EXHIBIT 10.2

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN SHALL BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN ONLY PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHTS
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT, OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. THE HOLDER OF THIS SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH
A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON
OF ANY PLAN’S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING “PLAN ASSETS” OF
ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS
PURCHASE AND HOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT
PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO
SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (a) IT
IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR
A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER
PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON
OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (b) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE
COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

THIS SECURITY MAY NOT BE TRANSFERRED IN PART. ANY ATTEMPTED TRANSFER OF THIS
SECURITY IN PART SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

THE HOLDER’S INTEREST IS SUBORDINATE TO THE CLAIMS OF POLICYHOLDERS, CLAIMANTS
AND BENEFICIARIES AND TO ALL OTHER CLASSES OF CREDITORS OTHER THAN SURPLUS
NOTEHOLDERS AND INTEREST PAYMENTS AND PRINCIPAL PAYMENTS REQUIRE PRIOR APPROVAL
OF THE APPLICABLE REGULATOR.

NOTWITHSTANDING ANY OTHER PROVISION OF THIS SURPLUS NOTE, ALL PAYMENTS OF
INTEREST ON AND REPAYMENT OF PRINCIPAL OF THIS SURPLUS NOTE, TO THE EXTENT
REQUIRED UNDER APPLICABLE LAW, MAY BE MADE ONLY WITH THE PRIOR WRITTEN APPROVAL
OF THE APPLICABLE REGULATOR (AS DEFINED BELOW). IT IS WITHIN THE APPLICABLE
REGULATOR’S DISCRETION TO DETERMINE WHETHER TO PERMIT THE PAYMENT OF SUCH
AMOUNTS.

Fixed Rate Senior Subordinated Surplus Note due 2020

of

PMI Mortgage Insurance Co.

PMI Mortgage Insurance Co., a stock insurance company domiciled in Arizona (the
“Company,” which term shall include any successor), for value received, promises
to pay to The PMI Group, Inc., or any registered transferee of this Surplus Note
(the “Holder”), the principal amount of Twenty Four Million Dollars
($24,000,000) on April 10, 2020, or the first Business Day thereafter (or any
earlier date of acceleration of the maturity of this Surplus Note, or the first
Business Day thereafter) (the “Maturity Date”), and to pay interest on the
outstanding principal amount of this Surplus Note (i) from May 5, 2010 or from
the most recent Interest Payment Date (as defined below) to which interest has
been paid or duly provided for, semiannually in arrears on April 10th and
October 10th of each year (each, an “Interest Payment Date”), commencing on
October 10, 2010, at an annual rate equal to 4.50% (the “Interest Rate”), in
each case subject to the Payment Restrictions (as defined below). Interest shall
accrue for each Interest Period (as defined below) until the principal hereof is
paid or duly provided for, and on any overdue principal and on any overdue
installment of interest that has been approved by the Applicable Regulator, at
an annual rate equal to the then applicable Interest Rate, compounded annually.
The amount of interest payable for any Interest Period shall be computed on the
basis of a 360-day year of twelve 30-day months.

The Interest Rate for any Interest Period will at no time be higher than the
maximum rate then permitted by applicable law and regulations of the State of
Arizona, as the same may be modified by United States law of general
application.

The holder’s interest is subordinate to the claims of policyholders, claimants
and beneficiaries and to all other classes of creditors other than surplus
noteholders and interest payments and principal payments require prior approval
of the Applicable Regulator.

Payments under this Surplus Note shall be subject to the following terms and
conditions:

(a) If and to the extent required under Applicable Insurance Laws (as defined
below) or statutory accounting principles, as applicable, for the Company to be
permitted to report in its financial statements filed with the State of Arizona
Department of Insurance or such other insurance regulatory authority of the
state of domicile of the Company (the “Applicable Regulator”) the outstanding
principal balance under the Surplus Note as constituting part of the Company’s
surplus in accordance with statutory accounting principles of the Company
applied on a consistent basis throughout the periods involved, any payment of
interest and/or principal under this Surplus Note, may be made only (i) with the
prior approval of the Applicable Regulator and (ii) from the funds and other
assets of the Company otherwise legally available to make payments with respect
to this Surplus Note under Applicable Insurance Laws (the conditions set forth
in the foregoing clauses (i) and (ii) are referred to herein as the “Payment
Restrictions”).

The Company covenants that it shall use its best efforts to obtain the approval
of the Applicable Regulator to make payments under this Surplus Note on or prior
to the date on which any such payment shall otherwise become due and payable. In
addition to and not in lieu of the foregoing, the Holder shall have the option
of seeking such approvals itself and, in such event, the Company covenants to
cooperate fully with the Holder in seeking such approvals.

“Applicable Insurance Laws” means the insurance code and statutes of Arizona and
all publicly available rules, regulations, policy statements and other guidance
thereunder and the order or approval of the Applicable Regulator authorizing the
Company to issue this Surplus Note. In the event the Company changes its state
of domicile, the law of its new domicile will be deemed to apply in the event of
a conflict with the expression provisions of this Surplus Note.

“Surplus Note Register” is the register kept by the Company at its office in
Walnut Creek, California, in which it shall provide for the registration of this
Surplus Note and the registration of transfers of the Surplus Note. Such Surplus
Note Register shall be in written form or in any other form capable of being
converted into written form within a reasonable time.

(b) To the extent that a payment of all or a portion of the principal of this
Surplus Note or interest thereon is prohibited by any Payment Restriction,
interest shall continue to be accrued on such unpaid principal amount at the
rate provided in this Surplus Note.

(c) Except as provided in (a) and (b) above, no provision of this Surplus Note
shall impair the obligations of the Company, which are absolute and
unconditional, to pay the principal and interest on this Surplus Note at the
times, place and rate, and in the coin or currency, prescribed in this Surplus
Note. No provision of this Surplus Note shall extinguish the Company’s ultimate
liability for the payment of principal and interest.

(d) Each payment made hereunder will be credited first to accrued but unpaid
interest, if any, and the balance of such payment will be credited to the
outstanding principal balance.

(e) Until such time as the Company shall receive the approval of the Applicable
Regulator for a payment under this Surplus Note, the obligation of the Company
to make such payment shall not form a part of the Company’s legal liabilities
and shall not be a basis of any set off. Until repaid, all financial statements
published or filed with the Applicable Regulator by the Company shall show as a
footnote to such financial statement all outstanding principal amounts under
this Surplus Note in accordance with the Applicable Insurance Laws and
applicable statutory accounting principles.

(f) Notwithstanding any other provision contained herein, the Company shall not
be required to make any payment of interest on this Surplus Note for any
Interest Period to the extent in excess of the Regulatory Interest Limitation,
if any, applicable to such Interest Period.

“Interest Period” means the period from and including, the date of original
issuance of this Surplus Note to, but excluding the initial Interest Payment
Date and thereafter, from and including, the first day following the end of the
preceding Interest Period, to but excluding the next applicable Interest Payment
Date or, in the case of the last Interest Period, the related Redemption Date or
Maturity Date, as applicable.

“Regulatory Interest Limitations” means any cap or other limitation on the rate
or amount of interest that may be paid on this Surplus Note pursuant to
Applicable Insurance Laws or any order approving the issuance of this Surplus
Note.

(g) No part of the obligation to pay principal or accrued interest may be offset
or subject to recoupment with respect to any liability owed to the Company.

The interest installment so payable, and punctually paid or duly provided for,
on any Interest Payment Date will be paid to the holder in whose name this
Surplus Note is registered on the Surplus Note Register at the close of business
of the “record date” for such interest installment, which shall be the
fourteenth (14th) day prior to such Interest Payment Date, whether or not such
day is a Business Day (as defined below). The Company and any agent of the
Company may treat the holder in whose name the Surplus Note is registered on the
Surplus Note Register as the owner of the Surplus Note on the applicable record
date for the purpose of receiving payments of principal and interest on the
Surplus Note and on any other date for all other purposes whatsoever (whether or
not such payment is overdue), and neither the Company nor any agent of the
Company shall be affected by notice to the contrary.

A copy of the April 20, 2010, pre-approval of interest payments issued by the
Arizona Department of Insurance is attached as Schedule A hereto.

Payment of the principal and interest on this Surplus Note due on the Maturity
Date or any Redemption Date, as the case may be, shall be made in immediately
available funds against presentation and surrender of this Surplus Note at the
office or agency of PMI Mortgage Insurance Co., 3003 Oak Road, Walnut Creek,
California 94597, or at the office or agency of any other paying agent appointed
by the Company for that purpose. Payment of interest on this Surplus Note due on
any Interest Payment Date other than the Maturity Date or any Redemption Date,
as the case may be, shall be made at the option of the Company by check mailed
to the Holder at such address as shall appear in the Surplus Note Register or by
wire transfer of immediately available funds to an account appropriately
designated by the Holder. All payments in respect of this Surplus Note shall be
payable in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts.

References to payments of principal hereunder shall include redemption amounts
and interest on overdue principal, if any.

Notwithstanding anything to the contrary contained herein, if any Interest
Payment Date other than the Maturity Date or any Redemption Date, falls on a day
that is not a Business Day, then any interest payable on such date will be paid
on, and such Interest Payment Date will be moved to, the next succeeding
Business Day, and no additional interest will accrue in respect of such payment
made on such next succeeding Business Day. If the Maturity Date or any
Redemption Date falls on a day that is not a Business Day, then the principal
and interest payable on such date will be paid on the next succeeding Business
Day, and no additional interest will accrue in respect of such payment made on
such next succeeding Business Day.

“Business Day” means any day other than a Saturday, a Sunday or a day on which
the Federal Reserve Bank of New York is authorized or required by law or
executive order to close or to be closed.

The Company waives diligence, presentment, demand for payment, notice of
nonpayment, notice of protest, and all other demands and notices.

Early Redemption. The Company shall, subject to the prior consent of the
Applicable Regulator, redeem this Surplus Note, in full or in part, prior to the
Maturity Date, in accordance with the provisions below.

If the Reference Notes are to be repurchased, in whole or in part, due to an
Optional Call or a Fundamental Change, the Company shall use its reasonable best
efforts to obtain the consent of the Applicable Regulator to redeem the
Repurchase Redemption Portion of this Surplus Note prior to the applicable
Repurchase Date, or as soon as reasonably practicable thereafter, in an amount
not to exceed the applicable Repurchase Redemption Price. Following receipt of
consent of the Applicable Regulator, on the Business Day prior to the applicable
Repurchase Date (the “Repurchase Redemption Date”), the Company shall redeem the
Repurchase Redemption Portion of this Surplus Note for an amount (the
“Repurchase Redemption Price”) equal to the applicable Repurchase Amount, or
such lesser amount approved by the Applicable Regulator, and shall in addition
pay to the Holder all unpaid interest in respect of such redeemed amount
accruing from (and including) the immediately preceding Interest Payment Date
through, but excluding, such Repurchase Redemption Date. If the Applicable
Regulator does not approve such redemption, or approves payment of a lesser
amount, then the Company shall pay to the Holder the amount so approved and the
Repurchase Redemption Portion of this Surplus Note shall remain outstanding and
unredeemed to the extent of such unapproved amount and interest shall continue
to accrue and be due and payable thereon on each Interest Payment Date following
the Repurchase Redemption Date, and the Company shall use its reasonable best
efforts to obtain the consent of the Applicable Regulator to redeem the
unapproved amount as soon as reasonably practicable following the Repurchase
Redemption Date. The portion of this Surplus Note not so redeemed shall remain
outstanding and continue to accrue interest in accordance with the terms and
conditions herein.

Following the occurrence of a Material Conversion, the Company shall use its
reasonable best efforts to obtain the consent of the Applicable Regulator to
redeem the Conversion Redemption Portion of this Surplus Note in an amount not
to exceed the Conversion Redemption Price. Following receipt of consent of the
Applicable Regulator, on the Conversion Redemption Date, the Company shall
redeem the Conversion Redemption Portion of this Surplus Note for an amount (the
“Conversion Redemption Price”) equal to the applicable Material Conversion
Amount or such lesser amount approved by the Applicable Regulator, and shall in
addition pay to the Holder all unpaid interest in respect of such redeemed
amount accruing from (and including) the immediately preceding Interest Payment
Date through, but excluding, such redemption date, if and to the extent that
holders of the Reference Notes converted in connection with the Material
Conversion are entitled to accrued and unpaid interest with respect to such
Reference Notes. If the Applicable Regulator does not approve such redemption,
or approves payment of a lesser amount, then the Company shall pay to the Holder
the amount so approved and the Conversion Redemption Portion of this Surplus
Note shall remain outstanding and unredeemed to the extent of such unapproved
amount and interest shall continue to accrue and be due and payable thereon on
each Interest Payment Date following the Conversion Redemption Date, and the
Company shall use its reasonable best efforts to obtain the consent of the
Applicable Regulator to redeem the unapproved amount as soon as reasonably
practicable following the Conversion Redemption Date. The portion of this
Surplus Note not so redeemed shall remain outstanding and continue to accrue
interest in accordance with the terms and conditions herein.

“Conversion Redemption Date” means the Business Day prior to the next succeeding
date that cash or property in respect of Reference Notes that will be converted
in connection with the Material Conversion must be paid or delivered, as the
case may be, pursuant to the Terms and Conditions.

“Conversion Redemption Portion” shall equal a portion of this Surplus Note equal
to the product of (I) the quotient of (x) the aggregate principal amount of the
Reference Notes tendered for conversion (and not validly withdrawn) on or prior
to the date of the applicable Material Conversion but following the date of the
previous Material Conversion, if any, divided by (y) the aggregate principal
amount of the Reference Notes then outstanding multiplied by (II) the principal
amount then outstanding under this Surplus Note.

“Fundamental Change” shall have the same meaning that term has in the Terms and
Conditions.

“Material Conversion” means any date on which the aggregate principal amount of
Reference Notes properly submitted for conversion and not validly withdrawn or
capable of being validly withdrawn (together with all Reference Notes previously
submitted for conversion and not validly withdrawn or capable of being validly
withdrawn and with respect to which a redemption of all or part of this Surplus
Note has not previously been made) exceeds 1% of the initial aggregate
outstanding principal amount of the Reference Notes.

“Material Conversion Amount” shall equal the aggregate cash amount to be paid by
the Reference Issuer in respect of the Reference Notes to be converted in
connection with the applicable Material Conversion, other than accrued and
unpaid interest.

“Optional Call” means the Reference Issuer’s exercise of its optional redemption
right with respect to the Reference Notes as set forth in the Terms and
Conditions.

“Redemption Date” any Repurchase Redemption Date or Conversion Redemption Date.

“Reference Notes” means those certain 4.50% Convertible Senior Notes due 2020
issued by Reference Issuer on or about May 5, 2010 in the aggregate principal
amount of Twenty Four Million Dollars ($24,000,000). A Prospectus Supplement
describing the Reference Notes is attached hereto as Schedule B.

“Reference Issuer” means The PMI Group, Inc., a Delaware corporation the common
stock of which is publicly traded on the New York Stock Exchange under the
symbol “PMI”.

“Repurchase Amount” means the aggregate cash amount (other than accrued and
unpaid interest) to be paid in respect of the redemption of the applicable
Reference Notes on the applicable Repurchase Date.

“Repurchase Date” means any date on which the Reference Issuer will repurchase
all or part of the Reference Notes pursuant to its optional or mandatory
redemption rights and obligations set forth in the Terms and Conditions.

“Repurchase Redemption Portion” shall equal a portion of this Surplus Note equal
to the product of (I) the quotient of (x) the aggregate principal amount of the
Reference Notes being redeemed at the applicable Repurchase Date divided by
(y) the aggregate principal amount of the Reference Notes then outstanding
multiplied by (II) the principal amount then outstanding under this Surplus
Note.

“Terms and Conditions” means the Description of the Notes relating to the
Reference Notes as set forth in that April 26, 2010, Prospectus Supplement to
the Prospectus dated February 12, 2009, including the base indenture and the
supplemental indenture which are referred to therein.

“Trading Day” shall have the same meaning that term has in the Terms and
Conditions.

Except as set forth above, this Surplus Note is not subject to prepayment.

In the event of redemption of this Surplus Note in part only, a new Surplus Note
for the unredeemed portion hereof will be issued in the name of the holder
hereof upon the cancellation hereof.

Upon the occurrence of an Event of Default (as defined below), the Holder may
give notice of such Event of Default to the Company, and demand payment of the
entire outstanding principal amount of this Surplus Note, plus accrued interest,
plus interest on such overdue principal at the Interest Rate, plus, to the
extent provided in any approval from the Applicable Regulator, interest on any
overdue interest that has been approved by the Applicable Regulator, such
interest to accrue at the Interest Rate to the date of payment, plus such
further amounts as shall be necessary to cover the Holder’s costs and expenses
of collection, including reasonable attorneys’ fees. Payments demanded as a
result of an Event of Default are subject to the prior notice and consent of the
Applicable Regulator. Notwithstanding the foregoing, the Holder shall not be
permitted to exercise any remedy set forth herein following the occurrence of an
Event of Default if, following the exercise of such remedy the Company would be
forced into bankruptcy or receivership.

An “Event of Default” hereunder means the occurrence of either of the following
events:

(a) default is made in the payment of any installment of interest on this
Surplus Note when such interest becomes due and payable and such default
continues for a period of 30 days, provided that the Company has obtained
approval from the Applicable Regulator for such interest payment in accordance
with the provisions hereof, or

(b) default is made in the payment of the principal of this Surplus Note when
such principal becomes due and payable, provided that the Company has obtained
approval from the Applicable Regulator for such principal payment in accordance
the provisions hereof.

No provision of this Surplus Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to make all payments due in
respect of this Surplus Note at the time and place and at the rate and in the
money herein prescribed.

No agreement or interest securing any obligation of the Company, whether
existing on the date of this Surplus Note or subsequently entered into, shall
apply to or secure the obligation of the Company under this Surplus Note.

Subject to the limitations provided herein and in compliance with the
restrictions set forth in the legend, this Surplus Note is transferable by the
holder hereof on the Surplus Note Register of the Company, upon surrender of
this Surplus Note for registration of transfer at the office of the Company, or
at any other office or agency so designated by the Company, accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company duly executed by the holder hereof or such holder’s attorney duly
authorized in writing, and thereupon a new Surplus Note for the same aggregate
principal amount will be issued to the designated transferee. No service charge
will be made for any such registration of transfer, but the Company may require
payment of a sum sufficient to cover any tax, fee or other governmental charge
payable in relation thereto.

No recourse shall be had for the payment of the principal or interest on this
Surplus Note, or for any claim based hereon, against any incorporator,
stockholder, officer, director, employee or agent, past, present or future, as
such, of the Company or of any predecessor or successor entity of the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.ANY UNRESOLVED DISPUTE OR DIFFERENCE
BETWEEN THE PARTIES ARISING OUT OF OR RELATING TO THIS SURPLUS NOTE, OR THE
BREACH THEREOF, SHALL BE FINALLY SETTLED BY ARBITRATION IN ACCORDANCE WITH THE
RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE WRITTEN AWARD RENDERED BY THE
ARBITRATOR SHALL BE FINAL AND BINDING UPON THE PARTIES, AND JUDGMENT UPON THE
AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF AND HAVING JURISDICTION OVER THE PARTIES OR THEIR ASSETS. THE
ARBITRATION SHALL TAKE PLACE AS MUTUALLY DETERMINED BY THE PARTIES OR THE
ARBITRATOR IN THE ABSENCE OF AGREEMENT BY THE PARTIES. THE SUBSTANTIVE LAW OF
THE STATE OF ARIZONA SHALL APPLY IN SUCH PROCEEDINGS.

THIS SURPLUS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF ARIZONA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

In Witness Whereof, the Company has duly executed this certificate on this 5th
day of May, 2010.

PMI MORTGAGE INSURANCE CO.

[SEAL]

By: /s/ Donald P. Lofe Jr.
Name: Donald P. Lofe Jr.
Title: Executive Vice-President, Chief Financial
Officer and Chief Administrative Officer