Document:

exv10w1

Exhibit 10.1

August 4, 2009

STRICTLY CONFIDENTIAL

Mr. Brian M. Culley

Chief Business Officer

Adventrx Pharmaceuticals Inc.

6725 Mesa Ridge Road

Suite 100

San Diego, CA 92121

Dear Mr. Culley:

     This letter (the “Agreement”) constitutes the agreement between Adventrx Pharmaceuticals Inc.
(the “Company”) and Rodman & Renshaw, LLC (“Rodman”) that Rodman shall serve as the exclusive
placement agent (the “Services”) for the Company, on a “best efforts” basis, in connection with the
proposed offer and placement (the “Offering”) by the Company of approximately $1.0 million of
securities of the Company (the “Securities”), including convertible preferred securities. The terms
of the Offering and the Securities shall be mutually agreed upon by the Company and the investors
and nothing herein implies that Rodman would have the power or authority to bind the Company or an
obligation for the Company to issue any Securities or complete the Offering. The Company expressly
acknowledges and agrees that Rodman’s obligations hereunder are on a reasonable best efforts basis
only and that the execution of this Agreement does not constitute a commitment by Rodman to
purchase the Securities and does not ensure the successful placement of the Securities or any
portion thereof or the success of Rodman with respect to securing any other financing on behalf of
the Company. As the Offering will consist of registered securities, the provisions of Annex A will
apply in addition to the provisions set forth herein.

     A. Fees and Expenses. In connection with the Services described above, the Company
shall pay to Rodman the following compensation:

          1. Placement Agent’s Fee. The Company shall pay to Rodman a cash placement fee (the
“Placement Agent’s Fee”) equal to 7% of the aggregate purchase price paid by each purchaser of
Securities that are placed in the Offering. The Placement Agent’s Fee shall be paid at the closing
of the Offering (the “Closing”) from the gross proceeds of the Securities sold.

          2. Warrants. As additional compensation for the Services, the Company shall issue to
Rodman or its designees at the closing of the Offering (the “Closing”), warrants (the “Rodman
Warrants”) to purchase that number of shares of common stock of the Company (“Shares”) equal to 5%
of the aggregate number of Shares placed in the Offering. The Rodman Warrants shall have the same
terms, including exercise price and registration rights, as the warrants issued to investors
(“Investors”) in the Offering. If no warrants are issued to Investors, the Rodman Warrants shall
have an exercise price equal to 125% of the price at which Shares are issued to Investors, or, if
no Shares are issued, 125% of the current market price of the Shares at Closing, an exercise period
of five years and registration rights for the Shares underlying the Rodman Warrants equivalent to
those granted with respect to the Securities.

     B. Term and Termination of Engagement. The term (the “Term”) of Rodman’s engagement
will begin on the date hereof and end on the earlier of the consummation of the Offering or two
business days after the receipt by either party hereto of written notice of termination; provided
that no such notice may be given by the Company for a period of 30 days after the date hereof.
Notwithstanding anything to

 

 

the contrary contained herein, the provisions concerning confidentiality, indemnification and
contribution contained herein and the Company’s obligations contained in Section H hereof will
survive any expiration or termination of this Agreement, and the Company’s obligation to pay fees
actually earned and payable and to reimburse expenses actually incurred and reimbursable pursuant
to Section A hereof, will survive any expiration or termination of this Agreement.

     C. [Intentionally Omitted]

     D. Use of Information. The Company will furnish Rodman such written information as
Rodman reasonably requests in connection with the performance of its services hereunder. The
Company understands, acknowledges and agrees that, in performing its services hereunder, Rodman
will use and rely entirely upon such information as well as publicly available information
regarding the Company and other potential parties to an Offering and that Rodman does not assume
responsibility for independent verification of the accuracy or completeness of any information,
whether publicly available or otherwise furnished to it, concerning the Company or otherwise
relevant to an Offering, including, without limitation, any financial information, forecasts or
projections considered by Rodman in connection with the provision of its services.

     E. Confidentiality. In the event of the consummation or public announcement of any
Offering, Rodman shall have the right to disclose its participation in such Offering, including,
without limitation, the placement at its cost of “tombstone” advertisements in financial and other
newspapers and journals. Rodman agrees not to use any confidential information concerning the
Company provided to Rodman by the Company for any purposes other than those contemplated under this
Agreement.

     F. Securities Matters. The Company shall be responsible for any and all compliance
with the securities laws applicable to it, including Regulation D and the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, and unless otherwise agreed
in writing, all state securities (“blue sky”) laws. Rodman agrees to cooperate with counsel to the
Company in that regard.

     G. Company Acknowledgement. The Company acknowledges that the Offering of convertible
Securities may create significant risks, including the risk that the Company may have insufficient
cash resources and/or registered shares to timely meet its payment and conversion obligations. The
Company further acknowledges that, depending on the number and price of new shares issued, such
transaction may result in substantial dilution which could adversely affect the market price of the
Company’s shares.

     H. Indemnity.

          1. In connection with the Company’s engagement of Rodman as placement agent, the Company
hereby agrees to indemnify and hold harmless Rodman and its affiliates, and the respective
controlling persons, directors, officers, shareholders, agents and employees of any of the
foregoing (collectively the “Indemnified Persons”), from and against any and all claims, actions,
suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by
any of them (including the reasonable fees and expenses of counsel), as incurred, (collectively a
“Claim”), that are (A) related to or arise out of (i) any actions taken or omitted to be taken
(including any untrue statements made or any statements omitted to be made) by the Company, or (ii)
any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s
engagement of Rodman, or (B) otherwise relate to or arise out of Rodman’s activities on the
Company’s behalf under Rodman’s engagement, and the Company shall reimburse any Indemnified Person
for all expenses (including the reasonable fees and

 

 

expenses of counsel) as incurred by such Indemnified Person in connection with investigating,
preparing or defending any such claim, action, suit or proceeding, whether or not in connection
with pending or threatened litigation in which any Indemnified Person is a party. The Company will
not, however, be responsible for any Claim, that is finally judicially determined to have resulted
from the gross negligence or willful misconduct of any person seeking indemnification for such
Claim. The Company further agrees that no Indemnified Person shall have any liability to the
Company for or in connection with the Company’s engagement of Rodman except for any Claim incurred
by the Company as a result of such Indemnified Person’s gross negligence or willful misconduct.

          2. The Company further agrees that it will not, without the prior written consent of Rodman,
settle, compromise or consent to the entry of any judgment in any pending or threatened Claim in
respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is
an actual or potential party to such Claim), unless such settlement, compromise or consent includes
an unconditional, irrevocable release of each Indemnified Person from any and all liability arising
out of such Claim.

          3. Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion
or institution of any Claim with respect to which indemnification is being sought hereunder, such
Indemnified Person shall notify the Company in writing of such complaint or of such assertion or
institution but failure to so notify the Company shall not relieve the Company from any obligation
it may have hereunder, except and only to the extent such failure results in the forfeiture by the
Company of substantial rights and defenses. If the Company so elects or is requested by such
Indemnified Person, the Company will assume the defense of such Claim, including the employment of
counsel reasonably satisfactory to such Indemnified Person and the payment of the fees and expenses
of such counsel. In the event, however, that legal counsel to such Indemnified Person reasonably
determines that having common counsel would present such counsel with a conflict of interest or if
the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and
legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses
available to it or other Indemnified Persons different from or in addition to those available to
the Company, then such Indemnified Person may employ its own separate counsel to represent or
defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses
of such counsel. Notwithstanding anything herein to the contrary, if the Company fails timely or
diligently to defend, contest, or otherwise protect against any Claim, the relevant Indemnified
Party shall have the right, but not the obligation, to defend, contest, compromise, settle, assert
crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified
by the Company therefor, including without limitation, for the reasonable fees and expenses of its
counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof. In
addition, with respect to any Claim in which the Company assumes the defense, the Indemnified
Person shall have the right to participate in such Claim and to retain his, her or its own counsel
therefor at his, her or its own expense.

          4. The Company agrees that if any indemnity sought by an Indemnified Person hereunder is held
by a court to be unavailable for any reason then (whether or not Rodman is the Indemnified Person),
the Company and Rodman shall contribute to the Claim for which such indemnity is held unavailable
in such proportion as is appropriate to reflect the relative benefits to the Company, on the one
hand, and Rodman on the other, in connection with Rodman’s engagement referred to above, subject to
the limitation that in no event shall the amount of Rodman’s contribution to such Claim exceed the
amount of fees actually received by Rodman from the Company pursuant to Rodman’s engagement. The
Company hereby agrees that the relative benefits to the Company, on the one hand, and Rodman on the
other, with respect to Rodman’s engagement shall be deemed to be in the same proportion as (a) the
total value paid or proposed to be paid or received by the Company or its stockholders as the case
may be,

 

 

pursuant to the Offering (whether or not consummated) for which Rodman is engaged to render
services bears to (b) the fee paid or proposed to be paid to Rodman in connection with such
engagement.

          5. The Company’s indemnity, reimbursement and contribution obligations under this Agreement
(a) shall be in addition to, and shall in no way limit or otherwise adversely affect any rights
that any Indemnified Party may have at law or at equity and (b) shall be effective whether or not
the Company is at fault in any way.

     I. Limitation of Engagement to the Company. The Company acknowledges that Rodman has
been retained only by the Company, that Rodman is providing services hereunder as an independent
contractor (and not in any fiduciary or agency capacity) and that the Company’s engagement of
Rodman is not deemed to be on behalf of, and is not intended to confer rights upon, any
shareholder, owner or partner of the Company or any other person not a party hereto as against
Rodman or any of its affiliates, or any of its or their respective officers, directors, controlling
persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), employees or agents. Unless otherwise
expressly agreed in writing by Rodman, no one other than the Company is authorized to rely upon
this Agreement or any other statements or conduct of Rodman, and no one other than the Company is
intended to be a beneficiary of this Agreement. The Company acknowledges that any recommendation
or advice, written or oral, given by Rodman to the Company in connection with Rodman’s engagement
is intended solely for the benefit and use of the Company’s management and directors in considering
a possible Offering, and any such recommendation or advice is not on behalf of, and shall not
confer any rights or remedies upon, any other person or be used or relied upon for any other
purpose. Rodman shall not have the authority to make any commitment binding on the Company. The
Company, in its sole discretion, shall have the right to reject any investor introduced to it by
Rodman. The Company agrees that it will perform and comply with the covenants and other
obligations set forth in the purchase agreement and related transaction documents between the
Company and the investors in the Offering, and that Rodman will be entitled to rely on the
representations, warranties, agreements and covenants of the Company contained in such purchase
agreement and related transaction documents as if such representations, warranties, agreements and
covenants were made directly to Rodman by the Company.

     J. Limitation of Rodman’s Liability to the Company. Rodman and the Company further
agree that neither Rodman nor any of its affiliates or any of its their respective officers,
directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act), employees or agents shall have any liability to the Company, its security
holders or creditors, or any person asserting claims on behalf of or in the right of the Company
(whether direct or indirect, in contract, tort, for an act of negligence or otherwise) for any
losses, fees, damages, liabilities, costs, expenses or equitable relief arising out of or relating
to this Agreement or the Services rendered hereunder, except for losses, fees, damages,
liabilities, costs or expenses that arise out of or are based on any action of or failure to act by
Rodman and that are finally judicially determined to have resulted solely from the gross negligence
or willful misconduct of Rodman.

     K. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be fully performed
therein. Any disputes that arise under this Agreement, even after the termination of this
Agreement, will be heard only in the state or federal courts located in the City of New York, State
of New York. The parties hereto expressly agree to submit themselves to the jurisdiction of the
foregoing courts in the City of New York, State of New York. The parties hereto expressly waive any
rights they may have to contest the jurisdiction, venue or authority of any court sitting in the
City and State of New York. In the event of the bringing of any action, or suit by a party hereto
against the other party hereto, arising out of or relating to this Agreement, the party in whose
favor the final judgment or award shall be entered shall be entitled to

 

 

have and recover from the other party the costs and expenses incurred in connection therewith,
including its reasonable attorneys’ fees. Any rights to trial by jury with respect to any such
action, proceeding or suit are hereby waived by Rodman and the Company.

     L. Notices. All notices hereunder will be in writing and sent by certified mail, hand
delivery, overnight delivery or fax, if sent to Rodman, to Rodman & Renshaw, LLC, at the address
set forth on the first page hereof, fax number (646) 841-1640, Attention: General Counsel, and if
sent to the Company, to the address set forth on the first page hereof, fax number (858) 552-0876,
Attention: Chief Business Officer. Notices sent by certified mail shall be deemed received five
days thereafter, notices sent by hand delivery or overnight delivery shall be deemed received on
the date of the relevant written record of receipt, and notices delivered by fax shall be deemed
received as of the date and time printed thereon by the fax machine.

     M. Miscellaneous. This Agreement shall not be modified or amended except in writing
signed by Rodman and the Company. This Agreement shall be binding upon and inure to the benefit of
both Rodman and the Company and their respective assigns, successors, and legal representatives.
This Agreement constitutes the entire agreement of Rodman and the Company with respect to this
Offering and supersedes any prior agreements with respect to the subject matter hereof, and the May
22, 2009 engagement agreement between the parties shall continue in accordance with its terms other
than with respect to this Offering. If any provision of this Agreement is determined to be invalid
or unenforceable in any respect, such determination will not affect such provision in any other
respect, and the remainder of the Agreement shall remain in full force and effect. This Agreement
may be executed in counterparts (including facsimile counterparts), each of which shall be deemed
an original but all of which together shall constitute one and the same instrument.

 

 

     In acknowledgment that the foregoing correctly sets forth the understanding reached by Rodman
and the Company, please sign in the space provided below, whereupon this letter shall constitute a
binding Agreement as of the date indicated above.

	 	 	 	 	 
	 	Very truly yours,

RODMAN & RENSHAW, LLC

 	 
	 	By  	/s/ John Borer
 	 
	 	 	Name:  	John Borer 	 
	 	 	Title:  	Sr Managing Director 	 
	 

	 	 	 	 	 
	Accepted and Agreed:

ADVENTRX PHARMACEUTICALS INC.

 	 
	 	By  	/s/ Brian M. Culley
 	 	 
	 	 	Mr. Brian M. Culley 	 	 
	 	 	Chief Business Officer 	 	 

 

 

	 	 	 	 	 

Annex A

Additional Provisions With Respect to a Registered Offering

SECTION 1. WARRANTS The Rodman Warrants described in Section A.2 shall not be transferable
except as permitted by FINRA Rule 5110.

SECTION 2. REGISTRATION STATEMENT.

The Company represents and warrants to, and agrees with, the Placement Agent that:

     (A) The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (Registration File No. 333-159376) under the Securities Act of
1933, as amended (the “Securities Act”), which became effective on June 4, 2009, for the
registration under the Securities Act of the Shares. At the time of such filing, the Company met
the requirements of Form S-3 under the Securities Act. Such registration statement meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule.
The Company will file with the Commission pursuant to Rule 424(b) under the Securities Act, and the
rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a
supplement to the form of prospectus included in such registration statement relating to the
placement of the Shares and the plan of distribution thereof and has advised the Placement Agent of
all further information (financial and other) with respect to the Company required to be set forth
therein. Such registration statement, including the exhibits thereto, as amended at the date of
this Agreement, is hereinafter called the “Registration Statement”; such prospectus in the form in
which it appears in the Registration Statement is hereinafter called the “Base Prospectus”; and the
supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant
to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter called the
“Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the Base
Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents
incorporated by reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or
before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be; and any reference in this Agreement to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All
references in this Agreement to financial statements and schedules and other information which is
“contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the Registration Statement,
the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the
effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus
Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated
or, to the Company’s knowledge, is threatened by the Commission. For purposes of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act and the
“Time of Sale Prospectus” means the preliminary prospectus, if any, together with the free writing
prospectuses, if any, used in connection with the Placement, including any documents incorporated
by reference therein.

 

 

     (B) The Registration Statement (and any further documents to be filed with the Commission)
contains all exhibits and schedules as required by the Securities Act. Each of the Registration
Statement and any post-effective amendment thereto, at the time it became effective, complied in
all material respects with the Securities Act and the Exchange Act and the applicable Rules and
Regulations and did not and, as amended or supplemented, if applicable, will not, contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement, each as of its respective date, comply in all
material respects with the Securities Act and the Exchange Act and the applicable Rules and
Regulations. Each of the Base Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement, as amended or supplemented, did not and will not contain as of the date thereof any
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. The
Incorporated Documents, when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the applicable Rules and Regulations, and none
of such documents, when they were filed with the Commission, contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the statements therein (with
respect to Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus
Supplement), in light of the circumstances under which they were made not misleading; and any
further documents so filed and incorporated by reference in the Base Prospectus, the Time of Sale
Prospectus, if any, or Prospectus Supplement, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act and the applicable
Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. No post-effective amendment to the
Registration Statement reflecting any facts or events arising after the date thereof which
represent, individually or in the aggregate, a fundamental change in the information set forth
therein is required to be filed with the Commission. There are no documents required to be filed
with the Commission in connection with the transaction contemplated hereby that (x) have not been
filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time
period. There are no contracts or other documents required to be described in the Base Prospectus,
the Time of Sale Prospectus, if any, or Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, which have not been described or filed as required.

     (C) The Company is eligible to use free writing prospectuses in connection with the Placement
pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the
Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be,
filed with the Commission in accordance with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or
that was prepared by or behalf of or used by the Company complies or will comply in all material
respects with the requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. The Company will not, without the prior consent of the Placement Agent,
prepare, use or refer to, any free writing prospectus.

     (D) The Company has delivered, or will as promptly as practicable deliver, to the Placement
Agent complete conformed copies of the Registration Statement and of each consent and certificate
of experts, as applicable, filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the
Placement Agent reasonably requests. Neither the Company nor any of its directors and officers has
distributed and none of them will distribute, prior to the Closing Date, any offering material in
connection with the offering and sale of the

 

 

Shares other than the Base Prospectus, the Time of Sale Prospectus, if any, the Prospectus
Supplement, the Registration Statement, copies of the documents incorporated by reference therein
and any other materials permitted by the Securities Act.

SECTION 3. REPRESENTATIONS AND WARRANTIES. Except as set forth under the
corresponding section of the Disclosure Schedules or as disclosed in the SEC Reports (as defined
below) or the Registration Statement, the Company hereby makes the representations and warranties
set forth below to the Placement Agent.

     (A) Organization and Qualification. All of the direct and indirect subsidiaries
(individually, a “Subsidiary”) of the Company are set forth on Schedule 3(A). The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary
free and clear of any “Liens” (which for purposes of this Agreement shall mean a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right or other
restriction), and all the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation or default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no “Proceeding” (which for purposes of this Agreement shall mean any
action, claim, suit, investigation or proceeding (including, without limitation, an investigation
or partial proceeding, such as a deposition), whether commenced or threatened) has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail
such power and authority or qualification.

     (B) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company, its board of directors or its
stockholders in connection therewith other than in connection with the “Required Approvals”
(as defined in subsection 3(D) below). Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with the terms hereof and
thereof, will constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

     (C) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the consummation by the
Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of

 

 

the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others
any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse
of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or
affected; except in the case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.

     (D) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority or other
“Person” (defined as an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind, including, without
limitation, any Trading Market) in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than such filings as are required to be made under
applicable Federal and state securities laws, under the applicable rules of the NYSE Amex
(“AMEX”) or that certain Rights Agreement, dated July 27, 2005, as amended (the “Rights
Agreement”) (collectively, the “Required Approvals”).

     (E) Issuance of the Securities; Registration. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction Documents, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Company has
reserved from its duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to the Transaction Documents. The issuance by the Company of the Securities has
been registered under the Securities Act and all of the Securities are freely transferable and
tradable by the Purchasers without restriction (other than any restrictions arising solely from an
act or omission of a Purchaser). The Securities are being issued pursuant to the Registration
Statement and the issuance of the Securities has been registered by the Company under the
Securities Act. The Registration Statement is effective and available for the issuance of the
Securities thereunder and the Company has not received any notice that the Commission has issued or
intends to issue a stop-order with respect to the Registration Statement or that the Commission
otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, or intends or has threatened in writing to do so. The “Plan of
Distribution” section under the Registration Statement permits the issuance and sale of the
Securities hereunder. Upon receipt of the Securities, the Purchasers will have good and marketable
title to such Securities and the Securities will be freely tradable on the “Trading Market”
(which, for purposes of this Agreement shall mean means the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question: the Nasdaq Capital
Market, the NYSE Alternext US, the New York Stock Exchange, the Nasdaq National Market or the OTC
Bulletin Board).

     (F) Capitalization. The capitalization of the Company is as set forth on Schedule
3(F). The Company has not issued any capital stock since its most recently filed periodic report
under the Exchange Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the
Company’s employee stock purchase

 

 

plan and pursuant to the conversion or exercise of securities exercisable, exchangeable or
convertible into Common Stock (“Common Stock Equivalents”). No Person has any right of
first refusal, preemptive right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except as a result of the purchase and
sale of the Securities, there are no outstanding options, warrants, script rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to issue additional
shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will
not obligate the Company to issue shares of Common Stock or other securities to any Person (other
than the Purchasers) and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or
purchase securities. No further approval or authorization of any stockholder, the Board of
Directors of the Company or others is required for the issuance and sale of the Securities. Other
than the Rights Agreement, there are no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to which the Company is a party or, to the
knowledge of the Company, between or among any of the Company’s stockholders.

     (G) SEC Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements and other documents
required to be filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period
as the Company was required by law to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any such extension.
As of their respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.

     (H) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date
of the latest audited financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has
not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or
required to be disclosed in filings made with the Commission, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any agreements

 

 

to purchase or redeem any shares of its capital stock and (v) the Company has not issued any
equity securities to any officer, director or “Affiliate” (defined as any Person that,
directly or indirectly through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under Rule 144 under the
Securities Act), except pursuant to existing Company stock option plans. The Company does not have
pending before the Commission any request for confidential treatment of information. Except for
the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3(H), no
event, liability or development has occurred or exists with respect to the Company or its
Subsidiaries or their respective business, properties, operations or financial condition, that
would be required to be disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed 1 Trading Day prior to the date that
this representation is made.

     (I) Litigation. There is no action, suit, inquiry, notice of violation, Proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act. None of the Company’s or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company, and neither the Company or any of its
Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. No executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive covenant, and the
continued employment of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     (J) Labor Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company which could reasonably be
expected to result in a Material Adverse Effect.

     (K) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such default or violation
has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body,
or (iii) is or has been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws applicable to
its business and all such laws that affect the environment, except in each case as could not have a
Material Adverse Effect.

 

 

     (L) Regulatory Permits. The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not have or reasonably be expected to result
in a Material Adverse Effect (“Material Permits”), and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or modification of any
Material Permit. For clarity, the Company has not received the approval of any regulatory agency
to market any of its product candidates.

     (M) Title to Assets. The Company and the Subsidiaries have good and marketable title
in fee simple to all real property owned by them that is material to the business of the Company
and the Subsidiaries and good and marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company and
the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which
is neither delinquent nor subject to penalties. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases
of which the Company and the Subsidiaries are in compliance.

     (N) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to
use, all patents, patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other similar intellectual property
rights necessary or material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary
has received a notice (written or otherwise) that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of
the Company, all such Intellectual Property Rights are enforceable (other than patent and trademark
applications) and there is no existing infringement by another Person of any of the Intellectual
Property Rights of others. The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

     (O) Insurance. The Company and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses in which the Company and the Subsidiaries are engaged, including, but
not limited to, directors and officers insurance coverage at least equal to the aggregate
subscription amount under the Transaction Documents. To the knowledge of the Company, such
insurance contracts and policies are accurate and complete. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.

     (P) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction with the Company or
any Subsidiary (other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise requiring payments to or
from any officer, director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other
employee benefits, including stock option agreements under any stock option plan of the Company.

 

 

     (Q) Sarbanes-Oxley. Except as disclosed in the SEC Reports or the Registration
Statement, the Company is in material compliance with all provisions of the Sarbanes-Oxley Act of
2002 which are applicable to it as of the date hereof and of the closing date of the Placement.

     (R) Certain Fees. Except as otherwise provided in this Agreement, no brokerage or
finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.

     (S) Trading Market Rules. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.

     (T) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become subject to the Investment
Company Act.

     (U) Registration Rights. No Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.

     (V) Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. Except as set
forth in Schedule 3(V), the Company has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance requirements of such
Trading Market.

     (W) Application of Takeover Protections. Except as set forth in the Registration
Statement, the Company and its Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the
Company’s Certificate of Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Purchasers as a result of the Purchasers
and the Company fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation as a result of the Company’s issuance of the Securities and
the Purchasers’ ownership of the Securities.

     (X) Solvency. Based on the financial condition of the Company as of the Closing Date
after giving effect to the receipt by the Company of the proceeds from the sale of the Securities
hereunder, (i) the Company’s fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature and (ii) the current cash flow of the
Company, together with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its debt when such amounts are required to be paid. The Company does
not intend to incur debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt). The SEC Reports set
forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of
this

 

 

Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts
owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of business; and (c) the
present value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with
respect to any Indebtedness.

     (Y) Tax Status. Except for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the Company and each
Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and
has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax
deficiency which has been asserted or threatened against the Company or any Subsidiary.

     (Z) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by
any person acting on its behalf of which the Company is aware) which is in violation of law, or
(iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

     (AA) Accountants. The Company’s accountants are set forth on Schedule 3(AA) of the
Disclosure Schedule. To the knowledge of the Company, such accountants, who the Company expects
will express their opinion with respect to the financial statements to be included in the Company’s
next Annual Report on Form 10-K, are a registered public accounting firm as required by the
Securities Act.

     (BB) Regulation M Compliance. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in
the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities (other than for the placement agent’s placement
of the Securities), or (iii) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.

     (CC) Approvals. The issuance and listing on the AMEX of the Shares requires no
further approvals, including but not limited to, the approval of shareholders.

     (DD) FINRA Affiliations. There are no affiliations with any FINRA member firm among
the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or
greater stockholder of the Company, except as set forth in the Base Prospectus.

 

 

SECTION 4. CLOSING. The obligations of the Placement Agent and the Purchasers,
and the closing of the sale of the Securities hereunder are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties on the part of the Company and its
Subsidiaries contained herein, to the accuracy of the statements of the Company and its
Subsidiaries made in any certificates pursuant to the provisions hereof, to the performance by the
Company and its Subsidiaries of their obligations hereunder, and to each of the following
additional terms and conditions:

     (A) No stop order suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of the Commission (to be
included in the Registration Statement, the Base Prospectus or the Prospectus Supplement or
otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent.

     (B) The Placement Agent shall not have discovered and disclosed to the Company on or prior to
the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement
or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary to make the
statements therein not misleading.

     (C) All corporate proceedings and other legal matters incident to the authorization, form,
execution, delivery and validity of each of this Agreement, the Securities, the Registration
Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.

     (D) The Placement Agent shall have received from outside counsel to the Company such counsel’s
written opinion, addressed to the Placement Agent and the Purchasers dated as of the Closing Date,
in form and substance reasonably satisfactory to the Placement Agent, which opinion shall include a
“10b-5” representation from such counsel.

     (E) Neither the Company nor any of its Subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by reference in the Base Prospectus,
any loss or interference with its business from fire, explosion, flood, terrorist act or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth in or contemplated by the Base Prospectus and
(ii) since such date there shall not have been any change in the capital stock or long-term debt of
the Company or any of its Subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, general affairs, management, financial position,
stockholders’ equity, results of operations or prospects of the Company and its Subsidiaries,
otherwise than as set forth in or contemplated by the Base Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the Placement Agent, so material
and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by the Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement.

     (F) The Common Stock is registered under the Exchange Act and, as of the Closing Date, the
Shares shall be listed and admitted and authorized for trading on AMEX, and satisfactory evidence
of such actions shall have been provided to the Placement Agent. The Company shall have taken no
action designed to, or likely to have the effect of terminating the registration of the Common
Stock under the Exchange Act or delisting or suspending from trading the Common Stock from AMEX,
nor has the

 

 

Company received any information suggesting that the Commission or AMEX is contemplating
terminating such registration or listing.

     (G) Subsequent to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock Exchange, the
Nasdaq National Market or the NYSE Alternext US or in the over-the-counter market, or trading in
any securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices or maximum ranges for prices shall have been established on
any such exchange or such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, (iii) the United
States shall have become engaged in hostilities in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities involving the United
States, or there shall have been a declaration of a national emergency or war by the United States,
or (iv) there shall have occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the effect of any such
event in clause (iii) or (iv) makes it, in the sole judgment of the Placement Agent, impracticable
or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the
manner contemplated by the Base Prospectus and the Prospectus Supplement.

     (H) No action shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities or materially and adversely affect or potentially
and adversely affect the business or operations of the Company; and no injunction, restraining
order or order of any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially and adversely affect the business or operations
of the Company.

     (I) The Company shall have prepared and filed with the Commission a Current Report on Form 8-K
with respect to the Placement, including as an exhibit thereto this Agreement.

     (J) The Company shall have entered into subscription agreements with each of the Purchasers
and such agreements shall be in full force and effect and shall contain representations and
warranties of the Company as agreed between the Company and the Purchasers.

     (K) FINRA shall have raised no objection to the fairness and reasonableness of the terms and
arrangements of this Agreement. In addition, the Company shall, if requested by the Placement
Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer
Filing with FINRA pursuant to FINRA Rule 5110 with respect to the Registration Statement and pay
all filing fees required in connection therewith.

     (L) Prior to the Closing Date, the Company shall have furnished to the Placement Agent such
further information, certificates and documents as the Placement Agent may reasonably request.

     All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agent.exv10w1

Exhibit 10.1

EXECUTION COPY

TRANSITION SERVICES AND SEPARATION AGREEMENT

     THIS TRANSITION SERVICES AND SEPARATION AGREEMENT (“Agreement”) is executed as of August 5,
2009 (“Agreement Date”), by and between Terence W. Edwards (“Edwards”) and PHH Corporation (the
“Company”).

     WHEREAS, Edwards resigned as President and Chief Executive Officer of the Company, effective
June 17, 2009; and

     WHEREAS, the parties desire to (i) set forth the terms pursuant to which Edwards’ employment
will continue while the Company conducts a search for a new Chief Executive Officer, and (ii)
provide for certain payments and benefits as consideration for Edwards’ agreement to certain
restrictive covenants and his execution of a general release of claims.

     NOW THEREFORE, intending to be legally bound hereby, the Company and Edwards agree as follows:

Transition Services and Last Day of Employment

     Edwards’ employment with the Company and any of its subsidiaries and affiliates will terminate
on earlier of (i) the date that a new Chief Executive Officer of the Company is appointed, or (ii)
December 31, 2009 (such date of termination is referred to herein as the “Termination Date”). From
the Agreement Date through the Termination Date (the “Transition Period”), Edwards will perform
such services as reasonably requested by the Board of Directors or Acting Chief Executive Officer
of the Company to assist in the transition to a new Chief Executive Officer.

     During the Transition Period, the Company will continue to pay Edwards’ annual base salary of
$564,635 as in effect as of the Agreement Date (the “Base Salary”), payable bi-weekly in accordance
with the Company’s normal payroll practices. In addition, during the Transition Period, (x)
Edwards may continue to participate in the Company’s health and welfare benefit plans and 401(k)
plan, subject to the terms of the plans, and (y) the Company shall provide the use of a Company
vehicle, financial planning services, and tax reimbursements on the foregoing perquisites, to the
extent provided to senior executives of the Company, and subject to the Company’s policies and
procedures. At the end of the Transition Period, Edwards shall return the Company-provided
vehicle.

Consideration.

     In consideration of Edwards’ execution of and failure to revoke the Release Agreement
contained in Exhibit A to this Agreement (the “Release”), and his continued compliance with
the terms and conditions of this Agreement, the Company agrees to pay or provide the following
payments and benefits:

     (a) Pay to Edwards severance in an amount equal to his Base Salary for the 24-month period
beginning on the Termination Date (the “Severance Period”), with payments beginning

1

 

EXECUTION COPY

within 30 days after the Termination Date, provided that Edwards has signed the Release and it has become
irrevocable before the start of payment. The severance will be payable bi-weekly in accordance
with the Company’s normal payroll practices, however, the payments scheduled to be paid after the
Termination Date and before the Release becomes irrevocable will not be paid until the first
bi-weekly payroll date on or after the date that the Release becomes irrevocable.

     (b) Pay to Edwards’s annual cash bonuses for calendar years 2009, 2010, and 2011 in an amount
equal to the bonus Edwards would have received based on actual performance of the Company. The
bonus will be paid to Edwards at the same time bonuses are payable to corporate employees, but no
later than March 15 after the end of the applicable performance year. The amount of cash bonus for
2011 will be pro-rated to reflect the actual number of months covered by the Severance Period in
2011.

     (c) Allow Edwards to continue to vest in any outstanding options or restricted stock units
that have been awarded to Edwards under the PHH Corporation Amended and Restated 2005 Equity and
Incentive Plan (the “Equity Plan”), subject to the terms and conditions of the Equity Plan and any
award agreement, on the same basis and at the same time as such awards would have vested had
Edwards remained in the employ of the Company through the Severance Period. On the last day of the
Severance Period, all remaining outstanding unvested stock options and restricted stock units,
other than 2009 performance-based restricted stock units, will become fully vested; 2009
performance-based restricted stock units will become vested on that date to the extent that
performance goals have been satisfied or are expected to be satisfied in the reasonable discretion
of the Compensation Committee. Mr. Edwards will have the right to exercise any option that is
vested and unexercised as of the Termination Date, as well as any other option that later vests
under the terms of this Agreement, until the earlier of (1) the date on which such option would
have expired by its original terms or (2) one year after the Severance Period ends.

     (d) Pay the premium for COBRA coverage, if elected by Edwards and his eligible dependents,
upon loss of coverage under the Company’s group health plan due to his termination on the
Termination Date, until the earlier of (i) the date that Edwards becomes eligible for coverage
under another group health plan, or (ii) the end of the 18 month maximum COBRA coverage period. If
Edwards does not become eligible for coverage under another group health plan by the end of the 18
month maximum COBRA coverage period, then the Company will continue to provide coverage for Edwards
and his eligible dependents for up to an additional 6 months; however, the coverage will terminate
earlier if Edwards becomes eligible for coverage under another group health plan during that time.
The Company will impute the amount of the COBRA premium during the period of COBRA coverage and the
fair market value of the continued coverage beyond the end of the COBRA period as taxable income to
Edwards.

     (e) No later than 35 days after the Termination Date, the Company will pay to Edwards a lump
sum cash transition payment equal to fifty thousand dollars ($50,000.00).

     None of the foregoing payments or benefits will be made or provided if the Release is not
signed and has not become irrevocable within 30 days after the Termination Date. Payment and
provision of the foregoing benefits are conditioned on Edwards’ continued compliance with the
restrictive covenants in this Agreement.

2

 

EXECUTION COPY

     All amounts paid and property transferred under this Agreement shall be subject to applicable
withholdings for federal, state, and local taxes.

     Edwards acknowledges that: (A) the payments and benefits set forth in this Agreement
constitute full settlement of all his rights arising out of his employment with the Company except
to matters specifically preserved herein, (B) he has no entitlement under any other severance or
similar arrangement maintained by the Company, and (C) except as otherwise provided specifically in
this Agreement, the Company does not and will not have any other liability or obligation to
Edwards. Edwards further acknowledges that, in the absence of his execution of this Agreement and
the Release, benefits and payments specified in the “Consideration” section of the Agreement would
not otherwise be due to Edwards.

No Mitigation or Off-Set

     Edwards is under no obligation to seek other employment and there shall be no offset against
amounts or benefits due to Edwards under this Agreement as a result of any compensation that
Edwards may earn in connection with future employment.

Covenants Not to Compete

     In further consideration for the benefits and payments set forth in this Agreement, Edwards
agrees that, during the Restriction Period (as defined below), Edwards shall not compete with the
Company or any of its subsidiaries or affiliates (the “PHH Group”), as set forth below:

	 	1.	 	Edwards agrees that he will not, directly or indirectly, as an individual on
Edwards’ own account, or as an independent contractor, employee, consultant, agent,
partner, member, joint venturer or otherwise, provide any service or assistance, in any
capacity or function to any business engaged in any of the businesses of or services
provided by or contemplated to be provided by the PHH Group or otherwise competing with
the businesses of the PHH Group, as in effect on the Agreement Date or any time during
which Edwards provided services to the PHH Group, including, but not limited to
businesses in the fleet management, mortgage origination and/or mortgage servicing
industries, or any of the following: Mike Albert Leasing, Inc.; Allstate Leasing,
Inc.; ARI (Automotive Rentals, Inc.); Donlen Corporation; Enterprises Leasing Company;
GE Commercial Finance Fleet Services; Emkay Vehicle Leasing; Lease Plan U.S.A.; Wheels,
Incorporated; American Leasing; BBL; MotoLease; Merchants Leasing; Sutton Leasing;
ULTEA; SunTrust; Wells Fargo; The CEI Group; Fleet Response; CCM; Union Leasing; Wells
Fargo Home Mortgage; Bank of America Mortgage; Chase Home Finance; CitiMortgage, Inc.;
GMAC Residential Holdings; SunTrust Mortgage, Inc.; MetLife Bank; Quicken Loans, Inc.;
CTX Mortgage; Branch Banking & Trust Co.; Pulte Mortgage; AmSouth Mortgage; Fifth Third
Mortgage; U.S. Bank Home Mortgage; Citizens Mortgage Corporation; and any successor entity of any of the foregoing that is created by merger,
consolidation or any other similar transaction. Notwithstanding the foregoing, nothing
in this Agreement shall limit Edwards, as an individual on Edwards’ own account, or as
an independent contractor, employee, consultant, agent, partner, member, joint venturer
or otherwise, from providing any service or assistance

3

 

EXECUTION COPY

	 	 	 	to government-sponsored
enterprises or quasi-governmental agencies, including, without limitation, Fannie Mae
and Freddie Mac, provided that such enterprise or agency is not engaged in mortgage
origination or mortgage servicing.
	 
	 	2.	 	The Executive acknowledges that the PHH Group’s businesses are conducted
nationally and agrees that the restrictions herein shall operate throughout the United
States. Nothing herein shall prohibit Edwards from being a passive owner of not more
than five percent (5%) of the outstanding securities of any publicly traded company
that would be a competing company as described in section 1 above, so long as Edwards
has no active participation in the business of such company.
	 
	 	3.	 	Edwards agrees that he will not, directly or indirectly, as an individual on
Edwards’ own account, or as an independent contractor, employee, consultant, agent,
partner, member, joint venturer or otherwise, solicit, induce or encourage, or permit
any person or entity to solicit, encourage, induce or attempt to induce on Edwards’
behalf during the Restriction Period:

	 	(a)	 	any person who was employed by the PHH Group on the Termination
Date, and/or any person who was employed by the PHH Group at any time during
the twelve-month period immediately preceding the Termination Date, to
terminate their employment with the PHH Group, or in any way interfere with the
relationship between the PHH Group and any employee thereof; or
	 
	 	(b)	 	any customer, client, supplier, licensee or other person or
entity that does business with the PHH Group to cease doing business with the
PHH Group, or in any way interfere with the relationship between any such
persons or entities and the PHH Group; and

	 	4.	 	Edwards agrees that he will not, directly or indirectly, as an individual on
Edwards’ own account, or as an independent contractor, employee, consultant, agent,
partner, member, joint venturer or otherwise, during the Restriction Period, call on,
solicit or service any person or entity who was a customer, client, licensor or
licensee of the PHH Group at any time during the twelve-month period immediately
preceding the Termination Date for any purpose which directly or indirectly competes
with the business of the PHH Group.

     Edwards agrees and acknowledges that the promises and covenants not to compete set forth above
each have a unique, very substantial and immeasurable value to the PHH Group, that the PHH Group is
engaged in a highly competitive industry, and that Edwards is receiving significant consideration
in exchange for these promises and covenants. Edwards acknowledges that the promises and covenants
set forth above are necessary for the reasonable and proper protection of the PHH Group’s legitimate business interests; and that each and every promise and
covenant is reasonable with respect to activities restricted, geographic scope and length of time.

     The “Restriction Period” for purposes of these “Covenants Not to Compete” shall start on the
Agreement Date and end on the last day of the Severance Period.

4

 

EXECUTION COPY

Confidential Information

     Edwards acknowledges that as part of his employment with the PHH Group, he had access to
information that was not generally disclosed or made available to the public. Edwards recognizes
that in order to guard the legitimate interests of the PHH Group, it is necessary for it to protect
all confidential information. Edwards agrees to keep secret all non-public, confidential and/or
proprietary information, matters and materials of the PHH Group, and personal confidential or
otherwise proprietary information regarding the PHH Group’s employees, executives, directors or
consultants affiliated with the PHH Group, including, but not limited to, documents, materials or
information regarding, concerning or related to the PHH Group’s research and development, its
business relationships, corporate structure, financial information, financial dealings, fees,
charges, personnel, methods, trade secrets, systems, procedures, manuals, confidential reports,
clients or potential clients, financial information, business and strategic plans, proprietary
information regarding its financial or other business arrangements with the executives, sales
representatives, editors and other professionals with which it works, software programs and codes,
access codes, and other similar materials or information, as well as all other information relating
to the business of the PHH Group which is not generally known to the public or within the fleet
management and/or mortgage industries or any other industry or trade in which the PHH Group
competes (collectively, “Confidential Information”), to which Edwards has had or may have access
and shall not use or disclose such Confidential Information to any person except (a) to the extent
required by applicable law, (b) to his personal advisors, to the extent such advisors agree to be
bound by this provision, or (c) to the minimum necessary to enforce this Agreement. This obligation
is understood to be in addition to any agreements Edwards may have signed with the PHH Group or any
of its subsidiaries or affiliates concerning confidentiality and non-disclosure, non-competition,
non-solicitation, and assignment of inventions or other intellectual property developments, which
agreements will remain in full force and effect.

Non-Disparagement.

     Edwards will not disparage or defame, through verbal or written statements or otherwise, the
PHH Group or any of its members, directors, officers, agents or employees or otherwise take any
action which could reasonably be expected to adversely affect the reputation, business practices,
good will, products and services of the PHH Group or the personal or professional reputation of any
of the PHH Group’s members, directors, officers, agents or employees.

     The Company, in its official capacity, will not disparage or defame, through verbal or written
statements or otherwise, Edwards or otherwise take any action which could reasonably be expected to
adversely affect Edwards’ reputation.

5

 

EXECUTION COPY

Enforcement of Restrictive Covenants.

     Edwards agrees and acknowledges that in the event of a breach or threatened breach by Edwards
of one or more of the covenants and promises described above in “Covenants Not to Compete,”
“Confidential Information,” and “Non Disparagement,” the PHH Group will suffer irreparable harm
that is not compensable solely by damages. Edwards agrees that under such circumstances, no
further payments, rights or benefits provided under the “Consideration” section this Agreement will
be due to Edwards, Edwards must repay to the Company amounts described under “Consideration” paid
to him in cash and upon payment or exercise of equity awards that would have terminated or not
become vested without operation of the provisions in “Consideration” above, within 10 days after
demand by the Company, and the PHH Group shall be entitled, upon application to a court of
competent jurisdiction, to obtain injunctive or other relief to enforce these promises and
covenants. The Company and any other member of the PHH Group will, in addition to the remedies
provided in this Agreement, be entitled to avail itself of all such other remedies as may now or
hereafter exist at law or in equity for compensation and for the specific enforcement of the
covenants in this Agreement. Resort to any remedy provided for in this Agreement or provided for
by law will not prevent the concurrent or subsequent employment of any other appropriate remedy or
remedies or preclude the Company or PHH Group’s recovery of monetary damages and compensation.

Cooperation.

     Edwards further agrees that, subject to reimbursement of his reasonable expenses, he will
cooperate fully with the Company and any of its subsidiaries and affiliates and their counsel with
respect to any matter (including any pending or future litigation, investigations, or governmental
proceedings) which relates to matters with which Edwards was involved during his employment with
the Company. Edwards will render such cooperation in a timely manner upon reasonable notice from
the Company.

Challenge.

     If Edwards violates or successfully challenges the enforceability of any provisions of this
Agreement, no further payments, rights or benefits provided under the “Consideration” section this
Agreement will be due to Edwards. However, Edwards may seek clarification from the Company of his
rights and obligations under this Agreement, and, if a dispute remains after seeking clarification,
Edwards may raise a dispute regarding his rights under this Agreement pursuant to the Arbitration
provisions of this Agreement.

Arbitration.

     Any dispute arising under this Agreement will be resolved by arbitration administered
exclusively in Baltimore, Maryland by JAMS, pursuant to its then-prevailing Employment Arbitration
Rules & Procedures, before an arbitrator or arbitrators whose decision shall be final, binding and
conclusive on the parties, and judgment on the award may be entered in any court having
jurisdiction. The Company shall bear any and all costs of the arbitration process, excluding any
attorneys’ fees incurred by Edwards with regard to such arbitration. Edwards and the Company
further acknowledge and agree that, due to the nature of the confidential information, trade
secrets, and intellectual property belonging to the PHH Group to which

6

 

EXECUTION COPY

Edwards has been given access, and the likelihood of significant harm that the PHH Group would
suffer in the event that such information was disclosed to third parties, nothing in this paragraph
shall preclude the Company or any other member of the PHH Group from seeking injunctive relief to
prevent Edwards from violating, or threatening to violate, the terms under the “Covenants Not to
Compete,” “Confidential Information” and “Non-Disparagement” sections of this Agreement.

Miscellaneous.

     No Admission of Liability. This Agreement is not to be construed as an admission of
any violation of any federal, state or local statute, ordinance or regulation or of any duty owed
by the Company or any other person to Edwards, or by Edwards or any other person to the Company.
There have been no such violations, and both the Company and Edwards specifically deny any such
violations.

     Absence of Reliance. Edwards acknowledges that in agreeing to this Agreement, he has
not relied in any way upon representations or statements of the Company other than those
representations or statements set forth in this Agreement.

     No Reinstatement. Edwards agrees that he will not apply for reinstatement with the
Company or any other member of the PHH Group or seek in any way to be reinstated, re-employed or
hired by the Company or any other member of the PHH Group in the future.

     Section Headings. The section headings are solely for convenience of reference and
shall not in any way affect the interpretation of this Agreement.

     Notice: All notices, requests, demands and other communications made or given in
connection with this Agreement shall be in writing and shall be deemed to have been duly given (a)
if hand delivered, at the same time delivered, or (b) at the time shown on the return receipt if
mailed in a certified postage prepaid envelope (return receipt requested) addressed to the
respective parties as follows:

     If to PHH Corporation:

PHH Corporation

c/o General Counsel

3000 Leadenhall Road

Mt. Laurel, NJ 08054

     If to Terence Edwards:

Mr. Terence Edwards

90 Lane of Acres

Haddonfield, NJ 08033

or to such other address as the party to whom notice is to be given may have previously furnished
to the other party in writing in the manner set forth above.

7

 

EXECUTION COPY

     409A Compliance: The parties agree that the payments and benefits in (a), (b), and
(d) under “Consideration” in this Agreement will not be subject to the 6 month delay in payment
described in Section 409A of the Internal Revenue Code and the Treasury Regulations thereunder
(“Section 409A”) due to application of the exemptions in Treasury Regulation Section
1.409A-1(b)(9)(iii) (the “two times, two year rule”), Treasury Regulation Section 1.409A-1(b)(4)
(the “short-term deferral rule”), and Treasury Regulation Section 1.409A-1(b)(9)(v)(B) (medical
benefits).

     For purposes of Section 409A, the right to a series of installment payments under this
Agreement shall be treated as a right to a series of separate payments. “Termination of
employment,” or words of similar import, as used in this Agreement means, for purposes of any
payments under this Agreement that are payments of deferred compensation subject to Section 409A,
Edwards’ “separation from service” as defined in Section 409A.

     With respect to any reimbursement of expenses of, or any provision of in-kind benefits to,
Edwards, as specified under this Agreement, such reimbursement of expenses or provision of in-kind
benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement
or the amount of in-kind benefits provided in one taxable year shall not affect the expenses
eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year;
(2) the reimbursement of an eligible expense shall be made no later than the end of the year after
the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits
shall not be subject to liquidation or exchange for another benefit.

     Legal Expenses. The Company shall reimburse Edwards for the costs of his legal fees
in connection with the negotiation and execution of this Agreement and the Release in an amount not
to exceed $10,000.

     Successors and Assigns. This Agreement will inure to the benefit of and be binding
upon the Company and Edwards and their respective successors, executors, administrators and heirs.
Edwards may not make any assignment of this Agreement or any interest herein, by operation of law
or otherwise. The Company may assign this Agreement to any successor to all or substantially all
of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of
assets, or otherwise.

     Severability. Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law. However, if any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability will not affect any other provision, and this Agreement will be
reformed, construed and enforced as though the invalid, illegal or unenforceable provision had
never been herein contained.

     Entire Agreement; Amendments. Except as otherwise provided herein, this Agreement
contains the entire agreement and understanding of the parties hereto relating to the subject
matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and
understandings of every nature relating to the subject matter hereof. This Agreement may not be
changed or modified, except by an agreement in writing signed by each of the parties hereto.

8

 

EXECUTION COPY

     Governing Law. This Agreement will be governed by, and enforced in accordance with,
the laws of the State of Maryland without regard to the application of the principles of conflicts
of laws.

     Counterparts and Facsimiles. This Agreement may be executed, including execution by
facsimile signature, in multiple counterparts, each of which will be deemed an original, and all of
which together will be deemed to be one and the same instrument.

[signature page to follow]

9

 

EXECUTION COPY

     IN WITNESS WHEREOF, Edwards and the Company have executed this Agreement as of the date first
above written.

	 	 	 	 	 
	 	 	 
	 	/s/ Terence W. Edwards
 	 
	 	Terence W. Edwards 	 

  Date: August 4, 2009

	 	 	 	 	 
	 	PHH CORPORATION

 	 
	 	By:  	/s/ George J. Kilroy
 	 
	 	 	George J. Kilroy

Acting Chief Executive Officer and President	 

  Date: August 5, 2009

10

 

Exhibit 10.1

EXECUTION COPY

Exhibit A

RELEASE AGREEMENT

       THIS RELEASE AGREEMENT (the “Release”) is executed as of                     , 2009, by
and between Terence W. Edwards (“Edwards”) and PHH Corporation (the “Company”).

     WHEREAS, the Company and Edwards entered into a Transition Services and Separation Agreement,
executed as of                     , 2009 (the “Agreement”) that provides for certain payments and
benefits to be paid only if Edwards has signed and not revoked a general release of claims.

     NOW THEREFORE, intending to be legally bound hereby, the Company and Edwards agree as follows:

Release and Covenant Not to Sue.

     In consideration for the benefits and payments specified in the Agreement, Edwards hereby
fully and forever releases and discharges the Company and each of its subsidiaries and affiliates,
and all of their predecessors and successors, assigns, officers, directors, trustees, employees,
agents and attorneys, past and present (“Releasees”) of and from any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, damages, judgments, orders and liabilities, of whatever kind
or nature, direct or indirect, in law, equity or otherwise, whether known or unknown, arising
through the date of this Release, out of Edwards’ employment with the Company or any Releasee,
including the termination thereof. By this paragraph Edwards waives any claims which Edwards has
or may have against Releasees, or any of them. This includes all rights and obligations under any
federal, state or local laws or ordinances pertaining to employment, including but not limited to
any claims for relief or causes of action under the Age Discrimination in Employment Act, 29 U.S.C.
§621 et seq., or any other federal, state or local statute, ordinance or regulation regarding
discrimination in employment, all claims for wrongful discharge, all claims that Releasees, or any
of them, dealt unfairly with Edwards, in bad faith or in violation of any contract or agreement,
expressed or implied, that may have existed between Releasees, or any of them, and Edwards, and all
claims against Releasees, or any of them, for assault, battery, personal injury, emotional
distress, pain and suffering.

     Edwards expressly represents that he has not filed a lawsuit or initiated any other
administrative proceeding against Releasees, or any of them, and that he has not assigned any claim
against the Releasees, or any of them, Edwards further promises not to initiate a lawsuit or to
bring any other claim against Releasees, or any of them, arising out of or in any way related to
Edwards’ employment by the Company or any Releasee, including the termination of that employment.
This Release will not prevent Edwards from filing a charge with the Equal Employment Opportunity
Commission (or similar state agency) or participating in any investigation conducted by the Equal
Employment Opportunity Commission (or similar state

 

 

EXECUTION COPY

agency); provided, however, that any claims by Edwards for personal relief in connection with
such a charge or investigation (such as reinstatement or monetary damages) would be barred by this
Release.

     The foregoing will not be deemed to release the Company from any of the following claims,
entitlements or rights of Edwards for or to:

	 	1.	 	Claims or actions brought, in good faith, solely to enforce or clarify the
promises, rights, entitlements, obligations, and benefits provided in this Release or
the Agreement;
	 
	 	2.	 	Vested benefits under retirement plans sponsored by the Company in which
Edwards is a participant, based on services performed prior to the Termination Date
(as defined in the Agreement);
	 
	 	3.	 	Rights to convert coverage under an existing life insurance policy provided
by the Company, subject to the conversion rights of such policy;
	 
	 	4.	 	Coverage, if any, under any policy of liability or directors and officers
liability insurance for matters subject to said policies for activities arising out
of or in any way related to Edwards’ employment prior to the Termination Date (as
defined in the Agreement);
	 
	 	5.	 	Any right to indemnification or cost of defense from or by the Company
pursuant to the Company’s by-laws or charter, or duly adopted resolution of the
Company’s Board of Directors for activities and actions by Edwards as an agent,
officer, or employee of the Company, prior to the Termination Date (as defined in the
Agreement);
	 
	 	6.	 	Earned wages and compensation, accrued vacation and accrued fringe
benefits, or reimbursement for authorized expenses acquired or incurred before the
Termination Date (as defined in the Agreement); and
	 
	 	7.	 	Any counterclaims in connection with a lawsuit or administrative proceeding
in which the Company, its successors, assigns or subrogees seek legal or equitable
relief from Edwards provided such counterclaim (i) arises out of the transaction or
occurrence that is the subject matter of the claim raised by the Company in such
lawsuit or proceeding, (ii) does not require for adjudication the joinder or presence
of third parties, and (iii) does not relate to or arise out of the termination of
Edwards’ employment or involve any claim for compensation or benefits for services
rendered to the Company.

2

 

EXECUTION COPY

Rescission Right.

     Edwards expressly acknowledges and recites that (a) he has read and understands the terms of
this Release in its entirety, (b) he has entered into this Release knowingly and voluntarily,
without any duress or coercion; (c) he has been advised orally and is hereby advised in writing to
consult with an attorney with respect to this Release before signing it; (d) he was provided
twenty-one (21) calendar days after the receipt of the Release to consider its terms before signing
it; and (e) he has seven (7) calendar days from the date of signing to terminate and revoke this
Release in which case this Release will be unenforceable, null and void. Edwards may revoke this
Release during those seven (7) days by providing written notice of revocation to the Company. The
revocation must be delivered to the General Counsel of PHH Corporation, 3000 Leadenhall Road, Mail
Stop LGL, Mt. Laurel, NJ 08054.

[signature page to follow]

3

 

EXECUTION COPY

     IN WITNESS WHEREOF, Edwards and the Company have executed this Release as of the date first
above written.

	 	 	 	 	 
	 	 	 
	 	 	 
	 	Terence W. Edwards 	 

  Date: _______________

	 	 	 	 	 
	 	PHH CORPORATION

 	 
	 	By:  	 	 
	 	 	 	 

  Date: _______________

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]