Credit SuisseFirst Boston (USA), Inc. c/o Credit Suisse First Boston LLC One Madison Avenue, 9th Floor New York, New York 10010

Exhibit 10.3

Credit Suisse First Boston (USA), Inc.
c/o Credit Suisse First Boston LLC
One Madison Avenue, 9th Floor
New York, New York 10010

August 12, 2005

VIA FAX ###-###-####

The PMI Group, Inc.

PMI Plaza

3003 Oak Road

Walnut Creek, CA  94597

Attention:  General Counsel

VIA FAX ###-###-####

FSA Portfolio Management Inc.,

c/o Financial Security Assurance Holdings Ltd.

31 West 52nd Street

New York, New York  10019

Attention:  General Counsel

VIA FAX ###-###-####

Greenrange Partners LLC

114 Goodwives River Rd.

Darien, CT 06820

Attention:  James H. Ozanne

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SPS Holding Corp.

P. O. Box 65250

Salt Lake City, UT 84165-0250

Attention:  General Counsel

RE:  Exercise Notice

Ladies and Gentlemen:

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

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

cc:

VIA FAX ###-###-####

Bracewell & Giuliani LLP

711 Louisiana Street, Suite 2300

Houston, Texas  77002

Attention:  William S. Anderson

VIA FAX ###-###-####

Thomas F. Cooney, III

Kirkpatrick & Lockhart Nicholson Graham LLP

1800 Massachusetts Avenue, N.W.

Second Floor

Washington, D.C.  20036

2

Acknowledgement of Receipt of Acceptance

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