
with maturities of six months or less from the date of acquisition backed by standby letters
of credit issued by any “Lender” as defined in a Bank Revolver or any commercial bank
satisfying the requirements of clause (b) of this definition; (g) money market mutual or
similar funds that invest exclusively in assets satisfying the requirements of clauses (a)
through (f) of this definition; (h) money market funds that (i) comply with the criteria set
forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated
AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $1,000,000,000;
(i) interests in privately offered investment funds under Section 3(c)(7) of the U.S.
Investment Company Act of 1940 where such interests are (i) freely transferable and (ii)
rated AAA by S&P or Aaa by Moody’s; and (j) one month LIBOR floating rate asset backed
securities that are (i) freely transferable and (ii) rated AAA by S&P or Aaa by Moody’s.

     “Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934, as amended, and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) of shares representing more than 25%
of the aggregate ordinary voting power represented by the issued and outstanding Capital
Stock of the Guarantor; (b) occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Guarantor by Persons who were neither (i) nominated by the
board of directors of the Guarantor nor (ii) appointed by directors so nominated; (c) the
acquisition of direct or indirect Control of the Guarantor by any Person or group; or (d)
the failure of the Guarantor to own, directly or indirectly, shares representing 100% of the
aggregate ordinary voting power represented by the issued and outstanding Capital Stock of
the Borrower.

     “Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by the Lender (or, for purposes of Section 2.9(b), by any
lending office of the Lender or by the Lender’s holding company, if any) with any

 

4

request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

     “Charges” has the meaning assigned to such term in Section 10.13.

     “Closing Date” means the date on which the conditions specified in Section 4.2
are satisfied (or waived in accordance with Section 10.2).

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     “Commitment” means the commitment of the Lender to make Loans, subject to the
terms and conditions of this Agreement, in an amount not to exceed (i) $3,000,000,000 from
the first day in 2008 on which the U.S. Internal Revenue Service accepts electronic filings
of personal tax returns through and including March 30, 2008 and (ii) thereafter,
$120,000,000, as such commitment may be reduced from time to time pursuant to Section 2.4.

     “Consolidated Net Worth” means, at any time, the total amount of stockholders’
equity of the Guarantor and its consolidated Subsidiaries at such time determined on a
consolidated basis in accordance with GAAP.

     “Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which such Person is
a party or by which it or any of its property is bound.

     “Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto.

     “Control Agreement” means the Investment Account Control Agreement between the
Borrower, the Lender and the Securities Intermediary referred to therein in substantially
the form of Exhibit B hereto.

     “Credit Parties” means the collective reference to the Borrower and the
Guarantor.

     “Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become an Event of
Default.

     “Disclosed Matters” means (a) matters disclosed in the Borrower’s public
filings with the Securities and Exchange Commission prior to January 10, 2008 and (b) the
actions, suits, proceedings and environmental matters disclosed in Schedule 3.6.

     “dollars” or “$” refers to lawful money of the United States of
America.

 

5

     “Effective Date” means the date on which the conditions specified in Section
4.1 are satisfied (or waived in accordance with Section 10.2).

     “Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated
or entered into by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, to the management, release or threatened
release of any Hazardous Material or to health and safety matters.

     “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines, penalties
or indemnities), of any Credit Party or any Subsidiary directly or indirectly resulting from
or based upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials
into the environment or (e) any contract, agreement or other consensual arrangement pursuant
to which liability is assumed or imposed with respect to any of the foregoing.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

     “ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with any Credit Party, is treated as a single employer under Section 414(b)
or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code.

     “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Credit Party or any of their ERISA Affiliates
of any liability under Title IV of ERISA with respect to the termination of any Plan; (e)
the receipt by any Credit Party or any ERISA Affiliate from the PBGC or a plan administrator
of any notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by any Credit Party or any of their ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by any Credit Party or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from any Credit Party or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.

 

6

     “Eurodollar”, when used in reference to any Loan, means that such Loan is
bearing interest at a rate determined by reference to the LIBO Rate.

     “Events of Default” has the meaning assigned to such term in Article VIII.

     “Excluded Taxes” means, with respect to the Lender or any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which the Lender is organized or in which its principal
office is located or in which its applicable lending office is located and (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which the Borrower is located.

     “Federal Funds Effective Rate” means for each day, the rate per annum which is
the average of the rates on the offered side of the Federal funds market quoted by three
interbank Federal funds brokers, selected by the Lender, at approximately 2:00 p.m., New
York City time, on such day for dollar deposits in immediately available funds, in an amount
comparable to the outstanding principal amount of the Loans, as determined by the Lender and
rounded upwards, if necessary, to the nearest 1/100 of 1%.

     “Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower or the Guarantor, as the context may
require.

     “GAAP” means generally accepted accounting principles in the United States of
America.

     “Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state, provincial or local,
and any agency, authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government.

     “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of
the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; provided that the term
Guarantee shall not include endorsements for collection or deposit in the ordinary course of
business.

 

7

     “Guarantee Obligation” means, as to any Person, any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other
obligations (the “primary obligations”) of any other Person (the “primary
obligor”) in any
manner, whether directly or indirectly, including any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply funds (i) for
the purchase or payment of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of business.
The amount of any Guarantee Obligation shall be deemed to be an amount equal as of any date
of determination to the stated determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made (unless such Guarantee Obligation shall be expressly
limited to a lesser amount, in which case such lesser amount shall apply) or, if not stated
or determinable, the amount as of any date of determination of the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good faith.

     “Guarantor” means H&R Block, Inc., a Missouri corporation.

     “Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls,
radon gas, infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.

     “Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement.

     “HSBC RAL” means “HSBC RAL” as such term is defined in the Appendix of Defined
Terms and Rules of Construction attached as Appendix A to Retail Settlement Products
Distribution Agreement.

     “HSBC TFS” means HSBC Taxpayer Financial Services, Inc., a Delaware
corporation.

     “HSBC TFS Letter” means a letter agreement between the Borrower, HSBC TFS and
the Lender in substantially the form of Exhibit C hereto.

     “Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar

 

8

instruments, (c)
all obligations of such Person upon which interest charges are customarily paid, (d) all
obligations of such Person under conditional sale or other title retention agreements
relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable and accrued expenses incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness secured thereby
has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of guaranty, (j)
all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances
and (k) for purposes of Section 6.2 only, all preferred stock issued by a Subsidiary of such
Person. The Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such Indebtedness provide
that such Person is not liable therefor. Indebtedness of a Person shall not include
obligations with respect to funds held by such Person in custody for, or for the benefit of,
third parties which are to be paid at the direction of such third parties (and are not used
for any other purpose).

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitee” has the meaning assigned to such term in Section 10.3(b).

     “Indirect RAL Participation Transaction” means any transaction by the Guarantor
or any Subsidiary involving (a) an investment in a partnership, limited partnership, limited
liability company, limited liability partnership, business trust or other pass-through
entity which is partially owned by the Guarantor or any Subsidiary, (b) the purchase by such
pass-through entity of refund anticipation loans or participation interests in refund
anticipation loans (and/or related rights and interests), and (c) the distribution of cash
flow received by such pass-through entity with respect to such refund anticipation loans or
participation interests therein to the owners of such pass-through entity.

     “Information” has the meaning assigned to such term in Section 10.12.

     “LIBO Rate” means [***] .

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b)
the interest of a vendor or a lessor under any conditional sale agreement, capital lease or
title retention agreement (or any financing lease having substantially the same economic
effect as any of the foregoing) relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to such securities;
provided that clause (c) above shall be deemed not to include stock options

 

9

granted
by any Person to its directors, officers or employees with respect to the Capital Stock of
such Person.

     “Loan Documents” means this Agreement, the Security Agreement, the Control
Agreement, the HSBC TFS Letter and the Notes, if any.

     “Loans” means the loans made by the Lender to the Borrower pursuant to this
Agreement.

     “Margin” means [***] % per annum.

     “Margin Stock” means any “margin stock” as defined in Regulation U of the
Board.

     “Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property or condition (financial or otherwise) of the Guarantor and the Subsidiaries
taken as a whole, (b) the ability of any Credit Party to perform any of its obligations
under this Agreement or (c) the rights of or benefits available to the Lenders under this
Agreement.

     “Material Indebtedness” means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of the Credit
Parties and any Subsidiaries in an aggregate principal amount exceeding $40,000,000. For
purposes of determining Material Indebtedness, the “principal amount” of the obligations of
any Credit Party or any Subsidiary in respect of any Hedging Agreement at any time shall be
the aggregate amount (giving effect to any netting agreements) that the Credit Party or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

     “Material Subsidiary” means any Subsidiary of any Credit Party, other than
OOMC, the aggregate assets or revenues of which, as of the last day of the most recently
ended fiscal quarter for which the Borrower has delivered financial statements pursuant to
Section 5.1(a) or (b), when aggregated with the assets or revenues of all other Subsidiaries
with respect to which the actions contemplated by Section 6.4 are taken, are greater than 5%
of the total assets or total revenues, as applicable, of the Guarantor and its consolidated
Subsidiaries, in each case as determined in accordance with GAAP.

     “Maximum Rate” has the meaning assigned to such term in Section 10.13.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Multiemployer Plan” means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

     “Notes” means the collective reference to any promissory note evidencing Loans.

     “Obligations” means, collectively, the unpaid principal of and interest on the
Loans and all other obligations and liabilities of the Borrower (including interest accruing

 

10

at the then applicable rate provided herein after the maturity of the Loans and interest
accruing at the then applicable rate provided herein after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Lender, whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, the Security Agreement, the Control
Agreement, the HSBC TFS Letter, any Note or any other document made, delivered or given in
connection herewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including all fees and disbursements of
counsel to the Lender that are required to be paid by the Borrower pursuant to the terms of
any of the foregoing agreements).

     “OOMC” means Option One Mortgage Corporation, a California corporation, and all
of its subsidiaries.

     “Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with respect to,
this Agreement.

     “Participant” has the meaning assigned to such term in Section 10.4(c).

     “Participation Agreement” means the First Amended and Restated HSBC Refund
Anticipation Loan and IMA Participation Agreement, dated as of November 13, 2006, as amended
from time to time, and any restatement, extension, renewal and replacement thereof, by and
among the Borrower, HSBC Bank USA, National Association, HSBC TFS and HSBC Trust Company
(Delaware), National Association.

     “Participation Interest” means a “Participation Interest” as defined in the
Participation Agreement.

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined
in ERISA and any successor entity performing similar functions.

     “Permitted Encumbrances” means:

     (a) judgment Liens in respect of judgments not constituting an Event of Default under
clause (k) of Article VIII;

     (b) Liens imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.4;

     (c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like
Liens imposed by law, arising in the ordinary course of business and securing obligations
that are not overdue by more than 30 days or are being contested in compliance with Section
5.4;

 

11

     (d) pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or regulations;

     (e) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business; and

     (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the affected property
or interfere with the ordinary conduct of business of the Credit Parties or any Subsidiary;

provided that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.

     “Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority or other
entity.

     “Plan” means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section
302 of ERISA, and in respect of which any Credit Party or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer”
as defined in Section 3(5) of ERISA.

     “Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A., as its prime rate in effect at its principal office in
New York City; each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective.

     “Proceeding” means any suit, action or proceeding arising out of or relating to
this Agreement, the Security Agreement, the Control Agreement or the HSBC TFS Letter, or for
recognition or enforcement of any judgment.

     “Purchase Price” means “Purchase Price” as such term is defined in the Appendix
of Defined Terms and Rules of Construction attached as Appendix A to Retail Settlement
Products Distribution Agreement.

     “RAL Receivables Amount” means, at any time, the difference (but not less
than zero) between (i) the aggregate amount of funds received by the Guarantor, any
Subsidiary or any qualified or unqualified special purpose entity created by any Subsidiary
with respect to the transfer of refund anticipation loans, or participation interests in
refund anticipation loans (and/or related rights and interests), to any third party in any
RAL Receivables Transaction, at or prior to such time, minus (ii) the

 

12

aggregate
amount received by all such third parties with respect to the transferred refund
anticipation loans, or participation interests in refund anticipation loans (and/or related
rights and interests), in all RAL Receivables Transactions, at or prior to such time,
excluding from the amounts received by such third parties, the aggregate amount of
any origination, set up, structuring or similar fees, all implicit or explicit financing
expenses and all indemnification and reimbursement payments paid to such any third party in
connection with any RAL Receivables Transaction.

     “RAL Receivables Transaction” means any securitization, on — or off — balance
sheet financing or sale transaction, involving refund anticipation loans, or participation
interests in refund anticipation loans (and/or related rights and interests), that were
acquired by the Guarantor, any Subsidiary or any qualified or unqualified special purpose
entity created by any Subsidiary.

     “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such
Person and such Person’s Affiliates.

     “Restricted Margin Stock” means all Margin Stock owned by the Guarantor and its
Subsidiaries to the extent the value of such Margin Stock does not exceed 25% of the value
of all assets of the Guarantor and its Subsidiaries (determined on a consolidated basis)
that are subject to the provisions of Section 6.3 and 6.4.

     “Retail Settlement Products Distribution Agreement” means the HSBC Retail
Settlement Products Distribution Agreement, dated as of September 23, 2005, as amended by
the Joinder and First Amendment to Program Contracts dated as of November 10, 2006 and the
Second Amendment to Program Contracts dated as of November 13, 2006, and as further amended
from time to time, and any restatement, extension, renewal and replacement thereof, by and
among the parties thereto, including, the Lender and the Guarantor.

     “Revolving Credit Exposure” means with respect to the Lender at any time, the
outstanding principal amount of the Lender’s Loans.

     “Revolving Termination Date” means the earlier of (i) June 30, 2008 and (ii)
the first day after April 15, 2008 on which the aggregate outstanding amount of the
Participation Interests purchased by the Borrower in HSBC RALs under the Participation
Agreement which have been financed by the making of Loans is less than $60,000,000.

     “RSM” means RSM McGladrey, Inc., a Delaware corporation.

     “S&P” means Standard & Poor’s Ratings Services.

     “Security Agreement” means a Security Agreement between the Borrower and the
Lender in substantially the form of Exhibit A hereto.

 

13

     “Servicing Agreement” means the First Amended and Restated HSBC Settlement
Products Servicing Agreement dated as of November 13, 2006 , as amended from time to time,
and any restatement, extension, renewal and replacement thereof, among HSBC Bank USA,
National Association, HSBC TFS, HSBC Trust Company (Delaware), N.A., and the Borrower.

     “Short-Term Debt” means, at any time, the aggregate amount of Indebtedness of
the Guarantor and its Subsidiaries at such time (excluding seasonal Indebtedness of H&R
Block Canada, Inc.) having a final maturity less than one year after such time, determined
on a consolidated basis in accordance with GAAP, plus the aggregate amount of Indebtedness
at such time under the Bank Revolvers, minus (a) to the extent otherwise included therein,
Indebtedness outstanding at such time (i) under mortgage facilities secured by mortgages and
related assets, (ii) incurred to fund servicing obligations required as part of servicing
mortgage backed securities in the ordinary course of business, (iii) incurred and secured by
broker-dealer Subsidiaries in the ordinary course of business and (iv) deposits and other
customary banking related liabilities incurred by banking Subsidiaries in the ordinary
course of business, (b) the excess, if any, of (i) the aggregate amount of cash and Cash
Equivalents held at such time in accounts of the Guarantor and its Subsidiaries (other than
broker-dealer Subsidiaries and banking Subsidiaries) to the extent freely transferable to
the Credit Parties and capable of being applied to the Obligations without any contractual,
legal or tax consequences over (ii) $15,000,000 and (c) to the extent otherwise included
therein, the current portion of long term debt.

     “Subsidiary” means, with respect to any Person (the “parent”) at any
date, any corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in accordance
with GAAP as of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership interests
are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more Subsidiaries of the parent or by the parent and one
or more Subsidiaries of the parent. Notwithstanding the foregoing, no entity shall be
considered a “Subsidiary” solely as a result of the effect and application of FASB
Interpretation No. 46R (Consolidation of Variable Interest Entities). Unless the context
shall otherwise require, all references to a “Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Guarantor, including the
Borrower and the Subsidiaries of the Borrower.

     “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

     “Total Facility Commitments” means the sum of the total “Commitments” under and
as defined in the Bank Revolvers.

 

14

     “Total Facility Loan Outstandings” has the meaning assigned to such term in
Section 6.2.

     “Transactions” means the execution, delivery and performance by the Credit
Parties of the Loan Documents, the borrowing of Loans, the use of the proceeds thereof, and
the granting of the security provided for in the Security Agreement.

     “Unrestricted Margin Stock” means all Margin Stock owned by the Guarantor and
its Subsidiaries other than Restricted Margin Stock.

     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.

          SECTION 1.2.   Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.

          SECTION 1.3.   Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Lender that the
Borrower requests an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Lender notifies the Borrower that the Lender requests an amendment to any
provision hereof for such purpose), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be interpreted on the
basis of GAAP as in effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

15

ARTICLE II

THE CREDITS

          SECTION 2.1.   Commitment. Subject to the terms and conditions set forth herein
(including the proviso at the end of Section 6.2), the Lender agrees to make revolving loans
(“Loans”) to the Borrower from time to time during the Availability Period in an aggregate
principal amount that will not result in the Lender’s Revolving Credit Exposure exceeding the
Lender’s Commitment as then in effect. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.

          SECTION 2.2.   Loans. Subject to Section 2.8, all Loans shall be comprised entirely
of Eurodollar Loans in accordance herewith. The Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement.

          SECTION 2.3.   Funding of Loans. As provided in the HSBC TFS Letter, HSBC TFS shall
notify the Lender of the aggregate amount of the Purchase Price for the Participation Interests to
be purchased by the Borrower under the Participation Agreement on any Business Day at the same time
as HSBC TFS notifies the Borrower of such amount, but in any event not later than 9:30 a.m. New
York City time on such Business Day. Subject to the terms and conditions of this Agreement, the
Lender shall make a Loan in the amount so notified in respect of each Business Day by wire transfer
of immediately available funds to or as instructed by HSBC TFS by 4:30 p.m., New York City time, on
such Business Day; provided, that if the Borrower shall notify the Lender and HSBC TFS not later
than one hour after the notification by HSBC TFS referred to in the preceding sentence that the
Borrower does not wish to borrow all or some of the amount so notified by HSBC TFS, then the Lender
shall make a Loan in such lesser amount, if any, specified in such notice of the Borrower. The
Borrower hereby irrevocably (i) authorizes and instructs the Lender to make Loans by transfer of
Loan proceeds directly to or as instructed by HSBC TFS as provided in the preceding sentence and
(ii) acknowledges and agrees that Loans will not be disbursed in any other manner or for any other
purpose than to fund the purchase by the Borrower of Participation Interests in HSBC RALs under the
Participation Agreement. Notices under this Section 2.3 shall be made by telephone discussion with
a representative of the Person being notified (and not by voicemail or other form of recorded
message) and promptly confirmed by fax. Absent manifest error, the Lender shall be entitled to
rely without further inquiry on notices and information received from HSBC TFS or the Borrower as
contemplated in this Section 2.3

          SECTION 2.4.   Termination and Reduction of Commitment. (a) Unless previously
terminated, the Commitment shall terminate on the Revolving Termination Date.

          (b) The Borrower may at any time terminate, or from time to time reduce, the Commitment;
provided that (i) each reduction of the Commitment shall be in an amount that is an
integral multiple of $1,000,000 and not less than $25,000,000 and (ii) the Borrower shall not
terminate or reduce the Commitment if, after giving effect to any concurrent prepayment of the

 

16

Loans in accordance with Section 2.6, the Revolving Credit Exposure would exceed the Commitment.

          (c) The Borrower shall notify the Lender of any election to terminate or reduce the Commitment
under paragraph (b) of this Section at least three Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided
that a notice of termination of the Commitment delivered by the Borrower may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Lender) on or prior to the specified effective date if
such condition is not satisfied. Any termination or reduction of the Commitment shall be
permanent.

          SECTION 2.5.   Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Lender (i) the unpaid principal amount of the Loans on
March 31, 2008 to the extent that such principal amount exceeds the Commitment on such date and
(ii) the then unpaid principal amount of each Loan on the Revolving Termination Date.

          (b) The Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to the Lender resulting from each Loan made by the
Lender, including the amounts of principal and interest payable and paid to the Lender from time to
time hereunder.

          (c) The entries made in the account maintained pursuant to paragraph (b) of this Section shall
be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of the Lender to maintain such account or any error
therein shall not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.

          (d) The Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to the Lender a promissory note payable to
the order of the Lender (or, if requested by the Lender, to the Lender and its assigns) and in a
form approved by the Lender. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 10.4) be represented by
one or more promissory notes in such form payable to the order of the payee named therein. In
addition, upon receipt of an affidavit of an officer of the Lender
as to the loss, theft, destruction or mutilation of the promissory note, the Borrower will
issue, in lieu thereof, a replacement promissory note in the same principal amount thereof and
otherwise of like tenor.

          SECTION 2.6.   Prepayment of Loans. (a) The Borrower (i) shall have the right at
any time and from time to time voluntarily to prepay the Loans in whole or in part without premium
or penalty, subject to prior notice in accordance with paragraph (b) of this Section, and (ii)
shall prepay the Loans from time to time in whole or in part without premium or penalty in
accordance with paragraph (c) of this Section.

 

17

          (b) The Borrower shall notify the Lender by telephone discussion with a representative of the
Lender (and not by voicemail or other form of recorded message) (confirmed by telecopy) of any
voluntary prepayment of Loans under Section 2.6(a)(i), not later than 12:00 noon, New York City
time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of Loans to be prepaid; provided that, if a notice
of prepayment is given in connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.4, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.4.

          (c) The Borrower shall prepay the principal of the Loans in an amount equal to (i) 97% of the
amount of all payments constituting repayment of HSBC RALs in which the Borrower has purchased a
Participation Interest that has been financed by the Lender which are remitted to the Borrower by
HSBC TFS under Section 3.4(b)(iii) of the Servicing Agreement, and (ii) 97% of the amount of all
repurchases of Participation Interests by HSBC TFS under Section 6 of the Participation Agreement
as to Participation Interests that have been financed by the Lender. In the HSBC TFS Letter, the
Borrower will irrevocably authorize and instruct (A) HSBC TFS, as Servicer under the Servicing
Agreement, to pay 97% of all amounts from time to time to be remitted to the Borrower by the
Servicer under Section 3.4(b)(iii) of the Servicing Agreement in respect of Participation Interests
financed by the Lender directly to the Lender for application to the prepayment of the Loans under
this Section 2.6(c) and (B) HSBC TFS to pay 97% of all amounts otherwise payable to the Borrower
in respect of the repurchase under Section 6 of the Participation Agreement of Participation
Interests in HSBC RALs that have been financed by the Lender directly to the Lender for application
to the prepayment of the Loans under this Section 2.6(c). The Lender shall be entitled to rely
without further inquiry on notices and information received from HSBC TFS as contemplated in this
Section 2.6(c). The Lender shall credit payments received from HSBC TFS under this Section 2.6(c)
to prepayment of the principal of the Loans on the date of receipt.

          SECTION 2.7.   Interest. (a) The Loans shall bear interest for each day at a rate
per annum equal to [***] .

          (b) Notwithstanding the foregoing, if any principal of or interest on any Loan or any other
amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to 3% plus the rate of interest otherwise applicable to the
Loans hereunder.

          (c) Accrued interest on each Loan shall be payable monthly in arrears on the fifth Business
Day of the following month and on the Revolving Termination Date; provided that interest
accrued pursuant to paragraph (b) of this Section shall be payable on demand. On the second
Business Day of such following month, the Lender shall deliver to the Borrower and HSBC TFS by
e-mail an invoice for the amount of accrued interest on the Loans for the preceding month, together
with a schedule in reasonable detail showing how such amount was calculated.

 

18

          (d) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Prime Rate under Section 2.8 shall be computed on the basis
of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last day). The LIBO Rate
(and in the case of determinations under Section 2.8, the Federal Funds Effective Rate and the
Prime Rate) shall be determined by the Lender, and such determination shall be conclusive absent
manifest error. The Lender shall as soon as practicable notify the Borrower of the effective date
and the amount of each change in interest rate.

          SECTION 2.8.   Alternate Rate of Interest. If at any time:

          (a) the Lender determines (which determination shall be conclusive absent manifest error) that
adequate and reasonable means do not exist for ascertaining the LIBO Rate; or

          (b) the Lender determines that the LIBO Rate will not adequately and fairly reflect the cost
to the Lender of making or maintaining Loans;

then the Lender shall give notice thereof to the Borrower by telephone or telecopy as promptly as
practicable thereafter and, until the Lender notifies the Borrower that the circumstances giving
rise to such notice no longer exist, the Loans shall bear interest at a rate per annum equal to,
for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day
[***] , and (b) the Federal Funds Effective Rate in effect on such day [***] . Any change in the
Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

          SECTION 2.9.   Increased Costs. (a) If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, the Lender; or

     (ii) impose on the Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by the Lender;

and the result of any of the foregoing shall be to increase the cost to the Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to the Lender or to reduce the amount of any sum received or receivable by the
Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to the
Lender such additional amount or amounts as will compensate the Lender for such additional costs
incurred or reduction suffered.

          (b) If the Lender determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on the Lender’s capital or on the capital of
the Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by the
Lender to a level below that which the Lender or the Lender’s holding

 

19

company could have achieved
but for such Change in Law (taking into consideration the Lender’s policies and the policies of the
Lender’s holding company with respect to capital adequacy), then from time to time the Borrower
will pay to the Lender such additional amount or amounts as will compensate the Lender or the
Lender’s holding company for any such reduction suffered.

          (c) A certificate of the Lender setting forth the amount or amounts necessary to compensate
the Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this
Section (together with a statement of the reason for such compensation and a calculation thereof in
reasonable detail) shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay the Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

          (d) Failure or delay on the part of the Lender to demand compensation pursuant to this Section
shall not constitute a waiver of the Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate the Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date that the Lender
notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of
the Lender’s intention to claim compensation therefor; provided, further, that, if
the Change in Law giving rise to such increased costs or reductions is retroactive, then the
six-month period referred to above shall be extended to include the period of retroactive effect
thereof.

          SECTION 2.10.   Taxes. (a) Any and all payments by or on account of any obligation
of the Borrower or the Guarantor hereunder shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided that if the Borrower or the Guarantor
shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Lender receives an amount
equal to the sum it would have received had no such deductions been made, (ii) the Borrower or the
Guarantor shall make such deductions and (iii) the Borrower or the Guarantor shall pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.

          (c) The Borrower shall indemnify the Lender, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section) paid by the Lender
and any penalties, interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by the Lender shall be conclusive absent manifest error.

 

20

          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Lender the original or a
certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment reasonably satisfactory to
the Lender.

          SECTION 2.11.   Payments Generally. (a) The Borrower shall make each payment required to
be made by it hereunder (whether of principal or interest, or under Section 2.9 or 2.10, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on any date may, in
the discretion of the Lender, be deemed to have been received on the next succeeding Business Day
for purposes of calculating interest thereon. All such payments shall be made to the Lender at its
account at HSBC Bank USA, N.A., Buffalo, N.Y., ABA #021001088, Cash Ops W/T, A/C #001842609, or at
such other bank or account as it shall specify from time to time by notice in writing to the
Borrower. If any payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such extension. All
payments hereunder shall be made in dollars. Notwithstanding the foregoing, this Section 2.11
shall not apply to payments by HSBC TFS as contemplated by Section 2.6(c).

          (b) If at any time insufficient funds are received by and available to the Lender to pay fully
all amounts of principal, interest and any other amounts then due hereunder, such funds shall be
applied (i) first, to pay interest then due hereunder, (ii) second, to pay principal then due
hereunder, and (iii) third, any other amounts due and owing hereunder.

          SECTION 2.12.   Mitigation Obligations. If the Lender requests compensation under
Section 2.9, or if the Borrower is required to pay any additional amount to the Lender or any
Governmental Authority for the account of the Lender pursuant to Section 2.10, then the Lender
shall use reasonable efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of the Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.9 or 2.10, as the case may be, in the
future and (ii) would not subject the Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to the Lender. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by the Lender in connection with any such designation or assignment.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

          Each of the Credit Parties represents and warrants to the Lender that:

 

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          SECTION 3.1.   Organization; Powers. Each of the Credit Parties and the Subsidiaries
is duly organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, has the power and authority to carry on its business as now conducted and, except
where the failure to be so, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect, is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required. The Borrower was converted from a
Delaware corporation known as “Block Financial Corporation” on January 1, 2008 pursuant to Section
18-214 of the Delaware Limited Liability Company Act.

          SECTION 3.2.   Authorization; Enforceability. The Transactions are within each Credit
Party’s corporate or limited liability company, as the case may be, powers and have been duly
authorized by all necessary corporate or limited liability company, as the case may be, and, if
required, stockholder or member, as the case may be, action. This Agreement has been duly executed
and delivered by each Credit Party and constitutes a legal, valid and binding obligation of each
Credit Party, enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and
subject to general principles of equity, regardless of whether considered in a proceeding in equity
or at law.

          SECTION 3.3.   Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any applicable law or
regulation or the charter, by-laws, operating agreement or other organizational documents of any
Credit Party or any Subsidiary or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, material agreement or other instrument (other than those
to be terminated on or prior to the Closing Date) binding upon any Credit Party or any Subsidiary
or their assets, or give rise to a right thereunder to require any payment to be made by any Credit
Party or any Subsidiary, and (d) except as provided in the Loan Documents, will not result in the
creation or imposition of any Lien on any asset of any Credit Party or any Subsidiary.

          SECTION 3.4.   Financial Condition; No Material Adverse Change. (a) Each Credit
Party has heretofore furnished to the Lender consolidated balance sheets and statements of income
and cash flows (and, in the case of the Guarantor, of stockholders’ equity) (i) as of and for the
fiscal year ended April 30, 2007 (A) reported on by KPMG LLP, an independent registered public
accounting firm, in respect of the financial statements of the Guarantor, and (B) certified by its
chief financial officer, in respect of the financial statements of the Borrower, and (ii) as of and
for the fiscal quarter and the portion of the fiscal year ended October 31, 2007. Such financial
statements present fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries and of the Guarantor
and its consolidated Subsidiaries as of such date and for such period in accordance with GAAP.
Except as set forth on Schedule 3.4(a), neither the Guarantor nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet referred to above, any material
Guarantee Obligation, contingent liability or liability for taxes, or any long-term lease or
unusual forward or long-term commitment, including any interest rate or foreign currency swap or
exchange transaction not in the ordinary course of business, which is not reflected in the

 

22

foregoing statements or in the notes thereto. During the period from April 30, 2007 to and
including the date hereof, and except as disclosed in filings made by the Guarantor with the U.S.
Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, there has been no sale, transfer or other disposition
by the Guarantor or any of its consolidated Subsidiaries of any material part of its business or
property other than in the ordinary course of business and no purchase or other acquisition of any
business or property (including any Capital Stock of any other Person), material in relation to the
consolidated financial condition of the Guarantor and its consolidated Subsidiaries at April 30,
2007.

          (b) From April 30, 2007 through the Effective Date, there has been no material adverse change
in the business, assets, property or condition (financial or otherwise) of the Guarantor and its
Subsidiaries, taken as a whole.

          SECTION 3.5.   Properties. (a) Each of the Credit Parties and the Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended purposes.

          (b) Each of the Credit Parties and the Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Credit Parties and the Subsidiaries does not infringe upon the
rights of any other Person, except for any such infringements that, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.6.   Litigation and Environmental Matters. (a) There are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any Credit Party, threatened against or affecting any Credit Party or any Subsidiary
that (i) have not been disclosed in the Disclosed Matters and as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii)
challenge or would reasonably be expected to affect the legality, validity or enforceability of
this Agreement.

          (b) Except for the Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, would not reasonably be expected to result in a Material Adverse
Effect, neither of the Credit Parties nor any Subsidiary (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or (iv) knows of any
basis for any Environmental Liability.

          SECTION 3.7.    Compliance with Laws and Agreements. Each of the Credit Parties and
the Subsidiaries is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all indentures, agreements and other instruments
binding upon it or its property, except where the failure to be so, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

23

          SECTION 3.8.   Investment Company Status. Neither of the Credit Parties nor any of
the Subsidiaries is an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.

          SECTION 3.9.   Taxes. Each of the Credit Parties and the Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Guarantor, the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.10.   ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, would reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $25,000,000 the fair market value of the
assets of all such underfunded Plans.

          SECTION 3.11.   Disclosure. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Credit Parties to the Lender in connection
with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to state any material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial information,
the Credit Parties represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.

          SECTION 3.12.   Federal Regulations. No part of the proceeds of any Loans will be
used for “purchasing” or “carrying” any “margin stock” (within the respective meanings of each of
the quoted terms under Regulation U of the Board as now and from time to time hereafter in effect)
in a manner or in circumstances that would constitute or result in non-compliance by any Credit
Party or the Lender with the provisions of Regulations U, T or X of the Board. If requested by the
Lender, the Borrower will furnish to the Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 referred to in said Regulation U.

          SECTION 3.13.   Subsidiaries. As of the date hereof, the Guarantor has only the
Subsidiaries set forth on Schedule 3.13.

          SECTION 3.14.   Insurance. Each Credit Party and each Subsidiary of each Credit Party
maintains (pursuant to a self-insurance program and/or with financially sound and reputable
insurers) insurance with respect to its properties and business and against at least such

 

24

liabilities, casualties and contingencies and in at least such types and amounts as is customary in
the case of companies engaged in the same or a similar business or having similar properties
similarly situated.

ARTICLE IV

CONDITIONS

          SECTION 4.1.   Effective Date. Except as otherwise provided in Sections 4.2 and 4.3,
this Agreement shall become effective on the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.2):

          (a) The Lender (or its counsel) shall have received from each party hereto a counterpart of
this Agreement signed on behalf of such party.

          SECTION 4.2.   Closing Date. The obligations of the Lender to make Loans hereunder
shall not become effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 10.2):

          (a) The Effective Date shall have occurred.

          (b) The Lender shall have received a reasonably satisfactory written opinion (addressed to the
Lender and dated the Closing Date) of Stinson Morrison Hecker LLP, special counsel for the Credit
Parties, substantially in the form of Exhibit D hereto, and covering such other matters relating to
the Credit Parties, the Loan Documents or the Transactions as the Lender shall reasonably request.
The Credit Parties hereby request such counsel to deliver such opinion.

          (c) The Lender shall have received such documents and certificates as the Lender or its
counsel may reasonably request relating to the organization, existence and good standing of the
Credit Parties, the authorization of the Transactions and any other legal matters relating to the
Credit Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to
the Lender and its counsel.

          (d) The Lender shall have received a certificate, dated the Closing Date and signed by the
President, a Vice President or a Financial Officer of each Credit Party, confirming compliance with
the conditions set forth in paragraphs (a) and (b) of Section 4.3.

          (e) All governmental and material third party approvals necessary in connection with the
execution, delivery and performance of this Agreement, the Security Agreement, the Control
Agreement and the HSBC TFS Letter shall have been obtained and be in full force and effect.

          (f) The Lender shall have received a counterpart of the Security Agreement, duly executed
and delivered by the Borrower, and a counterpart of the HSBC TFS Letter, duly executed and
delivered by the parties thereto; and all filings and other actions necessary or

 

25

appropriate to
perfect the security interest created by the Security Agreement shall have been made or taken.

          (g) The Lender shall have received the results of searches of Uniform
Commercial Code filings in such jurisdictions as it shall deem appropriate and such searches shall
not reveal any filing that remains in effect and that describes any of the “Collateral” referred to
in the Security Agreement.

          (h) The Borrower shall have invested $60,000,000 in the HSBC Investor Money Market Fund
managed by HSBC Investments (USA), Inc. and the Lender shall have received a counterpart of the
Control Agreement with respect to that investment, duly executed and delivered by the parties
thereto.

The Lender shall notify the Borrower of the Closing Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligation of the Lender to make Loans hereunder
shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant
to Section 10.2) at or prior to the Closing Date.

          SECTION 4.3.   Each Loan. The obligation of the Lender to make each Loan is subject
to the satisfaction of the following conditions:

          (a) The representations and warranties of the Credit Parties set forth in Article III of this
Agreement (other than the representations and warranties set forth in subsections 3.4(b), 3.6(a)(i)
and 3.6(b)) shall be true and correct in all material respects on and as of the date of such Loan
(except to the extent related to a specific earlier date).

          (b) At the time of and immediately after giving effect to such Loan, no Event of Default shall
have occurred and be continuing.

Each Loan shall be deemed to constitute a representation and warranty by each of the Credit Parties
on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

ARTICLE V

AFFIRMATIVE COVENANTS

          Until the Commitment has expired or been terminated and the principal of and interest on each
Loan shall have been paid in full, each of the Credit Parties covenants and agrees with the Lender
that:

          SECTION 5.1.   Financial Statements and Other Information. The Borrower will furnish
to the Lender:

          (a) within 90 days after the end of each fiscal year of the Guarantor, an audited consolidated
balance sheet and related statements of operations, stockholders’ equity and cash flows of the
Guarantor and its consolidated Subsidiaries as of the end of and for such year,

 

26

setting forth in
each case in comparative form the figures for the previous fiscal year, all reported
on by Deloitte & Touche LLP or another independent registered public accounting firm of
recognized national standing (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material respects the financial condition
and results of operations of the Guarantor and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;

          (b) (i) in the case of the Guarantor, within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Guarantor and (ii) in the case of the Borrower, within
90 days after the end of each fiscal year of the Borrower, consolidated balance sheets and related
statements of operations and cash flows of the Borrower and the Guarantor and their consolidated
Subsidiaries, and the consolidated statement of stockholders’ equity of the Guarantor, as of the
end of and for such fiscal quarter (in the case of the Guarantor) and the then elapsed portion of
the fiscal year, setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by a Financial Officer of the Borrower and the Guarantor as presenting fairly
in all material respects the financial condition and results of operations of the Borrower and the
Guarantor and their consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

          (c) concurrently with any delivery of financial statements under clause (a) or (b) above, a
certificate of a Financial Officer of the Borrower and the Guarantor (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Section 6.1 and (iii) stating whether any change in GAAP
or in the application thereof has occurred since the date of the audited financial statements
referred to in Section 3.4 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;

          (d) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials (other than (i) statements of ownership such as Forms
3, 4 and 5 and Schedule 13G, (ii) routine filings relating to employee benefits, such as Forms S-8
and 11-K, and (iii) routine filings by (A) HRB Financial Corporation and its Subsidiaries,
including H&R Block Financial Advisors, Inc., (B) RSM McGladrey, Inc. and its Subsidiaries,
including Birchtree Financial Services, Inc., (C) RSM Equico, Inc. and its Subsidiaries, including
RSM Equico Capital Markets, LLC, (D) Option One Mortgage Corporation, (E) H&R Block Canada, Inc.
and (F) H&R Block Limited) filed by any Credit Party or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed by any Credit Party to
its shareholders generally, as the case may be;

          (e) a copy of any notice given by the Borrower under Section 4.1(b), Section 4.4(c) or Section
4.8 of the Participation Agreement, such copy to be provided at the same time as such notice is
given under the Participation Agreement; and

 

27

          (f) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of any Credit Party or any Subsidiary, or compliance with
the terms of this Agreement, as the Lender may reasonably request.

          SECTION 5.2. Notices of Material Events. The Borrower will furnish to the Lender prompt written notice of the following:

          (a) the occurrence of any Default;

          (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator
or Governmental Authority against or affecting any Credit Party or any Affiliate thereof that is
reasonably likely to be adversely determined and, if so determined, would reasonably be expected to
result in a Material Adverse Effect;

          (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, would reasonably be expected to result in liability of the Borrower, the Guarantor
or any Subsidiary in an aggregate amount exceeding $25,000,000; and

          (d) any other development that results in, or would reasonably be expected to result in, a
Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower and the Guarantor setting forth the details of the event
or development requiring such notice and any action taken or proposed to be taken with respect
thereto.

          SECTION 5.3. Existence; Conduct of Business. Each Credit Party will, and will cause each of the Subsidiaries to, do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its legal existence and
the rights, licenses, permits, privileges and franchises material to the conduct of its business;
provided that the foregoing shall not prohibit any merger, consolidation, liquidation,
disposition or dissolution permitted under Section 6.4.

          SECTION 5.4. Payment of Taxes. Each Credit Party will, and will cause each of the Subsidiaries to, pay its Tax liabilities
that, if not paid, would reasonably be expected to have a Material Adverse Effect before the same
shall become delinquent, except where (a) the validity or amount thereof is being contested in good
faith by appropriate proceedings, (b) such Credit Party or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make
payment pending such contest would not reasonably be expected to result in a Material Adverse
Effect.

          SECTION 5.5. Maintenance of Properties; Insurance. Each Credit Party will, and will cause each of the Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain (pursuant to a self-insurance program and/or with
financially sound and reputable insurers) insurance in such amounts and against such risks as is customarily maintained

 

 

28

by companies engaged in the same or similar businesses operating in the same
or similar locations.

          SECTION 5.6. Books and Records; Inspection Rights. Each Credit Party will, and will cause each of the Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all dealings and
transactions in relation to this Agreement and the transactions contemplated hereby. Each Credit
Party will, and will cause each of the Subsidiaries to, permit any representatives designated by
the Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make
extracts from its books and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often as reasonably
requested; provided that so long as no Event of Default exists, each Credit Party and each
Subsidiary shall have the right to be present and participate in any discussions with its
independent accountants. Nothing in this Section 5.6 shall permit the Lender to examine or
otherwise have access to the tax returns or other confidential information of any customer of
either Credit Party or any of their respective Subsidiaries.

          SECTION 5.7. Compliance with Laws. Each Credit Party will, and will cause each of the Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.

          SECTION 5.8. Use of Proceeds. The proceeds of the Loans will be used only to purchase Participation Interests in HSBC
RALs pursuant to the Participation Agreement. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any of the regulations
of the Board, including Regulations U and X.

          SECTION 5.9 Additional Collateral. The Borrower shall provide additional collateral to
the Lender from time to time as provided in the Security Agreement.

ARTICLE VI

NEGATIVE COVENANTS

          Until the Commitment has expired or terminated and the principal of and interest on each Loan
have been paid in full, each of the Credit Parties covenants and agrees with the Lender that:

          SECTION 6.1. Adjusted Net Worth. The Guarantor will not permit Adjusted Net Worth as at the last day of any fiscal quarter
of the Guarantor to be less than (a) for the fiscal quarter ending on January 31, 2008,
$800,000,000 and (b) for each other fiscal quarter, $1,000,000,000.

 

 

29

          SECTION 6.2. Indebtedness. The Credit Parties will not, and will not permit any Subsidiary to create, incur, assume or
permit to exist any Indebtedness, except:

          (a) subject to the proviso at the end of this Section 6.2, Indebtedness created under the Bank
Revolvers;

          (b) Indebtedness existing on the date hereof and set forth in Schedule 6.2 and extensions,
renewals and replacements of any such Indebtedness that do not increase the outstanding principal
amount thereof;

          (c) seasonal Indebtedness of H&R Block Canada, Inc., provided that the aggregate
principal amount of all such Indebtedness incurred pursuant to this subsection (c) shall not exceed
250,000,000 Canadian dollars at any time outstanding;

          (d) Indebtedness of the Borrower and the Guarantor, provided that (i) the obligations
of the Credit Parties hereunder shall rank at least pari passu with such
Indebtedness (including with respect to security) and (ii) the aggregate principal amount of all
Indebtedness permitted by this subsection (d) shall not exceed $2,000,000,000 at any time
outstanding;

          (e) subject to the proviso at the end of this Section 6.2, (i) Indebtedness in connection with
commercial paper issued in the United States through the Borrower which is guaranteed by the
Guarantor and (ii) Indebtedness under bank lines of credit or similar facilities;

          (f) Indebtedness in connection with Guarantees of the performance of any Subsidiary’s
obligations under or pursuant to (i) indemnity, fee, daylight overdraft and other similar customary
banking arrangements between such Subsidiary and one or more financial institutions in the ordinary
course of business, (ii) any office lease entered into in the ordinary course of business, and
(iii) any promotional, joint-promotional, cross-promotional, joint marketing, service, equipment or
supply procurement, software license or other similar agreement entered into by such Subsidiary
with one or more vendors, suppliers, retail businesses
or other third parties in the ordinary course of business, including indemnification
obligations relating to such Subsidiary’s failure to perform its obligations under such lease or
agreement;

          (g) acquisition-related Indebtedness (either incurred or assumed) and Indebtedness in
connection with the Guarantor’s guarantees of the payment or performance of primary obligations of
Subsidiaries of the Guarantor in connection with acquisitions by such Subsidiaries, or Indebtedness
secured by Liens permitted under subsection 6.3(f); provided that, during any fiscal year,
the aggregate outstanding principal amount of all Indebtedness incurred pursuant to this subsection
6.2(g) shall not exceed at any time $325,000,000;

          (h) Indebtedness of any Credit Party to any other Credit Party, of any Credit Party to any
Subsidiary, of any Subsidiary to any Credit Party and of any Subsidiary to any other Subsidiary;
provided that such Indebtedness shall not be prohibited by Section 6.5;

          (i) Indebtedness in connection with repurchase agreements pursuant to which mortgage loans of
a Credit Party or a Subsidiary are sold with the simultaneous agreement to repurchase the mortgage
loans at the same price plus interest at an agreed upon rate; provided

 

 

30

that the aggregate
outstanding principal amount of all Indebtedness incurred pursuant to this subsection 6.2(i) shall
not at any time exceed $500,000,000; provided, further, that no agreed upon
repurchase date shall be later than 90 business days after the date of the corresponding repurchase
agreement;

          (j) Indebtedness in connection with Guarantees or Guarantee Obligations which are made, given
or undertaken as representations and warranties, indemnities or assurances of the payment or
performance of primary obligations in connection with securitization transactions or other
transactions permitted hereunder, as to which primary obligations the primary obligor is a Credit
Party, a Subsidiary or a securitization trust or similar securitization vehicle to which a Credit
Party or a Subsidiary sold, directly or indirectly, the relevant mortgage loans;

          (k) Indebtedness of RSM, a Subsidiary of the Guarantor, to McGladrey & Pullen, LLP
(“M&P”) and certain related trusts under (i) that certain Asset Purchase Agreement dated as
of June 28, 1999 among RSM, M&P, the Guarantor and certain other parties signatory thereto (the
“M&P Purchase Agreement”) and (ii) the Retired Partners Agreement and the Loan Agreement
(as such terms are defined in the M&P Purchase Agreement); provided that the aggregate
outstanding principal amount payable in respect of such Indebtedness permitted under this paragraph
(k) shall not exceed $200,000,000 at any time;

          (l) Indebtedness in connection with (i) Capital Lease Obligations in an aggregate outstanding
principal amount not at any time exceeding $50,000,000 (excluding any Capital Lease Obligations
permitted by subsection 6.2(p)), (ii) obligations under existing mortgages in an aggregate
outstanding principal amount not exceeding $12,000,000 at any time, (iii) securities sold and not
yet purchased, provided that the aggregate outstanding principal amount of all Indebtedness
incurred pursuant to this clause (iii) (other than Indebtedness of Subsidiaries which act as
broker-dealers) shall not at any time exceed $15,000,000, (iv) customer deposits in the ordinary
course of business, (v) payables to brokers and dealers in the ordinary course of business and (vi)
reimbursement obligations of broker-dealers relating to letters of
credit in favor of a clearing corporation or Indebtedness of broker-dealers under other credit
facilities, provided that (A) such letters of credit or such other credit facilities are
used solely to satisfy margin deposit requirements and (B) the aggregate outstanding exposure of
the Guarantor and the Subsidiaries under all such letters of credit and all such other credit
facilities shall not exceed $200,000,000 at any time;

          (m) subject to the proviso at the end of this Section 6.2, Indebtedness incurred in connection
with the Borrower’s Refund Anticipation Loan Program, including any Indirect RAL Participation
Transaction; provided that (i) such Indebtedness is incurred during the period beginning on
January 2 of any year and ending on June 29 of such year, (iii) such Indebtedness is repaid in full
by June 30 of the year in which such Indebtedness is incurred and (iii) the covenants contained in
any agreement relating to such Indebtedness, or guarantee thereof (other than covenants specific to
the Borrower’s Refund Anticipation Loan Program and the operation thereof), are no more restrictive
than the covenants contained in this Agreement;

          (n) subject to the proviso at the end of this Section 6.2, liabilities related to the RAL
Receivables Transactions to the extent consistent with the definition thereof;

 

 

31

          (o) Indebtedness in respect of letters of credit in an aggregate outstanding principal amount
not to exceed $100,000,000;

          (p) Indebtedness in an amount not exceeding $150,000,000 in connection with the acquisition,
development or construction of the Guarantor’s new headquarters;

          (q) deposits and other liabilities incurred by banking Subsidiaries in the ordinary course of
business;

          (r) customary liabilities of broker-dealers incurred by broker-dealer Subsidiaries in the
ordinary course of business;

          (s) Indebtedness issued by a Subsidiary of the Borrower and primarily secured by mortgage
loans sold as contemplated by Section 6.5(c) hereof to such Subsidiary by another Subsidiary of the
Borrower;

          (t) Indebtedness secured by Liens permitted by subsection 6.3(d) or 6.3(e);

          (u) Indebtedness incurred solely to finance businesses described on Schedule 6.4(b) after the
date hereof that neither the Credit Parties nor their respective Subsidiaries are currently engaged
in to any material extent on the date hereof; provided that the aggregate principal amount
of all Indebtedness incurred pursuant to this clause (u) shall not at any time exceed $400,000,000;
and

          (v) other Indebtedness (excluding Indebtedness of the types described in subsections 6.2(a),
6.2(b)(ii), 6.2(e) and 6.2(m)) in an aggregate principal amount not at any time exceeding
$20,000,000;

provided, that the sum of the aggregate outstanding principal amount of all Indebtedness
permitted pursuant to subsections 6.2(a), 6.2(e) and 6.2(m) plus the RAL Receivables Amount
shall not at any time exceed the greater of (x) the Total Facility Commitments then in effect or
(y) the sum of the then outstanding principal amount of the “Loans” under the Bank Revolvers (such
sum, the “Total Facility Loan Outstandings”), except that, during the period from
January 2 of any year through June 30 of such year, such sum may exceed the greater of the Total
Facility Commitments then in effect or the then Total Facility Loan Outstandings by an amount up to
the total of (A) the aggregate outstanding principal amount of Indebtedness described in Section
6.2(m) and (B) $500,000,000.

          SECTION 6.3. Liens. Each Credit Party will not, and will not permit any Subsidiary to, create, incur, assume or
permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in respect of any thereof,
except:

          (a) Permitted Encumbrances;

          (b) (i) any Lien created under or securing a Bank Revolver and (ii) any Lien on any property
or asset of any Credit Party or any Subsidiary existing on the date hereof and set

 

 

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forth in
Schedule 6.3; provided that (i) such Lien shall not apply to any other property or asset of
any Credit Party or any Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof;

          (c) any Lien existing on any property or asset prior to the acquisition thereof by any Credit
Party or any Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not
apply to any other property or assets of any Credit Party or any Subsidiary and (iii) such Lien
shall secure only those obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;

          (d) Liens and transfers in connection with the securitization, financing or other transfer of
any mortgage loans or mortgage servicing reimbursement rights (and/or, in each case, related
rights, interests and servicing assets) owned by the Borrower or any of its Subsidiaries;

          (e) Liens and transfers in connection with the securitization or other transfer of any credit
card receivables (and/or related rights and interests) owned by the Borrower or any of its
Subsidiaries;

          (f) Liens on fixed or capital assets acquired, constructed or improved by any Credit Party or
any Subsidiary to secure Indebtedness of such Credit Party or such Subsidiary incurred to finance
the acquisition, construction or improvement of such fixed or capital assets; provided that
(i) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (ii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or
improving such fixed or capital assets and (iii) such Liens shall not apply to any other property
or assets of any Credit Party or any Subsidiary;

          (g) Liens arising in connection with repurchase agreements contemplated by Section 6.2(i);
provided that such security interests shall not apply to any property or assets of any
Credit Party or any Subsidiary except for the mortgage loans or securities, as applicable, subject
to such repurchase agreements;

          (h) Liens arising in connection with Indebtedness permitted by Sections 6.2(l)(v) or 6.2(q),
which Liens are granted in the ordinary course of business;

          (i) Liens not otherwise permitted by this Section 6.3 so long as the Obligations hereunder are
contemporaneously secured equally and ratably with the obligations secured thereby;

 

 

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          (j) Liens not otherwise permitted by this Section 6.3, so long as the aggregate outstanding
principal amount of the obligations secured thereby does not exceed (as to the Credit Parties and
all Subsidiaries) $250,000,000 at any one time;

          (k) Liens and transfers in connection with the RAL Receivables Transaction;

          (l) Liens securing Indebtedness permitted by subsection 6.2(u); and

          (m) Liens on Unrestricted Margin Stock.

          SECTION 6.4. Fundamental Changes; Sale of Assets. (a) Each Credit Party will not, and will not permit any Material Subsidiary to, merge into
or consolidate with any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all of its assets (other than Unrestricted Margin Stock), or all
or substantially all of the stock or assets related to its tax preparation business or liquidate or
dissolve, except (i) transfers in connection with the RAL Receivables Transaction and other
securitizations otherwise permitted hereby, (ii) sales and other transfers of mortgage loans
(and/or related rights and interests and servicing assets) and (iii) if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be continuing, (A) any
Material Subsidiary other than the Borrower may merge into a Credit Party in a transaction in which
the Credit Party is the surviving Person, (B) any wholly owned Material Subsidiary other than the
Borrower may merge into any other wholly owned Material Subsidiary in a transaction in which the
surviving entity is a wholly owned Subsidiary, (C) any Material Subsidiary other than the Borrower
may sell, transfer, lease or otherwise dispose of its assets to the Guarantor or to another
Material Subsidiary and (D) any Material Subsidiary other than the Borrower may liquidate or
dissolve if the Guarantor determines in good faith that such liquidation or dissolution is in the
best interests of the Guarantor and is not materially disadvantageous to the Lender;
provided that any such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by Section 6.5.

          (b) Except as set forth on Schedule 6.4(b), the Credit Parties will not, and will not permit
any Material Subsidiary to, engage to any material extent in any business other than businesses of
the type conducted by the Credit Parties and the Subsidiaries on August 10, 2005 and businesses
reasonably related thereto.

          SECTION 6.5. Transactions with Affiliates. Each Credit Party will not, and will not permit any Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets
from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the
ordinary course of business at prices and on terms and conditions not less favorable to such Credit
Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third
parties, (b) transactions between or among the Guarantor and/or its Subsidiaries not involving any
other Affiliate, and (c) transactions involving the transfer of mortgage loans and other assets for
cash and other consideration of not less than the sum of (i) the lesser of (x) the fair market
value of such mortgage loans and (y) the outstanding principal amount of such mortgage loans, and
(ii) the fair market value of such other assets, to a Subsidiary of the Borrower that issues
Indebtedness

 

 

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permitted by Section 6.2(s); provided, that this Section 6.5 shall not apply to any
transactions with OOMC.

          SECTION 6.6. Restrictive Agreements. The Credit Parties will not, and will not permit any Subsidiary to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that by its terms
prohibits, restricts or imposes any condition upon (a) the ability of any Credit Party or any
Subsidiary to create, incur or permit to exist any Lien upon any of its material property or assets
(unless such agreement or arrangement does not prohibit, restrict or impose any condition upon the
ability of either Credit Party or any Subsidiary to create, incur or permit to exist any Lien in
favor of the Lender created under the Loan Documents), or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Guarantor or any other Subsidiary or to Guarantee Indebtedness of
the Guarantor or any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the foregoing shall not apply
to restrictions and conditions existing on the date hereof identified on Schedule 6.6 (but shall
apply to any extension, renewal, amendment or modification expanding the scope of any such
restriction or condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the securitization, financing or other transfer of mortgage
loans (and/or related rights and interests and servicing assets) owned by the Borrower or any of
its Subsidiaries, (v) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured obligations permitted by this Agreement (including
obligations secured by Liens permitted by Section 6.3(j)) if such
restrictions or conditions apply only to the property or assets securing such obligations,
(vi) clause (a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof and (vii) clause (a) of the foregoing shall not apply
to restrictions or conditions imposed by any agreement relating to Indebtedness permitted hereunder
pursuant to subsection 6.2(m) or the RAL Receivables Transaction

        .

ARTICLE VII

GUARANTEE

          SECTION 7.1. Guarantee. (a) The Guarantor hereby unconditionally and irrevocably guarantees to the Lender and its
successors, indorsees, transferees and assigns, the prompt and complete payment and performance by
the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

          (b) The Guarantor further agrees to pay any and all expenses (including all fees and
disbursements of counsel) which may be paid or incurred by the Lender in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against, the Guarantor under
this Article. This Article shall remain in full force and effect until the Obligations and the

 

 

35

obligations of the Guarantor under the guarantee contained in this Article shall have been
satisfied by payment in full and the Commitment shall be terminated, notwithstanding that from time
to time prior thereto the Borrower may be free from any Obligations.

          (c) No payment or payments made by any Credit Party, any other guarantor or any other Person
or received or collected by the Lender from any collateral security or Credit Party or any other
Person by virtue of any action or proceeding or any set-off or appropriation or application, at any
time or from time to time, in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the Guarantor hereunder which shall,
notwithstanding any such payment or payments, remain liable hereunder for the Obligations until the
Obligations are paid in full and the Commitment is terminated.

          (d) The Guarantor agrees that whenever, at any time or from time to time, it shall make any
payment to the Lender on account of its liability hereunder, it will notify the Lender in writing
that such payment is made under this Article for such purpose.

          SECTION 7.2. Delay of Subrogation. Notwithstanding any payment or payments made by the Guarantor hereunder, or any set-off or
application of funds of the Guarantor by the Lender, the Guarantor shall not be entitled to be
subrogated to any of the rights of the Lender against the Borrower or against any collateral
security or guarantee or right of offset held by the Lender for the payment of the Obligations, nor
shall the Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower in respect of payments made by the Guarantor hereunder, until
all amounts owing to the Lender by the Borrower on account of the Obligations are paid in full and
the Commitment is terminated. If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been paid in full, such
amount shall be held by the Guarantor in trust for the Lender, segregated from other funds of the
Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to the Lender in the
exact form received by the Guarantor (duly indorsed by the Guarantor to the Lender, if required) to
be applied against the Obligations, whether matured or unmatured, in such order as the Lender may
determine. The provisions of this Section shall be effective notwithstanding the termination of
this Agreement and the payment in full of the Obligations and the termination of the Commitment.

 

 

36

          SECTION 7.3. Amendments, etc. with respect to the Obligations; Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor, and without notice to or further assent by the
Guarantor, any demand for payment of any of the Obligations made by the Lender may be rescinded by
the Lender, and any of the Obligations continued, and the Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or guarantee therefor or right
of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by the Lender, and
this Agreement and any other documents executed and delivered in connection herewith may be
amended, modified, supplemented or terminated, in whole or in part, in accordance with the
provisions hereof as the Lender may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Lender for the payment of the Obligations may
be sold, exchanged, waived, surrendered or released. The Lender shall not have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations
or for this Agreement or any property subject thereto. When making any demand hereunder against
the Guarantor, the Lender may, but shall be under no obligation to, make a similar demand on the
Borrower or any other guarantor, and any failure by the Lender to make any such demand or to
collect any payments from the Borrower or any such other guarantor or any release of the Borrower
or such other guarantor shall not relieve the Guarantor of its obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a
matter of law, of the Lender against the Guarantor. For the purposes hereof “demand” shall include
the commencement and continuance of any legal proceedings.

          SECTION 7.4. Guarantee Absolute and Unconditional. The Guarantor waives any and all notice of the creation, renewal, extension or accrual of
any of the Obligations and notice of or proof of reliance by the Lender upon this Agreement or
acceptance of this Agreement; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Agreement; and all dealings between the Borrower and the Guarantor, on the one hand, and
the Lender, on the other, shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Agreement. The Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment
to or upon the Borrower and the Guarantor with respect to the Obligations. This Article shall be
construed as a continuing, absolute and unconditional guarantee of payment without regard to (a)
the validity, regularity or enforceability of this Agreement, any other documents executed and
delivered in connection herewith, any of the Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time to time held by the
Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance)
which may at any time be available to or be asserted by the Guarantor against the Lender, or (c)
any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or the
Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge
of the Borrower for the Obligations, or of the Guarantor under this Article, in bankruptcy or in
any other instance. When pursuing its rights and remedies hereunder against the Guarantor, the
Lender may, but shall be under no obligation to, pursue such rights and remedies as it may have
against the Borrower or any other Person or against any collateral security or guarantee for the
Obligations

 

 

37

or any right of offset with respect thereto, and any failure by the Lender to pursue
such other rights or remedies or to collect any payments from the Borrower or any such other Person
or to realize upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower or any such other Person or of any such collateral security,
guarantee or right of offset, shall not relieve the Guarantor of any liability hereunder, and shall
not impair or affect the rights and remedies, whether express, implied or available as a matter of
law, of the Lender against the Guarantor. This Article shall remain in full force and effect and
be binding in accordance with and to the extent of its terms upon the Guarantor and its successors
and assigns, and shall inure to the benefit of the Lender and its successors, indorsees,
transferees and assigns, until all the Obligations and the obligations of the Guarantor under this
Agreement shall have been satisfied by payment in full and the Commitment shall be terminated,
notwithstanding that from time to time during the term of this Agreement the Borrower may be free
from any Obligations.

          SECTION 7.5. Reinstatement. This Article shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Credit Party or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, any Credit Party or any
substantial part of its property, or otherwise, all as though such payments had not been made.

          SECTION 7.6. Payments. The Guarantor hereby agrees that all payments required to be made by it hereunder will be
made to the Lender without set-off or counterclaim in accordance with the terms of the Obligations,
including in the currency in which payment is due.

ARTICLE VIII

EVENTS OF DEFAULT

          If any of the following events (“Events of Default”) shall occur:

          (a) the Borrower shall fail to pay any principal of any Loan when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or
otherwise;

          (b) the Borrower shall fail to pay any interest on any Loan or any other amount (other than an
amount referred to in clause (a) of this Article) payable under this Agreement, when and as the
same shall become due and payable, and such failure shall continue unremedied for a period of five
business days;

          (c) any representation or warranty made or deemed made by any Credit Party (or any of its
officers) in or in connection with this Agreement or any amendment or modification hereof, or in
any report, certificate, financial statement or other document furnished

 

 

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pursuant to or in
connection with this Agreement or any amendment or modification hereof, shall prove to have been
incorrect in any material respect when made or deemed made;

          (d) any Credit Party shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.2, 5.3 (with respect to the Credit Parties’ existence), 5.8 or 5.9 or in
Article VI;

          (e) any Credit Party shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article),
and such failure shall continue unremedied for a period of 30 days after notice thereof from the
Lender to the Borrower;

          (f) any Credit Party or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable (after expiration of any applicable grace or cure period);

          (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity; provided that this clause (g) shall not apply to (i) secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness or (ii) any obligation under a Hedging Agreement that becomes due
as a result of a default by a party thereto other than a Credit Party or a Subsidiary;

          (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of any Credit Party or any
Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii)
the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Credit Party or any Material Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;

          (i) any Credit Party or any Material Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Material Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose
of effecting any of the foregoing;

          (j) any Credit Party or any Material Subsidiary shall become unable, admit in writing or fail
generally to pay its debts as they become due;

 

 

39

          (k) one or more final judgments for the payment of money shall be rendered against the
Guarantor, the Borrower, any Subsidiary or any combination thereof and either (i) a creditor shall
have commenced enforcement proceedings upon any such judgment in an aggregate amount (to the extent
not covered by insurance as to which the relevant insurance company has not denied coverage) in
excess of $40,000,000 (a “Material Judgment”) or (ii) there shall be a period of 30
consecutive days during which a stay of enforcement of any Material Judgment shall not be in effect
(by reason of pending appeal or otherwise) (it being understood that, notwithstanding the
definition of “Default”, no “Default” shall be triggered solely by the rendering of such a judgment
or judgments prior to the commencement of enforcement proceedings or the lapse of such 30
consecutive day period, so long as such judgments are capable of satisfaction by payment at any
time);

          (l) an ERISA Event shall have occurred that, in the opinion of the Lender, when taken together
with all other ERISA Events that have occurred, would reasonably be expected to result in a
Material Adverse Effect;

          (m) a Change in Control shall occur;

          (n) the Guarantee contained in Article VII herein shall cease, for any reason, to be in full
force and effect in any material respect or any Credit Party shall so assert;

          (o) the Security Agreement, the Control Agreement or the HSBC TFS Letter shall for any reason
cease to be valid and binding on or enforceable against any Credit Party that is party thereto; or
any Credit Party shall so state in writing or bring an action to limit its obligations or
liabilities thereunder;

          (p) the Security Agreement shall for any reason (other than pursuant to the terms thereof)
cease to create a valid, perfected and first priority security interest in the Collateral purported
to be covered thereby;

          (q) any representation or warranty made or deemed made by any Credit Party in the Security
Agreement, the Control Agreement or the HSBC TFS Letter shall prove to have been incorrect in any
material respect when made or deemed made; or

          (r) any Credit Party shall fail to observe or perform any covenant or agreement (other than
as specified in clauses (o), (p) and (q) of this Article) contained in the Security Agreement, the
Control Agreement or the TFS Letter Agreement;

then, and in every such event (other than an event with respect to the Credit Parties described in
clause (h) or (i) of this Article), and at any time thereafter during the continuance of such
event, the Lender may, by notice to the Borrower, take either or both of the following actions, at
the same or different times: (i) terminate the Commitment, and thereupon the Commitment shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole
(or in part, in which case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other

 

 

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Obligations of the Credit
Parties accrued hereunder, shall become due and payable immediately, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the Credit Parties; and in
case of any event with respect to the Credit Parties described in clause (h) or (i) of this
Article, the Commitment shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other Obligations of the
Credit Parties accrued hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the Credit Parties.

ARTICLE IX

[RESERVED]

ARTICLE X

MISCELLANEOUS

          SECTION 10.1. Notices. Except in the case of notices and other communications expressly permitted to be given by
telephone and except as otherwise provided in Sections 2.3, 2.6 and 2.8, all notices and other
communications provided for herein shall be in writing and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by telecopy, as
follows:

          (a) if to the Borrower or the Guarantor, to it at One H&R Block Way, Kansas City, Missouri
64105, Attention of Becky Shulman (Telecopy No. (816) 854-8043), David Staley (Telecopy No. (816)
854-8043) and Andrew Somora (Telecopy No. (816) 802-1043); and

          (b) if to the Lender, to it at 2700 Sanders Road, Prospect Heights, Illinois 60070,
attention: Treasurer (Telecopy No. (847) 205-7538), with copies to 2700 Sanders Road, Prospect
Heights, Illinois 60070, attention: Deputy General Counsel- Corporate Law (Telecopy No.(847)
564-6366), HSBC Securities, Inc., 425 Fifth Avenue, Lower Level, New York, N.Y. 10018 (Telecopy No.
(212) 525-2479), attention Vince Clark, HSBC Taxpayer Financial Services Inc., 200 Somerset
Corporate Boulevard, Bridgewater, N.J. 08807 (Telecopy No. (908) 203-4211, attention: CEO and
Managing Director, and HSBC Taxpayer Financial Services Inc., 90 Christiana Road, New Castle, DE
19707 (Telecopy No. (302) 327-2507, attention: General Counsel); provided, that notices under
Section 2.3 need only be given to Mr. Kyle Hartung at telephone number (847) 564-6281, confirmed by
telecopy at (847) 564-6138.

Any party hereto may change its address, telephone number or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other

 

 

41

communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt. For so long as any Affiliate of the Lender is
a “Lender” under either of the Bank Revolvers, the Lender will accept delivery of any financial
statement or other information to be delivered under Section 5.1(a), (b) and(d) hereunder that is
posted to Intralinks. The Lender, the Borrower or the Guarantor may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be limited to
particular notices or communications.

          SECTION 10.2. Waivers; Amendments. (a) No failure or delay by the Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The rights and remedies
of the Lender hereunder are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or consent to any departure by
the Credit Parties therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of
whether the Lender may have had notice or knowledge of such Default at the time.

          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Credit Parties and the
Lender.

          SECTION 10.3. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay all reasonable and documented out-of-pocket expenses incurred by
the Lender, including the reasonable and documented fees, charges and disbursements of any counsel
for the Lender, in connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with the Loans made
hereunder, including in connection with any workout, restructuring or negotiations in respect
thereof.

          (b) The Credit Parties shall jointly and severally indemnify the Lender and each Related
Party of the Lender (each such Person being called an “Indemnitee”), against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a result of the material
breach by any Credit Party of any representation, warranty, covenant or agreement in this
Agreement, the Security Agreement, the Control Agreement or the HSBC TFS Letter; provided
that such indemnity shall not be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful misconduct of any
Indemnitee or any of its Related Parties.

 

 

42

          (c) No party to this Agreement shall be liable for lost profits, incidental, consequential,
exemplary, special or punitive damages arising under or in connection with this Agreement, the
Security Agreement, the Control Agreement or the HSBC TFS Letter, or the transaction contemplated
hereby or thereby.

          SECTION 10.4. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that no Credit
Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Lender (and any attempted assignment or transfer by any Credit Party without
such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of
the Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.

          (b) The Lender may assign to one or more assignees all or a portion of its rights under this
Agreement (including all or a portion of the Loans at the time owing to it); provided that
the Borrower must give its prior written consent to such assignment (which consent shall not be
unreasonably withheld); provided, further, that any consent of the Borrower
otherwise required under this paragraph shall not be required if an Event of Default has occurred
and is continuing. Any assignment or transfer by the Lender of rights under this Agreement that
does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by
the Lender of a participation in such rights and obligations in accordance with paragraph (c)
of this Section.

          (c) The Lender may, without the consent of any Credit Party, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of the Lender’s rights
and obligations under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) the Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the
performance of the obligations and (iii) the Credit Parties shall continue to deal solely and
directly with the Lender in connection with the Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which the Lender sells such a participation
shall provide that the Lender shall retain the sole right to enforce this Agreement and to approve
any amendment, modification or waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver of or under this Agreement that shall
(i) increase the Commitment, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, (iii) postpone the scheduled date of payment of the principal amount of any Loan,
or any interest thereon, or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of the Commitment, (iv) release any security provided for in the
Security Agreement, (v) release the guarantee contained in Article VII or (vi) change any of the
provisions of this Section. Subject to paragraph (d) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.9

 

 

43

and 2.10 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this
Section.

          (d) A Participant shall not be entitled to receive any greater payment under Section 2.9 or
2.10 than the Lender would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent.

          (e) The Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of the Lender, including any such pledge or
assignment to a Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of a security
interest shall release the Lender from any of its obligations hereunder or substitute any such
assignee for the Lender as a party hereto.

          SECTION 10.5. Survival. All covenants, agreements, representations and warranties made by the Credit Parties herein
and in the certificates or other instruments delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the Lender may
have had notice or knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any other
amount payable under this Agreement is outstanding and unpaid and so long as the Commitment
has not expired or terminated. The provisions of Sections 2.9, 2.10, 10.3, 10.9, 10.10 and 10.l5
shall survive and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the
Commitment or the termination of this Agreement or any provision hereof.

          SECTION 10.6. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Agreement and the documents provided for herein
constitute the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.1, this Agreement shall become effective
when it shall have been executed by the Lender and when the Lender shall have received counterparts
hereof which, when taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this
Agreement.

          SECTION 10.7. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality

 

 

44

and enforceability of the
remaining provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

          SECTION 10.8. Right of Setoff. If an Event of Default shall have occurred and be continuing, the Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all indebtedness at any time owing by the Lender to or for the credit or the
account of either Credit Party against any of and all the obligations of such Credit Party now or
hereafter existing under this Agreement held by the Lender, irrespective of whether or not the
Lender shall have made any demand under this Agreement and although such obligations may be
unmatured. The rights of the Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.

          SECTION 10.9. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the
State of New York.

          (b) Each Credit Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New
York sitting in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in connection with any Proceeding,
and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any Proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment
in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Lender may otherwise have to bring any Proceeding relating to this Agreement against
any Credit Party or its properties in the courts of any jurisdiction.

          (c) Each Credit Party hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any Proceeding arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such
Proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 10.1 in connection with a Proceeding. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any other manner permitted
by law in connection with a Proceeding.

          SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES

 

 

45

THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 10.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.

          SECTION 10.12. Confidentiality. The Lender agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrower or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this Section by it or (ii)
becomes available to the Lender on a nonconfidential basis from a source other than any Credit
Party; provided, that the Lender may file this Agreement with the Securities and Exchange
Commission. For the purposes of this Section, “Information” means all information received
from any Credit Party relating to any Credit Party or its business, other than any such information
that is available to the Lender on a nonconfidential basis prior to disclosure by such Credit
Party; provided that, in the case of information received from any Credit Party after the
date hereof, such information is clearly identified at the time of delivery as confidential. The
Lender shall be considered to have complied with its obligation under this Section if it has
exercised the same degree of care to maintain the confidentiality of such Information as it would
accord to its own confidential information.

          SECTION 10.13. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate
applicable to any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges payable to the Lender in
respect of other Loans or periods shall be increased

 

 

46

(but not above the Maximum Rate therefor)
until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by the Lender.

          SECTION 10.14. USA Patriot Act.

          The Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is
required to obtain, verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will allow the Lender to
identify the Borrower in accordance with the Act.

[THIS SPACE LEFT BLANK INTENTIONALLY]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	BLOCK FINANCIAL LLC, as Borrower

 	 
	 	By:  	/s/ Becky S. Shulman
 	 
	 	 	Name:  	Becky S. Shulman 	 
	 	 	Title:  	SVP and Treasurer 	 
	 
	 	H&R BLOCK, INC., as Guarantor

 	 
	 	By:  	/s/ Becky S. Shulman
 	 
	 	 	Name:  	Becky S. Shulman 	 
	 	 	Title:  	SVP and Treasurer 	 
	 
	 	HSBC FINANCE CORPORATION, as Lender

 	 
	 	By:  	/s/ William H. Kesler
 	 
	 	 	Name:  	William H. Kesler 	 
	 	 	Title:  	Senior Vice President — Treasurer 	 

 

 

	 	 	 	 	 

SCHEDULE 3.4(a)

Guarantee Obligations

	•	 	Guarantor’s obligation pursuant to the $250,000,000 Amended and Restated Bridge Credit
and Guarantee Agreement (HSBC) dated as of December 20, 2007, among the Guarantor, the
Borrower, the lenders party thereto and HSBC Bank USA, National Association.
	 
	•	 	Guarantor’s obligation pursuant to the $250,000,000 Amended and Restated Bridge Credit
and Guarantee Agreement (BNPP) dated as of December 20, 2007, among the Guarantor, the
Borrower, the lenders party thereto and BNP Paribas.

 

 

SCHEDULE 3.6

Disclosed Matters

None.

 

 

SCHEDULE 3.13

Subsidiaries

          The following is a list of the direct and indirect subsidiaries of H&R Block, Inc., a
Missouri corporation.

	 	 	 
	Company Name	 	Domestic Jurisdiction
	4230 W. Green Oaks, Inc.

	 	Michigan
	Aculink Mortgage Solutions, LLC

	 	Florida
	AcuLink of Alabama, LLC

	 	Alabama
	BFC Transactions, Inc.

	 	Delaware
	Birchtree Financial Services, Inc.

	 	Oklahoma
	Birchtree Insurance Agency, Inc.

	 	Missouri
	Block Financial LLC

	 	Delaware
	Burr Oak Technical Solutions, Inc.

	 	Delaware
	CFS-McGladrey, LLC

	 	Massachusetts
	Cfstaffing, Ltd.

	 	British Columbia
	Companion Insurance, Ltd.

	 	Bermuda
	Companion Mortgage Corporation

	 	Delaware
	Creative Financial Staffing of Western Washington, LLC

	 	Massachusetts
	EquiCo Europe Limited

	 	United Kingdom
	Equico, Inc.

	 	California
	Express Tax Service, Inc.

	 	Delaware
	Financial Marketing Services, Inc.

	 	Michigan
	Financial Stop Inc.

	 	British Columbia
	First Option Asset Management Services, Inc.

	 	California
	First Option Asset Management Services, LLC

	 	California
	FM Business Services, Inc.

	 	Delaware
	Franchise Partner, Inc.

	 	Nevada
	H&R Block (India) Private Limited

	 	India
	H&R Block (Nova Scotia), Incorporated

	 	Nova Scotia
	H&R Block Bank

	 	Missouri
	H&R Block Canada Financial Services, Inc.

	 	Federally Chartered
	H&R Block Canada, Inc.

	 	Federally Chartered
	H&R Block Eastern Enterprises, Inc.

	 	Missouri
	H&R Block Enterprises, Inc.

	 	Missouri
	H&R Block Financial Advisors, Inc.

	 	Michigan
	H&R Block Global Solutions (Hong Kong) Limited

	 	Hong Kong
	H&R Block Group, Inc.

	 	Delaware
	H&R Block Insurance Agency of Massachusetts, Inc.

	 	Massachusetts
	H&R Block Insurance Agency, Inc.

	 	Delaware
	H&R Block Limited

	 	New South Wales
	H&R Block Management, LLC

	 	Delaware
	H&R Block Services, Inc.

	 	Missouri
	H&R Block Tax and Business Services, Inc.

	 	Delaware
	H&R Block Tax and Financial Services Limited

	 	United Kingdom
	H&R Block Tax Institute, LLC

	 	Missouri

 

 

	 	 	 
	Company Name	 	Domestic Jurisdiction
	H&R Block Tax Services, Inc.

	 	Missouri
	HRB Advance LLC

	 	Delaware
	HRB Center LLC

	 	Missouri
	HRB Concepts LLC

	 	Delaware
	HRB Corporate Enterprises LLC

	 	Delaware
	HRB Corporate Services LLC

	 	Missouri
	HRB Digital LLC

	 	Delaware
	HRB Digital Technology Resources LLC

	 	Delaware
	HRB Expertise LLC

	 	Missouri
	HRB Financial Corporation

	 	Michigan
	HRB Innovations, Inc.

	 	Delaware
	HRB International LLC

	 	Missouri
	HRB Products LLC

	 	Missouri
	HRB Professional LLC

	 	Delaware
	HRB Progression LLC

	 	Delaware
	HRB Property Corporation

	 	Michigan
	HRB Realty Corporation

	 	Michigan
	HRB Support Services LLC

	 	Delaware
	HRB Tax & Technology Leadership LLC

	 	Missouri
	HRB Tax & Technology Software LLC

	 	Missouri
	HRB Technology Holding LLC

	 	Delaware
	HRB Texas Enterprises, Inc.

	 	Missouri
	OLDE Discount of Canada

	 	Federally Chartered
	OOMC Holdings LLC

	 	Delaware
	OOMC Residual Corporation

	 	New York
	Option One Advance Corporation

	 	Delaware
	Option One Insurance Agency, Inc.

	 	California
	Option One Loan Warehouse LLC

	 	Delaware
	Option One Mortgage Acceptance Corporation

	 	Delaware
	Option One Mortgage Capital Corporation

	 	Delaware
	Option One Mortgage Corporation

	 	California
	Option One Mortgage Corporation (India) Private Limited

	 	Pune
	Option One Mortgage Securities Corp.

	 	Delaware
	Option One Mortgage Securities II Corp.

	 	Delaware
	Option One Mortgage Securities III Corp.

	 	Delaware
	Option One Mortgage Securities IV LLC

	 	Delaware
	Option One Mortgage Services, Inc.

	 	Massachusetts
	O’Rourke Career Connections, LLC

	 	California
	PDI Global, Inc.

	 	Delaware
	Pension Resources, Inc.

	 	Illinois
	Premier Mortgage Services of Washington, Inc.

	 	Washington
	Premier Property Tax Services, LLC

	 	California
	Premier Trust Deed Services, Inc.

	 	California
	RedGear Technologies, Inc.

	 	Missouri
	RSM (Bahamas) Global, Ltd.

	 	The Bahamas
	RSM Employer Services Agency of Florida, Inc.

	 	Florida
	RSM Employer Services Agency, Inc.

	 	Georgia
	RSM Equico Canada, Inc.

	 	Federally Chartered
	RSM Equico Capital Markets, LLC

	 	Delaware
	RSM Equico, Inc.

	 	Delaware

 

 

	 	 	 
	Company Name	 	Domestic Jurisdiction
	RSM McGladrey Business Services, Inc.

	 	Delaware
	RSM McGladrey Business Solutions, Inc.

	 	Delaware
	RSM McGladrey Employer Services, Inc.

	 	Georgia
	RSM McGladrey Financial Process Outsourcing India Pvt. Ltd.

	 	India
	RSM McGladrey Financial Process Outsourcing, LLC

	 	Minnesota
	RSM McGladrey Insurance Services, Inc.

	 	Delaware
	RSM McGladrey TBS, LLC

	 	Delaware
	RSM McGladrey, Inc.

	 	Delaware
	ServiceWorks, Inc.

	 	Delaware
	TaxNet Inc.

	 	California
	TaxWorks, Inc.

	 	Delaware
	The Tax Man, Inc.

	 	Massachusetts
	West Estate Investors, LLC

	 	Missouri
	Woodbridge Mortgage Acceptance Corporation

	 	Delaware

 

 

SCHEDULE 6.2

Existing Indebtedness

	•	 	The Irrevocable Standby Letter of Credit issued on March 22, 2004 by KeyBank National
Association in favor of Old Republic Insurance Company for an amount up to $16,509,269.

	•	 	Irrevocable Standby Letter of Credit issued on December 18, 2003 by KeyBank National
Association in favor of Pacific Employer’s Insurance Company and ACE American Insurance
Company for an amount up to $865,650.

	•	 	Irrevocable Standby Letter of Credit issued on February 16, 2005 by KeyBank National
Association in favor of Chubb National Company for an amount up to $3,500,000.

	•	 	Promissory Note dated December 6, 2001 in the principal amount of $5,500,000 between
MyBenefitSource.com, Inc. (now RSM McGladrey Employer Services, Inc.) and AUSA Holdings
Company.

	•	 	The Guarantor’s and Subsidiaries’ obligations under surety bonds and fidelity bonds
issued pursuant to state mortgage licensing requirements.

	•	 	The $250,000,000 Amended and Restated Bridge Credit and Guarantee Agreement (HSBC) dated
as of December 20, 2007, among the Guarantor, the Borrower, the lenders party thereto and
HSBC Bank USA, National Association.

	•	 	The $250,000,000 Amended and Restated Bridge Credit and Guarantee Agreement (BNPP) dated
as of December 20, 2007, among the Guarantor, the Borrower, the lenders party thereto and
BNP Paribas.

 

 

SCHEDULE 6.3

Existing Liens

None.

 

 

SCHEDULE 6.4(b)

ADDITIONAL BUSINESSES

	•	 	Businesses that offer products and services typically provided by finance companies,
banks and other financial service providers, including consumer finance and mortgage-loan
related products and services, credit products, insurance products, check cashing, money
orders, wire transfers, stored value cards, bill payment services, notary services and
similar products and services.

	•	 	Businesses that offer financial, or financial-related, products and services that can be
marketed, provided or distributed by leveraging the retail locations of Guarantor’s
Subsidiaries or the relationships of such Subsidiaries with their clients as a tax return
preparer or financial advisor or service provider.

 

 

SCHEDULE 6.6

Existing Restrictions

	•	 	Indenture dated as of October 20, 1997, by and between the Credit Parties and Bankers
Trust Company, as trustee (the “October 20, 1997 Indenture”).

	•	 	Any other Indenture entered into by any Credit Party to the extent that (a) the
Indebtedness thereunder is permitted by Section 6.2(d) of this Agreement and (b) such other
Indenture has substantially similar terms to the October 20, 1997 Indenture.

	•	 	Repurchase Agreements of the type referred to in Section 6.2(i) of this Agreement.

	•	 	Certain Subsidiaries must maintain capital requirements which could impair their ability
to pay dividends or other distributions.

 

 

EXHIBIT A

[FORM OF SECURITY AGREEMENT]

SECURITY AGREEMENT

     SECURITY AGREEMENT dated as of January 10, 2008 between BLOCK FINANCIAL LLC
(“Debtor”), a Delaware limited liability company, and HSBC FINANCE CORPORATION
(“Secured Party”), a Delaware corporation.

     WHEREAS, Debtor, Secured Party and H&R Block, Inc. have entered into a Credit and Guarantee
Agreement dated as of January 10, 2008 (as amended, restated or otherwise modified and in effect
from time to time, the “Credit Agreement”) pursuant to which Secured Party has agreed,
subject to the terms and conditions thereof, to make loans to Debtor from time to time.

     WHEREAS, Secured Party has required, as a condition to its making loans under the Credit
Agreement, that Debtor execute and deliver this Agreement.

     NOW, THEREFORE, in consideration of the premises and to induce Secured Party to make loans to
Debtor under the Credit Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. Definitions. Capitalized terms used herein without definition are used herein as
defined in the Credit Agreement. In addition, the following terms shall have the following
meanings:

     “Additional Collateral Amount” means, at any time there is a Collateral Deficiency,
the amount by which the Required Collateral Amount exceeds the fair market value of the Securities
Account, as determined by the Securities Intermediary or the Transfer Agent or another service
provider.

     “BFC Program Contracts” means, collectively, the Indemnification Agreement, the
Participation Agreement and the Servicing Agreement.

     “Collateral” is defined in Section 2 hereof.

     “Collateral Deficiency” means at any time that the fair market value of the Collateral
held in the Securities Account, as determined by the Securities Intermediary or the Transfer Agent
or another service provider, shall be less than the Required Collateral Amount.

     “Contract Obligor” means any Person that is obligated to Debtor under a BFC Program
Contract.

 

 

     “Control Agreement” means the Investment Account Control Agreement between Debtor,
Secured Party and the Securities Intermediary with respect to the Securities Account, in
substantially the form of Exhibit B to the Credit Agreement.

     “Direct Pay Provisions” means the provisions of paragraph 2 of the HSBC TFS
Letter. 

     “HSBC RAL” means “HSBC RAL” as such term is defined in the Appendix of Defined Terms
and Rules of Construction attached as Appendix A to Retail Settlement Products Distribution
Agreement.

     “HSBC TFS” means HSBC Taxpayer Financial Services, Inc., a Delaware corporation.

     “HSBC TFS Letter” means a letter agreement between Debtor, HSBC TFS and Secured Party
in substantially the form of Exhibit C to the Credit Agreement.

     “Indemnification Agreement” means the HSBC Settlement Products Indemnification
Agreement dated as of September 23, 2005 among HSBC Bank USA, N.A., HSBC TFS, Household Tax Masters
Acquisition Corporation, Beneficial Franchise Company Inc., H&R Block Services, Inc., H&R Block Tax
Services, Inc., H&R Block Enterprises, Inc., H&R Block Eastern Enterprises, Inc., HRB Digital LLC
(successor by merger to H&R Block Digital Tax Solutions, LLC), H&R Block and Associates, L.P. (now
dissolved), HRB Innovations Inc. (formerly known as HRB Royalty, Inc.) and Debtor, as amended by
the Joinder and First Amendment to Program Contracts dated as of November 10, 2006 and the Second
Amendment to Program Contracts dated as of November 13, 2006, and as further amended from time to
time, and any restatement, extension, renewal and replacement thereof.

     “Participation Agreement” means the First Amended and Restated HSBC Refund
Anticipation Loan and IMA Participation Agreement, dated as of November 13, 2006, as amended from
time to time, and any restatement, extension, renewal and replacement thereof, by and among the
Borrower, HSBC Bank USA, National Association, HSBC TFS and HSBC Trust Company (Delaware), National
Association.

     “Participation Interest” means a “Participation Interest” under and as defined in the
Credit Agreement.

     “Required Collateral Amount” means at any time the greater of (i) $60,000,000 and (ii)
the quotient of (a) the amount determined in good faith by the Secured Party to be the excess of
(A) its forecast of the amount of delinquent HSBC RALs originated in 2008 as of December 31, 2008
(without consideration of any subsequent recoveries) over (B) $96,300,000, divided by (b) .89,
which quotient shall be multiplied by .49999999. The Secured Party, acting in good faith, may
compute the Required Collateral Amount from time to time in its discretion, and any such
computation of the Required Collateral Amount shall be based on the Secured Party’s statistical and
reasonable judgmental forecast and models and methods in accordance with its practices and policies
then in effect and shall be conclusive and binding in the absence of manifest error. The Secured
Party’s forecast of the amount of delinquent HSBC RALs originated in 2008 as of December 31, 2008
(without consideration of any subsequent recoveries) as of the date of this Agreement is
$96,270,623.

 

 

     “Securities Account” means account number 615878 maintained by Debtor with the
Securities Intermediary, all cash balances, securities, instruments, financial assets and
investment property at any time and from time to time credited to, received or receivable in
respect of such account, and all securities entitlements and claims thereunder or in connection
therewith.

     “Securities Intermediary” means HSBC Investor Funds.

     “Servicing Agreement” means the First Amended and Restated HSBC Settlement Products
Servicing Agreement dated as of November 13, 2006 , as amended from time to time, and any
restatement, extension, renewal and replacement thereof, among HSBC Bank USA, National Association,
HSBC TFS, HSBC Trust Company (Delaware), N.A., and Debtor.

     “Transfer Agent” has the meaning specified in the Control Agreement.

     “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, however, if, by reason of mandatory provisions of law, the
attachment, perfection or priority of Secured Party’s security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New
York, the term “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such provisions.

     The terms “control”, entitlement holder”, “entitlement order”,
“financial asset”, “instrument”, “investment property”,
“proceeds”, “security”, “security entitlement”, “securities
intermediary” and “supporting obligation” shall have the respective meanings set forth
in the Uniform Commercial Code.

     2. Security Interest. As collateral security for the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations, Debtor hereby
assigns and pledges to Secured Party and grants to Secured Party a security interest in and to all
of Debtor’s right, title and interest in the following property and interests in property, whether
now owned or hereafter acquired by Debtor and wherever located (collectively, the
“Collateral”):

     (a) the BFC Program Contracts, including (without limitation) the Participation
Interests purchased by Debtor under the Participation Agreement, all rights of Debtor
related to the HSBC RALs to which such Participation Interests relate, and all monies due
and to become due in respect thereof; provided, that the security interest created hereby
shall not extend to the rights reserved to Debtor pursuant to the proviso in Section 3
hereof;

     (b) the Securities Account (including without limitation any Additional Collateral
Amount deposited therein pursuant to Section 5(d) hereof); and

     (c) all proceeds, supporting obligations, income, benefits, substitutions, additions
and replacements of and to any of the property described in this Section 2

 

 

including, without limitation, all rights, claims and benefits against any Contract
Obligor or other Person obligated on any Collateral, and all related books, correspondence,
files, records, invoices and other papers, including, without limitation, all computer runs,
programs and files.

     3. Certain Rights of Debtor. Notwithstanding any other term or provision of this
Agreement, as long as no Event of Default has occurred, Debtor may exercise all of its rights under
the BFC Program Contracts, other than the following, which Debtor may not exercise: (a) the right
to receive payments from HSBC TFS under the Direct Pay Provisions of the amounts to be transferred
by HSBC TFS to Secured Party thereunder, (b) the right to sell, assign, pledge or grant a security
interest in or Lien on the Collateral and (c) its right to modify, amend or waive its rights under
the BFC Program Contracts that would affect in any way the Participation Interests that have been
financed by Secured Party pursuant to the Credit Agreement, provided, further, that
even after an Event of Default has occurred and is continuing under the Credit Agreement, Debtor
will have the right, on a prospective basis, (i) under Section 4.1 of the Participation Agreement,
to participate or not participate in subsequently originated HSBC RALs and to change the Applicable
Percentage (as defined in the Participation Agreement) with respect thereto, (ii) under Section 4.4
of the Participation Agreement, to elect not to purchase a participation interest in certain groups
of subsequently originated HSBC RALs; and (iii) under Section 4.8 of the Participation Agreement to
sell, assign or transfer its right to purchase participation interests on subsequently originated
HSBC RALs that are not financed by Secured Party.

     4. Representations and Warranties of Debtor. Debtor represents and warrants to
Secured Party as follows:

     (a) Binding Effect. This Agreement has been, and the Control Agreement and the HSBC
TFS Letter will be, duly executed and delivered by Debtor, and this Agreement constitutes, and the
Control Agreement and the HSBC TFS Letter will constitute, legal, valid and binding agreements of
Debtor, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding in equity or at law.

     (b) Ownership and Liens. Debtor is and will be the owner of the Collateral and no
Lien exists or will exist upon such Collateral at any time except as provided for in this
Agreement. Debtor is the sole entitlement holder with respect to the Securities Account.

     (c) Perfection. This Agreement is effective to create in favor of Secured Party a
valid security interest in and Lien upon all of Debtor’s right, title and interest in and to the
Collateral and, upon the filing of an appropriate Uniform Commercial Code financing statement in
the Office of the Secretary of State of the State of Delaware, such security interest will be a
duly perfected security interest in all of the Collateral and no further recordings or filings are
or will be required in connection with the creation, perfection or enforcement of such security
interest and Lien, other than (i) the filing of continuation statements or financing change
statements in accordance with applicable law and (ii) additional filings if Debtor changes its
name, identity or organizational structure or the jurisdiction in which it is organized.

 

 

     5. Agreements of Debtor. Debtor hereby agrees with Secured Party as follows:

     (a) Direct Payment to Secured Party. Debtor shall enter into the HSBC TFS Letter
with Secured Party and HSBC TFS. Debtor shall, forthwith upon becoming aware or being made aware
that it has received any amount in payment under the Direct Pay Provisions at any time, pay such
amount to Secured Party, and any such amount which may be so received by Debtor shall, from the
time of Debtor being or becoming aware of such receipt, not be commingled by Debtor with any of its
other funds or property but, until paid to Secured Party, shall be held separate and apart from
such other funds and property and in trust for Secured Party. Debtor authorizes and empowers
Secured Party (i) to ask, demand, receive, receipt and give acquittance for any and all amounts
which may be or become due or payable at any time to Debtor under the Direct Pay Provisions and
(ii) in its discretion to file any claims or take any action or proceeding, either in its own name
or in the name of Debtor or otherwise, which Secured Party may deem to be necessary or advisable to
collect amounts due under the Direct Pay Provisions.

     (b) Performance of BFC Program Contracts. Debtor shall remain liable under the BFC
Program Contracts to perform all of its obligations thereunder and shall duly and punctually
perform and observe all of the terms and provisions of the BFC Program Contracts on the part of
Debtor to be performed or observed, subject to any applicable grace or cure periods contained in
the BFC Program Contracts. Secured Party does not assume and shall not have any obligations or
liabilities under the BFC Program Contracts by reason of or arising out of this Agreement, nor
shall Secured Party be obligated to make any inquiry as to the nature or sufficiency of any payment
received under the BFC Program Contracts or to collect or enforce the BFC Program Contracts.
Debtor shall not agree to or suffer or permit any amendment, modification or waiver of or under the
BFC Program Contracts that would affect in any way the Participation Interests that have been
financed by Secured Party pursuant to the Credit Agreement.

     (c) Other Documents and Actions. Debtor shall, within 10 days of request by Secured
Party, give, execute, deliver, file or record any financing statement, notice, instrument,
agreement or other document that may be necessary or desirable in the reasonable judgment of
Secured Party to create, preserve, perfect or validate the security interest granted pursuant
hereto or to enable Secured Party to exercise and enforce the rights of Secured Party hereunder
with respect to such security interest.

     (d) Additional Collateral. Not later than one Business Day after the date of any
written demand by the Secured Party made upon the Debtor at any time after February 15, 2008 when
there is a Collateral Deficiency, the Borrower shall deposit into the Securities Account cash in
the amount of the Additional Collateral Amount stated in such demand, which shall thereupon
constitute part of the Collateral. Any such demand shall include a computation of the Additional
Collateral Amount and the Secured Party’s forecast of the amount of delinquent HSBC RALs originated
during 2008 as of December 31, 2008 and shall be conclusive and binding in the absence of manifest
error. Without limiting the foregoing, the Additional Collateral Amount so deposited shall be made
available from funds of the Debtor and not from collections distributable to the Secured Party
under the Direct Pay Provisions.

 

 

     (e) Control Agreement. Debtor shall take any and all actions required or requested
by Secured Party from time to time to cause Secured Party to maintain exclusive control the
Securities Account and for that purpose Debtor shall enter into the Control Agreement with Secured
Party and the Securities Intermediary. Debtor agrees that Debtor shall not withdraw any money or
property from the Securities Account or modify or terminate the Control Agreement or any customer
agreement relating to the Securities Account without the prior written consent of Secured Party.

     (f) Other Liens. Debtor shall not create, permit or suffer to exist, and shall
defend the Collateral against and take such other action as is necessary to remove, any Lien on the
Collateral and shall defend the right, title and interest of Secured Party in and to the Collateral
and in and to all Proceeds thereof against the claims and demands of all Persons whatsoever.

     (g) Preservation of Rights. Whether or not any Event of Default has occurred or is
continuing, Secured Party may, but shall not be required to, take any actions Secured Party
reasonably deems necessary or appropriate to preserve any Collateral or any rights against third
parties to any of the Collateral and Debtor shall, within 30 days of demand by Secured Party, pay,
or reimburse Secured Party for, all expenses incurred in connection therewith.

     (h) Changes in Name, etc. The name of Debtor that appears above its signature on
this Agreement is its full and correct legal name as it appears in its certificate of formation.
Debtor shall notify Secured Party promptly in writing prior to any change in Debtor’s name,
identity, limited liability company structure or state of formation.

     (i) Financing Statements. Debtor hereby irrevocably authorizes Secured Party, at
Debtor’s expense, to file such financing and continuation statements relating to this Agreement,
without Debtor’s signature, as Secured Party may deem appropriate, and appoints Secured Party as
Debtor’s attorney-in-fact to execute any such statements in Debtor’s name and to perform all other
acts which Secured Party deems appropriate to perfect and continue the security interest created
hereby.

     6. Remedies. During the period during which an Event of Default shall have occurred
and be continuing:

     (a) Secured Party shall have, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a Secured Party upon default under the
Uniform Commercial Code (whether or not the Uniform Commercial Code applies to the affected
Collateral) and Secured Party may, without notice, demand or legal process of any kind except as
may be required by law, at any time or times (i) if Secured Party shall have requested that Debtor
assemble any tangible Collateral pursuant to Section 6(a)(ii) hereof and Debtor shall have failed
to do so in a commercially reasonable time, enter Debtor’s premises and take physical possession of
such tangible Collateral and maintain such possession on Debtor’s premises, at no cost to Secured
Party, or remove such tangible Collateral or any part thereof to such other place or places as
Secured Party may desire, (ii) require Debtor to, and Debtor hereby agrees to, assemble any
tangible Collateral as directed by Secured Party and make it available to Secured Party at a place
to be designated by Secured Party which is reasonably convenient to

 

 

Secured Party and Debtor and (iii) without notice except as specified below, sell, lease,
assign, grant an option or options to purchase or otherwise dispose of the Collateral or any part
thereof at public or private sale, at any exchange, broker’s board or at any of the offices of
Secured Party or elsewhere, for cash, on credit or for future delivery, and upon such other terms
as Secured Party may deem commercially reasonable. Debtor agrees that, to the extent notice of
sale shall be required by law, at least 10 days’ notice to Debtor of the time and place of any
public sale or the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Secured Party may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor and such sale may, without further
notice, be made at the time and place to which it was so adjourned;

     (b) Secured Party may make any compromise or settlement deemed desirable with respect to any
of the Collateral and may extend the time of payment, arrange for payment in installments or
otherwise modify the terms of, any of the Collateral;

     (c) Secured Party may, in the name of Secured Party or in the name of Debtor or otherwise,
demand, sue for, collect or receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral, but shall be under no obligation to do so; and

     (d) Secured Party may take any action and exercise any right or remedy available to it under
the Control Agreement, including any right to give instructions or entitlement orders to the
Securities Intermediary under the Control Agreement and to dispose of any Collateral in the
Securities Account as provided in Section 6(a).

     7. Deficiency; Application of Proceeds. If the proceeds of sale, collection or other
realization of or upon the Collateral are insufficient to cover the costs and expenses of such
realization and the payment in full of the Obligations, Debtor shall remain liable for any
deficiency. The proceeds of any collection, sale or other realization of all or any part of the
Collateral shall be applied first, to payment of all expenses payable or reimbursable by Debtor
under the Loan Documents in connection with such collection, sale or other realization on the
Collateral, and then as provided in the Credit Agreement.

     8. Power of Attorney. Debtor hereby irrevocably constitutes and appoints Secured
Party, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Debtor and in the name of Debtor or in
its own name, from time to time in the discretion of Secured Party, after the occurrence and during
the continuance of an Event of Default, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute and deliver any and all documents
and instruments which may be necessary or desirable to accomplish the purposes of this Agreement
and, without limiting the generality of the foregoing, hereby gives Secured Party the power and
right, on behalf of Debtor, without notice to or assent by Debtor, to do the following upon the
occurrence and during the continuance of an Event of Default:

 

 

     (a) to ask, demand, collect, receive and give acquittance and receipts for any and all moneys
due and to become due under any Collateral and, in the name of Debtor or its own name or otherwise,
to take possession of and endorse and collect any checks, drafts, notices acceptances or other
instruments for the payment of monies due under any Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed appropriate by Secured
Party for the purpose of collecting any and all such moneys due under any Collateral whenever
payable and to file any claim or to take any other action or proceeding or otherwise deemed
appropriate by Secured Party for the purpose of collecting any and all such moneys due under any
Collateral;

     (b) to pay or discharge charges or Liens levied or placed on or threatened against the
Collateral;

     (c) to direct any Contract Obligor or other party liable under any of the Collateral to make
payment of any and all monies due and to become due thereunder directly to Secured Party or as
Secured Party may direct, and to receive payment of and receipt for any and all moneys, claims and
other amounts due and to become due in respect of or arising out of any Collateral;

     (d) to sign and indorse any invoices, drafts against debtors, assignments, verifications and
notices in connection with or relating to the Collateral;

     (e) to commence and prosecute any suits, actions or proceedings to collect the Collateral or
any part thereof and to enforce any other right in respect of any Collateral;

     (f) to participate in the defense of any suit, action or proceeding brought against Debtor
with respect to any Collateral, or to defend same with Debtor’s consent;

     (g) to settle, compromise or adjust any such suit, action or proceeding as it relates to the
Collateral and, in connection therewith, to give such discharges or releases as Secured Party may
deem appropriate;

     (h) to notify each Contract Obligor in respect of any BFC Program Contracts that such
Collateral has been assigned to Secured Party and that any payments due or to become due in respect
of such Collateral are to be made directly to Secured Party; and to communicate in its own name
with any party to any BFC Program Contract with regard to the assignment of the right, title and
interest of Debtor in and under the BFC Program Contracts hereunder and other matters relating
thereto;

     (i) to execute, in connection with any sale of Collateral provided for in Section 6
hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect
to the Collateral; and

     (j) generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Secured Party were the absolute owner
thereof for all purposes and to do, at Secured Party’s option and at Debtor’s expense, at any time
or from time to time, all acts and things which Secured Party reasonably

 

 

deems necessary to protect, preserve or realize upon the Collateral and Secured Party’s Lien
therein, in order to effect the intent of this Agreement, all as fully and effectively as Debtor
might do.

The power of attorney granted hereunder is a power coupled with an interest, shall be irrevocable
until this Agreement is terminated pursuant to Section 9, and shall not limit the rights of Secured
Party when no Event of Default shall have occurred and be continuing.

     9. Termination. This Agreement and the security interests granted hereunder shall not
terminate until the termination of the Commitment of the Secured Party under the Credit Agreement
and the full and complete payment and satisfaction of all Obligations (regardless of whether the
Credit Agreement shall have earlier terminated), at which time Secured Party shall notify (i) the
Securities Intermediary of the termination of the Control Agreement pursuant to Section 15 thereof
and (ii) HSBC TFS of the termination of the HSBC TFS Letter pursuant to paragraph 3 thereof.

     10. Further Assurances. At any time and from time to time, within 10 days of request
of Secured Party, and at the sole expense of Debtor, Debtor shall duly execute and deliver any and
all such further instruments, documents and agreements and take such further actions as Secured
Party may reasonably require in order for Secured Party to obtain the full benefits of this
Agreement, including, without limitation, using Debtor’s best efforts to secure all consents and
approvals necessary or appropriate for the assignment to Secured Party of any Collateral held by
Debtor or in which Debtor has any rights not heretofore assigned.

     11. Limitation on Duty of Secured Party. The powers conferred on Secured Party under
this Agreement are solely to protect the Secured Party’s interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any of the Collateral. Secured Party shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers and neither Secured
Party nor any of its officers, directors, employees or agents shall be responsible to Debtor for
any act or failure to act, except for gross negligence or willful misconduct. Without limiting the
foregoing, Secured Party shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if such Collateral is accorded treatment
substantially equivalent to that which Secured Party, in its individual capacity, accords its own
property consisting of the type of Collateral involved, it being understood and agreed that Secured
Party shall have no responsibility for taking any necessary steps, other than steps taken in
accordance with the standard of care set forth above, to preserve rights against any Person with
respect to any Collateral.

     12. Private Sales. Debtor recognizes that Secured Party may be unable to
effect a public sale of certain of the Collateral by reason of prohibitions contained in the
Securities Act of 1933, as amended, and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group of purchasers which
will be obliged to agree, among other things, to acquire such Collateral for their own account for
investment and not with a view to the distribution or resale thereof. Debtor acknowledges and

 

 

agrees that any such private sale may result in prices and other terms less favorable than if such
sale were a public sale and, notwithstanding such circumstances, agrees that, solely by reason of
such circumstances, any such private sale shall be deemed to have been made in a commercially
reasonable manner; provided, that nothing in this Section 12 shall otherwise relieve Secured Party
of any duty to proceed in a commercially reasonable manner in connection with such private sale.
Secured Party shall be under no obligation to delay a sale of any of the Collateral for the period
of time necessary to permit registration of any Collateral for public sale under such Act or
applicable state securities laws.

     13. Miscellaneous.

     (a) No Waiver. No failure on the part of Secured Party to exercise, and no course of
dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by Secured Party of any
right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. The rights and remedies hereunder provided are cumulative and
may be exercised singly or concurrently, and are not exclusive of any rights and remedies provided
by law.

     (b) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

     (c) Notices. All notices, demands and requests that any party is required or elects
to give to any other party shall be given in accordance with the provisions of the Credit
Agreement.

     (d) Amendments. The terms of this Agreement may be waived, altered or amended only by
an instrument in writing duly executed by Debtor and Secured Party.

     (e) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of each of the parties hereto; provided, that
Debtor shall not assign or transfer its rights or delegate its obligations hereunder without the
prior written consent of Secured Party.

     (f) Counterparts; Headings. This Agreement may be executed in any number of
counterparts and by any party on any counterpart, all of which together shall constitute one and
the same instrument. The headings in this Agreement are for convenience of reference only and
shall not alter or otherwise affect the meaning hereof.

     (g) Severability. If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally construed in favor of
Secured Party in order to carry out the intentions of the parties hereto as nearly as may be
possible, and the invalidity or unenforceability of any provision in any jurisdiction shall not
affect the validity or enforceability of such provision in any other jurisdiction.

 

 

     IN WITNESS WHEREOF, the parties have caused this Security Agreement to be duly executed and
delivered as of the date first written above.

	 	 	 	 	 
	 	BLOCK FINANCIAL LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HSBC FINANCE CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

EXHIBIT B

[FORM OF CONTROL AGREEMENT]

INVESTMENT ACCOUNT CONTROL AGREEMENT

     INVESTMENT ACCOUNT CONTROL AGREEMENT dated as of January 10, 2008 among BLOCK FINANCIAL LLC, a
Delaware limited liability company (“Debtor”), HSBC FINANCE CORPORATION (“Secured
Party”), a Delaware corporation, and HSBC INVESTOR FUNDS (the “Securities
Intermediary”), a Massachusetts business trust.

     WHEREAS, Debtor, Secured Party and H&R Block, Inc. have entered into a Credit and Guarantee
Agreement dated as of January 10, 2008 (as amended, restated or otherwise modified and in effect
from time to time, the “Credit Agreement”) pursuant to which Secured Party has agreed,
subject to the terms and conditions thereof, to make loans to Debtor from time to time.

     WHEREAS, Secured Party has required, as a condition to its making loans under the Credit
Agreement, that Debtor execute and deliver to Secured Party a Security Agreement (as amended,
restated or otherwise modified and in effect from time to time, the “Security Agreement”),
which Security Agreement creates a security interest in certain property of Debtor, including the
Securities Account, as hereinafter defined, maintained with Securities Intermediary by Debtor in
which certain cash balances, securities, financial assets and other investment property are held.

     WHEREAS, Secured Party, Debtor and Securities Intermediary have agreed to enter into this
Agreement to perfect Secured Party’s security interests in the Collateral, as defined below.

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     Section 1. Meaning of “UCC”. All references herein to the “UCC” shall mean
the Uniform Commercial Code as in effect in the State of New York.

     Section 2. Establishment of Securities Account. The Securities Intermediary hereby
confirms that (i) the Securities Intermediary has established account number 615878 in the name
Debtor (such account and any successor account, the “Securities Account”), (ii) the
Securities Account is a “securities account” as such term is defined in Section 8-501(a) of the
UCC, (iii) pursuant to that the Security Agreement, Secured Party has a security interest in
Debtor’s right, title and interest in and to such Securities Account and all cash balances,
securities, instruments, investment property and financial assets maintained therein from time to
time, including any Additional Collateral Amount (as defined in the Security Agreement) deposited
into the Securities Account at any time (collectively, “Collateral”) and all securities
entitlements relative thereto, (iv) the Securities Intermediary shall, subject to the terms of this
Agreement, treat Secured Party as entitled to exercise the rights relating to any Collateral
credited to the Securities Account, (v) all property delivered to the Securities Intermediary
pursuant to the Security Agreement will be promptly credited to the Securities Account and become
Collateral, and (vi) all Collateral credited to the Securities Account shall be registered in the
name of the Secured

 

 

Party, endorsed to the Secured Party or in blank, and in no case will any Collateral credited
to the Securities Account be registered in the name of the Debtor, payable to the order of the
Debtor or specially endorsed to the Debtor except to the extent the foregoing have been specially
endorsed to the Secured Party or in blank.

     Section 3. “Financial Assets” Election. The Securities Intermediary hereby agrees
that each item of property (whether investment property, financial asset, security, instrument or
cash) credited to the Securities Account shall be treated as a “financial asset” within the meaning
of Section 8-102(a)(9) of the UCC.

     Section 4. Sole Control. Secured Party shall have sole control over the Securities
Account. Securities Intermediary shall not accept any direction, instructions, or entitlement
orders with respect to the Securities Account or the Collateral credited thereto from any person
other than Secured Party, except as provided in Section 6 and unless otherwise ordered by a court
of competent jurisdiction.

     Section 5. Entitlement Orders. The Securities Intermediary hereby agrees that if
Secured Party delivers to the Securities Intermediary and its transfer agent identified in Section
14 (the “Transfer Agent”) an “entitlement order” (within the meaning of Section 8-102(a)(8) of the
UCC) relating to the Securities Account, the Securities Intermediary shall comply with such
entitlement order (and shall cause the Transfer Agent to so comply) without further consent by the
Debtor or any other person, and Debtor hereby irrevocably authorizes such compliance. Secured
Party will only issue an entitlement order following an “Event of Default” under the Credit
Agreement and for the purpose of directing the Securities Intermediary to distribute Collateral to
the Secured Party for application to the obligations of the Debtor under the Credit Agreement and
the Security Agreement.

     Section 6. Procedures for Securities Account. (a) The Debtor may from time to time
deposit in the Securities Account cash as Additional Collateral Amounts as provided in the Security
Agreement.

     (b) The Securities Intermediary shall, or shall cause the Transfer Agent or another servicer
provider to, determine the fair market value of the assets in the Securities Account from time to
time in accordance with its then current policies and procedures on the request of the Secured
Party and shall notify, or cause the Transfer Agent or such other service provider to notify, the
Secured Party of such fair market value.

     (c) Without Secured Party’s prior written consent: (i) neither Debtor nor any party other
than Secured Party may withdraw any Collateral from the Securities Account and (ii) the Securities
Intermediary will not comply with any entitlement order or request to withdraw any Collateral from
the Securities Account given by any party other than Secured Party.

     Section 7. Subordination of Lien; Waiver of Set-Off. In the event that the Securities
Intermediary has or subsequently obtains by agreement, operation of law or otherwise a security
interest in the Securities Account or any Collateral credited thereto, the Securities Intermediary
hereby agrees that such security interest shall be subordinate to the security interest of the
Secured Party. The Collateral will not be subject to deduction, set-off, banker’s lien, or any

 

 

other right in favor any person other than the Secured Party except for the payment of the
customary fees and expenses of the Securities Intermediary.

     Section 8. Choice of Law. Both this Agreement and the Securities Account shall be
governed by the laws of the State of New York. Regardless of any provision in any other agreement,
for purposes of the UCC, New York shall be deemed to be the Securities Intermediary’s location and
the Securities Account (as well as the securities entitlements related thereto) shall be governed
by the laws of the State of New York.

     Section 9. Conflict with other Agreements. There are no other agreements entered into
between the Securities Intermediary and the Debtor with respect to the Securities Account except
for a certain account application dated December 15, 2006 (the “Account Agreement”), which
the Securities Intermediary and the Debtor agree remains in full force and effect in accordance with
its terms. In the event of any conflict between this Agreement (or any portion thereof) and any
other agreement now existing (including the Account Agreement) or hereafter entered into, the terms
of this Agreement shall prevail.

     Section 10. Indemnification The Securities Intermediary shall have no liability under
this Agreement except in the case of its gross negligence or willful misconduct. Debtor agrees to
indemnify Securities Intermediary and Transfer Agent against all claims, liabilities and expenses
incurred, sustained or payable by Securities Intermediary or Transfer Agent arising out of this
Agreement except to the extent directly caused by the Securities Intermediary’s or the Transfer
Agent’s gross negligence or willful misconduct.

     Section 11. Amendments. No amendment or modification of this Agreement or waiver of
any right hereunder shall be binding on any party hereto unless it is in writing and is signed by
all of the parties hereto.

     Section 12. Notice of Adverse Claims. Except for the claims and interests of the
Secured Party and of Debtor in the Securities Account, the Securities Intermediary does not know of
any claim to, or interest in, the Securities Account or in any financial asset credited thereto.
If any person asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the Securities Account or in
any Collateral carried therein, the Securities Intermediary will promptly notify the Secured Party
and Debtor thereof.

     Section 13. Successors. The terms of this Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective corporate successors or heirs and
personal representatives.

     Section 14. Notices. All notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

	 	 	 	 	 
	 

	 	Secured Party:
	 	HSBC Finance Corporation
	 

	 	 	 	2700 Sanders Road
	 

	 	 	 	Prospect Heights, IL 60070
	 

	 	 	 	Attention: Treasurer
	 

	 	 	 	Fax no.: . (847) 205-7538

 

 

	 	 	 	 	 
	 

	 	 	 	with copies to:
	 
	 	 	 	 
	 

	 	 	 	HSBC Finance Corporation
	 

	 	 	 	2700 Sanders Road
	 

	 	 	 	Prospect Heights, IL 60070
	 

	 	 	 	Attention: Deputy General Counsel-Corporate
	 

	 	 	 	Law Fax no.: (847) 564-6366
	 
	 	 	 	 
	 

	 	 	 	HSBC Securities, Inc.
	 

	 	 	 	425 Fifth Avenue, Lower Level
	 

	 	 	 	New York, N.Y. 10018
	 

	 	 	 	(Telecopy No. (212) 525-2479)
	 

	 	 	 	Attention: Vince Clark
	 
	 	 	 	 
	 

	 	 	 	HSBC Taxpayer Financial Services Inc.
	 

	 	 	 	200 Somerset Corporate Boulevard
	 

	 	 	 	Bridgewater, N.J. 08807
	 

	 	 	 	(Telecopy No. (908) 203-4211)
	 

	 	 	 	attention: CEO and Managing Director
	 
	 	 	 	 
	 

	 	 	 	HSBC Taxpayer Financial Services Inc.
	 

	 	 	 	90 Christiana Road
	 

	 	 	 	New Castle, DE 19707
	 

	 	 	 	(Telecopy No. (302) 327-2507)
	 

	 	 	 	attention: General Counsel
	 
	 	 	 	 
	 

	 	Debtor:
	 	Block Financial LLC
	 

	 	 	 	One H&R Block Way
	 

	 	 	 	Kansas City, MO 64105
	 

	 	 	 	Attention: Becky Shulman (Telecopy
	 

	 	 	 	No. (816) 854-8043), David Staley
	 

	 	 	 	(Telecopy No. (816) 854-8043) and Andrew
	 

	 	 	 	 Somora (Telecopy No. (816)
802-1043)
	 
	 	 	 	 
	 

	 	Securities Intermediary:
	 	HSBC Investor Funds
	 

	 	 	 	c/o HSBC Investments (USA) Inc.
	 

	 	 	 	452 Fifth Avenue
	 

	 	 	 	New York, NY 10018
	 

	 	 	 	Attention: Richard Fabietti
	 

	 	 	 	Telephone: 212 525-2387
	 

	 	 	 	Fax No.: 917 525-1032

 

 

	 	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	HSBC Investments (USA) Inc.
	 

	 	 	 	452 Fifth Avenue
	 

	 	 	 	New York, NY 10018
	 

	 	 	 	Attention: James M. Curtis
	 

	 	 	 	Telephone: 212 525-6961
	 

	 	 	 	Fax No.: 917 229-5219
	 
	 	 	 	 
	 

	 	Transfer Agent:
	 	Citi Fund Services Ohio, Inc.
	 

	 	 	 	3455 Stelzer Road
	 

	 	 	 	Columbus, Ohio 43219
	 

	 	 	 	Attention: Ayre Spencer
	 

	 	 	 	TA Risk Management
	 

	 	 	 	Telephone: 1-877-244-2424
	 

	 	 	 	Telecopy: (614) 428-3061

Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed to have been given
on the date of receipt. Debtor, Secured Party or Securities Intermediary may, in its sole
discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of such
procedures may be limited to particular notices or communications.

     Section 15. Termination. The rights and powers granted herein to the Secured Party
have been granted in order to perfect its security interests in the Securities Account, are powers
coupled with an interest and will neither be affected by the bankruptcy of Debtor nor by the lapse
of time. This Agreement, the rights and powers granted herein to the Secured Party, and the
obligations of the Securities Intermediary hereunder shall automatically terminate upon the
termination of the Secured Party’s security interests pursuant to the terms of the Security
Agreement. The Secured Party shall promptly provide written notice of such termination to the
Securities Intermediary.

     Section 16. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any party hereto may
execute this Agreement by signing and delivering one or more counterparts.

 

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered
as of the date first written above.

	 	 	 	 	 
	 	BLOCK FINANCIAL LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HSBC FINANCE CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HSBC INVESTOR FUNDS,

as Securities Intermediary

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

EXHIBIT C

[FORM OF HSBC TFS LETTER]

HSBC TAXPAYER FINANCIAL SERVICES, INC.

90 Christiana Road

New Castle, Delaware 19720

As of January 10, 2008

HSBC Finance Corporation

2700 Sanders Road

Prospect Heights, IL 60070

Block Financial LLC

One H&R Block Way

Kansas City, MO 64105

Ladies and Gentlemen:

     HSBC Taxpayer Financial Services (“HSBC TFS”) acknowledges that HSBC Finance
Corporation (the “Lender”) and Block Financial LLC (the “Borrower”) have notified
HSBC TFS that they are party to (1) a Credit and Guarantee Agreement dated as of January 10, 2008
(as amended, restated or otherwise modified and in effect from time to time, the “Credit
Agreement”) with H&R Block, Inc., as Guarantor, pursuant to which the Lender has agreed,
subject to the terms and conditions thereof, to make loans to the Borrower from time to time and
(2) a Security Agreement dated as of January 10, 2008 (as amended, restated or otherwise modified
and in effect from time to time, the “Security Agreement”) pursuant to which the Borrower
has granted to the Lender a security interest in certain property, including the Borrower’s right,
title and interest in and to the Servicing Agreement and the Participation Agreement to secure the
obligations of the Borrower under the Credit Agreement. The parties are entering into this letter
agreement to set forth certain agreements among them.

     1. Definitions. Capitalized terms used herein that are not otherwise defined herein
shall have the meanings set forth in the Credit Agreement.

 

 

     2. Instructions. As contemplated in the Credit Agreement and the Security
Agreement, the Borrower hereby authorizes and instructs HSBC TFS: (1) to give notice to the Lender
of the Purchase Price of all Participation Interests to be purchased by the Borrower under the
Participation Agreement, such notice to be given to the Lender simultaneously with the giving of
notice to the Borrower under Section 4.3 of the Participation Agreement but in any case not later
than 9:30 a.m., New York City time; (2) to accept from the Lender for the account of the Borrower
the proceeds of Loans made by the Lender to the Borrower under the Credit Agreement in payment of
the Purchase Price of Participation Interests to the extent of the amount of such Loans; (3) to pay
97% of all amounts from time to time payable to the Borrower by HSBC TFS under Section 6 of the
Participation Agreement in respect of the repurchase of Participation Interests which have been
financed by the Lender direct to the Lender to such account as it shall specify from time to time;
and (4) to pay 97% of all amounts from time to time to be remitted to the Borrower by HSBC TFS
under Section 3.4(b)(iii) of the Servicing Agreement in respect of principal of HSBC RALs in which
the Borrower has purchased Participation Interests which have been financed by the Lender directly
to the Lender to such account as it shall specify from time to time; provided, that so long as no
Event of Default has occurred and is continuing under the Credit Agreement, HSBC TFS is authorized
and instructed to pay 3% of all amounts from time to time to be remitted to the Borrower by HSBC
TFS under Section 3.4(b)(ii) of the Servicing Agreement in respect of HSBC RALs in which the
Borrower has purchased Participation Interests which have been financed by the Lender directly to
the Borrower to such account as it shall specify from time to time.

     The Borrower and HSBC TFS agree that the authorizations and instructions in the preceding
paragraph may not be waived, modified or revoked without the prior written agreement of the Lender.
HSBC TFS hereby acknowledges and agrees to the instructions in the preceding paragraph. The
Lender agrees that it shall give prompt written notice to HSBC TFS and the Borrower when all Loans
borrowed and other amounts payable under the Credit Agreement have been paid in full and no further
Commitment exists thereunder, at which time the authorizations and instructions in the preceding
paragraph and the agreements of the parties in this letter agreement shall terminate.

     3. Miscellaneous. Except as provided in paragraph 2, all notices and other
communications provided for in this letter agreement shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as
follows:

	 	 	 	 	 
	 

	 	Lender:
	 	HSBC Finance Corporation
	 

	 	 	 	2700 Sanders Road
	 

	 	 	 	Prospect Heights, IL 60070
	 

	 	 	 	Attention: Treasurer
	 

	 	 	 	Fax no.: (847) 205-7538
	 
	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 

	 	 	 	HSBC Finance Corporation
	 

	 	 	 	2700 Sanders Road
	 

	 	 	 	Prospect Heights, IL 60070

 

 

	 	 	 	 	 
	 

	 	 	 	Attention: Deputy General Counsel- Corporate

Law
	 
	 

	 	 	 	Fax no.: (847) 564-6366
	 

	 	 	 	HSBC Securities, Inc.
	 

	 	 	 	425 Fifth Avenue, Lower Level
	 

	 	 	 	New York, N.Y. 10018
	 

	 	 	 	(Telecopy No. (212) 525-2479)
	 

	 	 	 	Attention: Vince Clark
	 
	 	 	 	 
	 

	 	 	 	HSBC Taxpayer Financial Services Inc.
	 

	 	 	 	200 Somerset Corporate Boulevard
	 

	 	 	 	Bridgewater, N.J. 08807
	 

	 	 	 	(Telecopy No. (908) 203-4211)
	 

	 	 	 	attention: CEO and Managing Director
	 
	 	 	 	 
	 

	 	 	 	HSBC Taxpayer Financial Services Inc.
	 

	 	 	 	90 Christiana Road
	 

	 	 	 	New Castle, DE 19707
	 

	 	 	 	(Telecopy No. (302) 327-2507)
	 

	 	 	 	attention: General Counsel
	 
	 	 	 	 
	 

	 	Borrower:
	 	Block Financial
	 

	 	 	 	One H&R Block Way
	 

	 	 	 	Kansas City, MO 64105
	 

	 	 	 	Attention: Becky Shulman (Telecopy
	 

	 	 	 	No. (816) 854-8043), David Staley
	 

	 	 	 	(Telecopy No. (816) 854-8043) and Andrew
	 

	 	 	 	Somora (Telecopy No. (816) 802-1043)
	 
	 	 	 	 
	 

	 	HSBC TFS:
	 	HSBC Taxpayer Financial Services Inc.
	 

	 	 	 	90 Christiana Road
	 

	 	 	 	New Castle, Delaware 19720
	 

	 	 	 	Attention: CEO and Managing Director
	 

	 	 	 	Telephone: 908-203-4441
	 

	 	 	 	Fax No.: 302-327-2533

Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All notices and other communications given to any
party hereto in accordance with the provisions of this letter agreement shall be deemed to have
been given on the date of receipt. Without limiting paragraph 2 hereof, the Lender, the Borrower
or HSBC TFS may, in its sole discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant

 

 

to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or communications.

     This letter agreement shall be governed by and construed in accordance with the law of the
State of New York.

 

 

     By executing this letter agreement in the space below, each of the Borrower, HSBC TFS and the
Lender agree to the terms and provision of this letter agreement.

	 	 	 	 	 
	 	Very truly yours,

HSBC TAXPAYER FINANCIAL SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Accepted and agreed:

HSBC FINANCE CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Accepted and agreed:

BLOCK FINANCIAL LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

EXHIBIT D

[FORM OF OPINION OF STINSON MORRISON HECKER LLP]

January 10, 2008

HSBC Finance Corporation

2700 Sanders Road

Prospect Heights, Illinois 60070

Ladies and Gentlemen:

          We have acted as special counsel for Block Financial LLC (the “Borrower”) and H&R Block, Inc.
(the “Guarantor” and, together with the Borrower, the “Credit Parties”), in connection with the
Credit and Guarantee Agreement, dated as of January 10, 2008 (the “Credit Agreement”), by and among
the Borrower, the Guarantor and HSBC Finance Corporation (the “Lender”). Unless otherwise defined
herein, capitalized terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and capitalized terms defined in the Security Agreement
(defined below) and used herein, but not defined in the Credit Agreement, shall have the meanings
given to them in the Security Agreement.

          In connection with this opinion letter, we have examined originally executed counterparts or
other copies identified to our satisfaction of the following documents (the “Reviewed Documents”):

	 	(a)	 	the Credit Agreement;
	 
	 	(b)	 	the Security Agreement, dated as of January 10, 2008 (the “Security
Agreement”), between the Borrower and the Lender;
	 
	 	(c)	 	the Investment Account Control Agreement dated as of January 10, 2008 (the
“Control Agreement”), among the Borrower, the Lender and HSBC Investor Funds (the
“Securities Intermediary”);
	 
	 	(d)	 	the letter agreement, dated as of January 10, 2008 (the “HSBC TFS Letter”)
among the Borrower, the Lender and HSBC TFS;
	 
	 	(e)	 	the Form UCC-1 Financing Statement naming the Borrower, as Debtor, and the
Lender, as Secured Party, filed or to be filed by Lender in the office of the Secretary
of State of Delaware in the form attached hereto as Exhibit A (the “Financing
Statement”);

 

 

	 	(f)	 	the following documents regarding the Borrower: (i) the certificate of
conversion and certificate of formation and any amendments thereto certified as of the
date hereof by the Secretary of the Borrower, (ii) the Operating Agreement, dated as of
January 1, 2008, and any amendments thereto certified as of the date hereof by the
Secretary of the Borrower, (iii) a copy of the resolutions of the sole member of the
Borrower certified as of the date hereof by the Secretary of the Borrower and (iv) a
certificate of good standing dated January 8, 2008 issued by the Secretary of State of
Delaware;
	 
	 	(g)	 	the following documents regarding the Guarantor: (i) the articles of
incorporation and any amendments thereto certified as of the date hereof by the
Secretary of the Guarantor, (ii) the by-laws and any amendments thereto certified as of
the date hereof by the Secretary of the Guarantor, (iii) a copy of the resolutions of
the Board of Directors of the Guarantor certified as of the date hereof by the
Secretary of the Guarantor and (iv) a certificate of good standing dated January 8,
2008 issued by the Secretary of State of Missouri; and
	 
	 	(h)	 	such other, agreements, certificates, documents, orders, pleadings, records and
papers, including, without limitation, certificates of public officials and
certificates of representatives of the Borrower and the Guarantor, as we have deemed
appropriate, in our professional judgment, to render the opinions set forth below.

          The documents specified in items (a) through (d) above are hereinafter collectively called the
“Loan Documents” and individually, a “Loan Document.”

          In rendering the opinions and confirmations set forth herein, we have made, without
investigation on our part, the following assumptions:

     a. (i) Each Reviewed Document submitted to us as an original is authentic; (ii) each Reviewed
Document submitted to us as a certified, conformed, telecopied, photostatic, electronic or
execution copy conforms to the original of such document, and each such original is authentic;
(iii) all signatures appearing on Reviewed Documents are genuine; (iv) the execution, delivery and
performance of each Loan Document have been duly authorized by all requisite corporate, limited
liability company, partnership or other action on the part of, and each Loan Document has been duly
executed and delivered by, the parties thereto other than the Credit Parties, and each Loan
Document is, under all applicable laws, the valid and binding obligation of the parties thereto
(other than the Credit Parties) enforceable against such parties (other than the Credit Parties) in
accordance with its terms; (v) all natural persons who have signed or will sign any of the Reviewed
Documents had, or will have, as the case may be, the legal capacity to do so at the time of such
signature; and (vi) excluding Reviewed Documents, there is no agreement, understanding, course of
dealing or performance, usage of trade, or writing defining, supplementing, amending, modifying,
waiving or qualifying the terms of any of the Loan Documents.

 

 

     b. The statements, recitals, representations and warranties as to matters of fact set forth in
the Loan Documents are accurate and complete. All certificates and similar documents provided to
us by public officials are accurate and complete. The certificates provided to us by either or
both of the Credit Parties are accurate and complete as to the factual matters set forth therein.

     c. There is no circumstance (such as, but not limited to mutual mistake of fact or
misunderstanding, fraud in the inducement, duress, undue influence, waiver or estoppel) extrinsic
to the Loan Documents which might give rise to a defense against enforcement of any of the Loan
Documents.

     d. The conduct of the parties and their respective agents in connection with the Loan
Documents and the transactions contemplated thereby has complied with any requirements of good
faith, fair dealing, and conscionability.

     e. The Collateral exists, and the Borrower has sufficient rights in the Collateral to grant a
security interest therein under Section 9-203 of the New York UCC (defined below), the Missouri UCC
(defined below) or the Delaware UCC (defined below), as applicable, and we express no opinion as to
the nature or extent of the rights or title of the Borrower in and to any of the Collateral.

     f. Each opinion recipient is without notice of any defense against enforcement of any rights
created by, or any adverse claim to any property or security interest transferred or created as a
part of or contemplated by, the Loan Documents.

     g. The Financing Statement has been, or will be, properly filed and indexed in the Uniform
Commercial Code records of the Secretary of State of Delaware.

     h. The Securities Intermediary is a “securities intermediary” (as defined in § 8-102(a)(14) of
the New York UCC) with respect to the Collateral which is the subject of the Control Agreement.

          Based upon the foregoing, and subject to the assumptions, qualifications and limitations set
forth herein, we are of the opinion that as of this date:

          1. Borrower is a limited liability company validly existing and in good standing under the
laws of the State of Delaware, Guarantor is a corporation validly existing and in good standing
under the laws of the State of Missouri, and each Credit Party has the limited liability company or
corporate (as applicable) power to own its properties and to carry on its

 

 

business as presently conducted by it as described in the Guarantor’s Form 10-K for the year
ended April 30, 2007, as amended, or any of the Guarantor’s subsequent filings with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.

          2. Each Credit Party has all requisite limited liability company or corporate (as applicable)
power and authority to execute, deliver and perform its obligations under the Loan Documents to
which it is a party and has taken all necessary limited liability company or corporate (as
applicable) action to authorize the execution and delivery of, and the performance of its
obligations under, the Loan Documents to which it is a party.

          3. Each Credit Party has duly executed and delivered the Loan Documents to which it is a party
and such Loan Documents constitute the legal, valid and binding agreements of such Credit Party,
enforceable against such Credit Party in accordance with their respective terms.

          4. The execution and delivery by each Credit Party of each Loan Document to which it is a
party do not, and the performance of its obligations thereunder will not, (a) violate the
Borrower’s certificate of formation or Operating Agreement, dated as of January 1, 2008, or the
Guarantor’s articles of incorporation or by-laws, as the case may be, (b) violate any applicable
law, statute or regulation of the United States or the State of Missouri that we, based upon the
scope of our representation of and our experience with such Credit Party, reasonably recognize as
applicable to such Credit Party with respect to transactions of the type contemplated by the Loan
Documents, (c) violate any order, writ, judgment, injunction, decree, determination or award of any
court or other Governmental Authority binding upon such Credit Party of which we have knowledge, or
(d) breach, constitute a default under, result in the acceleration of (or entitle any party to
accelerate) the maturity of, any obligation of a Credit Party under, or result in or require the
creation of any lien upon or security interest in (other than pursuant to the Loan Documents) any
of its property pursuant to the terms of, the Bank Revolvers and the other financing agreements and
instruments and the BFC Program Contracts listed on Exhibit B attached hereto.

          5. No authorization or approval or other action by, and no notice to or filing with, any
Governmental Authority of the United States, the State of Missouri or the State of Delaware is
required for the execution and delivery by a Credit Party, or the validity or enforceability
against such Credit Party, of each Loan Document to which it is a party other than (i) such as have
been obtained, made or given and are in full force in effect, (ii) the filing of financing
statements (including the Financing Statement) under the Uniform Commercial Code pursuant to the
requirements of the Loan Documents and (iii) any authorization, approval, notice, filing or other
action which is not a condition required to be satisfied on or before the Effective Date but is
itself a future obligation of such Credit Party under a Loan Document.

          6. To our knowledge, there is no suit, action or proceeding pending against either Credit
Party before any court, governmental or regulatory authority, agency or commission, or board of
arbitration or overtly threatened against either Credit Party in writing which (whether pending or
threatened) challenges the legality, validity or enforceability of any Loan Document.

 

 

          7. The Security Agreement is effective to create in favor of the Lender a valid security
interest in all right, title and interest of the Borrower in the Collateral described in the
Security Agreement to secure the Obligations. Assuming that the Financing Statement was filed in
the office of the Secretary of State of Delaware (the “Filing Office”), the security interest of
the Lender in the Collateral has been duly perfected in that portion of the Collateral in which a
security interest may be perfected by the filing of a financing statement under the Delaware UCC.
Without limiting the foregoing, the security interest of the Lender in the Securities Account has
been perfected pursuant to the execution and delivery of the Control Agreement.

          8. The making of the Loans and the application of the proceeds thereof as provided in the
Credit Agreement do not violate Regulations T, U and X of the Board of Governors of the Federal
Reserve Board.

          9. The Borrower is not an “investment company” or a company “controlled by” an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as amended.

     Our opinions set forth above are subject to the following additional qualifications and
limitations:

	a.	 	The enforceability of each Loan Document is subject to the effect of applicable bankruptcy,
insolvency, reorganization, receivership, arrangement, moratorium, assignment for the benefit
of creditors and other similar laws affecting the rights and remedies of creditors. This
qualification includes, without limitation, the avoidance, fraudulent transfer and preference
provisions of the federal Bankruptcy Code of 1978 (11 U.S.C. §§ 101 et seq.), as amended, and
the fraudulent transfer and conveyance laws of the State of Missouri, and we render no opinion
that any transaction provided for in the Loan Documents would not be subject to avoidance or
otherwise adversely affected under such provisions or laws.

	b.	 	The enforceability of each Loan Document is subject to the effect of principles of equity
(including those respecting the availability of specific performance), whether considered in a
proceeding at law or in equity, and the limitations imposed by applicable procedural
requirements of applicable state or federal law.

	c.	 	The enforceability of each Loan Document is subject to (1) the effect of generally applicable
rules of law that limit or deny the enforceability of provisions (i) purporting to waive
defenses or rights or the obligations of good faith, fair dealing, diligence and
reasonableness; (ii) purporting to authorize a party to take discretionary independent actions
for the account of, or as agent or attorney-in-fact for, a Credit Party under a Loan Document;
or (iii) purporting to provide for the indemnification or exculpation of a party with respect
to such party’s intentional acts or gross negligence, with respect to securities law
violations or to the extent that such provisions violate public policy considerations; and (2)
the effect of generally applicable rules of law that may, where a portion of the contract may
be unenforceable, limit the enforceability of the balance of the contract to

 

 

	 	 	circumstances in which the unenforceable portion is not an essential part of the transaction
or contract.

	d.	 	We express no opinion as to the enforceability of (i) any contractual provision which either
directly or indirectly limits or tends to limit the time in which any suit or action may be
instituted by a party; (ii) any contractual provision which requires a party to execute and
deliver additional agreements or instruments other than agreements or instruments which are
limited in effect to effectuating the express terms of a Loan Document and do not expand or
modify such terms; (iii) any waiver by a party of personal service of process or any consent
of a party to service of process upon it in a manner that does not satisfy the requirements
of applicable law; (iv) any waiver by a party of its right to a jury trial, (v) any provision
of a Loan Document that purports to waive or modify the rules identified in Section 9-602 of
the applicable Uniform Commercial Code; and (vi) any contractual provision which would have
the effect of giving the Lender cumulative or duplicative remedies, to the extent such
cumulative or duplicate remedies purport to or would have the effect of compensating the
Lender in amounts in excess of the actual amount of the indebtedness owed to the Lender and
other loss suffered by the Lender.

	e.	 	The enforceability of any right of set-off in any of the Loan Documents is subject to the
effect of common law principles pertaining to set-off, such as mutuality of obligations,
maturity of obligations, and the like.

	f.	 	The enforceability of a Loan Document which purports to be a guarantee of, or the grant of a
lien or security interest for, the payment or performance of obligations of another person
(“guaranteed obligations”), including, without limitation, the applicable provisions
of the Credit Agreement, is subject to the effect of generally applicable rules of law that
may discharge the guarantor or grantor of such lien or security interest to the extent that
(i) action or inaction by the beneficiary of the guaranteed obligations impairs the value of
collateral securing guaranteed obligations to the detriment of such guarantor or grantor or
(ii) the guaranteed obligations are materially modified.

	g.	 	With respect to the recovery of attorneys’ fees under the Loan Documents, to the extent that
the laws of the State of Missouri are applicable, the provisions of Mo. Rev. Stat. § 408.092
limit the right to recover attorneys’ fees in connection with a “credit agreement” (as defined
in Mo. Rev. Stat. § 432.045.1) and reads in pertinent part as follows:

	 	 	 	Notwithstanding any other provision of law to the contrary, attorneys’ fees
are permitted to enforce a credit agreement provided the enforcing attorney
is a licensed member of the Missouri Bar or is authorized to practice law in
Missouri, and such fees meet one of the following requirements:

     (1) Such fees are included in a written credit agreement, and are not
otherwise prohibited by law; or

 

 

     (2) Such fees do not exceed fifteen percent of the outstanding credit
balance in default, provided such credit was extended by a for-profit
business or credit union. ...

At the court’s discretion, additional fees may be awarded to the attorney
for the prevailing party.

A “credit agreement” is defined in Mo. Rev. Stat. § 432.045.1 as “an
agreement to lend or forebear repayment of money, to otherwise extend
credit, or to make other financial accommodation.”

	h.	 	With respect to the enforceability of any contractual provision stating that the Credit
Agreement or any of the other Loan Documents or the obligations, rights or remedies of the
parties thereunder shall be governed by or construed or determined in accordance with the laws
of the State of New York, we call your attention to the following: Missouri courts generally
apply the rules of Section 187 of the Restatement (Second) of Conflicts of Law (1971) in
deciding whether to give effect to the parties’ choice of the state whose law will govern the
interpretation of their contractual rights and duties. State ex rel. Geil v. Corcoran, 623
S.W.2d 557, 559 (Mo. Ct. App. 1981); Davidson & Associates, Inc. v. Internet Gateway, 334 F.
Supp. 2d 1164, 1175 (E.D. Mo. 2004). Section 187 of the Restatement provides in pertinent
part as follows:

	 	(1)	 	The law of the state chosen by the parties to govern their
contractual rights and duties will be applied if the particular issue is one
which the parties could have resolved by an explicit provision in their
agreement directed to that issue.
	 
	 	(2)	 	The law of the state chosen by the parties to govern their
contractual rights and duties will be applied even if the particular issue is
one which the parties could not have resolved by an explicit provision in their
agreement directed to that issue unless either:

	 	(a)	 	the chosen state has no substantial
relationship to the parties or the transaction and there is no
other reasonable basis for the parties’ choice, or
	 
	 	(b)	 	application of the law of the chosen
state would be contrary to a fundamental policy of a state
which has a materially greater interest than the chosen state
in the determination of the particular issue and which, under
the rule of § 188 [of the Restatement], would be the state of
the applicable law in the absence of an effective choice of law
by the parties.

     While the Missouri choice of law rules are, nevertheless, not entirely settled,
we believe that a state or federal court sitting in the State of Missouri, properly
presented with the question and properly applying the choice of law rules of the
State of Missouri should honor the provisions of a Loan Document stating that, to
the extent provided therein, the rights and duties of the parties thereto are

 

 

to be governed by the laws of the State of New York (except as to matters of
procedure which may be governed by the laws of the forum state) unless either (a)
the State of New York has no substantial relationship to the parties to such Loan
Document or the transactions contemplated by such Loan Document and there is no
reasonable basis for such parties’ choice or (b) application of the laws of the
State of New York would be contrary to a fundamental policy of the State of Missouri
and the State of Missouri has materially greater interest than the State of New York
in the determination of the particular issue.

	i.	 	With respect to the enforceability of any contractual provision in the Credit Agreement or
any other Loan Document whereby the parties submit to the jurisdiction of the federal and New
York State courts located in the City or County of New York in connection with any suit,
action or proceeding related to such agreement or any of the matters contemplated thereby, we
call your attention to the following: Missouri courts generally follow the holding of the
Missouri Supreme Court in High Life Sales Co. v. Brown-Forman Corp., 823 S.W.2d 493 (Mo. 1992)
that a forum selection clause in a contract should be enforced unless it is unfair or
unreasonable to do so. Id. at 494. Factors considered by Missouri courts in determining the
fairness of enforcing forum selection clauses include (1) whether a forum selection clause is
a part of an adhesive contract (i.e., “one in which the parties have unequal standing in terms
of bargaining power (usually a large corporation versus an individual) and often involv[ing]
take-it-or-leave-it provisions in printed form contracts”, id. at 497), (2) whether the forum
selection clause was neutral and reciprocal (Id.) and (3) whether inclusion of the forum
selection clause in the contract was the product of fraud or coercion (Marano Enterprises v.
Z-Teca Restaurants, L.P., 254 F.3d 753, 757 (8th Cir. 2001)). There are also
Missouri cases which have found a forum selection clause to be unreasonable (e.g., High Life
Sales).

	j.	 	In addition to the other qualifications set forth in this opinion letter regarding the
enforceability of a Loan Document under the laws of the State of Missouri, certain waivers,
procedures, remedies and other provisions of any Loan Document covered by such opinion may be
rendered unenforceable or limited by the laws, regulations or judicial decisions of the State
of Missouri within the scope of this opinion letter, but such laws, regulations and judicial
decisions would not render any of such Loan Documents invalid as a whole under the laws of the
State of Missouri and would not make the remedies available under such Loan Documents
inadequate for the practical realization of the principal rights and benefits purporting to be
afforded thereby, except for the economic consequences of any judicial, administrative or
other delay or procedure which may be imposed by applicable law.

	k.	 	With respect to our opinions regarding security interests set forth in opinion paragraph 7
above, we advise you that (i) any security interest in “proceeds” (as defined in the New York
UCC, the Missouri UCC or the Delaware UCC, as applicable) of Collateral may be limited as to
perfection and effectiveness to the extent provided in Section 9-315 of the New York UCC, the
Missouri UCC or the Delaware UCC, as applicable; and (ii) the Lender’s rights under the Loan
Documents are subject to the rights of the following parties under circumstances described in
the applicable sections of the New York UCC, the Missouri UCC or the Delaware UCC, as
applicable, set forth below: (a) purchasers of

 

 

	 	 	chattel paper or instruments under the circumstances described in Section 9-330 or (b)
holders in due course of negotiable instruments, holders to whom negotiable documents of
title have been duly negotiated, or protected purchasers of securities, in each case, under
the circumstances described in Section 9-331.

	l.	 	We note that in order to continue the perfection of the security interest in that portion of
the Collateral which has been perfected by the filing of the Financing Statement under the
Delaware UCC for more than five (5) years, a continuation statement must be filed as to such
Financing Statement in the Filing Office within six (6) months prior to the expiration of each
consecutive five-year period (with the first such period commencing on the date the Financing
Statement was duly filed) and in all respects in compliance with Article 9, Part 5 of the
Delaware UCC.

	m.	 	We call your attention to the fact that with respect to any security interest in Collateral
perfected by the filing of the Financing Statement under the Delaware UCC, the Financing
Statement will not be effective to perfect a security interest under the Delaware UCC in (i)
any Collateral acquired by the Borrower more than four (4) months after it changes it name so
as to make the Financing Statement seriously misleading, unless a new appropriate financing
statement indicating its new name is properly filed before the expiration of such four (4)
months and (ii) any Collateral four (4) months after it changes its jurisdiction of
organization (or if earlier, when perfection under the Delaware UCC would have ceased) unless
such security interest is perfected in such new jurisdiction before that termination occurs.

	n.	 	We are expressing no opinion as to the priority of any lien or security interest created by
the Loan Documents.

	o.	 	We call your attention that Section 522 of the federal Bankruptcy Code limits the extent to
which property acquired by a debtor after the commencement of a case under the federal
Bankruptcy Code may be subject to a security interest arising from a security agreement
entered into by such debtor before the commencement of such case.

	p.	 	We do not express any opinion as to the attachment or perfection of a security interest in
deposit accounts, letter-of-credit rights, money or commercial tort claims as those terms are
defined in the New York UCC, the Missouri UCC or the Delaware UCC, as applicable.

	q.	 	We express no opinion with respect to any laws, rules or regulations governing the issuance
or sale of securities.

	r.	 	In connection with any matters confirmed by us with respect to the existence or absence of
facts, conditions or circumstances, the words “to our knowledge”, “of which we have
knowledge”, “known to us” and words of similar import mean that in the course of performing
legal services on behalf of any Credit Party, we are without conscious awareness of facts or
other information that such confirmed matters are untrue, and in preparing this opinion
letter, we have not undertaken any independent verification of such confirmed matters beyond
our recollection of legal services currently or previously

 

 

	 	 	performed by us for the Credit Parties, and have made no investigation or inquiry with any
Credit Party or any other persons regarding such confirmed matters except as stated above in
this opinion letter. For purposes of the preceding sentence, the terms “to our knowledge”,
“of which we have knowledge”, “known to us” and similar phrases refer to the actual present
knowledge of those lawyers of Stinson Morrison Hecker LLP who have devoted substantive
attention to the matters relating to the Loan Documents and the other transactions of the
Credit Parties occurring on the date hereof, and not to the knowledge of Stinson Morrison
Hecker LLP as a firm or its partners or employees generally.

	s.	 	Our opinions set forth in this opinion letter are based upon the facts in existence and the
laws in effect on the date hereof, and we expressly disclaim any obligation to update or
supplement our opinions in response to changes in the law becoming effective hereafter or
future events or circumstances affecting the transactions contemplated by the Loan Documents.

          Our opinions and statements expressed herein are restricted to matters governed by (a) the
federal laws of the United States of America; (b) the laws of the State of Missouri, including,
without limitation, the Uniform Commercial Code as in effect in the State of Missouri, Mo. Rev.
Stat. §§ 400.1-101 et seq. (the “Missouri UCC”); (c) with respect to the opinions given as to the
Borrower set forth in opinion paragraphs 1, 2, 3, 4(a) and 5, the Delaware Limited Liability
Company Act, 6 Del. Code Ann. §§ 18-101 et seq.; (d) with respect to the opinions given as to the
Borrower set forth in the first and third sentences of opinion paragraph 7, Article 9 of the
Uniform Commercial Code as in effect in the State of New York, 38 New York Consol. Laws §§ 9-101 et
seq. (the “New York UCC”); and (e) with respect to the opinions given as to the Borrower set forth
in opinion paragraph 5 and the second sentence of opinion paragraph 7, Article 9 of the Uniform
Commercial Code as in effect in the State of Delaware, 6 Del. Code Ann. §§ 9-101 et seq. (the
“Delaware UCC”). Except as indicated in the preceding sentence, we express no opinion as to any
matter rising under the laws of any other jurisdiction, including, without limitation, the
statutes, ordinances, rules and regulations of counties, towns, municipalities and special
political subdivisions of the State of Missouri. To the extent that any Reviewed Document is
governed by or subject to the laws of any state or jurisdiction not specified above in this
paragraph with respect to such opinion or confirmation, we have assumed that the laws of such state
or jurisdiction (without regard to conflicts of laws principles) are substantively identical to the
laws of the State of Missouri.

          This opinion letter is solely for the benefit of the addressee hereof in connection with the
execution and delivery of the Loan Documents and may not be relied upon for any other purpose or by
any other person for any purpose, without in each instance our prior written consent. We
understand that this opinion letter may be included in closing binders with respect to the
transactions contemplated by the Loan Documents.

Very truly yours,

 

 

EXHIBIT A

Financing Statement

[Attached]

 

 

EXHIBIT B

Financing Agreements and Instruments

	1.	 	Indenture dated October 20, 1997 among Block Financial LLC (the “Company”), H&R Block, Inc.
(the “Guarantor”) and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company) (the
“First Trustee”), together with:

	 	a.	 	The First Supplemental Indenture dated as of April 18, 2000 among the
Company, the Guarantor, the First Trustee and The Bank of New York, as separate
trustee under the Indenture (the “Second Trustee”).
	 
	 	b.	 	The Company’s 8.50% Notes due 2007, which are guaranteed by the
Guarantor pursuant to the guarantees endorsed on said Notes.
	 
	 	c.	 	The Officers’ Certificate of the Company dated October 26, 2004
establishing the terms of the Notes described in d. below.
	 
	 	d.	 	The Company’s 5.125% Notes due 2014, which are guaranteed by the
Guarantor pursuant to the guarantees endorsed on said Notes.

	2.	 	The Amended and Restated Five-year Credit and Guarantee Agreement dated as of August 10, 2005
among the Company, the Guarantor, the financial institutions which are Lender parties thereto,
and JP Morgan Chase Bank, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”), as amended by the First Amendment dated as of November 28, 2006 among the Company,
the Guarantor, the Lender parties and the Administrative Agent and the Second Amendment dated
as of November 19, 2007 among the Company, the Guarantor, the Lender parties and the
Administrative Agent.

	3.	 	The Five-Year Credit and Guarantee Agreement dated as of August 10, 2005 among the Company,
the Guarantor, the financial institutions which are Lender parties thereto, and the
Administrative Agent, as amended by the First Amendment dated as of November 28, 2006 among
the Company, the Guarantor, the Lender parties and the Administrative Agent and the Second
Amendment dated as of November 19, 2007 among the Company, the Guarantor, the Lender parties
and the Administrative Agent.

	4.	 	The HSBC Retail Settlement Products Distribution Agreement, dated as of September 23, 2005
among HSBC Bank USA, National Association, HSBC TFS, Beneficial Franchise Company Inc.,
Household Tax Masters Acquisition Corporation, H&R Block Services, Inc., H&R Block Tax
Services, Inc., H&R Block Enterprises, Inc., H&R Block Eastern Enterprises, Inc., HRB Digital
LLC (successor by merger to H&R Block Digital Tax Solutions, LLC), H&R Block and Associates,
L.P. (now dissolved), HRB Innovations Inc. (formerly known as HRB Royalty, Inc.), HSBC Finance
Corporation and the Guarantor, as amended by the Joinder and First Amendment to Program
Contracts dated as of November 10, 2006 and the Second Amendment to Program Contracts dated as
of November 13, 2006, by and among the parties thereto, including, the Lender and the
Guarantor, and as further amended from time to time, and any restatement, extension, renewal
and replacement thereof.

 

 

	5.	 	The First Amended and Restated HSBC Refund Anticipation Loan and IMA Participation
Agreement, dated as of November 13, 2006, by and among the Borrower, HSBC Bank USA, National
Association, HSBC TFS and HSBC Trust Company (Delaware), National Association, as amended from
time to time, and any restatement, extension, renewal and replacement thereof.

	6.	 	The First Amended and Restated HSBC Settlement Products Servicing Agreement dated as of
November 13, 2006, among HSBC Bank USA, National Association, HSBC TFS, HSBC Trust Company
(Delaware), N.A., and the Borrower, as amended from time to time, and any restatement,
extension, renewal and replacement thereof.

	7.	 	The HSBC Settlement Products Indemnification Agreement dated as of September 23, 2005 among
HSBC Bank USA, National Association, HSBC TFS, Household Tax Masters Acquisition Corporation,
Beneficial Franchise Company Inc., H&R Block Services, Inc., H&R Block Tax Services, Inc., H&R
Block Enterprises, Inc., H&R Block Eastern Enterprises, Inc., HRB Digital LLC (successor by
merger to H&R Block Digital Tax Solutions, LLC), H&R Block and Associates, L.P. (now
dissolved), HRB Innovations Inc. (formerly known as HRB Royalty, Inc.) and the Company, as
amended by the Joinder and First Amendment to Program Contracts dated as of November 10, 2006
and the Second Amendment to Program Contracts dated as of November 13, 2006, and as further
amended from time to time, and any restatement, extension, renewal and replacement thereof.

	8.	 	The Amended and Restated Bridge Credit and Guarantee Agreement (HSBC), dated as of December
20, 2007, among the Borrower, the Guarantor, the lenders party thereto and HSBC Bank USA,
National Association, as administrative agent.

	9.	 	The Amended and Restated Bridge Credit and Guarantee Agreement (BNPP), dated as of December
20, 2007, among the Borrower, the Guarantor, the lenders party thereto and BNP Paribas, as
administrative agent.exv10w14

 

Exhibit 10.14

EXECUTION COPY

 

 

SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

among

OPTION ONE ADVANCE TRUST 2007-ADV2

as Issuer,

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

as Committed Purchaser and Agent,

THE CIT GROUP/BUSINESS CREDIT, INC.

as Committed Purchaser

DB STRUCTURED PRODUCTS, INC.

as Committed Purchaser and Administrative Agent

and

MONTEREY FUNDING LLC and MONTAGE FUNDING LLC

as Conduit Purchasers

Dated as of January 18, 2008

OPTION ONE ADVANCE TRUST 2007-ADV2

ADVANCE RECEIVABLES BACKED NOTES, SERIES 2007-ADV2

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I

 
	DEFINITIONS

	 
	 	 	 	 	 	 
	SECTION 1.01.

	 	Certain Defined Terms
	 	 	1	 
	SECTION 1.02.

	 	Other Definitional Provisions
	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE II

 
	COMMITMENT; CLOSING AND PURCHASES OF ADDITIONAL NOTE BALANCES

	 
	 	 	 	 	 	 
	SECTION 2.01.

	 	Commitment
	 	 	5	 
	SECTION 2.02.

	 	Closing
	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE III

 
	FUNDING DATES

	 
	 	 	 	 	 	 
	SECTION 3.01.

	 	Funding Dates
	 	 	7	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IV	 	 	 	 
	 
	 	 	 	 	 	 
	CONDITIONS PRECEDENT TO EFFECTIVENESS

	 
	 	 	 	 	 	 
	SECTION 4.01.

	 	Closing Subject to Conditions Precedent
	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE V

 
	REPRESENTATIONS AND WARRANTIES OF THE ISSUER

	 
	 	 	 	 	 	 
	SECTION 5.01.

	 	Issuer
	 	 	12	 
	SECTION 5.02.

	 	Securities Act
	 	 	14	 
	SECTION 5.03.

	 	No Fee
	 	 	14	 
	SECTION 5.04.

	 	Information
	 	 	14	 
	SECTION 5.05.

	 	The Purchased Notes
	 	 	14	 
	SECTION 5.06.

	 	Use of Proceeds
	 	 	14	 
	SECTION 5.07.

	 	Taxes, etc
	 	 	15	 
	SECTION 5.08.

	 	Financial Condition
	 	 	15	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE VI

 
	COVENANTS OF THE ISSUER

	 
	 	 	 	 	 	 
	SECTION 6.01.

	 	Information from the Issuer
	 	 	15	 
	SECTION 6.02.

	 	Access to Information
	 	 	16	 
	SECTION 6.03.

	 	Ownership and Security Interests; Further Assurances
	 	 	16	 
	SECTION 6.04.

	 	Covenants
	 	 	16	 
	SECTION 6.05.

	 	Amendments
	 	 	16	 
	SECTION 6.06.

	 	With Respect to the Exempt Status of the Purchased Notes
	 	 	16	 
	SECTION 6.07.

	 	Additional Deliveries
	 	 	17	 
	 
	 	 	 	 	 	 
	ARTICLE VII

 
	ADDITIONAL COVENANTS

	 
	 	 	 	 	 	 
	SECTION 7.01.

	 	Legal Conditions to Closing
	 	 	17	 
	SECTION 7.02.

	 	Expenses
	 	 	17	 
	SECTION 7.03.

	 	Mutual Obligations
	 	 	17	 
	SECTION 7.04.

	 	Restrictions on Transfer
	 	 	17	 
	SECTION 7.05.

	 	Securities Act
	 	 	18	 
	SECTION 7.06.

	 	Agreement and Consent to Agent
	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE VIII

 
	INDEMNIFICATION

	 
	 	 	 	 	 	 
	SECTION 8.01.

	 	Indemnification
	 	 	18	 
	SECTION 8.02.

	 	Procedure and Defense
	 	 	18	 
	SECTION 8.03.

	 	Requirements of Law
	 	 	18	 
	SECTION 8.04.

	 	Taxes
	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE IX

 
	TRANSFERS OF NOTES

	 
	 	 	 	 	 	 
	SECTION 9.01.

	 	Transfers of Notes
	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE X

 
	MISCELLANEOUS

	 
	 	 	 	 	 	 
	SECTION 10.01.

	 	Amendments
	 	 	23	 
	SECTION 10.02.

	 	Severability of Provisions
	 	 	23	 
	SECTION 10.03.

	 	Notices
	 	 	23	 
	SECTION 10.04.

	 	No Waiver; Remedies
	 	 	23	 
	SECTION 10.05.

	 	Integration
	 	 	23	 
	SECTION 10.06.

	 	Negotiation
	 	 	23	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	SECTION 10.07.

	 	Binding Effect; Assignability
	 	 	24	 
	SECTION 10.08.

	 	Provision of Documents and Information
	 	 	24	 
	SECTION 10.09.

	 	GOVERNING LAW; JURISDICTION
	 	 	24	 
	SECTION 10.10.

	 	No Proceedings
	 	 	24	 
	SECTION 10.11.

	 	Execution in Counterparts
	 	 	25	 
	SECTION 10.12.

	 	No Recourse — Purchasers
	 	 	25	 
	SECTION 10.13.

	 	Survival
	 	 	25	 
	SECTION 10.14.

	 	USA Patriot Act
	 	 	25	 
	SECTION 10.15.

	 	Confidentiality.
	 	 	25	 
	SECTION 10.16.

	 	Tax Characterization
	 	 	27	 
	SECTION 10.17.

	 	No Recourse
	 	 	27	 
	SECTION 10.18.

	 	Administrative Agent
	 	 	28	 

EXHIBITS:

Schedule I — Information for Notices

Schedule A — Purchaser Information

iii

 

SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

     SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT dated as of January 18, 2008 (this “Note
Purchase Agreement” or “Agreement”), among Option One Advance Trust 2007-ADV2, a Delaware statutory
trust, as issuer (the “Issuer”), Greenwich Capital Financial Products, Inc., a Delaware corporation
(as “Greenwich Purchaser” and as “Agent” under the Indenture), The CIT Group/Business Credit, Inc.,
a Delaware corporation (as “CIT Purchaser”), DB Structured Products, Inc., a Delaware corporation
(“DBSP”), as a Committed Purchaser and as administrative agent for Monterey and Montage (in such
capacity, the “Administrative Agent”), Monterey Funding LLC, a Delaware limited liability company
(“Monterey”) and Montage Funding LLC, a Delaware limited liability company (“Montage” and, together
with the Greenwich Purchaser, the CIT Purchaser, DBSP and Monterey, the “Purchasers”).

          The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

          SECTION 1.01. Certain Defined Terms. Capitalized terms used herein without definition
shall have the meanings set forth in the Indenture and the Receivables Purchase Agreement (as
defined below). Additionally, the following terms shall have the following meanings:

          “Administrative Agent” is defined in the preamble.

          “Closing” shall have the meaning set forth in Section 2.02.

          “Committed Purchasers” means the Greenwich Purchaser, the CIT Purchaser, DBSP and
their successors and assigns.

          “Commitment” means the commitment of each Committed Purchaser to purchase Additional
Note Balances pursuant to Section 2.01 in an amount equal to the Maximum Note Principal Balance of
the Note acquired by it hereunder, in the case of DBSP, minus the outstanding principal balance of
such Note funded or maintained by a related Conduit Purchaser. The Commitments of the Committed
Purchasers are set forth on Schedule A hereto.

          “Commitment Interest” With respect to any Committed Purchaser and as of any date of
determination, the percentage equal to a fraction, the numerator of which is the Maximum Note
Principal Balance with respect to (and as indicated on) such Committed Purchaser’s Purchased
Note(s) and the denominator of which is the Maximum Note Balance.

          “Conduit Purchasers” means any Purchaser which is designated as a “Conduit Purchaser”
on the signature pages hereto or in any assignment agreement pursuant to which it becomes a party
to this Agreement. The initial Conduit Purchasers are Monterey and Montage.

 

 

          “Confidential Information” shall mean any and all materials and information concerning
Option One, the Depositor or the Issuer and their subsidiaries and Affiliates, and their business,
which information is non-public, confidential or proprietary in nature, and shall include, without
limitation, (i) information transmitted in written, oral, magnetic or any
other medium, (ii) all copies and reproductions, in whole or in part, of such information and
(iii) all summaries, analyses, compilations, studies, notes or other records which contain,
reflect, or are generated from such information; provided, that Confidential Information does not
include, with respect to a Person, information that: (a) is or becomes generally available to the
public other than as a result of an action by the Agent, the Administrative Agent or any Purchaser
or their representatives or (b) becomes available to the Agent, the Administrative Agent or any
Purchaser on a non-confidential basis from a person other than Option One, the Depositor, the
Issuer and/or any one or more of their subsidiaries or Affiliates who is not, to the knowledge of
the Agent, the Administrative Agent or any Purchaser, as applicable, otherwise bound by a
confidentiality agreement with Option One, or is not, to the knowledge of the Agent, the
Administrative Agent or any Purchaser, as applicable, otherwise prohibited from transmitting the
information to the Agent, the Administrative Agent or any Purchaser.

          “Foreign Owner” means any Owner or Participant that is organized under the laws of a
jurisdiction other than those in which the Seller, the Depositor or the Issuer are located. For
purposes of this definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

          “Governmental Actions” means any and all consents, approvals, permits, orders,
authorizations, waivers, exceptions, variances, exemptions or licenses of, or registrations,
declarations or filings with, any Governmental Authority required under any Governmental Rules.

          “Governmental Authority” means the United States of America, any state or other
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and having jurisdiction over
the applicable Person.

          “Governmental Rules” means any and all laws, statutes, codes, rules, regulations,
ordinances, orders, writs, decrees and injunctions, of any Governmental Authority and any and all
legally binding conditions, standards, prohibitions, requirements and judgments of any Governmental
Authority.

          “Indemnified Party” means each of the Agent, each Purchaser and any of their officers,
directors, employees, agents, representatives, assignees and Affiliates and any Person who controls
any of the Agent or any Purchaser or their Affiliates within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act.

          “Indemnified Proceeding” shall have the meaning provided in Section 8.02.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

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          “Indenture” means the Indenture dated as of October 1, 2007 between the Issuer and
Wells Fargo Bank, National Association, as Indenture Trustee as amended from time to time in
accordance with the terms thereof.

          “Lien” means, with respect to any asset, (a) any mortgage, lien, pledge, charge,
security interest, hypothecation, option or encumbrance of any kind in respect of such asset or (b)
the interest of a vendor or lessor under any conditional sale agreement, financing lease or other
title retention agreement relating to such asset.

          “Maximum Note Balance” shall have the meaning set forth in the Indenture.

          “Maximum Note Principal Balance” means, with respect to each Purchased Note, the
amount set forth on Schedule A for such Purchased Note.

          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or
the Indenture.

          “Owner” shall mean each Purchaser or Support Party that is a beneficial owner of an
interest in a Note as reflected on the books of such Purchaser, the Agent or the Administrative
Agent in accordance with this Agreement and the Transaction Documents.

          “Participant” shall have the meaning specified in Section 9.01 of this
Agreement.

          “Participation” shall have the meaning specified in Section 9.01 of the Agreement.

          “Permitted Transferee” shall mean (i) each Purchaser, (ii) the Administrative Agent
(in its individual capacity), (iii) the Agent in its individual capacity, (iv) any Affiliate of any
Purchaser, the Agent or the Administrative Agent, (v) any commercial paper conduit administered or
managed by the Agent, the Administrative Agent or any Affiliate thereof, the commercial paper notes
of which are rated in the highest short term rating category by at least two of S&P, Moody’s or
Fitch, Inc. and (vi) any other Person who has been consented to by the Issuer (which consent shall
not be unreasonably withheld, delayed or conditioned); provided, that, from and after the
occurrence of an Event of Default or a Funding Termination Event, the consent of the Issuer shall
not be required.

          “Purchased Notes” means the Option One Advance Trust 2007-ADV2, Advance Receivables
Backed Notes, Series 2007-ADV2 issued by the Issuer pursuant to the Indenture.

          “Purchasers” means the Committed Purchasers, the Conduit Purchasers, their respective
successors and assigns and any other Noteholder hereunder.

          “Receivables Purchase Agreement” means the Receivables Purchase Agreement dated as of
October 1, 2007, between the Issuer, the Depositor and the Receivables Seller, as the same may be
amended, modified or supplemented from time to time.

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          “Receivables Seller” means Option One Mortgage Corporation.

          “Reference Rate” means the rate of interest publicly announced by Wells Fargo Bank,
National Association, its successors or any other commercial bank designated by the Agent to the
Issuer from time to time, in New York, New York from time to time as its prime rate or base rate.
The prime rate or base rate is determined from time to time by such bank as a means of pricing some
loans to its borrowers and neither is tied to any external rate of interest or index nor
necessarily reflects the lowest rate of interest actually charged by such bank to any particular
class or category of customers. Each change in the Reference Rate shall be effective from and
including the date such change is publicly announced as being effective.

          “Regulatory Change” means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by any Owner (or, for purposes of Section 8.03(b), by any lending
office of such Owner or by such Owner’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.

          “Support Advances” shall mean any loans or advances, or any participation or other
interest, funded or held by Support Party pursuant to a Support Facility (but excluding any such
loans or advances made to fund the applicable Conduit Purchaser’s obligations to pay interest, fees
or other similar amounts relating to the funding of its making or maintaining its interest in a
Note).

          “Support Facility” shall mean any liquidity or credit support agreement in favor a
Conduit Purchaser which relates to this Agreement, the Note held by or on behalf of such Conduit
Purchaser and the other Transaction Documents (including any agreement to purchase an assignment of
or participation in such Conduit Purchaser’s interest in such Note).

          “Support Party” shall mean any bank, insurance company or other financial institution
or Person extending or having a commitment to extend funds to or for the account of a Conduit
Purchaser (including by agreement to purchase an assignment of, or participation in, the Note held
by or on behalf of such Conduit Purchaser) under a Support Facility. Deutsche Bank AG, New York
Branch shall be deemed to be a Support Party for Monterey and Montage.

          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

          SECTION 1.02. Other Definitional Provisions.

          (a) All terms defined in this Note Purchase Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.

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          (b) As used herein and in any certificate or other document made or delivered pursuant hereto
or thereto, accounting terms not defined in Section 1.01, and accounting terms partially defined in
Section 1.01 to the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of accounting terms
herein are inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained herein shall control.

          (c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Note Purchase Agreement shall refer to this Note Purchase Agreement as a whole and not to any
particular provision of this Note Purchase Agreement; and Section, subsection, Schedule and Exhibit
references contained in this Note Purchase Agreement are references to Sections, subsections, and
Exhibits in or to this Note Purchase Agreement unless otherwise specified.

          (d) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented and includes (in the
case of agreements or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted successors and assigns.

ARTICLE II

COMMITMENT; CLOSING AND PURCHASES OF

ADDITIONAL NOTE BALANCES

          SECTION 2.01. Commitment.

          (a) (i) At any time during the Funding Period at least two (2) Business Days prior to a
proposed Funding Date (or, with respect to any Funding Date described in clause (iii) of the
definition thereof in the Indenture, at least one (1) Business Day prior to each such Funding
Date), to the extent that the aggregate outstanding Note Principal Balance (after giving effect to
the proposed purchase) is less than the lesser of (x) the Aggregate Collateral Value and (y) the
Maximum Note Balance, and subject to the terms and conditions hereof and in accordance with the
other Transaction Documents, the Issuer may deliver to the Agent, on behalf of the Purchasers, a
written request that the Purchasers purchase Additional Note Balances (each such request, a
“Purchase Request”). Each Purchase Request shall identify the proposed Funding Date, the
Receivables Balance of the Receivables that will be sold and/or contributed to the Issuer on such
Funding Date and the Cash Purchase Price thereof. Subject to the terms and conditions and in
reliance upon the covenants, representations and warranties set forth herein and in the other
Transaction Documents, on the identified Funding Date, each Conduit Purchaser may in its sole and
absolute discretion, and each Committed Purchaser shall, severally and not jointly, purchase its
Commitment Interest of the Additional Note Balances requested in the Purchase Request; provided,
however, that the portion of such Additional Note Balance required to be purchased by the Deutsche
Purchaser shall be reduced by the amount of such Additional Note Balance that the Conduit
Purchasers purchase pursuant to Section 2.01(a)(ii); provided, further, that no Committed Purchaser
shall be obligated to purchase an Additional

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Note Balance to the extent that, after giving effect to such purchase, the existing principal
balance of the Note held by it would exceed its Commitment.

               (ii) In the event that any Conduit Purchaser elects, in its sole discretion, to purchase any
portion of DBSP’s Commitment Interest of any Additional Note Balance requested in a Purchase
Request hereunder pursuant to Section 2.01(a)(i), the portion of such Additional Note Balance
required to be purchased by DBSP shall be reduced by the amount purchased by such Conduit
Purchaser.

          (b) (i) Except as otherwise provided in this Section 2.01(b), all purchases of Additional Note
Balances under this Agreement shall be made by the Committed Purchasers simultaneously and
proportionately based on each Committed Purchaser’s respective Commitment Interest, it being
understood that no Committed Purchaser shall be responsible for any default by any other Committed
Purchaser with respect to such other Committed Purchaser’s obligation to purchase an Additional
Note Balance requested hereunder. The Commitment of any Committed Purchaser shall not be enforced
as a result of the default by any other Committed Purchaser in that other Committed Purchaser’s
obligation to purchase an Additional Note Balance requested hereunder and any
amounts paid in connection with the obligation to purchase shall be refunded with no penalty.
No Committed Purchaser shall be obligated to purchase Additional Note Balances required to be made
by it by the terms of this Agreement if any other Committed Purchaser fails to do so. For the
avoidance of doubt, in the event that the Agent or a Committed Purchaser having a Commitment
Interest greater than or equal to 30% provides notice of a Funding Termination Event in accordance
with the terms and provisions of the Indenture, then no Committed Purchaser shall be obligated to
purchase Additional Note Balances otherwise required to be made by it by the terms of this
Agreement.

               (ii) Notwithstanding any other provision of this Agreement, and in order to reduce the number
of fund transfers among the parties hereto, the Issuer, the Agent and the Purchasers agree that the
Agent may (but shall not be obligated to), and the Issuer and the Purchasers hereby irrevocably
authorize the Agent to, fund, on behalf of the Purchasers, purchases of Additional Note Balances
pursuant to this Section 2.01; provided, however, that the Agent shall in no event fund such
purchase of Additional Note Balances if the Agent shall have determined pursuant to Section 3.01(b)
that one or more of the conditions precedent contained in Section 3.01(a) will not be satisfied on
the day of the proposed purchase of Additional Note Balances. If the Issuer gives a Purchase
Request requesting a purchase of Additional Note Balances and the Agent elects not to fund such
proposed purchase of Additional Note Balances on behalf of the Purchasers, then promptly after
receipt of the Purchase Request requesting such purchase of Additional Note Balances, the Agent
shall notify each Purchaser of the specifics contained in such Purchase Request and that it will
not fund such Purchase Request on behalf of the Purchasers. If the Agent notifies the Purchasers
that it will not fund a requested purchase of Additional Note Balances on behalf of the Purchasers,
each Conduit Purchaser may in its sole and absolute discretion, and each Committed Purchaser shall,
purchase its Commitment Interest of the Additional Note Balance pursuant to Section 2.01(a), by
remitting the required funds to the Issuer pursuant to and in accordance with Section 3.01(c)
hereto. If the Agent elects to fund a requested purchase of Additional Note Balances, the Agent
will remit the required funds for such Purchase Request to the Issuer pursuant to and in accordance
with Section 3.01(c) hereto.

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               (iii) If the Agent has notified the Purchasers that the Agent, on behalf of the Purchasers,
will fund a particular purchase of Additional Note Balances pursuant to Section 2.01(b)(ii), the
Agent may assume that each Committed Purchaser has made such amount available to the Agent on such
day and the Agent, in its sole discretion, may, but shall not be obligated to, cause a
corresponding amount to be made available to the Issuer on such day. If the Agent makes such
corresponding amount available to the Issuer and such corresponding amount is not in fact made
available to the Agent by a Committed Purchaser, the Agent shall be entitled to recover such
corresponding amount on demand from such Committed Purchaser together with interest thereon, for
each day from the date such payment was due until the date such amount is paid to the Agent, at the
Reference Rate. During the period in which such Purchaser has not paid such corresponding amount to
the Agent, notwithstanding anything to the contrary contained in this Agreement or any other
Transaction Document, the amount so advanced by the Agent to the Issuer shall, for all purposes
hereof, be a purchase of Additional Note Balances made by the Agent for its own account. Upon any
such failure by a Committed Purchaser to pay the Agent, the Agent shall promptly thereafter notify
the Issuer of such failure and the Issuer shall immediately pay such corresponding amount to the
Agent for its own account.

               (iv) Nothing in this Section 2.01(b) shall be deemed to relieve any
Committed Purchaser from its obligations to fulfill its Commitment hereunder or to prejudice any
rights that the Agent or the Issuer may have against any Committed Purchaser as a result of any
default by such Committed Purchaser hereunder.

          (c) From time to time during the Funding Period, the Issuer may request that the Agent consent
to add transactions to the definition of Securitization Trusts, and such additional transactions
may be added to the definition of Securitization Trusts with the written consent of the Agent (such
consent at the sole discretion of the Agent). The Issuer understands and acknowledges that the
Agent does not hereby commit to add any such transactions and any agreement to do so is subject to
completion by the Purchasers of due diligence to their satisfaction regarding such transactions and
execution of such additional documentation as the Agent deems appropriate in its sole discretion.

          SECTION 2.02. Closing. The closing (the “Closing”) of the execution of this Agreement
shall take place at 2:00 PM at the offices of Thacher Proffitt & Wood LLP, 2 World Financial
Center, New York, New York 10281 on January 18, 2008 (the “Effective Date”) or if the conditions
precedent to closing set forth in Section 4.01 of this Agreement shall not have been satisfied or
waived by such date, as soon as possible after such conditions shall have been satisfied or waived,
or at some other time or date and place as the parties hereto shall agree upon.

ARTICLE III

FUNDING DATES

          SECTION 3.01. Funding Dates.

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          (a) Subject to the conditions and terms set forth herein and in Sections 7.01 and 7.02 of the
Indenture with respect to each Funding Date, the Issuer may request, each Conduit Purchaser may in
its sole and absolute discretion, and each Committed Purchaser shall, severally and not jointly, to
purchase Additional Note Balances from the Issuer from time to time in accordance with, and upon
the satisfaction, as of the applicable Funding Date, of each of the following additional
conditions:

          (i) With respect to each Funding Date, each of the Funding Conditions set forth in
Section 7.02 of the Indenture shall have been satisfied;

          (ii) Each of the representations and warranties of the Servicer and the Receivables
Seller made in the Transaction Documents shall be true and correct as if made as of such
Funding Date (except to the extent they expressly relate to an earlier or later time);

          (iii) The Servicer and the Receivables Seller shall be in compliance with all of their
respective covenants contained in the Transaction Documents;

          (iv) No Event of Default or default shall have occurred under the Indenture and be
continuing; and

          (v) With respect to each Funding Date, the Agent shall have received evidence
reasonably satisfactory to it of the completion of all recordings, registrations, and
filings as may be necessary or, in the reasonable opinion of the Agent, desirable to
perfect or evidence the assignments required to be effected on such Funding Date in
accordance with the Receivables Purchase Agreement including, without limitation, the
assignment of the Receivables and the proceeds
thereof required to be assigned pursuant to the Indenture.

          (b) The Agent shall determine in its reasonable discretion whether each of the above
conditions have been met and such determination shall be binding on the parties hereto.

          (c) The price paid by the Purchasers on each Funding Date for the Additional Note Balance
purchased on such Funding Date shall be equal to the amount of such Additional Note Balance
purchased by such Purchaser and shall be remitted not later than 3:00 PM New York City time on such
Funding Date by wire transfer of immediately available funds to the Funding Account.

          (d) Each Purchaser or its designee shall record on the schedule attached to its related
Purchased Note, the date and amount of any Additional Note Balance purchased by it;
provided, that failure to make such recordation on such schedule or any error in such
schedule shall not adversely affect such Purchaser’s rights with respect to its Note Principal
Balance and its right to receive interest payments in respect of the Note Principal Balance
actually held.

          (e) On or prior to the date hereof, the Purchased Notes representing the interest of each
Committed Purchaser in the Issuer shall be delivered to the applicable indenture trustee for each
Committed Purchaser.

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ARTICLE IV

CONDITIONS PRECEDENT TO EFFECTIVENESS

          SECTION 4.01. Closing Subject to Conditions Precedent. The effectiveness of this
Agreement is subject to the satisfaction at the time of the Closing of the following conditions
(any or all of which may be waived by the Purchasers, as applicable, in their sole discretion):

          (a) Performance by the Issuer, the Servicer the Depositor and the Receivables Seller.
All the terms, covenants, agreements and conditions of the Transaction Documents to be complied
with and performed by the Issuer, the Depositor, the Servicer and the Receivables Seller on or
before the Effective Date shall have been complied with and performed in all material respects.

          (b) Representations and Warranties. Each of the representations and warranties of the
Issuer, the Depositor, the Servicer and the Receivables Seller made in the Transaction Documents
shall be true and correct in all material respects as of the Effective Date (except to the extent
they expressly relate to an earlier or later time).

          (c) Officer’s Certificate. The Agent shall have received in form and substance
reasonably satisfactory to the Agent an officer’s certificate from the Depositor, the Receivables
Seller and the Servicer and a certificate of an Authorized Officer of the Issuer, dated the
Effective Date, each certifying to the satisfaction of the conditions set forth in the preceding
paragraphs (a) and (b), in each case, together with incumbency, by-laws, resolutions and good
standing.

          (d) Opinions of Counsel to the Issuer, the Depositor, the Receivables Seller and the
Servicer. Counsel to the Issuer, the Depositor, the Receivables Seller and the Servicer shall
have delivered to the Agent and the Purchasers favorable opinions, dated as of the date of the
Effective Date, or reliance letters dated as of the Effective Date with respect to
legal opinions rendered on the Closing Date, in each case, satisfactory in form and substance
to the Agent, the Purchasers and their counsel, relating to corporate matters, enforceability, true
sale, non-consolidation, and perfection and an opinion as to which state’s law applies to security
interest and perfection matters. In addition to the foregoing, the Receivables Seller shall have
caused its counsel to deliver a favorable opinion dated as of the Effective Date, or a reliance
letter dated as of the Effective Date with respect to a legal opinion rendered on the Closing Date,
with respect to the effect that the Issuer will not be treated as an association (or publicly
traded partnership) taxable as a corporation or as a taxable mortgage pool, for federal income tax
purposes satisfactory in form and substance of the Agent, the Purchasers and their counsel.

          (e) Officer’s Certificate of Indenture Trustee. The Agent and the Purchasers shall
have received in form and substance reasonably satisfactory to the Agent and the Purchasers an
Officer’s Certificate from the Indenture Trustee, dated as of the date of the Effective Date, with
respect to the Indenture, together with incumbency, by-laws, resolutions and good standing.

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          (f) Opinions of Counsel to the Indenture Trustee. Counsel to the Indenture Trustee
shall have delivered to the Agent and the Purchasers a favorable opinion, dated as of the Effective
Date and reasonably satisfactory in form and substance to the Agent, the Purchasers and their
counsel related to the enforceability of the Indenture.

          (g) Opinions of Counsel to the Owner Trustee. Delaware counsel to the Owner Trustee
of the Issuer shall have delivered favorable opinions regarding the formation, existence and
standing of the Issuer and of the Issuer’s execution, authorization and delivery of each of the
Transaction Documents to which it is a party and such other matters as were reasonably requested,
dated as of the date of the Effective Date and reasonably satisfactory in form and substance to the
Agent, the Purchasers and their counsel.

          (h) Filings and Recordations. The Agent shall have received evidence reasonably
satisfactory to it of (i) the completion of all recordings, registrations, and filings as may be
necessary or, in the reasonable opinion of the Agent, desirable to perfect or evidence the
assignment by the Receivables Seller to the Depositor of the Receivables Seller’s ownership
interest in the Aggregate Receivables conveyed pursuant to the Receivables Purchase Agreement and
the proceeds thereof, (ii) the completion of all recordings, registrations, and filings as may be
necessary or, in the reasonable opinion of the Agent, desirable to perfect or evidence the
assignment by the Depositor to the Issuer of the Receivables Seller’s and the Depositor’s ownership
interest in the Aggregate Receivables conveyed pursuant to the Receivables Purchase Agreement and
the proceeds thereof and (iii) the completion of all recordings, registrations, and filings as may
be necessary or, in the reasonable opinion of the Agent, desirable to perfect or evidence the grant
of a first priority perfected security interest in the Issuer’s ownership interest in the Aggregate
Receivables in favor of the Indenture Trustee, subject to no Liens prior to the Lien created by the
Indenture.

          (i) Documents. The Agent shall have received a duly executed counterpart of each of
the Transaction Documents, the Second Amended and Restated Fee Side Letter and the Deutsche Side
Letter, that certain letter agreement dated as of the Effective Date between the Agent and DBSP, in
form acceptable to the Agent, the Purchased Notes and each and every document or certification
delivered by any party in connection with any of the Transaction Documents or the Purchased Notes,
and each such document shall be in full force and effect.

          (j) Actions or Proceedings. No action, suit, proceeding or investigation by or before
any Governmental Authority shall have been instituted to restrain or prohibit the consummation of,
or to invalidate, any of the transactions contemplated by the Transaction Documents, the Purchased
Notes and the documents related thereto in any material respect.

          (k) Approvals and Consents. All Governmental Actions of all Governmental Authorities
required with respect to the transactions contemplated by the Transaction Documents, the Purchased
Notes and the documents related thereto shall have been obtained or made.

          (l) Accounts. The Agent shall have received evidence reasonably satisfactory to it
that each Account has been established in accordance with the terms of the Indenture, and

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that the
Issuer shall have deposited an amount equal to the amount required to be deposited in the Reserve
Account pursuant to the Indenture.

          (m) Fees and Expenses. The fees and expenses payable by the Issuer and the Seller on
or prior to the Effective Date pursuant to Section 7.02(b) of this Agreement or any other
Transaction Document (including, without limitation, the Fee Side Letter) shall have been paid.

          (n) Other Documents. The Issuer, the Depositor, the Receivables Seller and the
Servicer shall have furnished such other opinions, information, certificates and documents as the
Agent or any Purchaser may have reasonably requested.

          (o) Securitization Trust Acknowledgment. The Agent shall have received acknowledgment
notices from the Securitization Trustee of each Securitization Trust acknowledging the receipt of
notice from the Receivables Seller of the transfer by the Receivables Seller of the Receivables to
the Issuer that the Indenture Trustee is an “Advance Financing Person” and that if there is an
“Advance Facility” referenced in the applicable Pooling and Servicing Agreement related to any
Securitization Trust, the Transaction Documents shall constitute the “Advance Facility” (as and to
the extent such terms or terms of substantially similar import are used in such Pooling and
Servicing Agreement).

          (p) Verification Agent. The Receivables Seller shall have engaged the Verification
Agent pursuant to an agreement reasonably satisfactory to the Agent.

          (q) Proceedings in Contemplation of Sale of Purchased Notes. All actions and
proceedings undertaken by the Issuer, the Depositor, the Receivables Seller and the Servicer in
connection with the issuance and sale of the Purchased Notes as herein contemplated shall be
satisfactory in all respects to the Agent, each Purchaser and their respective counsel.

          (r) Funding Termination Events. No Event of Default, Funding Termination Event or
Funding Interruption Event shall then be occurring.

          (s) Due Diligence. Each Purchaser shall have completed its due diligence examination
of the Issuer, the Depositor, the Receivables Seller and the Receivables to its sole satisfaction.

          (t) Satisfaction of Conditions. Each condition to the purchase of Additional Note
Balance described in Section 3.01(a) of this Agreement shall have been satisfied.

          If any condition specified in this Section 4.01 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the Greenwich
Purchaser by notice to the Receivables Seller at any time at or prior to the Closing Date, and the
Purchasers shall incur no liability as a result of such termination.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF

THE ISSUER

          The Issuer hereby makes the representations and warranties set forth in ARTICLE IX of the
Indenture to the Purchasers, as of the Closing Date, and as of each Funding Date, as applicable,
and the Purchasers shall be deemed to have relied on such representations and warranties in making
(or committing to make) purchases of Additional Note Balances on each Funding Date.

          SECTION 5.01. Issuer. The representations and warranties set forth in ARTICLE IX of
the Indenture are true and correct as of the date hereof.

          (a) The Issuer has been duly organized and is validly existing and in good standing as a
statutory trust under the laws of the State of Delaware, with requisite trust power and authority
to own its properties and to transact the business in which it is now engaged, and is duly
qualified to do business and is in good standing (or is exempt from such requirements) in each
State of the United States where the nature of its business requires it to be so qualified and the
failure to be so qualified and in good standing would have a material adverse effect on the Issuer
or any adverse effect on the interests of the Purchasers.

          (b) The issuance, sale, assignment and conveyance of the Purchased Note and the Additional
Note Balances, the performance of the Issuer’s obligations under each Transaction Document to which
it is a party and the consummation of the transactions therein contemplated will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any Lien (other than any Lien created by the Transaction
Documents), charge or encumbrance upon any of the property or assets of the Issuer or any of its
Affiliates pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it or any of its Affiliates is bound or to which any of its
property or assets is subject, nor will such action result in any violation of the provisions of
its organizational documents or any Governmental Rule applicable to the Issuer, in each case which
could be expected to have a material adverse effect on the transactions contemplated therein.

          (c) No Governmental Action which has not been obtained is required by or with respect to the
Issuer in connection with the execution and delivery to the Purchasers of the Purchased Note. No
Governmental Action which has not been obtained is required by or with respect to the Issuer in
connection with the execution and delivery of any of the Transaction Documents to which the Issuer
is a party or the consummation by the Issuer of the transactions contemplated thereby except for
any requirements under state securities or “blue sky” laws in connection with any transfer of the
Purchased Note.

          (d) The Issuer possesses all material licenses, certificates, authorities or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by it, and has not received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authority or permit

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which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially
and adversely affect its condition, financial or
otherwise, or its earnings, business affairs or business prospects.

          (e) Each of the Transaction Documents to which the Issuer is a party has been duly authorized,
executed and delivered by the Issuer and is a valid and legally binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms, subject to enforcement of bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general applicability relating to
or affecting creditors’ rights and to general principles of equity.

          (f) The execution, delivery and performance by the Issuer of each of its obligations under
each of the Transaction Documents to which it is a party will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any agreement or instrument
to which the Issuer is a party or by which the Issuer is bound or to which any of its properties
are subject or of any statute, order or regulation applicable to the Issuer of any court,
regulatory body, administrative agency or governmental body having jurisdiction over the Issuer or
any of its properties, in each case which could be expected to have a material adverse effect on
any of the transactions contemplated therein.

          (g) The Issuer is not in violation of its organizational documents or in default under any
agreement, indenture or instrument the effect of which violation or default would be material to
the Issuer or the transactions contemplated by the Transaction Documents. The Issuer is not a
party to, bound by or in breach or violation of any indenture or other agreement or instrument, or
subject to or in violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the Issuer that materially and
adversely affects, or may in the future materially and adversely affect (i) the ability of the
Issuer to perform its obligations under any of the Transaction Documents to which it is a party or
(ii) the business, operations, financial condition, properties, assets or prospects of the Issuer.

          (h) There are no actions or proceedings against, or investigations of, the Issuer pending, or,
to the knowledge of the Issuer threatened, before any Governmental Authority, court, arbitrator,
administrative agency or other tribunal (i) asserting the invalidity of any of the Transaction
Documents or (ii) seeking to prevent the issuance of the Purchased Note or the consummation of any
of the transactions contemplated by the Transaction Documents or the Purchased Note or (iii) that,
if adversely determined, could materially and adversely affect the business, operations, financial
condition, properties, assets or prospects of the Issuer or the validity or enforceability of, or
the performance by the Issuer of its respective obligations under, any of the Transaction Documents
to which it is a party or (iv) seeking to affect adversely the income tax attributes of the
Purchased Note.

          (i) The Issuer is not, and neither the issuance and sale of the Purchased Note to the
Purchasers nor the activities of the Issuer pursuant to the Transaction Documents, shall render the
Issuer an “investment company” or under the “control” of an “investment company” as such terms are
defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

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          (j) The Issuer is solvent and has adequate capital for its business and undertakings.

          (k) The chief executive offices of the Issuer are located at Option One Advance Trust
2007-ADV2, c/o Wilmington Trust Company, as Owner Trustee, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890, or, with the consent of the Purchaser, such other address as
shall be designated by the Issuer in a written notice to
the other parties hereto.

          (l) There are no contracts, agreements or understandings between the Issuer and any Person
granting such Person the right to require the filing at any time of a registration statement under
the Act with respect to the Purchased Note.

          SECTION 5.02. Securities Act. Assuming the accuracy of the representations and
warranties of and compliance with the covenants of the Purchasers, contained herein, the sale of
the Purchased Notes and the sale of Additional Note Balances pursuant to this Agreement are each
exempt from the registration and prospectus delivery requirements of the 1933 Act. In the case of
the offer or sale of the Purchased Notes, no form of general solicitation or general advertising
was used by the Issuer, any Affiliates of the Issuer or any person acting on its or their behalf,
including, but not limited to, advertisements, articles, notices or other communications published
in any newspaper, magazine or similar medium or broadcast over television or radio, or any seminar
or meeting whose attendees have been invited by any general solicitation or general advertising.
Neither the Issuer, any Affiliates of the Issuer nor any Person acting on its or their behalf has
offered or sold, nor will the Issuer or any Person acting on its behalf offer or sell directly or
indirectly, the Purchased Notes or any other security in any manner that, assuming the accuracy of
the representations and warranties and the performance of the covenants given by the Purchasers and
compliance with the applicable provisions of the Indenture with respect to each transfer of any
Purchased Note, would render the issuance and sale of the Purchased Notes as contemplated hereby a
violation of Section 5 of the 1933 Act or the registration or qualification requirements of any
state securities laws, nor has any such Person authorized, nor will it authorize, any Person to act
in such manner.

          SECTION 5.03. No Fee. Neither the Issuer nor any of its Affiliates has paid or agreed
to pay to any Person any compensation for soliciting another to purchase the Purchased Notes.

          SECTION 5.04. Information. The information provided pursuant to Section 6.01(a) hereof
will, at the date thereof, be true and correct in all material respects.

          SECTION 5.05. The Purchased Notes. The Purchased Notes have been duly and validly
authorized, and, when executed and authenticated in accordance with the terms of the Indenture, and
delivered to and paid for in accordance with this Note Purchase Agreement, will be duly and validly
issued and outstanding and will be entitled to the benefits of the Indenture.

          SECTION 5.06. Use of Proceeds. No proceeds of a purchase hereunder will be used (i)
for a purpose that violates or would be inconsistent with Regulations T, U or X

14

 

promulgated by the
Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security
in any transaction in violation of Section 13 or 14 of the 1934 Act.

          SECTION 5.07. Taxes, etc. Any taxes, fees and other charges of Governmental
Authorities applicable to the Issuer, except for franchise or income taxes, in connection with the
execution, delivery and performance by the Issuer of each Transaction Document to which it is a
party, the issuance of the Purchased Note or otherwise applicable to the Issuer have been paid or
will be paid by the Issuer at or prior to the Closing Date or Funding Date, to the extent then due.

          SECTION 5.08. Financial Condition. On the date hereof and on each
Funding Date, the Issuer is not or will not be insolvent or the subject of any voluntary or
involuntary bankruptcy proceeding.

ARTICLE VI

COVENANTS OF THE ISSUER

          SECTION 6.01. Information from the Issuer. So long as any Purchased Note remains
outstanding, the Issuer shall furnish to the Agent and each Purchaser:

          (a) such information (including financial information), documents, records or reports with
respect to the Receivables or the Issuer as the Agent or any of the Purchasers or the Purchasers
may from time to time reasonably request;

          (b) as soon as possible and in any event within two (2) Business Days after the occurrence
thereof, notice of any Event of Default, Securitization Termination Event, Funding Termination
Event or Funding Interruption Event; and

          (c) promptly and in any event within 30 days after the occurrence thereof, written notice of a
change in address or the jurisdiction of organization of the Issuer, the Depositor or the
Receivables Seller; and

          (d) promptly, and in any event within 5 days after the occurrence thereof, written notice of
(i) any legal action brought in any jurisdiction against the Depositor or the Issuer, or any legal
action brought in any jurisdiction against the Seller in which the plaintiff is seeking a judgment
for the payment of money in excess of $15,000,000.00, (ii) any final judgment or judgments held
against the Depositor or the Issuer or any final judgment or judgments held against the Seller for
the payment of money in excess of $15,000,000.00 in the aggregate, (iii) any other events that
could reasonably be likely to have a Material Adverse Effect with respect to the Seller, the
Depositor or the Issuer, (iv) any claim for liability brought in any jurisdiction against the
Seller, the Depositor or the Issuer relating to ERISA, or any contribution failure with respect to
any “defined benefit plan” (as defined in ERISA) sufficient to give rise to a lien under Section
302(f) of ERISA, and (v) the creation or assertion of any Lien on the Aggregate Receivables;

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          SECTION 6.02. Access to Information. So long as any Purchased Note remains
outstanding, the Issuer shall, at any time and from time to time during regular business hours, or
at such other reasonable times upon reasonable notice to the Issuer permit any of the Agent, the
Purchasers, or their agents or representatives to do the following in such a manner that does not
unreasonably interfere with the conduct by the Issuer or any of its Affiliates of their business:

          (a) examine all books, records and documents (including computer tapes and disks) in the
possession or under the control of the Issuer relating to the Receivables or the Transaction
Documents as may be reasonably requested, and

          (b) visit the offices and property of the Issuer for the purpose of examining such materials
described in clause (a) above.

          SECTION 6.03. Ownership and Security Interests; Further Assurances. The Issuer will
take all action necessary to maintain the Indenture Trustee’s security interest in the Receivables
and the other items pledged to the Indenture Trustee pursuant to the
Indenture.

          The Issuer agrees to take any and all acts and to execute any and all further instruments
reasonably necessary or reasonably requested by the Agent or any of the Purchasers to more fully
effect the purposes of this Note Purchase Agreement.

          SECTION 6.04. Covenants. The Issuer shall duly observe and perform each of its
covenants set forth in each of the Transaction Documents to which it is a party.

          SECTION 6.05. Amendments. Except as otherwise provided in Section 8.01 of the
Indenture, the Issuer shall not make, or permit any Person to make, any amendment, modification or
change to, or provide any waiver under any Transaction Document to which the Issuer is a party
without the prior written consent of the Purchasers with aggregate Note Principal Balance of not
less than 66 2/3% of the aggregate Note Principal Balance of the Outstanding Notes.

          SECTION 6.06. With Respect to the Exempt Status of the Purchased Notes.

          (a) Neither the Issuer nor any of its respective Affiliates, nor any Person acting on its
behalf will, directly or indirectly, (i) make offers or sales of any security, or solicit offers to
buy any security, under circumstances that would require the registration of the Purchased Notes
under the 1933 Act or under any state securities laws, or (ii) permit the Issuer to become an
“investment company” registered or required to be registered under the 1940 Act.

          (b) Neither the Issuer nor any of its Affiliates, nor any Person acting on its behalf will
engage in any form of general solicitation or general advertising (within the meaning of Regulation
D promulgated under the 1933 Act) in connection with any offer or sale of the Purchased Notes.

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          SECTION 6.07. Additional Deliveries

          On or prior to any Funding Date, the Issuer will furnish or cause to be furnished to the
Purchasers and any subsequent purchaser therefrom of Additional Note Balance, if any Purchaser or
such subsequent purchaser so requests, a letter from such Persons furnishing a certificate or
opinion on the Closing Date as described in Section 4.01 hereof or on or before any Funding Date in
which such Person shall state that such subsequent purchaser may rely upon such original
certificate or opinion as though delivered and addressed to such subsequent purchaser and solely in
the case of a certificate and not in the case of an opinion made on and as of the Closing Date or
such Funding Date, as the case may be.

ARTICLE VII

ADDITIONAL COVENANTS

          SECTION 7.01. Legal Conditions to Closing. The parties hereto will take all reasonable
action necessary to obtain (and will cooperate with one another in obtaining) any consent,
authorization, permit, license, franchise, order or approval of, or any exemption by, any
Governmental Authority or any other Person, required to be obtained or made by it in connection
with any of the transactions contemplated by this Note Purchase Agreement.

          SECTION 7.02. Expenses.

          (a) The Issuer covenants that, whether or not the Closing takes place, except as otherwise
expressly provided herein, all reasonable costs and expenses incurred in connection with this Note
Purchase Agreement and the transactions contemplated hereby.

          (b) The Issuer covenants that, upon the Closing taking place, the Issuer shall pay to the
Agent from net proceeds of the sale of the Notes contemplated hereunder the portion of the Facility
Fee set forth in subclause (i) of the definition thereof.

          (c) The Issuer covenants to pay as and when billed by the Agent or any Purchaser all of the
reasonable out-of-pocket costs and expenses incurred in connection with the consummation and
administration of the transactions contemplated hereby and in the other Transaction Documents
including, without limitation, (i) all reasonable fees, disbursements and expenses of counsel to
the Agent and the Purchasers, (ii) all reasonable fees and expenses of the Indenture Trustee, (iii)
all reasonable fees and expenses of the Verification Agent, in connection therewith and all
reasonable costs and expenses incurred in connection with the enforcement of rights and remedies
hereunder, shall be paid by the Issuer.

          SECTION 7.03. Mutual Obligations. On and after the Closing, each party hereto will do,
execute and perform all such other acts, deeds and documents as the other party may from time to
time reasonably require in order to carry out the intent of this Note Purchase Agreement.

          SECTION 7.04. Restrictions on Transfer. Each of the Purchasers agrees that it will
comply with the restrictions on transfer of the Purchased Notes set forth in the Indenture and
resell the Purchased Notes only in compliance with such restrictions.

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          SECTION 7.05. Securities Act. The Purchasers agree that they will acquire the
Purchased Notes, as applicable, pursuant to this Note Purchase Agreement without a view to any
public distribution thereof, and will not offer to sell or otherwise dispose of the Purchased Notes
(or any interest therein) in violation of any of the registration requirements of the Act or any
applicable state or other securities laws, or by means of any form of general solicitation or
general advertising (within the meaning of Regulation D under the 1933 Act) and will comply with
the requirements of the Indenture. The Purchasers acknowledge that they have no right to require
the Issuer or any other Person to register the Purchased Notes under the 1933 Act or any other
securities law.

          SECTION 7.06. Agreement and Consent to Agent. The Purchasers agree with, and consent
to, each of the provisions in the Indenture regarding the Agent.

ARTICLE VIII

INDEMNIFICATION

          SECTION 8.01. Indemnification. The Issuer hereby agrees to indemnify and hold
harmless each Indemnified Party in accordance with, and pursuant to, Section 9.11 of the Indenture.

          SECTION 8.02. Procedure and Defense. In case any litigation, claim, suit, action or
proceeding (including any governmental or regulatory investigation or proceeding) shall be
instituted involving any Indemnified Party in respect of which indemnity may be sought pursuant to
Section 8.01 (each such litigation, claim, suit, action or
proceeding being referred to an “Indemnified Proceeding”), such Indemnified Party shall follow
the procedures set forth in Section 9.11 of the Indenture. The Indemnified Party shall have the
rights and defense set forth in Section 9.11 of the Indenture.

          SECTION 8.03. Requirements of Law.

          (a) If any Regulatory Change shall (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the account of, or credit
extended by, any Owner or (ii) impose on any Owner any other condition affecting this Agreement,
maintaining its respective Commitment or the purchase of Additional Note Balances in accordance
with the terms and provisions of this Agreement, and the result of any of the foregoing shall be to
increase the cost to such Owner of complying with the terms and provisions of this Agreement,
maintaining its respective Commitment or purchasing such Additional Note Balances or to reduce the
amount of any sum received or receivable by such Owner hereunder (whether of principal, interest or
otherwise), then the Issuer shall pay to such Owner such additional amount or amounts as will
compensate such Owner for such additional costs incurred or reduction suffered.

          (b) If any Owner determines that any Regulatory Change regarding capital requirements has or
would have the effect of reducing the rate of return on such Owner’s capital or on the capital of
such Owner’s holding company, if any, as a consequence of this Agreement,

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the maintenance of its
respective Commitment or the purchase of Additional Note Balances to a level below that which such
Owner or such Owner’s holding company could have achieved but for such Regulatory Change (taking
into consideration such Owner’s policies and the policies of such Owner’s holding company with
respect to capital adequacy), then from time to time the Issuer shall pay to such Owner such
additional amount or amounts as will compensate such Owner or such Owner’s holding company for any
such reduction suffered.

          (c) A certificate of an Owner setting forth the amount or amounts necessary to compensate such
Owner or its holding company, as the case may be, as specified in paragraph (a) or (b) of this
Section 8.03 (together with a statement of the reason for such compensation and a calculation
thereof in reasonable detail) shall be delivered to the Issuer and the Agent and shall be
conclusive absent manifest error. The Issuer shall pay such Owner the amount shown as due on any
such certificate in accordance with the terms and provisions of Section 2.10(c) of the Indenture.

          (d) Failure or delay on the part of any Owner to demand compensation pursuant to this Section
shall not constitute a waiver of such Owner’s right to demand such compensation; provided, that the
Issuer shall not be required to compensate an Owner pursuant to this Section 8.03 for any increased
costs or reductions incurred more than six (6) months prior to the date that such Owner notifies
the Issuer of the Regulatory Change giving rise to such increased costs or reductions and of such
Owner’s intention to claim compensation therefor; provided, further, that, if the Regulatory Change
giving rise to such increased costs or reductions is retroactive, then the six (6) month period
referred to above shall be extended to include the period of retroactive effect thereof

          SECTION 8.04. Taxes.

          (a) Any and all payments by or on account of any obligation of the Seller, Depositor or Issuer
hereunder or pursuant to the Indenture (including, but not limited to, all amounts payable with
respect to the Notes) shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided, that if the Seller, the
Depositor or the Issuer shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then: (i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section
8.04), the Agent, the Administrative Agent, any Owner or any Participant (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been made;
provided, however, that none of the Seller, the Depositor or the Issuer shall be required to
increase any such amounts payable to the Agent, the Administrative Agent, any such Owner or any
such Participant (as the case may be) with respect to any Indemnified or Other Taxes that are
attributable to such party’s failure to comply with the requirements of paragraph (e) of this
Section 8.04; (ii) the Seller, the Depositor or the Issuer shall make such deductions; and (iii)
the Seller, the Depositor or the Issuer shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

          (b) In addition, the Seller, the Depositor or the Issuer shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

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          (c) The Seller, the Depositor and the Issuer shall indemnify the Agent, the Administrative
Agent, each Owner and each Participant, within ten (10) days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section 8.04) paid by the
Seller, the Depositor or the Issuer, as the case may be, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the Seller, the Depositor,
the Issuer and the Agent by an Owner or a Participant or by the Agent or the Administrative Agent
on its own behalf or on behalf of an Owner or Participant, shall be conclusive absent manifest
error.

          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Seller, the Depositor or the Issuer to a Governmental Authority, such party shall deliver to the
Agent and the Administrative Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the Agent and the Administrative Agent.

          (e) Any Foreign Owner that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Seller, the Depositor or the Issuer is located, or
any treaty to which such jurisdiction is a party, with respect to payments under this Agreement,
shall deliver to the Seller, the Depositor and the Issuer (with a copy to the Agent and the
Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by
the Seller, the Depositor or the Issuer, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without withholding or at a
reduced rate.

ARTICLE IX

TRANSFERS OF NOTES

          SECTION 9.01. Transfers of Notes

          (a) Any sale, transfer, assignment, participation, pledge, hypothecation or other disposition
(a “Transfer”) of a Note or any interest therein may be made only in accordance with this Section
9.01 and any applicable provisions of the Indenture. Any partial Transfer of an interest in a Note
(other than to an existing Purchaser or by a Conduit Purchaser under a Support Facility, which may
be in any amount) or a Commitment by a Purchaser shall be in respect of, at least $5,000,000 in the
aggregate, which may be composed of (A) a portion of the outstanding principal balance of the Note
funded or maintained by such Purchaser or (B) to the extent in excess of such portion of the
outstanding principal balance of such Note, such Purchaser’s Commitment hereunder. Any Transfer of
an interest in a Note otherwise permitted by this Section 9.01 and any applicable provisions of the
Indenture will be permitted only if it consists of a pro rata percentage interest in all payments
made with respect to the Purchaser’s interest in such Note. No Note or any interest therein may be
Transferred by Assignment or Participation to any Person (each, a “Transferee”) unless the
Transferee is a Permitted Transferee and prior to

20

 

the Transfer, the Transferee shall have executed
and delivered to the Agent and the Issuer a Transferee Certificate in substantially the form of
Exhibit B to the Indenture.

          (b) Each of the Issuer and Option One authorizes each Purchaser to disclose to any Transferee
and Support Party and to any prospective Transferee or Support Party which is a Permitted
Transferee any and all Confidential Information in the Purchaser’s possession concerning this
Agreement or the Transaction Documents or concerning Option One, the Depositor, the Issuer, the
Receivables or such party which has been delivered to such Purchaser pursuant to this Agreement or
the Transaction Documents (including information obtained pursuant to rights of inspection granted
hereunder) or which has been delivered to such Purchaser by or on behalf of the Issuer or Option
One in connection with such Purchaser’s credit evaluation of the Receivables, the Issuer or Option
One prior to becoming a party to, or purchasing an interest in this Agreement or the Notes;
provided, that prior to any such disclosure, such Transferee or Support Party or prospective
Transferee or Support Party shall have agreed in writing to maintain the confidentiality of all
Confidential Information provided to it in accordance with the provisions of this Agreement.

          (c) Each Purchaser may, in accordance with applicable law, at any time grant participations in
all or part of its Commitment or its interest in the Notes, including the payments due to it under
this Agreement and the Transaction Documents (each, a “Participation”), to any Permitted
Transferee (each such Permitted Transferee, a “Participant”); provided, however, that no
Participation shall be granted to any Person unless; (i) the conditions to Transfer specified in
this Agreement shall have been satisfied, and (ii) such Participation consists of a pro rata
percentage interest in all payments made with respect to such Purchaser’s beneficial interest (if
any) in the Notes. In connection with any such Participation, each Purchaser shall maintain a
register of each Participant and the amount of each related Participation. Each Purchaser hereby
acknowledges and agrees that (A) any such Participation will not alter or affect such Purchaser’s
direct obligations hereunder, and (B) none of the Indenture Trustee, the Issuer or Option One shall
have any obligation to have any communication or relationship with any Participant. Each Purchaser
and each Participant shall comply with the provisions of Section 8.04(c) of this Agreement. No
Participant shall be entitled to Transfer all or any portion of its Participation, without the
prior written consent of the applicable Purchaser. Each Participant shall be entitled to receive
additional amounts and indemnification pursuant to Sections 8.01, 8.03 and 8.04 hereof as if such
Participant were a Purchaser and such Sections applied to its Participation; provided, that, in the
case of Section 8.04, such Participant has complied with the provisions of Section 8.04(c) hereof
as if it were a Purchaser. Each Purchaser shall give the Agent notice of the
consummation of any sale by it of a Participation. It shall be a further condition to the
grant of any Participation that the Participant shall have certified, represented and warranted
that (i) it is entitled to (A) receive payments with respect to its participation without deduction
or withholding of any United States federal income taxes and (B) an exemption from United States
backup withholding tax, and (ii) to the extent such Participant has not otherwise directly provided
such forms to the Issuer and the Indenture Trustee, (A) prior to the date on which the first
interest payment is due to such Participant, such Participant will provide to the Issuer and
Indenture Trustee, the forms described in Section 8.04(c) as though the Participant were a
Purchaser, and (B) such Participant similarly will provide subsequent forms as described in Section
8.04(c) with respect to such Participant as though it were a Purchaser.

21

 

          (d) Each Purchaser may in accordance with applicable law, sell or assign (each, an
“Assignment”) to any Permitted Transferee (each, an “Assignee”) all or any part of
its Commitment (if any) or its interest in the Notes and its rights and obligations under this
Agreement and the Transaction Documents pursuant to an agreement (a “Transfer Supplement”),
executed by such Assignee and the Purchaser and delivered to the Agent; provided, however, that no
such assignment or sale shall be effective unless and until the conditions to Transfer specified in
this Agreement shall have been satisfied. From and after the effective date determined pursuant to
such Transfer Supplement, (x) the Assignee thereunder shall be a party hereto and, to the extent
provided in such Transfer Supplement, have the rights and obligations of a Purchaser hereunder as
set forth therein and (y) the transferor Purchaser shall, to the extent provided in such Transfer
Supplement, be released from its Commitment and other obligations under this Agreement; provided,
however, that after giving effect to each such Assignment, the obligations released by any such
Purchaser shall have been assumed by an Assignee or Assignees. Such Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Assignee and the resulting adjustment of Commitment Interests arising from the
Assignment.

          (e) Upon instruction to register a transfer of a Purchaser’s interest in the Notes (or portion
thereof) and surrender for registration of transfer of such Purchaser’s Note(s) (if applicable) and
delivery to the Issuer and the Indenture Trustee of a Transferee Certification, executed by the
registered owner (and the beneficial owner if it is a Person other than the registered owner), and
receipt by the Indenture Trustee of a copy of the duly executed related Transfer Supplement and
such other documents as may be required under this Agreement or the Indenture, such interest in the
Notes (or portion thereof) shall be transferred in the records of the Indenture Trustee and, if
requested by the Assignee, new Notes shall be issued to the Assignee and, if applicable, the
transferor Purchaser in amounts reflecting such Transfer as provided in the Indenture.

          (f) Each Purchaser may pledge its interest in the Notes to any Federal Reserve Bank as
collateral in accordance with applicable law.

          (g) Each Support Party shall be entitled to receive additional payments and indemnification
pursuant to Sections 8.01, 8.03 and 8.04 hereof as though it were a Purchaser and such Section
applied to its interest in or commitment to acquire an interest in the Notes; provided, that such
Support Party shall not be entitled to additional payments pursuant to (i) Section 8.03 by reason
of Regulatory Changes which occurred prior to the date it became a Support Party or (ii) Section
8.04 attributable to its failure to satisfy the requirements of Section 8.04(c) as if it were a
Purchaser; provided, further, that unless such
Support Party is a Permitted Transferee or has been consented to by the Issuer, such Support
Party shall be entitled to receive additional amounts pursuant to Sections 8.03 or 8.04 only to the
extent that its related Conduit Purchaser would have been entitled to receive such amounts in the
absence of the Commitment and Support Advances from such Support Party. The provisions of Section
8.03 shall apply to the Administrative Agent and to such of its Affiliates as may from time to time
administer, make referrals to or otherwise provide services or support to the Conduit
Purchasers
(in each case as though such Administrative Agent or Affiliate were a Purchaser and such Section
applied to its administration of or other provisions of services or support to such Conduit

22

 

Purchaser in connection with the transactions contemplated by this Agreement), whether as an
administrator, administrative agent, referral agent, managing agent or otherwise.

          (h) Each Support Party claiming increased amounts described in Sections 8.03 or 8.04 hereof
shall furnish, through its related Conduit Purchaser, to the Issuer, the Administrative Agent, the
Indenture Trustee and the Agent a certificate setting forth the basis and amount of each request by
such Support Party for any such amounts referred to in Sections 8.03 or 8.04, such certificate to
be conclusive with respect to the factual information set forth therein absent manifest error.

ARTICLE X

MISCELLANEOUS

          SECTION 10.01. Amendments. No amendment or waiver of any provision of this Note
Purchase Agreement shall in any event be effective unless the same shall be in writing and signed
by all of the parties hereto, and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

          SECTION 10.02. Severability of Provisions. If any one or more of the agreements,
provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then the
unenforceable agreements, provisions or terms shall be deemed severable from the remaining
agreements, provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other agreements, provisions or terms of this Agreement.

          SECTION 10.03. Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including telecopies) and mailed, telecopied
(with a copy delivered by overnight courier) or delivered, as to each party hereto, at its address
as set forth in Schedule I hereto or at such other address as shall be designated by such party in
a written notice to the other parties hereto. All such notices and communications shall be deemed
effective upon receipt thereof, and in the case of telecopies, when receipt is confirmed by
telephone.

          SECTION 10.04. No Waiver; Remedies. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

          SECTION 10.05. Integration. This Agreement contains a final and complete integration
of all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof, superseding all prior oral or written understandings.

          SECTION 10.06. Negotiation. This Agreement and the other Transaction Documents are
the result of negotiations among the parties hereto, and have been reviewed by the respective
counsel to the parties hereto, and are the products of all parties hereto. Accordingly, this
Agreement and the other Transaction Documents shall not be construed against

23

 

the Agent or any
Purchaser merely because of the Agent’s or such Purchaser’s involvement in the preparation of this
Agreement and the other Transaction Documents.

          SECTION 10.07. Binding Effect; Assignability.

          (a) This Note Purchase Agreement shall be binding upon and inure to the benefit of the Issuer,
the Agent and the Purchasers and their respective permitted successors and assigns (including any
subsequent holders of any Purchased Note); provided, however, the Issuer shall not have any right
to assign its respective rights hereunder or interest herein (by operation of law or otherwise)
without the prior written consent of all of the Purchasers.

          (b) Each Purchaser shall have the right to assign its rights and obligations hereunder to an
Affiliate without the consent of the Issuer or the Receivables Seller.

          (c) This Note Purchase Agreement shall create and constitute the continuing obligation of the
parties hereto in accordance with its terms, and shall remain in full force and effect until such
time as all amounts payable with respect to the Purchased Notes shall have been paid in full.

          SECTION 10.08. Provision of Documents and Information. The Issuer acknowledges and
agrees that the Agent and each Purchaser is permitted to provide to any subsequent Purchaser,
permitted assignees and Participants, opinions, certificates, documents and other information
relating to the Issuer and the Receivables delivered to the Agent or the Purchasers pursuant to
this Note Purchase Agreement.

          SECTION 10.09. GOVERNING LAW; JURISDICTION. THIS NOTE PURCHASE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW). EACH OF THE PARTIES TO THIS NOTE PURCHASE AGREEMENT HEREBY AGREES TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING
JURISDICTION TO REVIEW THE JUDGMENTS THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED
ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.

          SECTION 10.10. No Proceedings. Until the date that is one year and one day after the
last day on which any amount is outstanding under this Note Purchase Agreement and the Purchasers
hereby covenant and agree that they will not institute against the Issuer, or join in any
institution against the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law. Each of the Issuer, the Administrative Agent,
the Agent and each Purchaser hereby agrees that it shall not institute or join against any Conduit
Purchaser any bankruptcy,

24

 

reorganization, arrangement, insolvency or liquidation proceeding, or
other proceeding under any federal or state bankruptcy or similar law, for one year and a day after
the latest maturing commercial paper note, medium term note or other debt security issued by such
Conduit Purchaser is paid.

          SECTION 10.11. Execution in Counterparts. This Note Purchase Agreement may be executed
in any number of counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.

          SECTION 10.12. No Recourse — Purchasers. The obligations of each Purchaser under
this Note Purchase Agreement, or any other agreement, instrument, document or certificate executed
and delivered by or issued by such Purchaser or any officer thereof are solely the partnership or
corporate obligations of such Purchaser, as the case may be. No recourse shall be had for payment
of any fee or other obligation or claim arising out of or relating to this Note Purchase Agreement
or any other agreement, instrument, document or certificate executed and delivered or issued by any
Purchaser or any officer thereof in connection therewith, against any stockholder, limited partner,
employee, officer, director or incorporator of such Purchaser.

          SECTION 10.13. Survival. All representations, warranties, covenants, guaranties and
indemnifications contained in this Note Purchase Agreement and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the sale, transfer or
repayment of the Purchased Notes. In addition the respective agreements, covenants, indemnities and
other statements set forth in this Section 9.13 and in Sections 7.02, 8.01, 8.02, 9.01, 9.02, 9.03,
9.04, 9.06, 9.07, 9.09, 9.10, 9.12 and 9.14 shall remain in full force and effect regardless of any
termination or cancellation of this Agreement.

          SECTION 10.14. USA Patriot Act. Each Purchaser hereby notifies the Issuer that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Issuer, which information includes the name and address of the
Issuer and other information that will allow such Purchaser to identify the Issuer in accordance
with the Patriot Act.

          SECTION 10.15. Confidentiality.

          (a) The Issuer covenants and agrees to hold in confidence, and not disclose to any Person, the
terms of this Agreement (including any fees payable in connection with this Agreement or the other
Transaction Documents or the identity of any Purchaser under this Agreement), except as the Agent,
the Administrative Agent or Purchaser may have consented to in writing prior to any proposed
disclosure and except it may disclose such information (i) to its officers, directors, employees,
agents, counsel, accountants, auditors, advisors or representatives, (ii) to the extent such
information has become available to the public other than as a result of a disclosure by or through
the Issuer or (iii) to the extent it should be (A) required by law, rule, regulation, subpoena, or
in connection with any legal or regulatory proceeding or (B) requested by any governmental or
regulatory authority having jurisdiction over the Issuer; provided, that, in the case of clause
(iii)(A), the Issuer will use all reasonable efforts to maintain confidentiality

25

 

and will (unless
otherwise prohibited by law) notify the Agent, the Administrative Agent and the Purchasers of
its intention to make any such disclosure prior to making such disclosure. Notwithstanding the
foregoing, Option One and its Affiliates shall be permitted: (i) to disclose the terms of the
Transaction Documents other than the Pricing Side Letter or Fee Side Letter (unless required by law
or a regulatory agency), including, without limitation, filing copies with the Securities and
Exchange Commission; and (ii) to disclose the terms of the Transaction Documents, including the
Pricing Side Letter and the Fee Side Letter, and to provide copies thereof, to any Person or
representative of a Person who has executed a confidentiality agreement with H&R Block, Inc. in
connection with a potential acquisition of Option One or any portion of its business by such
Person.

          (b) Each of the Agent, the Administrative Agent and each Purchaser, severally and with respect
to itself only, agrees that it will use the Confidential Information solely for the purpose of the
Transaction (as defined below) and agrees not to disclose to any third party any such Confidential
Information now or hereafter received or obtained by it without the Issuer’s prior written consent;
provided, however, that it may disclose such Confidential Information (i) to its Affiliates,
subsidiaries, directors, officers, employees and agents with a need to know the Confidential
Information for the purposes of the transaction evidenced by this Agreement and the other
Transaction Documents (the “Transaction”), (ii) to its respective accountants, attorneys
and other confidential advisors (collectively “Advisors”) who need to know such information
for the purpose of assisting it in connection with the Transaction, (iii) to the extent it should
be (A) required by applicable law, rule, regulation, subpoena or in connection with any legal or
regulatory proceeding or (B) requested by any governmental or regulatory authority having
jurisdiction over the Administrative Agent, the Agent, the Purchasers or any Company
Representative; provided, that, in the case of clause (iii)(A) and (B), the Administrative Agent,
the Agent or Purchaser will use all reasonable efforts to maintain confidentiality and will (unless
otherwise prohibited by law) notify the Issuer of its intention to make any such disclosure prior
to making such disclosure, (iv) to S&P, Moody’s or any other nationally recognized statistical
rating agency then rating the Notes or the commercial paper notes or other debt obligations of a
Conduit Purchaser, (v) to any actual or potential subordinated investor in any Conduit Purchaser
that has signed a confidentiality agreement containing restrictions on disclosure substantially
similar to this Section 10.15, (vi) to credit enhancers and dealers and investors in respect of the
commercial paper notes of any Conduit Purchaser in accordance with the customary practices of such
Conduit Purchaser for disclosures to credit enhancers, dealers or investors, as the case may be, it
being understood that any such credit enhancers, dealers and investors shall be required to
maintain the confidentiality of any such information received by them and any such disclosure to
credit enhancers, dealers or investors will not identify the Issuer or any of its Affiliates by
name, (vii) to any third party that has executed a confidentially agreement with a Noteholder or
(viii) to the extent that such information has been independently acquired or developed by the
Agent, the Administrative Agent or any Purchaser without violating any of their respective
obligations under this Agreement. Each of the Agent, the Administrative Agent and each Purchaser
agrees to be responsible for any breach of this Agreement by its Affiliates and Advisors and agrees
that its Affiliates and Advisors will be advised by it of the confidential nature of such
information and shall agree to be bound by this Agreement.

          (c) None of the Agent, the Administrative Agent or any Purchaser nor any of their Affiliates
or Advisors, without the prior written consent of the Issuer, will disclose to any

26

 

person the fact
that Confidential Information has been provided to it or them, that discussions or negotiations
have taken place with respect to the Transaction, or the
existence, terms, conditions, or other facts of the Transaction, including the status thereof.
Notwithstanding the foregoing, the Confidential Information and the fact that discussions or
negotiations are taking place with respect to a Transaction or the existence, terms, conditions, or
other facts of such Transaction, including the status thereof may be disclosed on a confidential
basis to (i) any rating agency that assigns a rating to the debt obligations of the Agent, the
Administrative Agent or any Purchaser, (ii) Support Parties and (iii) to any third party that has
executed a confidentiality agreement with a Noteholder; provided, that such Persons shall be
informed of the confidential nature of the Confidential Information.

          (d) Notwithstanding anything herein to the contrary, if the Agent, the Administrative Agent or
any Purchaser or any of their Affiliates or Advisors are legally compelled (whether by deposition,
interrogatory, request for documents, subpoena, civil investigation, demand or similar process) to
disclose any of the Confidential Information (including the fact that discussions or negotiations
are taking place with respect to the Transaction) it may disclose such Confidential Information;
provided, that it promptly notify Option One and the Issuer of such requirement so that Option One
and/or the Issuer may seek a protective order or other appropriate remedy and/or waive compliance
with the provisions hereof. Each of the Agent, the Administrative Agent, and each Purchaser agrees
to use commercially reasonable efforts to assist Option One and the Issuer in obtaining any such
protective order. Failing the entry of a protective order or the receipt of a waiver hereunder, it
may disclose, without liability hereunder, that portion (and only that portion) of the Confidential
Information that it has been advised by counsel that it is legally compelled to disclose; provided
that it agrees to use commercially reasonable efforts to obtain assurance that confidential
treatment will be accorded such Confidential Information by the person or persons to whom it was
disclosed.

          (e) Notwithstanding anything herein to the contrary, it is understood that the Agent, the
Administrative Agent and the Purchasers or their affiliates may disclose the Confidential
Information or portions thereof at the request of a bank examiner or other regulatory authority or
in connection with an examination of any of the Agent, the Administrative Agent or the Purchasers
and their respective Affiliates by a bank examiner or other regulatory authority without any notice
to the Issuer or Option One.

          SECTION 10.16. Tax Characterization. Each party to this Note Purchase Agreement (a)
acknowledges and agrees that it is the intent of the parties to this Note Purchase Agreement that
for all purposes, including federal, state and local income, single business and franchise tax
purposes, the Purchased Notes will be treated as evidence of indebtedness secured by the
Receivables and proceeds thereof and the trust created under the Indenture will not be
characterized as an association (or publicly traded partnership) taxable as a corporation, (b)
agrees to treat the Purchased Notes for federal, state and local income and franchise tax purposes
as indebtedness and (c) agrees that the provisions of all Transaction Documents shall be construed
to further these intentions of the parties.

          SECTION 10.17. No Recourse. It is expressly understood and agreed by the parties
hereto that (a) this Note Purchase Agreement is executed and delivered by Wilmington

27

 

Trust Company, not individually or personally but solely as trustee of the Issuer, in the exercise
of the powers and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust Company but is made and
intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually or personally, to
perform any covenant either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any Person claiming by, through or under the
parties hereto and (d) under no circumstances shall Wilmington Trust Company be personally liable
for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer
under this Note Purchase Agreement or any other related documents.

          SECTION 10.18. Administrative Agent. Each Conduit Purchaser hereby appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. The provisions of this Section 10.18 are
solely for the benefit of the Administrative Agent and the Conduit Purchasers. None of the Issuer,
the Agent or any other Purchaser shall have any rights as a third-party beneficiary or otherwise
under any of the provisions of this Section 10.18. In performing its functions and duties
hereunder, the Administrative Agent shall act solely as the agent for the Conduit Purchasers and
does not assume nor shall be deemed to have assumed any obligation or relationship of trust or
agency with or for the other Purchasers, the Issuer, the Agent, any Affiliate thereof or any of
their respective successors and assigns. As to any matters not expressly provided for by this Note
Purchase Agreement or the other Transaction Documents, the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from acting) upon the
instructions of the Conduit Purchasers; provided, however, that the Administrative Agent shall not
be required to take any action which, in the reasonable opinion of the Administrative Agent,
exposes the Administrative Agent to liability or which is contrary to this Note Purchase Agreement
or any other Transaction Document or applicable law. The duties of the Administrative Agent shall
be mechanical and administrative in nature. The Administrative Agent shall not have by reason of
this Note Purchase Agreement or any other Transaction Document a fiduciary relationship in respect
of any Noteholder. Nothing in this Note Purchase Agreement or any other Transaction Document,
express or implied, is intended to or shall be construed to impose upon the Administrative Agent
any obligations in respect of this Note Purchase Agreement or any other Transaction Document except
as expressly set forth herein or therein. The Administrative Agent and its directors, officers,
agents or employees shall not be liable for any action taken or omitted to be taken by it under or
in connection with this Note Purchase Agreement or any other Transaction Document unless such
action or inaction shall constitute gross negligence or willful misconduct on the part of the
Administrative Agent or its directors, officers, agents or employees. The Administrative Agent may
at any time request instructions from the Conduit Purchasers with respect to any actions or
approvals which by the terms of this Note Purchase Agreement or any other Transaction Document the
Administrative Agent is permitted or required to take or to grant, and if such instructions are
promptly requested, the Administrative Agent shall be absolutely entitled to refrain from taking
any action or to withhold any approval under any of the other Transaction Document until it shall
have received

28

 

such instructions from the Conduit Purchasers. Without limiting the foregoing, the Conduit Purchasers shall not have any
right of action whatsoever against the Administrative Agent as a result of the Administrative Agent
acting or refraining from acting under this Note Purchase Agreement, the Notes or any of the other
Transaction Document in accordance with the instructions of the Conduit Purchasers.

29

 

          IN WITNESS WHEREOF, the parties have caused this Second Amended and Restated Note Purchase
Agreement to be executed by their respective officers hereunto duly authorized, as of the date
first above written.

	 	 	 	 	 
	 	Option One Advance Trust 2007-ADV2

 	 
	 	By:  	Wilmington Trust Company, not in its
 	 
	 	 	individual capacity but solely as Owner 	 
	 	 	Trustee 	 
	 
	 	 	 
	 	By:  	                                              /s/ Rosaline K. Maney
 	 
	 	 	Name:  	Rosaline K. Maney 	 
	 	 	Title:  	Vice President 	 
	 
	 	

Greenwich Capital Financial Products, Inc., as

Committed Purchaser and as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	The CIT Group/Business Credit, Inc.

as Committed Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	DB Structured Products, Inc.

as Committed Purchaser and Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Second Amended and Restated Note Purchase Agreement

 

 

          IN WITNESS WHEREOF, the parties have caused this Second Amended and Restated Note Purchase
Agreement to be executed by their respective officers hereunto duly authorized, as of the date
first above written.

	 	 	 	 	 
	 	Option One Advance Trust 2007-ADV2

 	 
	 	By:  	Wilmington Trust Company, not in its
 	 
	 	 	individual capacity but solely as Owner 	 
	 	 	Trustee 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	

Greenwich Capital Financial Products, Inc., as

Committed Purchaser and as Agent

 	 
	 	By:  	/s/ Dominic   Obaditch
 	 
	 	 	Name:  	Dominic Obaditch  	 
	 	 	Title:  	Managing Director 
Greenwich Capital
Corporate Services, Inc.

as attorney-in-fact 	 
	 
	 	The CIT Group/Business Credit, Inc. as

Committed Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	DB Structured Products, Inc.

as Committed Purchaser and Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Second Amended and Restated Note Purchase Agreement

 

 

          IN WITNESS WHEREOF, the parties have caused this Second Amended and Restated Note Purchase
Agreement to be executed by their respective officers hereunto duly authorized, as of the date
first above written.

	 	 	 	 	 
	 	Option One Advance Trust 2007-ADV2

 	 
	 	By:  	Wilmington Trust Company, not in its individual
 	 
	 	 	capacity but solely as Owner Trustee 	 
	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Greenwich Capital Financial Products, Inc., as

Committed Purchaser and as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	The CIT Group/Business Credit, Inc. as

Committed Purchaser

 	 
	 	By:  	/s/ Howard Trebach
 	 
	 	 	Name:  	Howard Trebach 	 
	 	 	Title:  	Vice President 	 
	 
	 	DB Structured Products, Inc.

as Committed Purchaser and Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Second Amended and Restated Note Purchase Agreement

 

 

          IN WITNESS WHEREOF, the parties have caused this Second Amended and Restated Note Purchase
Agreement to be executed by their respective officers hereunto duly authorized, as of the date
first above written.

	 	 	 	 	 
	 	Option One Advance Trust 2007-ADV2

 	 
	 	By:  	Wilmington Trust Company, not in its
 	 
	 	 	individual capacity but solely as Owner 	 
	 	 	Trustee	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Greenwich Capital Financial Products, Inc., as

Committed Purchaser and as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	The CIT Group/Business Credit, Inc.

as Committed Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	DB Structured Products, Inc.

as Committed Purchaser and Administrative Agent
 	 

	 	 	 	 	 	 
	/s/ John McCarthy	 	By:  	/s/ GLENN MINKOFF
 	 
	John McCarthy	 	 	Name:  	GLENN MINKOFF 	 
	Authorized Signatory	 	 	Title:  	     DIRECTOR 	 
	 

Second Amended and Restated Note Purchase Agreement

 

 

	 	 	 	 	 
	 	Monterey Funding LLC, 

as Conduit Purchaser

 	 
	 	By:  	/s/ Philip A. Martone
 	 
	 	 	Name:  	Philip A. Martone 	 
	 	 	Title:  	Vice President 	 
	 
	 	Montage Funding LLC, 

as Conduit Purchase

 	 
	 	By:  	/s/   Philip A. Martone
 	 
	 	 	Name:  	Philip A. Martone 	 
	 	 	Title:  	Vice President 	 

 Second Amended and Restated Note Purchase Agreement

 

 

	 	 	 	 	 

Schedule I

Information for Notices

	1.	 	if to the Issuer:

OPTION ONE ADVANCE TRUST 2007-ADV2

3 Ada

Irvine, California 92618

Attention: Rod Smith

Facsimile: (949) 790-7514

Telephone: (949) 790-8100

	2.	 	if to the Depositor:

OPTION ONE ADVANCE CORPORATION

3 Ada

Irvine, California 92618

Attention: Rod Smith

Facsimile: (949) 790-7514

Telephone: (949) 790-8100

	3.	 	if to the Receivables Seller:

OPTION ONE MORTGAGE CORPORATION

3 Ada

Irvine, California 92618

Attention: Rod Smith

Facsimile: (949) 790-7514

Telephone: (949) 790-8100

	4.	 	if to the Greenwich Purchaser or the Agent:

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

600 Steamboat Road

Greenwich, Connecticut 06830

Attention: Robert Pravetz

Facsimile: 203-618-2148

Telephone: 203-618-6884

 

 

With a copy to:

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

600 Steamboat Road

Greenwich, Connecticut 06830

Attn: Dominic Obaditch

Telecopy: (203) 422-4565

Telephone: (203) 618-2565

	5.	 	if to the CIT Purchaser:

The CIT Group/Business Credit, Inc.

11 West 42nd Street, 13th floor

New York, NY 10036

Attention: Howard Trebach

Facsimile: (212) 461-7760

Telephone: (212) 461-7753

With Copy To:

The CIT Group/Business Credit, Inc.

11 West 42nd Street, 13th floor

New York, NY 10036

Attention: Jorge S. Wagner

Facsimile: (212) 771-9517

Telephone: (212) 771-9520

	6.	 	if to DBSP:

	 	(a)	 	DB Structured Products, Inc.

60 Wall Street, 19th Floor

New York, New York 10005

Attention: Glenn Minkoff

Tel: (212) 250-3406

Fax: (212) 797-5160

	 	(b)	 	Monterey Funding LLC

c/o Lord Securities Corporation 

48 Wall Street, 27th Floor

New York, NY 10005

With Copy To:

Deutsche Bank AG, New York Branch

60 Wall Street, 18th Floor 
New York,

New York 10005

Mail Stop: NYC60-1850

 

 

Attention: Mary Conners

Telecopier: (212) 797-5150

Telephone: (212) 250-4731

	 	(c) 	 	 Montage Funding LLC

c/o Lord Securities Corporation

48 Wall Street, 27th Floor

New York, NY 10005

With Copy To:

Deutsche Bank AG, New York Branch

60 Wall Street, 18th Floor

New York, New York 10005

Mail Stop: NYC60-1850

Attention: Mary Conners

Telecopier: (212) 797-5150

Telephone: (212) 250-4731

	7.	 	if to the Administrative Agent:

DB Structured Products, Inc. 
60
Wall Street, 19th
Floor 
New York, New York 10005

Attention: Glenn Minkoff

Tel: (212) 250-3406

Fax: (212) 797-5160

 

 

Schedule A

Purchaser Information

	 	 	 	 	 
	Greenwich Capital Financial Products, Inc.
	 	 	 	 
	 
	 	 	 	 
	Maximum Note Principal Balance:
	 	$	1,200,000,000	 
	Commitment:
	 	$	725,000,000	 
	Commitment Interest:
	 	 	60.4167	%
	 
	 	 	 	 
	The CIT Group/Business Credit, Inc.
	 	 	 	 
	 
	 	 	 	 
	Maximum Note Principal Balance:
	 	$	1,200,000,000	 
	Commitment:
	 	$	50,000,000	 
	Commitment Interest:
	 	 	4.1667	%
	 
	 	 	 	 
	DB Structured Products, Inc.
	 	 	 	 
	 
	 	 	 	 
	Maximum Note Principal Balance:
	 	$	1,200,000,000	 
	Commitment:
	 	$	425,000,000	 
	Commitment Interest:
	 	 	35.4167	%

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