Document:

EX-10.37(a)

Amendment No. 10.37(a)

AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT

AMENDMENT dated as of June 17, 2005 to the Revolving Credit Agreement dated as of December 15,
2004 (the “Credit Agreement”) among THE PMI GROUP, INC. (the “Borrower”), the
LENDERS party thereto (the “Lenders”) and BANK OF AMERICA, N.A., as Administrative Agent
(the “Administrative Agent”).

W I T N E S S E T H :

WHEREAS, the parties hereto desire to amend the Credit Agreement to include a $25,000,000
letter of credit subfacility;

NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1 . Defined Terms; References. Unless otherwise specifically defined
herein, each term used herein that is defined in the Credit Agreement has the meaning assigned to
such term in the Credit Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby”
and each other similar reference and each reference to “this Agreement” and each other similar
reference contained in the Credit Agreement shall, after this Amendment becomes effective in
accordance with Section 6, refer to the Credit Agreement as amended hereby.

SECTION 2 . New Definitions. The following new definitions are added in
alphabetical order in Subsection 1.01 of the Credit Agreement:

“Auto-Extension Letter of Credit” has the meaning specified in Subsection
2.13(b)(iii).

“Cash Collateralize” has the meaning specified in Subsection 2.13(g).

“Honor Date” has the meaning specified in Subsection 2.13(c).

“ISP” means with respect to any Letter of Credit, the “International Standby Practices
1998” published by the Institute of International Banking Law & Practice, Inc. (or such later
version thereof as may be in effect at the time of issuance of such Letter of Credit).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit
Application, and any other document, agreement and instrument entered into by the L/C Issuer and
the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to any such Letter of
Credit.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

1

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, at any date of determination, the aggregate amount available
to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed
Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn
under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance
with Subsection 2.13(k). For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.

“Letter of Credit” means any standby letter of credit issued hereunder.

“Letter of Credit Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Subsection 2.13(i).

“Letter of Credit Sublimit” means an amount equal to $25,000,000 (or, if less, the
Aggregate Commitment then in effect). The Letter of Credit Sublimit is part of, and not in
addition to, the Aggregate Commitment.

“Non-Extension Notice” has the meaning specified in Subsection 2.13(b)(iii).

“Non-Extension Notice Date” has the meaning specified in Subsection
2.13(b)(iii).

“Unreimbursed Amounts” has the meaning specified in Subsection 2.13(c)(i).

SECTION 3 . Operative Letter of Credit Provisions. A new Subsection 2.13 is
added to the Credit Agreement immediately after Subsection 2.12 thereof, to read in its
entirety as follows:

2.13. Letters of Credit. (a) The Letter of Credit Commitment. (i) Subject to the
terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements
of the Lenders set forth in this Subsection 2.13, (1) from time to time on any Business Day
during the period from the date of effectiveness of Amendment No.1 to this Agreement until the
Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or its
Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings under the Letters of Credit, and (B) the Lenders
severally agree to participate in Letters of Credit issued for the account of the Borrower or its
Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C
Credit Extension with respect to any Letter of Credit, (x) the Principal Debt shall not exceed the
Aggregate Commitment, and (y) the L/C Obligations shall not exceed the Letter of Credit Sublimit.
Each L/C Credit Extension shall be deemed to be a representation by the Borrower that such L/C
Credit Extension complies with the conditions set forth in the proviso to the preceding sentence.
Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability
to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed.

(ii) The L/C Issuer shall not issue any Letter of Credit if (i) subject to Section
2.13(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last extension, unless the Required Lenders have approved such
expiry date, or (ii) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.

(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if: (A)
any order, judgment or decree of any Governmental Authority of competent jurisdiction shall by its
terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request
that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed
loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good
faith deems material to it, (B) except as otherwise agreed by the Administrative Agent and the L/C
Issuer, such Letter of Credit is in an initial stated amount less than $100,000, (C) such Letter of
Credit is to be denominated in a currency other than Dollars, (D) such Letter of Credit contains
any provisions for the automatic reinstatement of the stated amount after any drawing thereunder,
(E) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer, or
(F) a default of any Lender’s obligations to fund under Subsection 2.13(c) exists, unless
the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to
eliminate the L/C Issuer’s risk with respect to such Lender.

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under the terms hereof
and shall not amend any Letter of Credit without the consent of the Borrower.

(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C
Issuer would have no obligation at such time to issue such Letter of Credit in its amended form
under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.

(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit
issued by it and the documents associated therewith, and the L/C Issuer shall have all of the
benefits and immunities provided to the Administrative Agent in Article IX with respect to
any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as
fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer
with respect to such acts or omissions, and as additionally provided herein with respect to the L/C
Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of
Credit. (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in
the form of a Letter of Credit Application, appropriately completed and signed by a Responsible
Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and
the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date
and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their
sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In
the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a Business Day), (B) the
amount thereof, (C) the expiry date thereof, (D) the name and address of the beneficiary thereof,
(E) the documents to be presented by such beneficiary in case of any drawing thereunder, (F) the
full text of any certificate to be presented by such beneficiary in case of any drawing thereunder,
and (G) such other matters as the L/C Issuer may reasonably require. In the case of a request for
an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify
in form and detail reasonably satisfactory to the L/C Issuer (A) the Letter of Credit to be
amended, (B) the proposed date of amendment thereof (which shall be a Business Day), (C) the nature
of the proposed amendment, and (D) such other matters as the L/C Issuer may require. Additionally,
the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and
information pertaining to such requested Letter of Credit issuance or amendment, including any
Issuer Documents, as the L/C Issuer or the Administrative Agent may require in order to enable the
L/C Issuer to issue or amend the relevant Letter of Credit.

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm
with the Administrative Agent (by telephone or in writing) that the Administrative Agent has
received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer
will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received
written notice from any Lender, the Administrative Agent or the Borrower, at least one Business Day
prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one
or more applicable conditions contained in Subsection 4.02 shall not then be satisfied,
then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter
into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices. Immediately upon the issuance of each Letter of Credit,
each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of
such Lender’s Pro Rata Share times the amount of such Letter of Credit.

(iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C
Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to
prevent any such extension at least once in each twelve-month period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice (a “Non-Extension Notice”) to the
Borrower and to the beneficiary thereof not later than a day (the “Non-Extension Notice
Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is
issued (which day to be agreed shall be at least 90 days prior to the date on which such
Auto-Extension Letter of Credit would expire if a Non-Extension Notice with respect to such
Auto-Extension Letter of Credit were to be delivered, or such other day as shall be mutually agreed
upon between the Borrower and the L/C Issuer.) Unless otherwise directed by the L/C Issuer, the
Borrower shall not be required to make a specific request to the L/C Issuer for any such extension.
Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have
authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration Date; provided,
however, that the L/C Issuer shall not deliver a Non-Extension Notice for such
Auto-Extension Letter of Credit on or prior to the applicable Non-Extension Notice Date if (A) the
L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time
to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason
of the provisions of clause (ii) or (iii) of Subsection 2.13(a) or otherwise), or (B) it
has received notice (which may be by telephone or in writing) on or before the day that is five
Business Days before such Non-Extension Notice Date (1) from the Administrative Agent that the
Required Lenders have elected not to permit such extension or (2) from the Administrative Agent,
any Lender or the Borrower that one or more of the applicable conditions specified in
Subsection 4.02 is not then satisfied, and in each such case directing the L/C Issuer not
to permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will
also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter
of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations. (i) Upon receipt from the
beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C
Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than 5:00 p.m. on
the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor
Date”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an
amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer
by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Applicable Percentage thereof. In such event, the Borrower shall be deemed to have
requested to refinance such Unreimbursed Amount with the proceeds of a Borrowing of Base Rate Loans
to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Subsection 2.02 for the principal amount of Base
Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and
the conditions set forth in Subsection 4.02 (other than the delivery of a Loan Notice).
Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Subsection
2.13(c)(i) may be given by telephone if immediately confirmed in writing; provided that
the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

(ii) Each Lender shall upon any notice pursuant to Subsection 2.13(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer at the Administrative
Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later
than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Subsection 2.13(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of
Base Rate Loans because the conditions set forth in Subsection 4.02 cannot be satisfied or
for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear interest at the Default
Rate. In such event, each Lender’s payment to the Administrative Agent for the account of the L/C
Issuer pursuant to Subsection 2.13(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Subsection 2.13.

(iv) Until each Lender funds its Loan or L/C Advance pursuant to this Subsection
2.13(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest
in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of
the L/C Issuer.

(v) Each Lender’s obligation to make Loans or L/C Advances to reimburse the L/C Issuer for
amounts drawn under Letters of Credit, as contemplated by this Subsection 2.13(c), shall be
absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer,
the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender’s obligation to make Loans pursuant
to this Subsection 2.13(c) is subject to the conditions set forth in Subsection
4.02 (other than delivery by the Borrower of a Loan Notice). No such making of an L/C Advance
shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for
the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest
as provided herein.

(vi) If any Lender fails to make available to the Administrative Agent for the account of the
L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of
this Subsection 2.13(c) by the time specified in Subsection 2.13(c)(ii), the L/C
Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such payment is required to
the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal
to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with
banking industry rules on interbank compensation. A certificate of the L/C Issuer submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi)
shall be conclusive absent manifest error.

(d) Repayment of Participations. (i) At any time after the L/C Issuer has made a
payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in
respect of such payment in accordance with Subsection 2.13(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Applicable Percentage thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s L/C Advance was
outstanding) in the same funds as those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer
pursuant to Subsection 2.13(c)(i) is required to be returned under any of the circumstances
described in Subsection 10.06 (including pursuant to any settlement entered into by the L/C
Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the
L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned by such Lender, at a rate
per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations and the termination
of this Agreement.

(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following: (i) any lack of validity or
enforceability of such Letter of Credit, this Agreement, or any other Loan Document; (ii) the
existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any
Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit
(or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer
or any other Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any
unrelated transaction; (iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing under such Letter of
Credit; (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a
draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any
payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee
in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or
other representative of or successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any Debtor Relief Law; or (v) any
other circumstance or happening whatsoever, whether or not similar to any of the foregoing,
including any other circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or any Subsidiary.

(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any correspondent, participant or
assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document
or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to, and
shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any correspondent, participant or
assignee of the L/C Issuer shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Subsection 2.13(e); provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the
L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower
which the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or
the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by
the beneficiary of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C
Issuer may accept documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason.

(g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C
Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, the Borrower shall immediately Cash Collateralize the aggregate
amount of such L/C Obligation, or (ii) if, as of the Letter of Credit Expiration Date, any L/C
Obligation for any reason remains outstanding, the Borrower shall immediately Cash Collateralize
the aggregate amount of all L/C Obligations then outstanding. Subsection 8.02 sets forth
certain additional requirements to deliver Cash Collateral hereunder. For purposes of this
Subsection 2.13, and Subsection 8.02(c), “Cash Collateralize” means to
pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant
to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby consented to by the Lenders). Derivatives of such term have
corresponding meanings. The Borrower hereby grants to the Administrative Agent, for the benefit of
the L/C Issuer and the Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked
deposit accounts at Bank of America. Amounts on deposit in any such accounts shall be invested in
short-term investments selected by the Administrative Agent in consultation with the Borrower.

(h) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer and the
Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each standby Letter
of Credit.

(i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the
“Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Margin
times the daily amount available to be drawn under such Letter of Credit. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Subsection 2.13(k). Letter of
Credit Fees shall be (i) computed on a quarterly basis in arrears and (ii) due and payable on the
last Business Day of each March, June, September and December, commencing with the first such date
to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. If there is any change in the Applicable Margin during any quarter, the
daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by
the Applicable Margin separately for each period during such quarter that such Applicable Margin
was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the
Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the
Default Rate.

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The
Borrower shall pay directly to the L/C Issuer for its own account a fronting fee at a rate equal to
1/8 of 1% per annum, computed on the daily amount available to be drawn under each Letter of Credit
on a quarterly basis in arrears Such fronting fee shall be due and payable on the last Business
Day of each March, June, September and December in respect of the most recently-ended quarterly
period (or portion thereof, in the case of the first payment), commencing with the first such date
to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. For purposes of computing the daily amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with
Subsection 2.13(k). In addition, the Borrower shall pay directly to the L/C Issuer for its
own account such fees of the L/C Issuer relating to letters of credit and such other costs and
charges as are separately agreed between the Borrower and the L/C Issuer. Such fees and other
costs and charges are due and payable on demand and are nonrefundable.

(k) Letter of Credit Amount, Conflict with Issuer Documents. Unless otherwise
specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated
amount of such Letter of Credit in effect at such time; provided, however, that
with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related
thereto, provides for one or more automatic increases in the stated amount thereof, the amount of
such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated amount is in effect
at such time. In the event of any conflict between the terms hereof and the terms of any Issuer
Document, the terms hereof shall control.

(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or is for the account
of, a Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and
all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of
Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that
the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

SECTION 4 . Miscellaneous Conforming Changes To Reflect The Addition Of A Letter Of
Credit Subfacility.

(a) The definition of “Commitment” contained in Subsection 1.01 of the Credit
Agreement is amended by inserting the phrase “or participate in Letters of Credit”
immediately after the reference to “its obligation to make Loans” where it appears therein.

(b) The definition of “Default Rate” contained in Subsection 1.01 of the Credit
Agreement is amended by adding the following phrase at the end thereof: “and with respect to
the Letter of Credit Fee, the Default Rate shall be an interest rate equal to the Applicable
Margin plus 2% per annum”.

(c) The definition of “Loan Documents” contained in Subsection 1.01 of the
Credit Agreement is amended by adding the following phrase at the end thereof: “and each
Issuer Document”.

(d) The definition of “Principal Debt” contained in Subsection 1.01 of the
Credit Agreement is amended to read in its entirety as follows: “Principal Debt” means, on
any date, the sum of (i) the aggregate outstanding principal amount of the Loans and (ii) the
L/C Obligations, in each case on such date after giving effect to any Borrowing, any
prepayments or repayments and any issuance, cancellation or expiration of Letters of Credit,
in each case occurring on such date.

(e) Subsection 2.02(a) of the Credit Agreement is amended by adding the phrase
“,except as provided in clause (i) of Subsection 2.13(c)” at the end of the fifth
sentence thereof.

(f) Subsection 2.07 of the Credit Agreement is amended by adding the following
phrase at the beginning thereof: “In addition to the fees set forth in Subsection
2.13(i) :”.

(g) The first sentence of Subsection 2.11 of the Credit Agreement is amended to
read in its entirety as follows:” If, other than as expressly provided in Subsection
2.12 or elsewhere herein, any Lender shall obtain on account of the Loans made by it or
the L/C Obligations held by it, any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its Pro Rata Share (or other
share contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact and (b) purchase from the other Lenders such participations
in the Loans made by them or the L/C Obligations held by them as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Loans or L/C
Obligations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter recovered
from the purchasing Lender under any of the circumstances described in Subsection
10.06 (including pursuant to any settlement entered into by the purchasing Lender in its
discretion), such purchase shall to that extent be rescinded and each other Lender shall
repay to the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of
such paying Lender’s required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered, without further interest thereon.”

(h) The last sentence of Subsection 2.12(b) of the Credit Agreement is amended
to read in its entirety as follows: “On the Increase Effective Date following any such
increase undertaken pursuant to the provisions of this Section 2.12, the Pro Rata
Share of each Lender shall be adjusted (as so adjusted, the “Adjusted Pro Rata
Share”) so as to reflect the amount of each Lender’s Commitment relative to the Aggregate
Commitment of all Lenders as in effect immediately following such increase (as so adjusted,
the “Adjusted Pro Rata Share”) and, immediately after giving effect to such
adjustments any Loans and L/C Obligations then outstanding shall be reallocated among the
Lenders if such reallocation shall be necessary in order to keep the outstanding Loans and
L/C Obligations ratable with the Adjusted Pro Rata Shares.”

(i) The introductory sentence in Subsection 4.02 of the Credit Agreement is
amended to read in its entirety as follows: “The obligation of each Lender to make its Pro
Rata Share of each Borrowing hereunder and the obligation of the Issuing Bank to issue or
extend any Letter of Credit are each subject to the satisfaction of the following conditions
precedent”.

(j) Clause (b) of Subsection 4.02(b) of the Credit Agreement is amended by
adding the phrase “or L/C Credit Extension” immediately after the reference to “Borrowing”
where it appears therein.

(k) Clause (a) of Subsection 8.01 of the Credit Agreement is amended by (x)
adding the phrase “or any L/C Obligation” at the end of clause (i) thereof and (y) adding the
phrase “,Letter of Credit Fee” immediately after the reference to “utilization” where it
appears therein.

(l) Subsection 8.02 of the Credit Agreement is amended by (x) deleting the “and”
at the end of clause (b) thereof, (y) relettering clause (c) thereof as clause (d) and (z)
adding a new clause (c) immediately after clause (b) thereof, to read in its entirety as
follows: “(c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount
equal to the then outstanding amount thereof); and”.

(m) Clause Second of Subsection 8.03 of the Credit Agreement is amended
by adding the phrase “and the L/C Issuer” immediately after the reference to “the Lenders”
where it appears therein.

(n) Clause Third of Subsection 8.03 of the Credit Agreement is amended
to read in its entirety as follows: “Third, to payment of that portion of the
Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans
and L/C Borrowings, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;”.

(o) Clause Fourth of Subsection 8.03 of the Credit Agreement is amended
to read in its entirety as follows: “ Fourth, to payment of that portion of the
Obligations constituting unpaid principal of the Loans and L/C Borrowings, ratably among the
Lenders and the L/C Issuer in proportion to the respective amounts described in this clause
Fourth held by them;”.

(p) A new clause Fifth is added immediately after Clause Fourth of
Subsection 8.02 of the Credit Agreement, to read in its entirety as follows:
“Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit; and”.

(q) The following sentence is added at the end of Subsection 8.03 of the Credit
Agreement: “Subject to Subsection 2.13(c), amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any amount
remains on deposit as Cash Collateral after all Letters of Credit have either been fully
drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in
the order set forth above.”

(r) Clause (iii) of Subsection 10.02(a) of the Credit Agreement is amended by
adding the phrase “or to the L/C Issuer” immediately after the reference to “the
Administrative Agent” where is appears therein.

(s) All reference to “the Loans” contained in Subsection 10.09 of the Credit
Agreement shall be deemed to include a reference to “L/C Obligations” as well.

(t) Clause (iii) of the proviso set forth in Subsection 10.07(b) of the Credit
Agreement is amended by adding the phrase “and the L/C Issuer” immediately after the
reference to the “Administrative Agent” where it appears therein. In addition, all reference
to “the Loans” contained in Subsection 10.07(b) shall be deemed to include a
reference to “L/C Obligations” as well.

(u) Schedule 10.02 of the Credit Agreement is amended by adding the following
information at the end thereof:

L/C ISSUER:

Bank of America, N.A.

Trade Operations, Los Angeles

333 South Beaudry Avenue

Los Angeles, California 90017-1466

Mail Code: CA9-703-19-23

Attention: Hermann Schutterle

Telephone: 213- 345-0397

Telecopier: 213-345-6684

Electronic Mail: hermann.schutterle@bankofamerica.com

SECTION 5 . Representations Of Borrower. The Borrower represents and warrants that
(i) the representations and warranties of the Borrower set forth in Article V of the Credit
Agreement will be true and correct in all material respects on and as of the date of effectiveness
of this Amendment (except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they shall be true and correct in all material respects as of
such earlier date) and (ii) no Default will have occurred and be continuing on such date.

SECTION 6 . Governing Law; Counterparts; Effectiveness. This Amendment shall be
governed by and construed in accordance with the laws of the State of New York. This Amendment may
be signed in any number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become
effective on the date when the Administrative Agent shall have received from each of the Borrower
and the Required Lenders a counterpart hereof signed by such party or facsimile or other written
confirmation (in form satisfactory to the Administrative Agent) that such party has signed a
counterpart hereof.

2

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed
as of the date first above written.

THE PMI GROUP, INC.

By: /s/ Rhoda Rossman

	 	 	 	Name: Rhoda Rossman

Title: Sr. VP, Treasurer

THE PMI GROUP, INC.

By: /s/ Donald P. Lofe, Jr.

	 	 	 	Name: Donald P. Lofe, Jr.

Title: EVP, CFO

BANK OF AMERICA, N.A., as Lender,
Administrative Agent and L/C Issuer

By: /s/ Michael W. Colon

	 	 	 	Name: Michael W. Colon

Title: Senior Vice President

3

CITIBANK, N.A.

By: /s/ David A. Dodge

	 	 	 	Name: David A. Dodge

Title: Managing Director

WACHOVIA BANK, NATIONAL ASSOCIATION

By: /s/ Joan Anderson

	 	 	 	Name: Joan Anderson

Title: Director

SUNTRUST BANK

By: /s/ Robert Bugbee

	 	 	 	Name: Robert Bugbee

Title: Director

J.P. MORGAN CHASE BANK, N.A.

By: /s/ Lawrence Palumbo, Jr.

	 	 	 	Name: Lawrence Palumbo, Jr.

Title: Vice President

4EXHIBIT 4.2 

MAXWELL TECHNOLOGIES,
INC.
2005 OMNIBUS EQUITY INCENTIVE PLAN  

NOTICE OF STOCK OPTION
AWARD
AND STOCK OPTION AGREEMENT  

[Name]

[Address]
          
[Telephone]: (___)____-_____  

Dear _______________________: 

You have been granted an option
(“Option”) to purchase shares of common stock of Maxwell Technologies, Inc. (the
“Company”) under the Maxwell Technologies, Inc. 2005 Omnibus Equity Incentive
Plan (the “Plan”) with the following terms and conditions: 

	Option Number:	______.
	 
	Grant Date:	__________, 200__.
	 
	Type of Option:	[Nonqualified or Incentive Stock Option].
	 
	Number of Option Shares:	__________________.
	 
	Exercise Price Per Share:	U.S. $_____________.
	 
	Expiration Date:	Close of business at the Company's headquarters on the tenth (10th) anniversary
of the Grant Date, subject to earlier termination as described under
“Termination of Employment.”
	 
	Vesting Schedule:	Your Option will vest as follows:

	NUMBER OF SHARES	VESTING DATE
	
___% of Option Shares	___ anniversary of Grant Date
	Additional ___% of Option Shares	___ anniversary of Grant Date
	Additional ___% of Option Shares	___ anniversary of Grant Date
	Final ___% of Option Shares	___ anniversary of Grant Date

	 	
Your
Option will become fully vested if your  employment  terminates as a result
                                     of death, Disability or Retirement. 

	 	
Upon
any other  termination of  employment,  you will forfeit the portion of the
                                    Option  not  vested  as of the  date of your
 termination.  Your  entire  Option                                     (whether  vested
or nonvested)  is  terminated if your  employment is terminated
                                    for Cause. For this purpose,  (1) if you are subject
to an employment  agreement                                     with the Company or an
affiliate  that  includes a definition  of "Cause,"  that
                                    definition  shall apply for purposes hereof,  or (2)
in any other case,  "Cause"                                     means  any  failure  to
 adhere  to any  Company  rule,  regulation,  policy  or
                                    procedure,  including  but not  limited to the rules,
 regulations,  policies or                                     procedures  set forth in
the  Company's  standard  Employee  Handbook as then in
                                    effect.

	Manner of Exercise:  	You
may  exercise  this Option only to the extent  vested and only if the Option
                                    has not expired or  terminated.  To exercise  this
 Option,  you must notify the                                     Company  by  completing
 an  "Exercise  Agreement"  and  submitting  it  at  the
                                    Company's  headquarters.  Your "Exercise Agreement"
must specify how many shares                                     you  wish  to  purchase
 and  how  you  will  satisfy  the  exercise  price  and
                                    withholding taxes due, if any, upon exercise.  The
"Exercise  Agreement" will be                                     effective  when  it is
 received  by the  Company.  If  someone  else  wants  to
                                    exercise this Option after your death,  that person
must contact the Company and                                     prove to the  Company's
 satisfaction  that he or she is entitled to do so. Your
                                    ability to exercise the Option may be  restricted  by
the Company if required by                                     applicable law.

	Termination
of 
Employment:  	If
your  employment with the Company  terminates,  your Option will terminate on
                                     the close of business at the Company's headquarters
as follows:

	 	 • 	If
your employment terminates as a result of death or Disability,  your
                                           Option will  terminate on the first (1st)
 anniversary of the date of your                                            termination
of employment. 

	 	 • 	If
your  employment  terminates for any other reason,  your Option will
                                           terminate  ninety  (90)  days  after  the
 date  of  your  termination  of                                            employment. 

	 	
However,
in no event will this Option be exercisable after its Expiration Date.

	Transferability:  	You
may not  transfer or assign  this  Option for any  reason,  other than under
                                     your  will  or  as  required  by  intestate  laws.
 Any  attempted  transfer  or                                      assignment in
violation of this provision will be null and void.

	Restrictions on Resale:  	By
accepting this Option,  you agree not to sell any Shares  acquired under this
                                     Option at any time when applicable laws,  Company
policies  (including,  without                                      limitation,  the
Company's  Insider Trading Policy) or an agreement  between the
                                     Company and its underwriters prohibit a sale.

2 

	Change of Control:  	The
Company may determine, in its discretion,  whether an award issued under the
                                     Plan will become  vested or payable,  either in
whole or in part,  upon a Change                                      of  Control.  In
 addition,  each  holder  of an  Option  that  vested or became
                                     payable  as a result of the Change of  Control,  may
have the right for a period                                      of 30 days  following
the Change of Control to surrender the award or shares for
                                     a cash  payment  equal to the  difference  between
the higher of the Fair Market                                      Value of a Share on
the date of  surrender or the date of the Change of Control,
                                     and the grant or exercise price of the award.

	 	
The
Company may also cancel any Options that are not  exercised  or  surrendered
                                      during the 30-day period described above.

	Tax Consequences:  	If
this Option is designated  as a  nonqualified  stock option,  the exercise of
                                     this Option will result in taxable income to you.

	 	
If
this Option is designated as an incentive  stock option,  you understand that
                                     for the favorable tax treatment afforded to
incentive stock options to apply:

	 	                                     • 	You
must hold the shares  acquired  upon  exercise  for a period of one
                                           (1) year from the date of exercise and two (2)
years from the Grant Date. 

	 	                                     • 	The
Exercise  Price per Share must equal at least the fair market value
                                           of a Share on the Grant Date.  While the
 Committee  has made a good faith
                                           determination of the fair market value of a
Share in this regard,  neither                                            the  Committee,
 the  Board  nor  the  Company  can  guarantee  that  such
                                           determination  will be considered  fair market
value,  nor will you or any                                            other  individual
 be entitled to any  indemnification  for any failure of
                                           the Committee to have made such a
determination. 

	 	                                     • 	If
Shares with a fair market  value (as  determined  on the Grant Date)
                                           in excess of $100,000  become  exercisable
 (vested) for the first time in                                           any calendar
year  (including for this purpose option shares granted under
                                           all other  incentive  stock options  granted
to you by the Company and its                                            Subsidiaries),
 the number of Shares with a fair market value in excess of
                                           such $100,000 limit will be considered  issued
under a nonqualified  stock                                            option. 

3 

	 	                                     • 	You
 must   exercise   this  Option   within  ninety  (90)  days  after
                                           termination of employment  for any reason
other than  Disability or death.                                            Accordingly,
 if you exercise this Option more than ninety (90) days after
                                           such  termination  (if otherwise  permitted by
this  Option),  you will be                                            treated as
exercising a nonqualified  stock option.  For this purpose,  if
                                           you transfer to the  employment of a
subsidiary  that is not a Subsidiary,                                            you will
be  treated as  terminated  from  employment  on the date of such
                                           transfer,  or if you are employed by a
Subsidiary,  you will be treated as                                            terminated
 from  employment  on the date such  entity  ceases to meet the
                                           requirements  of  Section  422 of the  Code.
 In  addition,  you  will  be                                            considered to
have  terminated  employment  for purposes of these rules on
                                           the ninety-first  (91st) day of a military
leave, sick leave or other bona                                            fide leave of
absence  unless your  rights to return to active  employment
                                           are guaranteed by law or contract. 

	 	                                     • 	The
 excess  of the  Fair  Market  Value of the  Shares  at the time of
                                           exercise  over  the  amount  you pay  for
 such  Shares  may be an item of                                            adjustment
 for  alternative  minimum tax (AMT)  purposes on your personal
                                           tax return. 

	Amendment:  	This
 Stock  Option  Agreement  may be amended  only by  written  consent of the
                                     Company and the  Recipient,  unless the amendment is
not to the detriment of the                                      Recipient.

	Counterparts:  	This
Stock Option Agreement may be executed in counterparts.

	Governing Law:  	The
 provisions  of  Section  17(f)  of the  Plan  apply  to this  Stock  Option
                                     Agreement.

This Option is granted under and
governed by the terms and conditions of the Plan. Additional provisions regarding your
Option and definitions of capitalized terms used and not defined in this Option can be
found in the Plan. 

BY ACCEPTING THIS STOCK
OPTION AWARD, YOU AGREE TO ALL OF 
THE TERMS AND CONDITIONS DESCRIBED HEREIN AND IN THE
PLAN.   
YOU ALSO ACKNOWLEDGE RECEIPT OF THE PLAN.  

	_______________________________	_______________________________
	Authorized Officer	Recipient

4

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