Document:

Termination Deed

 Exhibit 10.1 
 

 
 Termination Deed 
 The PMI Group, Inc. 
 QBE Holdings (AAP) Pty Limited 
 QBE Insurance Group Limited 
 Allens Arthur Robinson 
 10/F Jardine House 
 1 Connaught Place 

Central 
 Hong Kong 
 Tel 852 2840 1202 
 Fax 852 2840 0686 

www.aar.com.au 
 ©Copyright Allens Arthur Robinson 2008 

			
	Termination Deed	  	

		
	 	  	 

  

 Table of Contents 
  

					
	 1.
	  	Definitions and Interpretation	  	1
		  	 1.1 Definitions
	  	1
		  	 1.2 Interpretation
	  	1
			
	 2.
	  	Termination and Release	  	2
			
	 3.
	  	Confidentiality	  	2
		  	 3.1 Confidentiality
	  	2
		  	 3.2 Permitted disclosure
	  	2
		  	 3.3 Survival of obligation
	  	3
			
	 4.
	  	Notices	  	3
			
	 5.
	  	Governing Law	  	4
			
	 6.
	  	Costs and stamp duty	  	4
			
	 7.
	  	Execution	  	4
			
	 8.
	  	Entire Agreement	  	4
			
	 9.
	  	Counterparts	  	4

  

  
 Page (i) 

			
	Termination Deed	  	

		
	 	  	 

  

			
	Date	  	2008
		
	Parties	  	

  

	 	1.	The PMI Group, Inc. of 3003 Oak Road, Walnut Creek, California 94597, United States of America (the Vendor). 

  

	 	2.	QBE Holdings (AAP) Pty Limited (ACN 000 005 881) of Level 2, 82 Pitt Street, Sydney, New South Wales, 2000, Australia (the Purchaser). 

 

	 	3.	QBE Insurance Group Limited (ACN 008 485 014) of Level 2, 82 Pitt Street, Sydney, New South Wales, 2000, Australia (the Note Issuer). 

 Recitals 
  

	 	A	The Vendor, the Purchaser and the Note Issuer are parties to a Share Sale Deed dated 29 August 2008, pursuant to which the Purchaser has agreed to purchase all the shares in
PMI Mortgage Insurance Asia Limited (the Share Sale Deed). 

  

	 	B	Pursuant to clause 21.1(a) of the Share Sale Deed, the Vendor and the Purchaser have agreed to terminate the Share Sale Deed in accordance with the terms of this Deed.

 Now this Deed witnesses as follows. 
  

	1.	Definitions and Interpretation 

  

	1.1	Definitions 

 Unless otherwise defined in this Deed,
definitions defined in the Share Sale Deed apply in this Deed: 
 Disclosure Letter means the letter dated 29 August 2008
executed by the Vendor and delivered to the Purchaser in relation to the Warranties. 
  

	1.2	Interpretation 

 Headings are for convenience only
and do not affect interpretation. The following rules apply unless the context requires otherwise. 
  

	 	(a)	The singular includes the plural, and the converse also applies. 

  

	 	(b)	A gender includes all genders. 

  

	 	(c)	If a word or phrase is defined, its other grammatical forms have a corresponding meaning. 

  

	 	(d)	A reference to a person includes a corporation, trust, partnership, unincorporated body or other entity, whether or not it comprises a separate legal entity.

  

	 	(e)	A reference to a clause or schedule is a reference to a clause of or a schedule of this Deed. 

  

  
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	Termination Deed	  	

		
	 	  	 

  

	 	(f)	A reference to an agreement or document (including a reference to this Deed) is to the agreement or document as amended, supplemented, novated or replaced except to the extent
prohibited by this Deed or that other agreement or document. 

  

	 	(g)	A reference to writing includes any method of representing or reproducing words, figures, drawings, or symbols in a visible or tangible form. 

  

	 	(h)	A reference to a party to this Deed or another agreement or document includes the party’s successors, permitted substitutes and permitted assigns (and, where applicable, the
party’s legal personal representatives). 

  

	 	(i)	A reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory
instrument issued under it. 

  

	 	(j)	Mentioning anything after includes, including, for example, or similar expressions, does not limit what else might be included. 

  

	 	(k)	Nothing in this Deed is to be interpreted against a party solely on the ground that the party put forward this Deed or any part of it. 

  

	2.	Termination and Release 

 The Vendor and the
Purchaser each agree: 
  

	 	(a)	to terminate the Share Sale Deed and the Disclosure Letter with immediate effect; and 

  

	 	(b)	that following termination of the Share Sale Deed and Disclosure Letter pursuant to paragraph (a): 

  

	 	(i)	Neither the Vendor nor the Purchaser will have any further rights or obligations under the Share Sale Deed except in relation to those clauses which survive termination of the Share
Sale Deed in accordance with its clause 21.2(a); and 

  

	 	(ii)	each of the Vendor and the Purchaser agrees to release the other party from any actions, demands, claims and proceedings under or in connection with the Share Sale Deed and
Disclosure Letter. 

  

	3.	Confidentiality 

  

	3.1	Confidentiality 

 Subject to clause 3.2, a
party must not disclose, or use for a purpose other than contemplated by this Deed, the terms of the Share Sale Deed or this Deed or any unpublished information or documents supplied by the other party in connection with the Share Sale Deed or this
Deed. 
  

	3.2	Permitted disclosure 

 A party may disclose any
confidential information or documents: 
  

	 	(a)	to the other party to this Deed; 

  

	 	(b)	under corresponding obligations of confidence as imposed by this clause, to persons which control or are controlled by or are under common control with the party within the meaning
of the Corporations Act 2001 (Cth), and the employees, legal advisors or consultants of such persons; or 

  

  
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	 Termination Deed
	  	

		
	 	  	 

  

	 	(c)	which is at the time lawfully in the possession of the proposed recipient of the information through sources other than the other party, or a Related Body Corporate of the other
party, to this Deed; 

  

	 	(d)	if required under a binding order of a Governmental Agency or under a procedure for discovery in any proceedings; 

  

	 	(e)	if required under any law or any administrative guideline, directive, request or policy whether or not having the force of law; 

  

	 	(f)	as required or permitted by this Deed; 

  

	 	(g)	to its bankers, professional advisers, its insurers and its reinsurers; 

  

	 	(h)	to any Rating Agency; or 

  

	 	(i)	with the prior written consent of the other party to this Deed. 

  

	3.3	Survival of obligation 

 This clause survives the
termination of the Share Sale Deed and this Deed. 
  

	4.	Notices 

 Any notice, demand, consent or other
communication (a Notice) given or made under this Deed: 
  

	 	(a)	must be in writing and signed by a person duly authorised by the sender; 

  

	 	(b)	must be delivered to the intended recipient by prepaid post (if posted to an address in another country, by registered airmail) or by hand or fax to the address or fax number below
or the address or fax number last notified by the intended recipient to the sender: 

  

			
	(i) to the Vendor:	  	 The PMI Group, Inc.
  
 3003 Oak Road
 Walnut Creek, CA 94597
 United States of America
  
 Facsimile: +1-925-658-6175
  
 Attention: General Counsel

		
	(ii) to the Purchaser and Note Issuer	  	 QBE Holdings (AAP) Pty Limited
  
 Level 2
 82 Pitt Street
 Sydney NSW 2000
  
 Facsimile: 612 9231 6104
  
 Attention: Company Secretary

  

	 	(c)	will be taken to be duly given or made: 

  

	 	(i)	in the case of delivery in person, when delivered; 

  

  
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	Termination Deed	  	

		
	 	  	 

  

	 	(ii)	in the case of delivery by post, two business days after the date of posting (if posted to an address in the same country) or seven business days after the date of posting (if
posted to an address in another country); and 

  

	 	(iii)	in the case of fax, on receipt by the sender of a transmission result report from the despatching machine showing the relevant number of pages and the correct destination fax
machine number or name of recipient and indicating that the transmission has been made without error, 

 but if the result is
that a Notice would be taken to be given or made on a day that is not a business day in the place to which the Notice is sent or at a time later than 4pm (local time), it will be taken to have been duly given or made at the commencement of business
on the next business day in that place. 
  

	5.	Governing Law 

 This Deed will be governed by the
laws of Hong Kong. Each party submits to the non-exclusive jurisdiction of the courts exercising jurisdiction there in connection with matters concerning this Deed. 
  

	6.	Costs and stamp duty 

 Each party shall bear its own
costs arising out of the preparation and negotiation of this Deed. All stamp duty (including fines, penalties and interest) that may be payable on or in connection with this Deed and any instrument executed under this Deed must be borne equally.

  

	7.	Execution 

 If any person executes this Deed on
behalf of a party, that person represents and warrants that he or she is at the time of execution, authorised to execute this Deed and has had no notice of the revocation of such authorisation. 
  

	8.	Entire Agreement 

 This Deed contains the entire
agreement between the parties with respect to its subject matter. It sets out the only conduct relied on by the parties and supersedes all earlier conduct and prior agreements and understandings between the parties in connection with its subject
matter. 
  

	9.	Counterparts 

 This Deed may be executed in any
number of counterparts. All counterparts together will be taken to constitute one instrument. 
  

  
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	 Termination Deed
	  	

		
	 	  	 

  

 Executed and delivered as a Deed in 
 Executed as a deed by The PMI Group, Inc.: 
  

					
			
	/s/ L. Stephen Smith	 		 	/s/ Andrew D. Cameron
	Signature of director	 		 	Signature of director/company secretary
		 		 	(Please delete as applicable)
			
	  	 		 	  
	Name of director (print)	 		 	Name of signatory (print)
			
	Executed as a deed in accordance with section 127 of the Corporations Act 2001 (Cth) by QBE Holdings (AAP) Pty Limited:	 		 	
			
	/s/ Frank M. O’Halloran	 		 	/s/ Duncan Ramsay
	Signature of director	 		 	Signature of director/company secretary
		 		 	(Please delete as applicable)
			
	  	 		 	  
	Name of director (print)	 		 	Name of signatory (print)
			
	Executed as a deed in accordance with section 127 of the Corporations Act 2001 (Cth) by QBE Insurance Group Limited:	 		 	
			
	/s/ Frank M. O’Halloran	 		 	/s/ Duncan Ramsey
	Signature of director	 		 	 Signature of director/company secretary
 (Please
delete as applicable)

			
	  	 		 	  
	Name of director (print)	 		 	Name of signatory (print)

  

  
 Page 5Amending Deed

 Exhibit 10.2 
 

 
 Amending Deed 
 PMI Mortgage Insurance Co. 
 QBE Insurance Group Limited 
 Note Deed 23 October 2008 
 Allens Arthur
Robinson 
 Deutsche Bank Place 
 Corner Hunter and Phillip Streets 
 Sydney NSW 2000 Australia 
 Tel +61 2 9230 4000 
 Fax +61 2 9230 5333 
 www.aar.com.au 
 ©Copyright Allens Arthur Robinson, Australia 2008 

			
	Amending Deed	  	

		
	 	  	 

  

 Table of Contents 
  

					
	 1.
	  	Definitions and Interpretation	  	1
			
	 2.
	  	Amendments	  	1
			
	 3.
	  	Effective Date	  	1
			
	 4.
	  	Remaining Provisions Unaffected	  	1
			
	 5.
	  	Governing Law and Jurisdiction	  	2
			
	 6.
	  	Counterparts	  	2
		
	 Schedule - Note Deed
	  	3

  

  
 Page i 

			
	Amending Deed	  	

		
	 	  	 

  

			
	Date 	 	2008

 Parties 
  

	 	1.	PMI Mortgage Insurance Co. of 3003 Oak Road, Walnut Creek, CA 94597, United States of America (the Noteholder). 

  

	 	2.	QBE Insurance Group Limited ABN 28 008 485 014 of Level 2, 82 Pitt Street, Sydney NSW 2000, Australia (the Note Issuer). 

 Recitals 
  

	 	A	The Noteholder and the Note Issuer are parties to a Note Deed dated 23 October 2008 (the Principal Deed) under which the Note Issuer agreed to issue the Note to
the Noteholder. 

  

	 	B	The parties wish to make certain further amendments to the Principal Deed in the manner set out in this Deed. 

 It is agreed as follows. 
  

	1.	Definitions and Interpretation 

  

	 	(a)	Words which are defined in the Principal Deed and which are used in this Deed have the same meaning in this Deed as in the Principal Deed, unless the context requires otherwise.

  

	 	(b)	The provisions of clauses 1.2 and 1.3 of the Principal Deed form part of this Deed as if set out in full in this Deed . 

  

	2.	Amendments 

 The Principal Deed is amended to read
as set out in the schedule. 
  

	3.	Effective Date 

 This Deed takes effect, and the
parties agree to be bound by the Principal Deed as amended by this Deed, from the date of this Deed (the Effective Date). 
  

	4.	Remaining Provisions Unaffected 

 Except as
specifically amended by this Deed, all terms and conditions of the Principal Deed remain in full force and effect. With effect from the Effective Date (as defined in clause 3), the Principal Deed as amended by this Deed is to be read as a
single integrated document incorporating the amendments effected by this Deed. 
  

  
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	Amending Deed	  	

		
	 	  	 

  

	5.	Governing Law and Jurisdiction 

  

	 	(a)	This Deed is governed by the laws of the State of New South Wales. 

  

	 	(b)	Each party irrevocably and unconditionally: 

  

	 	(i)	submits to the non-exclusive jurisdiction of the courts of New South Wales in connection with any suit, action or proceeding arising out of or relating to this Deed;

  

	 	(ii)	waives, to the fullest extent it may legally and effectively do so, any defence or objection based on absence of jurisdiction or inconvenient forum; and 

  

	 	(iii)	consents to service of process in the manner provided for Notices in clause 10 of the Principal Deed, provided that nothing in this Deed will affect the right of any party to
serve process in any other manner permitted by law. 

  

	 	(c)	The Noteholder appoints Allens Arthur Robinson or their successor in Australia as its agent for service. 

  

	6.	Counterparts 

 This Deed may be executed in any
number of counterparts. All counterparts together will be taken to constitute one instrument 
  

  
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	Amending Deed	  	

		
	 	  	 

  

 Schedule – Note Deed 
  

 

 
 Note 
 Deed 
 QBE Insurance Group Limited 
 PMI Mortgage Insurance Co. 
 Allens Arthur Robinson 
 Deutsche Bank Place 
 Corner Hunter and Phillip Streets 
 Sydney NSW 2000 
 Tel 61 2 9230 4000 
 Fax 61 2 9230 5333 
 www.aar.com.au 
 ©Copyright Allens Arthur Robinson 2008

			
	Amended and Restated Note Deed	  	

		
	 	  	 

  

 Table of Contents 
  

					
	 1.
	  	Definitions and Interpretation	  	21
			
		  	 1.1    Definitions
	  	21
			
		  	 1.2    Interpretation
	  	43
			
	 2.
	  	Creation of Note	  	54
			
	 3.
	  	Term	  	54
			
	 4.
	  	Purpose	  	54
			
	 5.
	  	Interest	  	54
			
		  	 5.1    Calculation of Interest
	  	54
			
		  	 5.2    Overdue Payments
	  	54
			
	 6.
	  	Payment Obligations	  	64
			
		  	 6.1    Repayment at end of Term
	  	64
			
		  	 6.2    Voluntary prepayment
	  	65
			
		  	 6.3    Method of payment
	  	65
			
	 7.
	  	Adjustments to Principal and Interest	  	65
			
	 8.
	  	Taxation	  	76
			
		  	 8.1    Payments made free and clear
	  	76
			
		  	 8.2    Additional payments
	  	76
			
	 9.
	  	Representations and Warranties	  	76
			
	 10.
	  	Notices	  	76
			
	 11.
	  	Conditions	  	87
			
	 12.
	  	Events of Default	  	87
			
	 13.
	  	Entire Agreement	  	98
			
	 14.
	  	Amendment	  	98
			
	 15.
	  	Assignment	  	98
			
	 16.
	  	Set-off	  	98
			
	 17.
	  	Further actions	  	98
			
	 18.
	  	Counterparts	  	109
			
	 19.
	  	Confidentiality	  	109
			
	 20.
	  	Governing Law	  	109

  

  
 Page (i) 

  

 Date 
 Parties

  

	 	1.	QBE Insurance Group Limited of Level 2, 82 Pitt Street, Sydney, NSW, 2000, Australia (the Note Issuer). 

  

	 	2.	PMI Mortgage Insurance Co. of 3003 Oak Road, Walnut Creek, CA 94597, United States (the Noteholder). 

 Recitals 
  

	 	A	The Note Issuer, QBE Holdings (AAP) Pty Limited (the Purchaser) and the Noteholder are parties to a Share Sale Agreement dated 14 August 2008, pursuant to which
the Purchaser has agreed to purchase all of the shares in PMI Mortgage Insurance Australia (Holdings) Pty Limited ABN 98 087 483 958 (the Share Sale Agreement). 

  

	 	B	The PMI Group, Inc., QBE Lenders’ Mortgage Insurance Limited (the HK Purchaser) and the Note Issuer are parties to a Share Sale
Deed dated 17 December 2008, pursuant to which the HK Purchaser has agreed to purchase all of the shares in PMI Mortgage Insurance Asia Limited (the HK Sale Agreement). 

  

	 	CB	Pursuant to the Share Sale Agreement, the Note Issuer agrees to issue the Note (as defined below) to the Noteholder in relation to that part of the purchase price payable by
the PurchaserQBE Holdings (AAP) Pty Limited under the Share Sale Agreement, on the following terms and conditions. 

  

	 	D	The Note Issuer and the Noteholder have agreed that, pursuant to the Share Sale Agreement and this Deed, the value of the Note (principal and interest) may be
reduced in accordance with the mechanisms contained in Schedule 6 to the Share Sale Agreement and as set out in clause 16.1 and 16.16 of the Share Sale Agreement. 

  

	 	E	The Note Issuer and the Noteholder have agreed that, pursuant to the HK Sale Agreement and this Deed, the value of the Note (principal and interest) may be reduced
in accordance with the mechanism set out in clauses 14.1 and 14.6 of the HK Sale Agreement. 

 It is agreed as follows. 

 

	1.	Definitions and Interpretation 

  

	1.1	Definitions 

 The following definitions apply unless
the context requires otherwise: 
  

  
 Page 1 

  

 Business Day means any day other than Saturday, Sunday or any other day on which banks
in the city of New York, USA or Sydney, Australia are required to close. 
 Governmental Entity means any government or
representative of a government or any governmental, semi-governmental, administrative, fiscal, regulatory or judicial body, department, commission, authority, agency, instrumentality, board or tribunal, whether federal, state, territorial or local
and whether Australian or foreign. It includes the Australian Securities and Investments Commission, the Australian Competition and Consumer Commission, the Australian Prudential Regulation Authority and the Australian Securities Exchange (and any
other securities exchange). 
 HK Note means the note deed issued pursuant to and in accordance with
the HK Sale Agreement between the Note Issuer and The PMI Group, Inc. 
 HK Sale Agreement
means the share sale deed dated on or around 29 August 2008 between The PMI Group, Inc., QBE Holdings (AAP) Pty Limited and QBE Insurance Group Limited in relation to the sale of the shares in PMI Mortgage Insurance Asia Limited.

 Insolvency Event in relation to a party, means any of the following: 
  

	 	(a)	a petition is presented, or a meeting is convened for the purpose of considering a resolution or other steps are taken by any person with a view to the appointment of an
administrator (whether out of court or otherwise) against or for the winding up of the other party or an administration order or a winding up order is made against or a provisional liquidator appointed with respect to the other party;

  

	 	(b)	an encumbrancer takes possession of, or a trustee or administrative receiver or similar officer is appointed in respect of, all or any part of the business or assets of the other
party, or distress or any form of execution is levied or enforced upon or sued out against any of those assets and is not discharged within seven days of being levied, enforced or sued out; 

  

	 	(c)	the other party is unable to pay its debts as they fall due or the value of its assets is less than the amount of its liabilities, taking into account its contingent and prospective
liabilities, or it suspends or threatens to suspend making payments with respect to all or any class of its debts; 

  

	 	(d)	the other party proposes or makes any composition or arrangement or composition with, or any assignment for the benefit of, its creditors; 

  

	 	(e)	anything analogous to any of the events described in paragraphs (a) – (d), inclusive, occurs under the laws of any applicable jurisdiction including insurance laws; or

  

	 	(f)	the other party ceases to carry on the whole or any material part of its business and that cessation, in the reasonable opinion of the first party, would be reasonably likely to
affect adversely the other party’s ability to observe and perform properly and punctually any of its obligations under this Deed. 

 Interest Period means: 
  

	 	(a)	in relation to each such period other than the last, the 6 month period commencing on the date of this Deed23 October 2008 and each 6 month period
thereafter; 

  

	 	(b)	in relation to the last such period, the period commencing on the first day of such period and ending on the Repayment Date. 

  

  
 Page 2 

  

 Interest Rate means 3.7875%, being 3 month US LIBOR plus 1% per
annum as at 1 July 2008. 
 Issue Date means the date of this Deed. 
 Note means the debt obligation of the Note Issuer representing the right of the Noteholder to receive the Principal under the terms and
conditions of, and as evidenced by, this Deed. 
 Principal means the amount specified in clause 2, as adjusted in accordance
with clauses 5.1 and 7. 
 Repayment Date means: 
  

	 	(a)	the date elected by the Note Issuer for repayment of the Principal under clause 6.2; and 

  

	 	(b)	the date on which the Principal must be repaid under clause 12; and 

  

	 	(c)	the expiry of the Term. 

 Tax includes any
tax, levy, impost, deduction, charge, rate, duty, GST or withholding which is levied or imposed by the Commonwealth of Australia or any political subdivision or taxing authority in it, and any related interest, penalty, charge, fee or other amount.

 Term has the meaning given to that term in clause 3. 
  

	1.2	Interpretation 

 Headings are for convenience only
and do not affect interpretation. The following rules apply unless the context requires otherwise. 
  

	 	(a)	The singular includes the plural and conversely. 

  

	 	(b)	A gender includes all genders. 

  

	 	(c)	If a word or phrase is defined, its other grammatical forms have a corresponding meaning. 

  

	 	(d)	A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them. 

  

	 	(e)	A reference to a clause or schedule is a reference to a clause of, or a schedule to, this Deed. 

  

	 	(f)	A reference to an agreement or document (including a reference to this Deed) is to the agreement or document as amended, varied, supplemented, novated or replaced, except to the
extent prohibited by this Deed or that other agreement or document. 

  

	 	(g)	A reference to a party to this Deed or another agreement or document includes the party’s successors and permitted substitutes and permitted assigns (and, where applicable, the
party’s legal personal representatives). 

  

	 	(h)	A reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory
instrument issued under it. 

  

	 	(i)	A reference to dollars or $ or US$ is to United States currency. 

  

	 	(j)	A reference to conduct includes an omission, statement or undertaking, whether or not in writing. 

  

	 	(k)	Mentioning anything after includes, including, for example, or similar expression does not limit what else might be included. 

 

  
 Page 3 

  

	2.	Creation of Note 

 By this Deed, the Note Issuer
creates the Note on the date of this Deed in favour of the Noteholder with an initial principal amount outstanding on the date of this Deed of US$186,505,850. The principal outstanding and interest payable under the
Note may be adjusted in accordance with the terms and conditions of this Deed, the HK Sale Agreement and the Share Sale Agreement. 
  

	3.	Term 

 The Note will continue on the following terms
during the period until its redemption in full on 30 September 2011 (the Term), subject to the terms and conditions of this Deed. 
  

	4.	Purpose 

 The purpose of the Note is to satisfy the
relevant part of the purchase price payable by the Purchaser under the Share Sale Agreement. 
  

	5.	Interest 

  

	5.1	Calculation of Interest 

  

	 	(a)	The Note Issuer shall pay interest on the Principal at the Interest Rate calculated in accordance with clause 5.1(b). 

  

	 	(b)	Interest shall be calculated on the Repayment Date on the daily Principal balance outstanding on the basis of the actual number of days elapsed in each Interest Period and a year of
360 days (including the first day of the Interest Period but excluding the last). 

  

	 	(c)	Interest, which is payable on the Repayment Date, will be calculated on the basis of each Interest Period, then, for the purpose of the calculation, added to, and so form part of
the Principal at the end of each Interest Period (on a compounding basis). 

  

	5.2	Overdue Payments 

 Interest on overdue amounts shall
accrue from the due date up to but excluding the date of actual payment, before and (as a separate and independent obligation) after judgment at the Interest Rate above plus 1% per annum unless otherwise agreed between the parties. The basis of
calculation of interest as set out in clause 5.1 will also apply to any calculation under this clause. 
  

	6.	Payment Obligations 

  

	6.1	Repayment at end of Term 

 Subject to clause 6.2 and
clause 12, the Note Issuer must repay the Principal (including Interest accrued) on the Repayment Date. 
  

  
 Page 4 

  

	6.2	Voluntary prepayment 

 The Note Issuer may only
prepay all or some of the Principal with prior written notice to the Noteholder. 
  

	6.3	Method of payment 

 The Note Issuer must make all
payments to the account specified in writing by the Noteholder. Payments must be in cleared funds and free of any set-off or deduction, except for taxes where required by law or adjustment to Principal and Interest in accordance with clause 7 of
this Deed. 
  

	7.	Adjustments to Principal and Interest 

  

	 	(a)	The parties agree that: 

  

	 	(i)	to the extent there are losses which exceed the Performance Metric as defined in the Share Sale Agreement, then the Principal and Interest will be reduced to the extent and in
accordance with the mechanism provided for in Schedule 6 of the Share Sale Agreement; 

  

	 	(ii)	subject to completion of the transaction under the HK Sale Agreement in accordance with and subject to its terms (including without limitation the issuing of the HK Note),
and to the extent that there is an Australian Note Shortfall as defined in the Share Sale Agreement, then the Principal and Interest will be reduced to the extent and in accordance with the mechanism provided for in Schedule 11 of the Share Sale
Agreement; and 

  

	 	(ii)	(iii) to the extent the Noteholder either agrees or is required to satisfy any claims for any breach of Warranties under the Share Sale Agreement, then the
Principal and Interest will be reduced to the extent and in accordance with the mechanism provided for in clauses 16.1(b) and 16.16 of the Share Sale Agreement; and 

  

	 	(iii)	to the extent The PMI Group, Inc either agrees or is required to satisfy any claims for any breach of a HK Vendor’s Warranty under and in accordance with the
HK Sale Agreement or a claim by Koon-hoo Luk against PMI Mortgage Insurance Asia Limited in respect of his resignation from or his tenure on the board of directors of PMI Mortgage Insurance Asia Limited, then the
Principal and Interest will be reduced to the extent and in accordance with the mechanism provided for in clauses 14.1(b) and 14.16 of the HK Sale Agreement. 

 In this clause HK Vendor’s Warranty means a warranty furnished by the PMI Group, Inc in clause 14 of the
HK Sale Agreement. 
  

	 	(b)	The Noteholder acknowledges that in acting under clause 6(b) of the Share Sale Agreement, the Noteholder will bring the substance of this clause 7 to the attention of potential
investors. 

  

  
 Page 5 

  

	8.	Taxation 

  

	8.1	Payments made free and clear 

 Payments in respect
of the Note are subject in all cases to applicable provisions of fiscal and other laws and regulations. All payments under the Note must be made free and clear of, and without deduction for, or by reference to, any present or future taxes of any
Governmental Entity of any jurisdiction or any political subdivision or taxing authority in it unless required by law. 
  

	8.2	Additional payments 

 If the Note Issuer is obliged
to make a deduction in respect of Tax from any payment (including the capitalisation of interest under clause 5.1(c)): 
  

	 	(a)	it shall promptly pay the amount deducted to the appropriate Governmental Entity; and 

  

	 	(b)	within 30 days of the end of the month in which the deduction is made, it shall deliver to the Noteholder, for collection, official receipts or other evidence of payment of that
amount. 

  

	9.	Representations and Warranties 

 Each party makes
the following representations and warranties to the other party as at the date of this Deed as follows: 
  

	 	(a)	(Incorporation) It is duly incorporated and validly existing under the laws of its place of incorporation, with full power and authority to own its properties and to conduct
its business as currently conducted. 

  

	 	(b)	(Power of authority) It has the power and authority to execute and exchange this Deed and perform and observe all its terms. This Deed has been duly executed by it and is a
legal, valid and binding Deed of it enforceable against it. 

  

	 	(c)	(Solvency) No step has been taken in relation to it to wind it up, appoint a controller or administrator, seize or take possession of any of its assets or make an
arrangement, compromise or composition with any of its creditors. It is able to pay all its debts as and when they become due and payable. 

  

	10.	Notices 

 Unless otherwise agreed between the
parties, any notice, demand, consent or other communication (a Notice) given or made under this Deed: 
  

	 	(a)	must be in writing and signed by a person duly authorised by the sender; 

  

  
 Page 6 

  

	 	(b)	must either be delivered to the intended recipient by prepaid post (if posted to an address in another country, by registered airmail) or by hand or fax to the address or fax number
below or the address or fax number last notified by the intended recipient to the sender: 

  

			
	 (i)     to Noteholder:
	  	 3003 Oak Road
 Walnut Creek, CA 94597
 United States
  
 Attention: General Counsel
  
 Fax No: +1-925-658-6175

		
	 (ii)    to the Note Issuer:
	  	 Level 2, 82 Pitt Street
 Sydney NSW 2000
 Australia
  
 Attention: Company Secretary
  
 Fax No: +61 2 9231 6104

  

	 	(c)	will be taken to be duly given or made: 

  

	 	(i)	in the case of delivery in person, when delivered; 

  

	 	(ii)	in the case of delivery by post two business days after the date of posting (if posted to an address in the same country) or seven business days after the date of posting (if posted
to an address in another country); and 

  

	 	(iii)	in the case of fax, on receipt by the sender of a transmission control report from the despatching machine showing the relevant number of pages and the correct destination fax
machine number or name of recipient and indicating that the transmission has been made without error, 

 but if the result is
that a Notice would be taken to be given or made on a day which is not a business day in the place to which the Notice is sent or is later than 4pm (local time) it will be taken to have been duly given or made at the commencement of business on the
next business day in that place. 
  

	11.	Conditions 

 The Note is being issued on the
condition that the liability of the Note Issuer under this Deed ranks and will rank at least equally and ratably (pari passu) in point and security with all its other respective unsecured and unsubordinated liabilities (both actual and contingent)
other than liabilities mandatorily preferred by law. 
  

	12.	Events of Default 

 The Note may be cancelled at any
time by the Noteholder if: 
  

	 	(a)	the Note Issuer fails to pay any amount when due under this Deed and that amount remains unpaid for a period of five Business Days from the date of notice of that non-payment by the
Noteholder to the Note Issuer; 

  

  
 Page 7 

  

	 	(b)	the Note Issuer fails duly to perform any of its other obligations under this Deed within 20 Business Days of the Noteholder notifying the Note Issuer of such failure or is
otherwise in breach of any representation or warranty which it has given under this Deed; 

  

	 	(c)	the Note Issuer ceases to be a member or comprise members of the QBE Group; or 

  

	 	(d)	an Insolvency Event occurs in respect of the Note Issuer, 

 whereupon, all monies owing under this Deed shall be deemed to be due and payable and the Note Issuer shall immediately repay all monies owing to the Noteholder under the Note. 
  

	13.	Entire Agreement 

 This Deed, HK Sale
Agreement and the Share Sale Agreement contain the entire agreement of the parties with respect to the Note. They set out the only conduct relied on by the parties and supersede all earlier conduct by the parties with respect to the Note.

  

	14.	Amendment 

 This Deed may be amended only by
another Deed executed by all parties. 
  

	15.	Assignment 

  

	 	(a)	The Note Issuer may only assign or transfer any of its rights or obligations under this Deed with the prior written consent of the Noteholder. 

  

	 	(b)	The Noteholder may transfer, assign, novate, sub-participate or otherwise deal with all or any of its rights or obligations under this Deed for any reason at any time.

  

	16.	Set-off 

  

	 	(a)	If the Note Issuer is in default of its obligations under this Deed, the Note Issuer authorises the Noteholder to apply any amounts payable by the Noteholder to the Note Issuer in
or towards satisfaction of the amount (including Principal) payable by the Note Issuer to the Noteholder. 

  

	 	(b)	If more than one of the circumstances contemplated by clause 7 of this Deed occurs, at the Note Issuer’s option, it may choose to apply the adjustment under clause 7 in full or
in part, first under either clause 7(a)(i) or 7(a)(ii) and secondly under clause 7(a)(iii). 

  

	17.	Further actions 

 Each party shall execute and
deliver such certificates and other documents and take such other actions as may reasonably be required pursuant to this Deed or as requested by the other party in order to carry out the provisions of this Deed. 
  

  
 Page 8 

  

	18.	Counterparts 

 This Deed may be executed in any
number of counterparts. All counterparts taken together will be taken to constitute one Deed. 
  

	19.	Confidentiality 

  

	 	(a)	Subject to paragraph (b) below, each party must keep the terms of this Deed confidential. 

  

	 	(b)	A party may make any disclosures in relation to this Deed as it thinks necessary to: 

  

	 	(i)	its professional advisers, insurers, bankers, financial advisers and financiers, if those persons undertake to keep information disclosed confidential; 

  

	 	(ii)	comply with any applicable law or requirement of any Governmental Entity; or 

  

	 	(iii)	any of its directors or employees to whom it is necessary to disclose the information if that person undertakes to keep the information confidential. 

  

	20.	Governing Law 

 This Deed is governed by the laws of
New South Wales, Australia. The parties submit to the non-exclusive jurisdiction of courts exercising jurisdiction there. 
  

  
 Page 9 

			
	Amending Deed	  	 

		
	 	  	 

  

 Executed and delivered as a Deed in 
 NOTE ISSUER 
  

					
	 Executed as a deed in accordance with section 127 of the Corporations Act 2001 by 
 QBE Insurance Group Limited:
	 		 	
			
	/s/ Frank M. O’Halloran	 		 	/s/ Duncan Ramsey
	Director Signature	 		 	Director/Secretary Signature
			
	 	 		 	 
	Print Name	 		 	Print Name

 NOTEHOLDER 
  

					
	Executed as a deed by PMI Mortgage Insurance Co.:	 		 	
			
	/s/ L. Stephen Smith	 		 	/s/ Donald P. Lofe, Jr.
	Director Signature	 		 	Director/Secretary Signature
			
	 	 		 	 
	Print Name	 		 	Print Name

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