Exhibit 10.3


 


Credit Suisse
First Boston (USA), Inc.

c/o Credit Suisse First Boston LLC

One Madison Avenue, 9th Floor

New York, New York 10010


 


August 12, 2005


 


VIA FAX 925-658-6175


The PMI Group, Inc.


PMI Plaza


3003 Oak Road


Walnut Creek, CA  94597


Attention:  General Counsel


 


VIA FAX 212-339-0849


FSA Portfolio Management
Inc.,


c/o Financial Security
Assurance Holdings Ltd.


31 West 52nd Street


New York, New York  10019


Attention:  General Counsel


 


VIA FAX 203 655 - 6044


Greenrange Partners LLC


114 Goodwives River Rd.


Darien, CT 06820


Attention:  James H. Ozanne


 


VIA FAX (801) 293-3907


SPS Holding Corp.


P. O. Box 65250


Salt Lake City, UT 84165-0250


Attention:  General Counsel


 


RE:  Exercise Notice


 


Ladies and Gentlemen:


 


Reference is made to that
certain Option Agreement, dated as of August 12, 2005, by and among Credit
Suisse First Boston (USA), Inc. (the “Optionee”), SPS Holding Corp., The
PMI Group, Inc., FSA Portfolio Management Inc., and Greenrange Partners
LLC (the “Option Agreement”).  Certain
capitalized terms used herein shall have the meanings assigned to them in
Option Agreement.


 





















 


Pursuant to Section 3.1(a) of
the Option Agreement, and subject to Section 3.1(b) of the Option
Agreement, the Optionee hereby exercises the Option to purchase the Option
Shares for the Exercise Price in accordance with the terms of the Option Agreement.  Please be advised that the Measurement Date
shall be September 30, 2005.


 


 


	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Credit Suisse First
  Boston (USA), Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ James P. Healy

  	
   

  	
   

  
	
   

  	
  James P. Healy

  	
   

  
	
   

  	
  Managing Director

  	
   

  
					



 


 


cc:


 


VIA FAX 713-437-5370


Bracewell &
Giuliani LLP


711 Louisiana Street, Suite 2300


Houston, Texas  77002


Attention:  William S. Anderson


 


VIA FAX (202) 778-9100


Thomas F. Cooney, III


Kirkpatrick &
Lockhart Nicholson Graham LLP


1800 Massachusetts
Avenue, N.W.


Second Floor


Washington, D.C.  20036


 


2





















 


Acknowledgement of
Receipt of Acceptance


 


Receipt of the foregoing
notice of acceptance delivered by Credit Suisse First Boston (USA), Inc.
on August 12, 2005 with respect to the exercise of the Option to purchase
the Option Shares is hereby acknowledged this 12th day of August,
2005, and such notice is effective to exercise the right to purchase the Option
Shares.  This Acknowledgement of Receipt
of Acceptance may be executed in counterparts.


 


 


	
   

  	
  The PMI
  Group, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Victor J.
  Bacigalupi

  	
   

  
	
   

  	
  Name: Victor J.
  Bacigalupi

  
	
   

  	
  Title Executive Vice
  President, Chief Administrative Officer and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FSA Portfolio
  Management Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Bruce E. Stern

  	
   

  
	
   

  	
  Name: Bruce E. Stern

  
	
   

  	
  Title General Counsel
  and Managing Director

  
	
   

  	
   

  
	
   

  	
  Greenrange Partners LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James H. Ozanne

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
  SPS Holding Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Matt Hollingsworth

  	
   

  
	
   

  	
  Name: Matt
  Hollingsworth

  
	
   

  	
  Title CEO