Exhibit 10.18**SEPARATION AND CONSULTING AGREEMENT**     This**SEPARATION AND CONSULTING AGREEMENT**(this“Agreement”) dated as of January 3,2008 (the “Effective Date”) is made by and among QBE Holdings, Inc., a Delaware corporation(“Parent”), North Pointe Holdings Corp., a Michigan corporation (the “Company”) andJames G. Petcoff (the “Executive”).**W I T N E S S E T H**     **WHEREAS**, the Executive and North Pointe Holdings Corp. entered an employment agreement datedJune 10, 2005, as amended as of January 1, 2007 (the “Employment Agreement”), pursuant towhich Executive serves as President, Chief Executive Officer and Chairman of North Pointe HoldingsCorp.; and     **WHEREAS**, pursuant to an Agreement and Plan of Merger dated as of January 3, 2008 (the“Merger Agreement”) between Parent, Noble Acquisition Corporation, a Michigan corporationand a direct, wholly-owned subsidiary of Parent (“Merger Sub”), and the Company, Merger Subshall merge with and into the Company (the “Merger”) at which time the Company shall becomea wholly-owned subsidiary of Parent; and     **WHEREAS**, in connection with the Merger, the Company and the Executive have agreed thatExecutive will resign his employment with the Company as of the Closing Date (as such term indefined in the Merger Agreement); and     **WHEREAS**, subject to the terms and conditions contained herein, the Executive and the Companyhave mutually agreed to embody in this Agreement the terms and conditions applicable to theExecutive’s termination of employment with the Company.     **NOW, THEREFORE**, in consideration of the premises and mutual covenants contained herein and forother good and valuable consideration, the receipt and sufficiency of which are mutuallyacknowledged, the Company and Executive hereby agree as follows:     1.     Termination of Employment Agreement. The Employment Agreement between Executiveand the Company shall be terminated and cancelled in its entirety as of the Closing Date, and thisAgreement shall constitute the entire agreement between Executive and the Company relating to theExecutive’s employment with the Company, termination thereof, and certain activities (as set forthherein) following such termination and shall expressly supersede in its entirety the EmploymentAgreement and any other agreement and understanding, whether written, oral, express or implied,between the Executive and the Company relating to the Executive’s employment with and terminationfrom employment with the Company. For the avoidance of doubt, the Executive hereby specificallywaives his right to any and all payments or benefits in connection with his termination ofemployment pursuant to Section 10 (relating to Post-Termination Payments) and Section 11 (relatingto Change of Control) of the Employment Agreement.     2.     Resignation. Effective on the Closing Date and subject to the consummation of thetransactions contemplated in the Merger Agreement, the Executive shall resign as President,
 

 
Chief Executive Officer and Chairman of the Company and from any and all directorships,committee memberships or any other positions he holds with the Company or any of its subsidiaries.     3.     Accrued Payments and Benefits.     (a)     Accrued Base Salary. On the Closing Date, the Company shall pay to the Executiveall accrued and unpaid base salary earned through the Closing Date.     (b)     Bonus. On the Closing Date, the Company shall pay to the Executive a pro rataportion of Executive’s bonus for 2008, based upon the cash bonus paid or due to the Executive underthe Company’s bonus plan applicable to the Executive for 2007.     (c)     Accrued Vacation Pay. On the Closing Date, the Company shall pay to the Executiveall accrued and unused vacation pay earned through the Closing Date.     (d)     Benefits. Except as otherwise specifically provided in this Agreement, by law orpursuant to the express provisions of any Company employee benefit plan, the Executive’sparticipation in all employee benefit plans and executive compensation plans and practices of theCompany shall terminate on the Closing Date and the Executive shall be entitled to receive anybenefits or rights provided to a terminating executive in accordance with the terms of any suchplan (excluding any severance payments pursuant to the terms of any Company severance plan).     4.     Consulting Services.     (a)     Services. Subject to the Executive’s execution, on the Closing Date, andnon-revocation of the waiver and release attached hereto as Exhibit A, the Company shallengage, and the Executive shall serve the Company, in the capacity as a consultant providingconsulting, advisory and related services (the “Consulting Services”) to the Company andits subsidiaries as requested by the Company. The term of the Executive’s engagement shallcommence on the Closing Date and shall consist of four (4) six-month segments ending on the secondanniversary of the Closing Date; provided, however, that either party may give written notice tothe other, at least forty-five (45) days prior to the end of any such six-month segment,terminating the consulting engagement as of the last day of such segment (the “ConsultingTerm”). During the Consulting Term, the Executive shall perform such Consulting Services atsuch time or times as the Company may reasonably request subject to the Executive’s concurrence(not to be unreasonably withheld); provided, however, that in no event will Executive berequired to perform Consulting Services for more than 40 hours in any calendar month during theConsulting Term.     (b)     Fees. During the Consulting Term, the Executive shall be entitled to a consultingfee in an amount equal to $50,000 per month, payable in arrears on the last business day of eachmonth**.**The Executive shall be reimbursed by the Company for the Executive’s reasonable andcustomary expenses incurred in connection with services rendered during the Consulting Term,subject to the submission of properly documented receipts, in accordance with the policies,programs, procedures and practices of the Company in effect at the time the expense was incurred,as the same may be changed from time to time.
 

 
     (c)     Death or Permanent Disability. In the event of Executive’s death or cessation ofservices as a result of his permanent disability during the Consulting Term, an additional amountequal to $300,000 shall become due and payable by the Company as of the date of Executive’s deathor cessation of services as a result of his permanent disability. For purposes of this paragraph(c), “permanent disability” shall mean any disability resulting from a physical or mental illnesspursuant to which Executive is, or would reasonably be expected to be, unable to perform theConsulting Services for a period of at least three (3) consecutive months (regardless of theduration of the remainder of the Consulting Term).     (d)     Independent Contractor Status. No provision of this Section 4 shall imply anyrelationship of partnership, agency or employer and employee between the Company and the Executiveduring the Consulting Term. The Executive will serve as an independent contractor providingconsulting services to the Company. The Executive shall not under any circumstances represent thathe is an employee or agent of the Company or any of its subsidiaries. The Executive shall assumefull responsibility for payment of all federal, state and local taxes or contributions imposed orrequired under unemployment insurance, social security and income tax laws, with respect to theExecutive’s performance of Consulting Services, and the Executive agrees to file any certificateswith the Company or other third parties that may at any time be required to demonstrate his statusas an independent contractor. The Executive shall not, by reason of this Section 4, acquire anybenefits, privileges or rights under any benefit plan operated by the Company or its subsidiariesfor the benefit of their employees, including, without limitation, (i) any pension orprofit-sharing plans or (ii) any plans providing medical, dental, disability or life insuranceprotection, except as may otherwise be required under applicable law, and except that the Companycovenants and agrees to allow the Executive to participate, for the duration of the ConsultingTerm, in group benefit plans extended to its employees if and to the extent that the Executive isand remains eligible to participate in such plans on the date hereof and immediately followingcessation of his employment by the Company.     5.     Full Settlement. The Executive acknowledges that the amounts paid under Sections 3and 4 shall constitute full settlement and satisfaction with respect to all obligations andliabilities of the Company and its affiliates, officers, directors, trustees, employees,shareholders, representatives and/or agents to the Executive with respect to his employment withthe Company, including, without limitation, all claims for wages, salary, vacation pay, draws,incentive pay, bonuses, stock and stock options (other than stock and stock options owned byExecutive on the date of this Agreement), commissions, severance pay and any and all other forms ofcompensation or benefits.     6.     Return of Company Property. On the Closing Date, the Executive shall return to theCompany all Company-owned property in his possession or under his control on such date, includingwithout limitation, credit cards, computer hardware and software, other electronic equipment,records, data, notes, reports, correspondence, financial information, customer files andinformation and other documents or information (including any and all copies of such property)written or created by, for or on behalf of the Company, whether or not by or at the Company’srequest.     7.     Release and Waiver of Claims at the Closing Date. In consideration for the benefitsand payments provided for in Sections 3 and 4 of this Agreement, the Executive hereby
 

 
agrees to execute a release and waiver of claims in the form attached hereto as ExhibitA, effective as of the Closing Date.     8.     Confidentiality; Noncompetition; Nonsolicitation.     (a)     Noncompetition. The Executive covenants and agrees that the Executive will notduring the Consulting Term and for a period of two (2) years following the termination of theConsulting Term (the “Noncompetition Period”), without the prior written consent of theCompany (such consent not to be unreasonably withheld), directly or indirectly, through any person,firm or corporation, alone or as a member of a partnership or as an officer, director, stockholder,investor or employee of or consultant to any other corporation or enterprise or otherwise, engageor be engaged, or assist any other person, firm, corporation or enterprise in engaging or beingengaged, in an insurance underwriting or agency business activity that is competitive with thebusiness of the Company or its affiliates or subsidiaries, or in any other business being conductedby the Company or any of its subsidiaries on the date hereof or during the Consulting Term in anygeographic area in which the Company or any of its affiliates or subsidiaries is conducting suchbusiness on the date hereof or during the Consulting Term. In consideration of the foregoingcovenant and agreement by the Executive (and in addition to payments due to the Executive underother provisions of this Agreement), the Company covenants and agrees to pay the Executive $10,000per month, payable monthly in arrears, beginning with the month which includes the Closing Date andending upon the completion of the Noncompetition Period. No provision in this Section 8(a) shallprohibit the Executive from being (i) a stockholder in a mutual fund or a diversified investmentcompany, (ii) an owner of not more than ten percent (10%) of the outstanding equity securities ofany class of a corporation, partnership, limited liability company or other business enterprise,nor more than five percent (5%) owner of American Equable, Inc. so long as the Executive has noactive participation as a director, officer, employee or otherwise in the business of suchcorporation, partnership, limited liability company, other business enterprise or American Equable,Inc. (iii) a director of any business enterprise so long as the Executive is not an officer oremployee of such enterprise and such enterprise does not compete with the Company, or (iv) an ownerof any equity interest, a director, an officer or an employee (or some or all of them) of LeaseCorporation of America.     (b)     Nonsolicitation. The Executive further covenants and agrees that during theNoncompetition Period, the Executive shall not (i) in any manner, directly or indirectly, induce orattempt to induce any employee or consultant of the Company or any of its affiliates orsubsidiaries to terminate or abandon his or her employment or services for any purpose whatsoever,or (ii) solicit any policyholder or agent of the Company or any of its subsidiaries or affiliatesto engage in an insurance underwriting or agency business activity that is competitive with thebusiness of the Company or its affiliates or subsidiaries on the date hereof or during theConsulting Term in any geographic area in which the Company or any of its affiliates orsubsidiaries is then conducting such business.     (c)     Non-Disparagement. Except to the extent required by law, the Executive agrees notto make or cause to be made, any oral or written statement, or take any other action, whichdisparages, criticizes, damages the reputation of, or is hostile to, the Company or itsadministration, employees, management, officers, shareholders, agents and/or directors.
 

 
     (d)     Confidentiality. The Executive agrees that the Executive shall not at any time,without the Company’s prior written consent, make use of or disclose, directly or indirectly, any(i) trade secret or other confidential or secret information of the Company or of any of itsaffiliates or subsidiaries or (ii) other technical, business, marketing, proprietary, financial,policyholder, pricing or personnel information of the Company or of any of its affiliates orsubsidiaries not intended to be available to the public generally or to the competitors of theCompany or to the competitors of any of its affiliates or subsidiaries (“ConfidentialInformation”), except to the extent that such Confidential Information (a) becomes a matter ofpublic record or is published in a newspaper, magazine or other periodical or on electronic orother media available to the general public, other than as a result of any act or omission of theExecutive, (b) is required to be disclosed by any law, regulation or order of any court orregulatory commission, department or agency, provided that the Executive gives prompt notice ofsuch requirement to the Company to enable the Company to seek an appropriate protective order, or(c) is required to be used or disclosed by the Executive to perform properly the Executive’s dutiesunder this Agreement.     (d)     Remedies. The Executive agrees that if Executive breaches this Section 8, theCompany will be irreparably harmed and will have no adequate remedy at law and will be entitled toan injunction as a matter of right from any court of competent jurisdiction restraining furtherbreach of any of this Section 8 without any obligation to post a bond or other security.     9.     Taxes. The payments due to Executive under this Agreement (other than pursuant toSection 4 hereof) shall be subject to reduction to satisfy all applicable Federal, state and localemployment and withholding tax obligations to the extent required by law.     10.     Non-Admission. The Executive expressly acknowledges that this Agreement does notconstitute an admission by the Company of any violation of any employment law, regulation,ordinance, or administrative procedure, or any other federal, state, or local law, common law,regulation or ordinance relating to the Executive’s employment or termination of employment.     11.     Forfeiture of Payments. The Executive acknowledges that if the Executivebreaches, in any material respect, the terms or conditions contained in the Agreement, the Companywill no longer be required to make or continue any payments or benefits payments described herein,to the extent permitted by applicable law.     12.     Cooperation with Litigation. Except for any litigation as to which the Executiveis an adverse party relative to the Company or any of its subsidiaries, the Executive shallcooperate fully with the Company in connection with any existing or future litigation andinvestigations against the Company or any of its subsidiaries, whether administrative, civil orcriminal in nature, and to the extent that the Company deems his cooperation necessary. TheCompany will, to the extent practicable, provide the Executive with reasonable notice of the needfor such cooperation and will make a good faith effort to accommodate the Executive’s reasonablescheduling needs in coordinating such cooperation.     13.     Notice. Other than a notice of revocation of the waiver and release of claims inaccordance with Exhibit A attached hereto, any notices to be given under this Agreement by a
 

 
party to the other may be effected either by personal delivery in writing or by mail,registered or certified, postage prepaid with return receipt requested. Mailed notices shall beaddressed to the parties at the following addresses, but each party may change his address bywritten notice in accordance with this section. Notices delivered personally shall be deemedcommunicated as of actual receipt; notices mailed by certified or registered mail shall be deemedcommunicated as of actual receipt; notices mailed first class shall be deemed communicated as of 5days after mailing:To Parent:QBE Holdings, Inc.