Strange Problem with Exim 4.10

Hello,

We're having trouble with a server that is running Exim 4.10. When we
try to send from a username that can't be verified, the server appears
to hang within the multiline SMTP response:

[testing@example bin]$ telnet server.example.com 25
Trying xxx.xxx.xxx.xxx...
Connected to server.example.com (xxx.xxx.xxx.xxx).
Escape character is '^]'.
220 server.example.com ESMTP Example (4.10) Fri, 26 Aug 2005 15:26:30
+0900
ehlo test
250-server.example.com Hello test [yyy.yyy.yyy.yyy]
250-SIZE 20971520
250-8BITMIME
250-ETRN
250-STARTTLS
250 HELP
MAIL FROM:<testing@sender.example.net>
250 OK
RCPT TO:<testing@receiver.example.net>
550-Verification failed for <testing@sender.example.net>

If I send another command (it doesn't seem to matter what the command
is), then the remainder of the 550 response comes back from the server,
but the command itself is ignored:

help
550-Unrouteable address
550 Sender verify failed

Obviously they should be running a more recent version of the software,
but in order to convince them to upgrade I wondered if someone could
tell me if this has been fixed? I scanned doc/ChangeLog and jumped out
immediately, but the log is very large so I may not have searched for
the right keywords. Maybe someone out there remembers?

Thanks!

TM