NORTH POINTE HOLDINGS CORP
GUARANTEE AGREEMENT, DATED FEBRUARY 22, 2006
<DOCUMENT>
<TYPE>EX-10.29
<SEQUENCE>12
<FILENAME>k02899exv10w29.txt
<DESCRIPTION>GUARANTEE AGREEMENT, DATED FEBRUARY 22, 2006
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.29

                                                                  EXECUTION COPY

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                               GUARANTEE AGREEMENT

                                     between

                       NORTH POINTE HOLDINGS CORPORATION,
                                  as Guarantor,

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,
                              as Guarantee Trustee

                          Dated as of February 22, 2006

                               NP CAPITAL TRUST I

================================================================================

<PAGE>

     GUARANTEE AGREEMENT, dated as of February 22, 2006, executed and delivered
by NORTH POINTE HOLDINGS CORPORATION, a Michigan corporation (the "Guarantor")
having its principal office at 28819 Franklin Road, Southfield, MI 48034, and
LASALLE BANK NATIONAL ASSOCIATION, a national banking association, as trustee
(in such capacity, the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of NP CAPITAL TRUST I, a Delaware statutory trust (the "Issuer").

                                   WITNESSETH:

     WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
the date hereof (the "Trust Agreement"), among the Guarantor, as Depositor, the
Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the holders from time to time of the Preferred Securities (as
hereinafter defined), the Issuer is issuing Twenty Million Dollars ($20,000,000)
aggregate Liquidation Amount (as defined in the Trust Agreement) of its Floating
Rate Preferred Securities (Liquidation Amount $1,000 per preferred security)
(the "Preferred Securities") representing preferred undivided beneficial
interests in the assets of the Issuer and having the terms set forth in the
Trust Agreement;

     WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Notes (as
defined in the Trust Agreement) of the Guarantor; and

     WHEREAS, as incentive for the Holders to purchase Preferred Securities the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.

     NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Preferred Securities:

                                   ARTICLE I

                         INTERPRETATION AND DEFINITIONS

     SECTION 1.1. Interpretation.

     In this Guarantee Agreement, unless the context otherwise requires:

          (a) capitalized terms used in this Guarantee Agreement but not defined
     in the preamble hereto have the respective meanings assigned to them in
     Section 1.2;

          (b) the words "include", "includes" and "including" shall be deemed to
     be followed by the phrase "without limitation";

<PAGE>

          (c) all references to "the Guarantee Agreement" or "this Guarantee
     Agreement" are to this Guarantee Agreement as modified, supplemented or
     amended from time to time;

          (d) all references in this Guarantee Agreement to Articles and
     Sections are to Articles and Sections of this Guarantee Agreement unless
     otherwise specified;

          (e) the words "hereby", "herein", "hereof" and "hereunder" and other
     words of similar import refer to this Guarantee Agreement as a whole and
     not to any particular Article, Section or other subdivision;

          (f) a reference to the singular includes the plural and vice versa;
     and

          (g) the masculine, feminine or neuter genders used herein shall
     include the masculine, feminine and neuter genders.

     SECTION 1.2. Definitions.

     As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:

          "Affiliate" of any specified Person means any other Person directly or
     indirectly controlling or controlled by or under direct or indirect common
     control with such specified Person; provided, that the Issuer shall not be
     deemed to be an Affiliate of the Guarantor. For the purposes of this
     definition, "control" when used with respect to any specified Person means
     the power to direct the management and policies of such Person, directly or
     indirectly, whether through the ownership of voting securities, by contract
     or otherwise; and the terms "controlling" and "controlled" have meanings
     correlative to the foregoing.

          "Beneficiaries" means any Person to whom the Issuer is or hereafter
     becomes indebted or liable.

          "Board of Directors" means either the board of directors of the
     Guarantor or any duly authorized committee of that board.

          "Common Securities" means the securities representing common undivided
     beneficial interests in the assets of the Issuer.

          "Debt" means with respect to any Person, whether recourse is to all or
     a portion of the assets of such Person, whether currently existing or
     hereafter incurred, and whether or not contingent and without duplication,
     (i) every obligation of such Person for money borrowed; (ii) every
     obligation of such Person evidenced by bonds, debentures, notes or other
     similar instruments, including obligations incurred in connection with the
     acquisition of property, assets or businesses; (iii) every reimbursement
     obligation of such Person with respect to letters of credit, bankers'
     acceptances or similar facilities issued for the account of such Person;
     (iv) every obligation of such Person issued or assumed as the deferred
     purchase price of property or services (but excluding trade accounts
     payable


                                       2

<PAGE>

     arising in the ordinary course of business); (v) every capital lease
     obligation of such Person; (vi) all indebtedness of such Person, whether
     incurred on or prior to the date of this Guarantee Agreement or thereafter
     incurred, for claims in respect of derivative products, including interest
     rate, foreign exchange rate and commodity forward contracts, options, swaps
     and similar arrangements; (vii) every obligation of the type referred to in
     clauses (i) through (vi) of another Person and all dividends of another
     Person the payment of which, in either case, such Person has guaranteed or
     is responsible or liable for, directly or indirectly, as obligor or
     otherwise; and (viii) any renewals, extensions, refundings, amendments or
     modifications of any obligation of the type referred to in clauses (i)
     through (vii).

          "Event of Default" means a default by the Guarantor on any of its
     payment or other obligations under this Guarantee Agreement; provided, that
     except with respect to a default in payment of any Guarantee Payments, the
     Guarantor shall have received notice of default from the Guarantee Trustee
     and shall not have cured such default within thirty (30) days after receipt
     of such notice.

          "Guarantee Payments" means the following payments or distributions,
     without duplication, with respect to the Preferred Securities, to the
     extent not paid or made by or on behalf of the Issuer: (i) any accumulated
     and unpaid Distributions (as defined in the Trust Agreement) required to be
     paid on the Preferred Securities, to the extent the Issuer shall have funds
     on hand available therefor at such time, (ii) the Redemption Price with
     respect to any Preferred Securities to the extent the Issuer shall have
     funds on hand available therefor at such time, and (iii) upon a voluntary
     or involuntary termination, winding up or liquidation of the Issuer, unless
     Notes are distributed to the Holders, the lesser of (a) the aggregate of
     the Liquidation Amount of $1,000 per Preferred Security plus accumulated
     and unpaid Distributions on the Preferred Securities to the date of
     payment, to the extent that the Issuer shall have funds available therefor
     at such time and (b) the amount of assets of the Issuer remaining available
     for distribution to Holders in liquidation of the Issuer after satisfaction
     of liabilities to creditors of the Issuer in accordance with applicable law
     (in either case, the "Liquidation Distribution").

          "Guarantee Trustee" means LaSalle Bank National Association, until a
     Successor Guarantee Trustee, as defined below, has been appointed and has
     accepted such appointment pursuant to the terms of this Guarantee
     Agreement, and thereafter means each such Successor Guarantee Trustee.

          "Guarantor" means North Pointe Holdings Corporation and each of its
     successors and assigns.

          "Issuer" has the meaning set forth herein above.

          "Holder" means any holder, as registered on the books and records of
     the Issuer, of any Preferred Securities; provided, that, in determining
     whether the holders of the requisite percentage of Preferred Securities
     have given any request, notice, consent or waiver hereunder, "Holder" shall
     not include the Guarantor, the Guarantee Trustee or any Affiliate of the
     Guarantor or the Guarantee Trustee.


                                       3

<PAGE>

          "Indenture" means the Junior Subordinated Indenture, dated as of the
     date hereof, as supplemented and amended, between the Guarantor and LaSalle
     Bank National Association, as trustee.

          "List of Holders" has the meaning specified in Section 2.1.

          "Majority in Liquidation Amount of the Preferred Securities" means a
     vote by the Holder(s), voting separately as a class, of more than fifty
     percent (50%) of the aggregate Liquidation Amount of all then outstanding
     Preferred Securities issued by the Issuer.

          "Obligations" means any costs, expenses or liabilities (but not
     including liabilities related to taxes) of the Issuer, other than
     obligations of the Issuer to pay to holders of any Trust Securities the
     amounts due such holders pursuant to the terms of the Trust Securities.

          "Officers' Certificate" means, with respect to any Person, a
     certificate signed by the Chief Executive Officer, Chief Financial Officer,
     President or a Vice President of such Person, and by the Treasurer, an
     Assistant Treasurer, the Secretary or an Assistant Secretary of such
     Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
     delivered with respect to compliance with a condition or covenant provided
     for in this Guarantee Agreement (other than the certificate provided
     pursuant to Section 2.2) shall include:

          (a) a statement that each officer signing the Officers' Certificate
     has read the covenant or condition and the definitions relating thereto;

          (b) a brief statement of the nature and scope of the examination or
     investigation undertaken by each officer in rendering the Officers'
     Certificate;

          (c) a statement that each officer has made such examination or
     investigation as, in such officer's opinion, is necessary to enable such
     officer to express an informed opinion as to whether or not such covenant
     or condition has been complied with; and

          (d) a statement as to whether, in the opinion of each officer, such
     condition or covenant has been complied with.

          "Person" means a legal person, including any individual, corporation,
     estate, partnership, joint venture, association, joint stock company,
     limited liability company, trust, unincorporated association, government or
     any agency or political subdivision thereof or any other entity of whatever
     nature.

          "Preferred Securities" has the meaning set forth in the first recital
     hereof.

          "Responsible Officer" means, with respect to the Guarantee Trustee,
     the officer in the CDO Trust Services Group of the Trustee having direct
     responsibility for the administration of this Guarantee Agreement.


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<PAGE>

          "Senior Debt" means the principal of and any premium, if any, and
     interest on (including interest accruing on or after the filing of any
     petition in bankruptcy or for reorganization relating to the Guarantor
     whether or not such claim for post-petition interest is allowed in such
     proceeding) all Debt of the Guarantor, whether incurred on or prior to the
     date of the Indenture or thereafter incurred, unless it is provided in the
     instrument creating or evidencing the same or pursuant to which the same is
     outstanding, that such obligations are not superior in right of payment to
     the Preferred Securities; provided, that if the Guarantor is subject to the
     regulation and supervision of an insurance regulatory authority, the
     Guarantor shall have received the approval of such appropriate insurance
     regulatory authority prior to issuing any such obligation; and provided,
     further, that Senior Debt shall not include any other debt securities and
     guarantees in respect of such debt securities issued to any trust other
     than the Trust (or a trustee of any such trust), partnership or other
     entity affiliated with the Guarantor that is a financing vehicle of the
     Guarantor (a "financing entity") in connection with the issuance by such
     financing entity of equity securities or other securities that are treated
     as equity capital for regulatory capital purposes guaranteed by the
     Guarantor pursuant to an instrument that ranks pari passu with or junior in
     right of payment to the Indenture.

          "Trust Indenture Act" means the Trust Indenture Act of 1939, as
     amended and as in effect on the date of this Guarantee Agreement.

          "Successor Guarantee Trustee" means a successor Guarantee Trustee
     possessing the qualifications to act as Guarantee Trustee under Section
     4.1.

Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.

                                   ARTICLE II

                                     REPORTS

     SECTION 2.1. List of Holders.

     The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee at such times as the Guarantee Trustee may request in writing, within
thirty (30) days after the receipt by the Guarantor of any such request, a list,
in such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders (the "List of Holders") as of a date not more than
fifteen (15) days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.


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<PAGE>

     SECTION 2.2. Periodic Reports to the Guarantee Trustee.

     The Guarantor shall deliver to the Guarantee Trustee, within one hundred
and twenty (120) days after the end of each calendar year of the Guarantor
ending after the date of this Guarantee Agreement, an Officers' Certificate
covering the preceding calendar year, stating whether or not to the knowledge of
the signers thereof the Guarantor is in default in the performance or observance
of any of the terms or provisions or any of the conditions of this Guarantee
Agreement (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Guarantor shall be in default thereof,
specifying all such defaults and the nature and status thereof of which they
have knowledge. The delivery requirements of this Section 2.2 may be satisfied
by compliance with Section 8.16(a) of the Trust Agreement.

     SECTION 2.3. Event of Default; Waiver.

     The Holders of a Majority in Liquidation Amount of the Preferred Securities
may, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.

     SECTION 2.4. Event of Default; Notice.

     (a) The Guarantee Trustee shall, within ninety (90) days after the
occurrence of a default, transmit to the Holders notices of all defaults
actually known to the Guarantee Trustee, unless such defaults have been cured or
waived before the giving of such notice. For the purpose of this Section 2.4,
the term "default" means any event that is, or after notice or lapse of time or
both would become, an Event of Default.

     (b) The Guarantee Trustee shall not be deemed to have knowledge of any
default or Event of Default unless the Guarantee Trustee shall have received
written notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have received written notice, of such default or Event
of Default from the Guarantor or a Holder.


                                       6

<PAGE>

                                   ARTICLE III

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

     SECTION 3.1. Powers and Duties of the Guarantee Trustee.

     (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising its rights pursuant
to Section 5.4(d) or to a Successor Guarantee Trustee upon acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
succession of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.

     (b) The rights, immunities, duties and responsibilities of the Guarantee
Trustee shall be as provided by this Guarantee Agreement and there shall be no
other duties or obligations, express or implied, of the Guarantee Trustee.
Notwithstanding the foregoing, no provisions of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it. Whether or not herein
expressly so provided, every provision of this Guarantee Agreement relating to
the conduct or affecting the liability of or affording protection to the
Guarantee Trustee shall be subject to the provisions of this Section 3.1. To the
extent that, at law or in equity, the Guarantee Trustee has duties and
liabilities relating to the Guarantor or the Holders, the Guarantee Trustee
shall not be liable to any Holder for the Guarantee Trustee's good faith
reliance on the provisions of this Guarantee Agreement. The provisions of this
Guarantee Agreement, to the extent that they restrict the duties and liabilities
of the Guarantee Trustee otherwise existing at law or in equity, are agreed by
the Guarantor and the Holders to replace such other duties and liabilities of
the Guarantee Trustee.

     (c) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, negligent
failure to act or own willful misconduct, except that:

          (i) the Guarantee Trustee shall not be liable for any error of
     judgment made in good faith by a Responsible Officer of the Guarantee
     Trustee, unless it shall be proved that the Guarantee Trustee was negligent
     in ascertaining the pertinent facts upon which such judgment was made; and

          (ii) the Guarantee Trustee shall not be liable with respect to any
     action taken or omitted to be taken by it in good faith in accordance with
     the direction of the Holders of not less than a Majority in Liquidation
     Amount of the Preferred Securities relating to the time, method and place
     of conducting any proceeding for any remedy available to the


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<PAGE>

     Guarantee Trustee, or exercising any trust or power conferred upon the
     Guarantee Trustee under this Guarantee Agreement.

     SECTION 3.2. Certain Rights of the Guarantee Trustee.

     (a) Subject to the provisions of Section 3.1:

          (i) the Guarantee Trustee may conclusively rely and shall be fully
     protected in acting or refraining from acting in good faith and in
     accordance with the terms hereof upon any resolution, certificate,
     statement, instrument, opinion, report, notice, request, direction,
     consent, order, bond, debenture, note, other evidence of indebtedness or
     other paper or document reasonably believed by it to be genuine and to have
     been signed, sent or presented by the proper party or parties;

          (ii) any direction or act of the Guarantor contemplated by this
     Guarantee Agreement shall be sufficiently evidenced by an Officers'
     Certificate unless otherwise prescribed herein;

          (iii) the Guarantee Trustee may consult with counsel, and the advice
     of such counsel shall be full and complete authorization and protection in
     respect of any action taken, suffered or omitted to be taken by it
     hereunder in good faith and in reliance thereon and in accordance with such
     advice. Such counsel may be counsel to the Guarantee Trustee, the Guarantor
     or any of its Affiliates and may be one of its employees. The Guarantee
     Trustee shall have the right at any time to seek instructions concerning
     the administration of this Guarantee Agreement from any court of competent
     jurisdiction;

          (iv) the Guarantee Trustee shall be under no obligation to exercise
     any of the rights or powers vested in it by this Guarantee Agreement at the
     request or direction of any Holder, unless such Holder shall have provided
     to the Guarantee Trustee reasonable security or indemnity against the
     costs, expenses (including reasonable attorneys' fees and expenses) and
     liabilities that might be incurred by it in complying with such request or
     direction, including such reasonable advances as may be requested by the
     Guarantee Trustee; provided, that, nothing contained in this Section
     3.2(a)(iv) shall be taken to relieve the Guarantee Trustee, upon the
     occurrence of an Event of Default, of its obligation to exercise the rights
     and powers vested in it by this Guarantee Agreement; provided, further,
     that nothing contained in this Section 3.2(a)(iv) shall prevent the
     Guarantee Trustee from exercising its rights under Section 4.2 hereof.;

          (v) the Guarantee Trustee shall not be bound to make any investigation
     into the facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture, note, other evidence of indebtedness or other paper or
     document, but the Guarantee Trustee, in its discretion, may make such
     further inquiry or investigation into such facts or matters as it may see
     fit, and if the Guarantee Trustee shall determine to make such inquiry or
     investigation, it shall be entitled to examine the books, records and
     premises of the Guarantor, personally or by agent or attorney;


                                       8

<PAGE>

          (vi) the Guarantee Trustee may execute any of the trusts or powers
     hereunder or perform any duties hereunder either directly or by or through
     its agents, attorneys, custodians or nominees and the Guarantee Trustee
     shall not be responsible for any misconduct or negligence on the part of
     any such agent, attorney, custodian or nominee appointed with due care by
     it hereunder;

          (vii) whenever in the administration of this Guarantee Agreement the
     Guarantee Trustee shall deem it desirable to receive instructions with
     respect to enforcing any remedy or right hereunder, the Guarantee Trustee
     (A) may request instructions from the Holders of a Majority in Liquidation
     Amount of the Preferred Securities, (B) may refrain from enforcing such
     remedy or right or taking such other action until such instructions are
     received and (C) shall be protected in acting in accordance with such
     instructions;

          (viii) except as otherwise expressly provided by this Guarantee
     Agreement, the Guarantee Trustee shall not be under any obligation to take
     any action that is discretionary under the provisions of this Guarantee
     Agreement;

          (ix) whenever, in the administration of this Guarantee Agreement, the
     Guarantee Trustee shall deem it desirable that a matter be proved or
     established before taking, suffering or omitting to take any action
     hereunder, the Guarantee Trustee (unless other evidence is herein
     specifically prescribed) may, in the absence of bad faith on its part,
     request and rely upon an Officers' Certificate which, upon receipt of such
     request from the Guarantee Trustee, shall be promptly delivered by the
     Guarantor; and

          (x) the Guarantee Trustee shall have no duty to cause any recording,
     filing or registration of any instrument or other writing (or any
     rerecording, refiling or reregistration thereof).

     (b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

     SECTION 3.3. Compensation.

     The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provisions of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
(including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Guarantee Trustee in accordance with any provisions of
this Guarantee Agreement.


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<PAGE>

     SECTION 3.4. Indemnity.

     The Guarantor agrees to indemnify and hold harmless the Guarantee Trustee
(including in its individual capacity) and any of its Affiliates and any of
their officers, directors, shareholders, employees, representatives or agents
from and against any loss, damage, liability, tax (other than income, franchise
or other taxes imposed on amounts paid pursuant to Section 3.3), penalty,
expense or claim of any kind or nature whatsoever incurred without negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement. This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Guarantee Trustee.

     In no event shall the Guarantee Trustee be liable for any indirect,
special, punitive or consequential loss or damage of any kind whatsoever,
including, but not limited to, lost profits, even if the Guarantee Trustee has
been advised of the likelihood of such loss or damage and regardless of the form
of action.

     In no event shall the Guarantee Trustee be liable for any failure or delay
in the performance of its obligations hereunder because of circumstances beyond
its control, including, but not limited to, acts of God, flood, war (declared or
undeclared), terrorism, fire, riot, embargo, government action, including any
laws, ordinances, regulations, governmental action or the like which delay,
restrict or prohibit the providing of the services contemplated by this
Guarantee Agreement.

     SECTION 3.5. Securities.

     The Guarantee Trustee or any other agent of the Guarantee Trustee, in its
individual or any other capacity, may become the owner or pledgee of Common or
Preferred Securities.

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

     SECTION 4.1. Guarantee Trustee; Eligibility.

     (a) There shall at all times be a Guarantee Trustee which shall:

          (i) not be an Affiliate of the Guarantor; and

          (ii) be a corporation organized and doing business under the laws of
     the United States or of any State thereof, authorized to exercise corporate
     trust powers, having a combined capital and surplus of at least fifty
     million dollars ($50,000,000), subject to supervision or examination by
     Federal or State authority and having an office


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<PAGE>

     within the United States. If such corporation publishes reports of
     condition at least annually, pursuant to law or to the requirements of such
     supervising or examining authority, then, for the purposes of this Section
     4.1, the combined capital and surplus of such corporation shall be deemed
     to be its combined capital and surplus as set forth in its most recent
     report of condition so published.

     (b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).

     (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee shall either eliminate such interest or resign in the manner
and with the effect set out in Section 4.2(c).

     SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.

     (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor, except during an Event of
Default.

     (b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.

     (c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

     (d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within thirty (30) days
after delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

                                    ARTICLE V

                                    GUARANTEE

     SECTION 5.1. Guarantee.

     (a) The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the


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<PAGE>

Issuer), as and when due, regardless of any defense (except for the defense of
payment by the Issuer), right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders. The
Guarantor shall give prompt written notice to the Guarantee Trustee in the event
it makes any direct payment to the Holders hereunder.

     (b) The Guarantor hereby also agrees to assume any and all Obligations of
the Issuer, and, in the event any such Obligation is not so assumed, subject to
the terms and conditions hereof, the Guarantor hereby irrevocably and
unconditionally guarantees to each Beneficiary the full payment, when and as
due, of any and all Obligations to such Beneficiaries. This Guarantee is
intended to be for the Beneficiaries who have received notice hereof.

     SECTION 5.2. Waiver of Notice and Demand.

     The Guarantor hereby waives notice of acceptance of the Guarantee Agreement
and of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

     SECTION 5.3. Obligations Not Affected.

     The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:

          (a) the release or waiver, by operation of law or otherwise, of the
     performance or observance by the Issuer of any express or implied
     agreement, covenant, term or condition relating to the Preferred Securities
     to be performed or observed by the Issuer;

          (b) the extension of time for the payment by the Issuer of all or any
     portion of the Distributions (other than an extension of time for payment
     of Distributions that results from the extension of any interest payment
     period on the Notes as provided in the Indenture), Redemption Price,
     Liquidation Distribution or any other sums payable under the terms of the
     Preferred Securities or the extension of time for the performance of any
     other obligation under, arising out of, or in connection with, the
     Preferred Securities;

          (c) any failure, omission, delay or lack of diligence on the part of
     the Holders to enforce, assert or exercise any right, privilege, power or
     remedy conferred on the Holders pursuant to the terms of the Preferred
     Securities, or any action on the part of the Issuer granting indulgence or
     extension of any kind;

          (d) the voluntary or involuntary liquidation, dissolution, sale of any
     collateral, receivership, insolvency, bankruptcy, assignment for the
     benefit of creditors, reorganization, arrangement, composition or
     readjustment of debt of, or other similar proceedings affecting, the Issuer
     or any of the assets of the Issuer;


                                       12

<PAGE>

          (e) any invalidity of, or defect or deficiency in, the Preferred
     Securities;

          (f) the settlement or compromise of any obligation guaranteed hereby
     or hereby incurred; or

          (g) any other circumstance whatsoever that might otherwise constitute
     a legal or equitable discharge or defense of a guarantor, it being the
     intent of this Section 5.3 that the obligations of the Guarantor hereunder
     shall be absolute and unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

     SECTION 5.4. Rights of Holders.

     The Guarantor expressly acknowledges that: (a) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (b) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (c) the Holders of a Majority in Liquidation
Amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and (d) any
Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Guarantee Trustee, the Issuer or any other Person.

     SECTION 5.5. Guarantee of Payment.

     This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Notes to Holders as provided in the Trust
Agreement.

     SECTION 5.6. Subrogation.

     The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, that, the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights it may acquire by way of subrogation
or any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Guarantee Agreement. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

     SECTION 5.7. Independent Obligations.


                                       13

<PAGE>

     The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3.

     SECTION 5.8. Enforcement.

     A Beneficiary may enforce the Obligations of the Guarantor contained in
Section 5.1(b) directly against the Guarantor, and the Guarantor waives any
right or remedy to require that any action be brought against the Issuer or any
other person or entity before proceeding against the Guarantor.

                                   ARTICLE VI

                           COVENANTS AND SUBORDINATION

     SECTION 6.1. Dividends, Distributions and Payments.

     So long as any Preferred Securities remain outstanding, if there shall have
occurred and be continuing an Event of Default or the Guarantor shall have
entered into an Extension Period as provided for in the Indenture and such
period, or any extension thereof, shall have commenced and be continuing, then
the Guarantor may not (a) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make liquidation payment with respect to, any of
the Guarantor's capital stock or (b) make any payment of principal of or any
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Guarantor that rank pari passu in all respects with or junior
in interest to the Notes (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of the Guarantor in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the occurrence of such Event of
Default or the applicable Extension Period, (ii) as a result of an exchange or
conversion of any class or series of the Guarantor's capital stock (or any
capital stock of a subsidiary of the Guarantor) for any class or series of the
Guarantor's capital stock or any class of series of the Guarantor's indebtedness
for any class or series of the Guarantor's capital stock, (iii) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversions or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) any declaration of a dividend in connection with
any rights plan, the issuance of rights, stock or other property under any
rights plan or the redemption or repurchase of rights pursuant thereto, or (v)
any dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock).


                                       14

<PAGE>

     SECTION 6.2. Subordination.

     The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt of the Guarantor.

     SECTION 6.3. Pari Passu Guarantees.

     (a) The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
guarantee agreements issued by the Guarantor with respect to preferred
securities (if any) similar to the Preferred Securities, issued by trusts other
than the Issuer established or to be established by the Guarantor (if any), in
each case similar to the Issuer.

     (b) The right of the Guarantor to participate in any distribution of assets
of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Debt of the Guarantor, under any indenture or
agreement that the Guarantor may enter into in the future or otherwise.

                                   ARTICLE VII

                                   TERMINATION

     SECTION 7.1. Termination.

     This Guarantee Agreement shall terminate and be of no further force and
effect upon (a) full payment of the Redemption Price of all Preferred
Securities, (b) the distribution of Notes to the Holders in exchange for all of
the Preferred Securities or (c) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement. The obligations of the Guarantor under Sections 3.3
and 3.4 shall survive any such termination or the resignation and removal of the
Guarantee Trustee.


                                       15

<PAGE>

                                  ARTICLE VIII

                                  MISCELLANEOUS

     SECTION 8.1. Successors and Assigns.

     All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its rights or delegate its obligations hereunder without the prior approval of
the Holders of a Majority in Liquidation Amount of the Preferred Securities.

     SECTION 8.2. Amendments.

     Except with respect to any changes that do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Guarantor, the Guarantee Trustee and the Holders of not less
than a Majority in Liquidation Amount of the Preferred Securities. The
provisions of Article VI of the Trust Agreement concerning meetings or consents
of the Holders shall apply to the giving of such approval.

     SECTION 8.3. Notices.

     Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

          (a) if given to the Guarantor, to the address or facsimile number set
     forth below or such other address, facsimile number or to the attention of
     such other Person as the Guarantor may give notice to the Guarantee Trustee
     and the Holders:

               North Pointe Holdings Corporation
               28819 Franklin Road
               Southfield, MI 48034
               Facsimile No.: (248) 358-3041
               Attention: Brian J. Roney

          (b) if given to the Issuer, at the Issuer's address or facsimile
     number set forth below or such other address, facsimile number or to the
     attention of such other Person as the Issuer may give notice to the
     Guarantee Trustee and the Holders:

               NP Capital Trust I
               28819 Franklin Road


                                       16

<PAGE>

               Southfield, MI 48034
               Facsimile No.: (248) 358-3041
               Attention: Brian J. Roney

          (c) if given to the Guarantee Trustee, at the address or facsimile
     number set forth below or such other address, facsimile number or to the
     attention of such other Person as the Guarantee Trustee may give notice to
     the Guarantor and the Holders:

               LaSalle Bank National Association
               135 South LaSalle Street
               Suite 1511
               Chicago, Illinois 60603
               Facsimile No.: (312) 904-0524
               Attention: CDO Trust Services Group--NP Capital Trust I

          (d) if given to any Holder, at the address set forth on the books and
     records of the Issuer.

     All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

     SECTION 8.4. Benefit.

     This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.

     SECTION 8.5. Governing Law.

     THIS GUARANTEE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH PARTY
HERETO, SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

     SECTION 8.6. Submission to Jurisdiction.

     ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS GUARANTEE AGREEMENT MAY BE BROUGHT IN OR
REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW
YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK
(IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF
THIS GUARANTEE AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS GUARANTEE AGREEMENT.


                                       17

<PAGE>

     SECTION 8.7. Counterparts.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

     SECTION 8.8. Severability.

     In the event that one or more of the provisions contained in this Guarantee
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Guarantee, but this Guarantee shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.

                            [Signature pages follow.]


                                       18

<PAGE>

     IN WITNESS WHEREOF, the undersigned have executed this Guarantee Agreement
as of the date first above written.

                                        NORTH POINTE HOLDINGS CORPORATION


                                        By: /s/ James G. Petcoff
                                            ------------------------------------
                                        Name: James G. Petcoff
                                        Title: Chairman, President and
                                               Chief Executive Officer


                                        LASALLE BANK NATIONAL ASSOCIATION,
                                        as Guarantee Trustee


                                        By: /s/ Koren E. Sumser
                                            ------------------------------------
                                        Name: Koren E. Sumser
                                        Title: First Vice President

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
ARTICLE I INTERPRETATION AND DEFINITIONS...................................    2
   Section 1.1. Interpretation.............................................    2
   Section 1.2. Definitions................................................    2
ARTICLE II REPORTS.........................................................    5
   Section 2.1. List of Holders............................................    6
   Section 2.2. Periodic Reports to the Guarantee Trustee..................    6
   Section 2.3. Event of Default; Waiver...................................    6
   Section 2.4. Event of Default; Notice...................................    6
ARTICLE III POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.............    7
   Section 3.1. Powers and Duties of the Guarantee Trustee.................    7
   Section 3.2. Certain Rights of the Guarantee Trustee....................    8
   Section 3.3. Compensation...............................................    9
   Section 3.4. Indemnity..................................................    9
   Section 3.5. Securities.................................................   10
ARTICLE IV GUARANTEE TRUSTEE...............................................   10
   Section 4.1. Guarantee Trustee; Eligibility.............................   10
   Section 4.2. Appointment, Removal and Resignation of the Guarantee
                Trustee....................................................   11
ARTICLE V GUARANTEE........................................................   11
   Section 5.1. Guarantee..................................................   11
   Section 5.2. Waiver of Notice and Demand................................   12
   Section 5.3. Obligations Not Affected...................................   12
   Section 5.4. Rights of Holders..........................................   13
   Section 5.5. Guarantee of Payment.......................................   13
   Section 5.6. Subrogation................................................   13
   Section 5.7. Independent Obligations....................................   13
   Section 5.8. Enforcement................................................   13
ARTICLE VI COVENANTS AND SUBORDINATION.....................................   14
   Section 6.1. Dividends, Distributions and Payments......................   14
   Section 6.2. Subordination..............................................   14
   Section 6.3. Pari Passu Guarantees......................................   14
</TABLE>


                                       i

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<S>                                                                           <C>
ARTICLE VII TERMINATION....................................................   15
   Section 7.1. Termination................................................   15
ARTICLE VIII MISCELLANEOUS.................................................   15
   Section 8.1. Successors and Assigns.....................................   15
   Section 8.2. Amendments.................................................   15
   Section 8.3. Notices....................................................   16
   Section 8.4. Benefit....................................................   17
   Section 8.5. Governing Law..............................................   17
   Section 8.6. Submission to Jurisdiction.................................   17
   Section 8.7. Counterparts...............................................   17
   Section 8.8. Severability...............................................   17
</TABLE>


                                       ii
</TEXT>
</DOCUMENT>
