RELEASE AND RESTRICTIVE COVENANTS AGREEMENT

1.

In consideration of Cashen’s execution of, failure to revoke and continued compliance with the terms and conditions of the Release, the Company agrees to (a) pay to Cashen a lump sum payment equal to $1,864,800.00, (b) transfer to Cashen title of a 2006 Cadillac Escalade, VIN# 3GYFK66N86G134294 (the “Vehicle”); provided after the Vehicle has been transferred to Cashen, Cashen shall be solely responsible for any taxes, registration, insurance, maintenance and fuel for the Vehicle, (c) transfer to Cashen title to an IBM Thinkpad computer (I.D. 6782) and its monitor, power cord and printer and (d) allow Cashen to continue to vest in and, to the extent applicable, exercise, any outstanding options or restricted stock units that have been awarded to Cashen under the 2005 PHH Corporation 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 and been exercisable had Cashen remained in the employ of the Company through October 11, 2009. The payment described in clause (a) shall be paid, the Vehicle described in clause (b) and the computer and printer described in clause (c) shall be transferred, to Cashen no later than ten (10) business days after the Effective Date of the Release, provided that the transfer of the computer referred to in clause (c) shall not occur unless Cashen returns such computer to the Company before the beginning of

2.

Cashen acknowledges that: (a) the payments and benefits set forth in this Release 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 Release, the Company does not and will not have any other liability or obligation to Cashen. Cashen further acknowledges that, in the absence of his execution of this Release, benefits and payments specified in the “Consideration” section of the Release would not otherwise be due to Cashen.

1.

Claims or actions brought, in good faith, solely to enforce or clarify the promises, rights, entitlements, obligations, and benefits provided in this Release, including but not limited to those provided under the “Consideration” section of this Agreement;

2.

Vested benefits under retirement plans sponsored by the Company in which Cashen is a participant, based on services performed prior to the Termination Date;

3.

Rights to continue health care coverage pursuant to the Consolidated Omnibus Reconciliation Act of 1985, at his own expense, under the Company’s group health plan upon a qualifying event, e.g., termination of employment;

4.

Rights to convert coverage under an existing life insurance policy provided by the Company, subject to the conversion rights of such policy;

5.

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 Cashen’s employment prior to the Termination Date;

6.

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 Cashen as an agent, officer, or employee of the Company, prior to the Termination Date;

7.

Earned wages and compensation, accrued vacation and accrued fringe benefits, or reimbursement for authorized expenses acquired or incurred before the Termination Date, including any bonus which may become due to Cashen under the Company’s 2005 Management Incentive Plan. Such bonus will be paid to Cashen if and when the bonus is paid to the Company’s executive officers, at a level consistent with Cashen’s former duties as Chief Financial Officer of the Company and subject to the terms of the 2005 Management Incentive Plan; and

8.

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 Cashen 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 Cashen’s employment or involve any claim for compensation or benefits for services rendered to the Company.