PMI Group (PMI)

5.05 Financial Statements; No Material Adverse Effect.

(a) The Borrower has delivered to the Administrative Agent for delivery to the Lenders true and complete copies of (i) the audited consolidated balance sheets of the Borrower for the fiscal years ended December 31, 2003, 2004 and 2005 and the related audited consolidated statements of income for

32

the fiscal years then ended and (B) the unaudited consolidated balance sheets of the Borrower as of March 31 and June 30, 2006, and the related unaudited consolidated statements of income for the three and six month periods then ended, together with all accompanying notes and schedules thereto, if any (collectively, the “Financial Statements”). The balance sheets and statements of income included in the Financial Statements have been prepared in accordance with GAAP consistently applied during the periods involved and fairly present in accordance with GAAP, in all material respects, the consolidated financial position and the results of operations of the Borrower as of the dates and for the periods presented therein (subject, in the case of interim period financial statements, to normal year-end adjustments, none of which, on the date hereof, are expected to be material, and subject, in the case of unaudited financial statements, to the absence of footnotes).

(b) Since the date of the most recent audited financial statements described in Subsection 5.05(a), there has been no condition, event or occurrence that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.06 Litigation. Except as set forth in the Borrower’s Annual Report on Form 10K for the fiscal year ended December 31, 2005, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened or contemplated, before any Governmental Authority of competent jurisdiction, by or against the Borrower or any Material Subsidiary or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby or (b) are reasonably likely to be adversely determined and, if so adversely determined, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.07 No Default. Neither the Borrower nor any Material Subsidiary is in default under or with respect to any Contractual Obligation that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.08 Taxes. The Borrower and its Material Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid, or made provision for the payment of, all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP and except for failures to so file or pay that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.09 ERISA Compliance. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Borrower and its Material Subsidiaries (a) have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Pension Plan, (b) are in compliance in all material respects with the presently applicable provisions of ERISA and the Code and (c) have not incurred any liability to the PBGC or a Pension Plan under Title IV of ERISA.

5.10 Margin Regulations; Investment Company Act.

(a) The Borrower is not engaged and will not engage as one of its principal activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock. After applying the proceeds of each Borrowing, not more than 25% of the value of the assets of the Borrower will consist of margin stock.

33

(b) Neither the Borrower nor any Material Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.11 Disclosure. The statements, information, reports, representations and warranties made by the Borrower (other than any statements, information or reports that contain, or representations or warranties made in respect of, any forecast or financial projection) and furnished to the Administrative Agent or the Lenders by the Borrower in connection with the Loan Documents, when taken together with the information contained in the Company’s filings with the SEC, do not, taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made therein not misleading.

5.05 Financial Statements; No Material Adverse Effect.

(a) The Borrower has delivered to the Administrative Agent for delivery to the Lenders true and complete copies of (i) the audited consolidated balance sheets of the Borrower for the fiscal years ended December 31, 2001, 2002 and 2003 and the related audited consolidated statements of income for the fiscal years then ended and (B) the unaudited consolidated balance sheets of the Borrower as of March 31, June 30 and September 30, 2004, and the related unaudited consolidated statements of income for the three, six and nine month periods then ended, together with all accompanying notes and schedules thereto, if any (collectively, the “Financial Statements”). The balance sheets and statements of income included in the Financial Statements have been prepared in accordance with GAAP consistently applied during the periods involved and fairly present in accordance with GAAP, in all material respects, the consolidated financial position and the results of operations of the Borrower as of the dates and for the periods presented therein (subject, in the case of interim period financial statements, to normal year-end adjustments, none of which, on the date hereof, are expected to be material, and subject, in the case of unaudited financial statements, to the absence of footnotes).

(b) Since the date of the most recent audited financial statements described in Subsection 5.05(a), there has been no condition, event or occurrence that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened or contemplated, before any Governmental Authority of competent jurisdiction, by or against the Borrower or any Material Subsidiary or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby or (b) are reasonably likely to be adversely determined and, if so adversely determined, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.07 No Default. Neither the Borrower nor any Material Subsidiary is in default under or with respect to any Contractual Obligation that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.08 Taxes. The Borrower and its Material Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid, or made provision for the payment of, all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP and except for failures to so file or pay that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.09 ERISA Compliance. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Borrower and its Material Subsidiaries (a) have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Pension Plan, (b) are in compliance in all material respects with the presently applicable provisions of ERISA and the Code and (c) have not incurred any liability to the PBGC or a Pension Plan under Title IV of ERISA.

25