Exhibit 4.2

                                                                  Execution Copy



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                               GUARANTEE AGREEMENT

                                 by and between

                       CASTLEPOINT BERMUDA HOLDINGS, LTD.

                                       and

                            WILMINGTON TRUST COMPANY

                         Dated as of September 27, 2007


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                                TABLE OF CONTENTS

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                                                                                                               Page


<S>                                   <C>                                                                       <C>
ARTICLE I          DEFINITIONS AND INTERPRETATION.................................................................1

    Section 1.1       Definitions and Interpretation..............................................................1

ARTICLE II         POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.............................................5

    Section 2.1       Powers and Duties of the Guarantee Trustee..................................................5
    Section 2.2       Certain Rights of the Guarantee Trustee.....................................................6
    Section 2.3       Not Responsible for Recitals or Issuance of Guarantee.......................................8
    Section 2.4       Events of Default; Waiver...................................................................8
    Section 2.5       Events of Default; Notice...................................................................8

ARTICLE III        GUARANTEE TRUSTEE..............................................................................9

    Section 3.1       Guarantee Trustee; Eligibility..............................................................9
    Section 3.2       Appointment, Removal and Resignation of the Guarantee Trustee...............................9

ARTICLE IV         GUARANTEE.....................................................................................10

    Section 4.1       Guarantee..................................................................................10
    Section 4.2       Waiver of Notice and Demand................................................................10
    Section 4.3       Obligations Not Affected...................................................................10
    Section 4.4       Rights of Holders..........................................................................11
    Section 4.5       Guarantee of Payment.......................................................................12
    Section 4.6       Subrogation................................................................................12
    Section 4.7       Independent Obligations....................................................................12
    Section 4.8       Enforcement by a Beneficiary...............................................................12

ARTICLE V          LIMITATION OF TRANSACTIONS; SUBORDINATION.....................................................13

    Section 5.1       Limitation of Transactions.................................................................13
    Section 5.2       Ranking....................................................................................14

ARTICLE VI         TERMINATION...................................................................................14

    Section 6.1       Termination................................................................................14

ARTICLE VII        INDEMNIFICATION...............................................................................14

    Section 7.1       Exculpation................................................................................14
    Section 7.2       Indemnification............................................................................15
    Section 7.3       Compensation; Reimbursement of Expenses....................................................16
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<PAGE>


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<S>                          <C>                                                                                <C>
ARTICLE VIII       MISCELLANEOUS.................................................................................16

    Section 8.1       Successors and Assigns.....................................................................16
    Section 8.2       Amendments.................................................................................17
    Section 8.3       Notices....................................................................................17
    Section 8.4       Benefit....................................................................................17
    Section 8.5       Governing Law..............................................................................18
    Section 8.6       Counterparts...............................................................................18
    Section 8.7       Separability...............................................................................18
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                                       ii
<PAGE>

                               GUARANTEE AGREEMENT


                 This GUARANTEE AGREEMENT (this "Guarantee"), dated as of
September 27, 2007, is executed and delivered by CastlePoint Bermuda Holdings,
Ltd., a Bermuda company limited by shares (the "Guarantor"), and Wilmington
Trust Company, a Delaware banking corporation, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Capital Securities (as defined herein) of CastlePoint Bermuda Holdings
Statutory Trust I, a Delaware statutory trust (the "Issuer").

         WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of the date hereof among Wilmington Trust Company, not
in its individual capacity but solely as institutional trustee, the
administrators of the Issuer named therein, the Guarantor, as sponsor, and the
holders from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof those undivided beneficial
interests, having an aggregate liquidation amount of $30,000,000.00 (the
"Capital Securities"); and

         WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee, to pay to the Holders of Capital
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 the
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

Section 1.1     Definitions and Interpretation.

         In this Guarantee, unless the context otherwise requires:

(a)  capitalized  terms used in this  Guarantee  but not defined in the preamble
     above have the respective meanings assigned to them in this Section 1.1;

(b)  a term defined anywhere in this Guarantee has the same meaning throughout;

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

(d)  all  references  in this  Guarantee  to  "Articles"  or  "Sections"  are to
     Articles or Sections of this Guarantee, unless otherwise specified;

(e)  terms  defined  in the  Declaration  as at the  date of  execution  of this
     Guarantee  have the  same  meanings  when  used in this  Guarantee,  unless
     otherwise  defined  in this  Guarantee  or  unless  the  context  otherwise
     requires; and



<PAGE>


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

         "Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.

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

         "Capital Securities" has the meaning set forth in the recitals to this
Guarantee.

         "Common Securities" means the common securities issued by the Issuer to
the Guarantor pursuant to the Declaration.

         "Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Guarantee is located at 1100 North Market Street, Wilmington,
Delaware 19890-1600, Attention: Corporate Trust Administration.

         "Covered Person" means any Holder of Capital Securities.

         "Debentures" means the debt securities of the Guarantor designated the
Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures due 2037
held by the Institutional Trustee (as defined in the Declaration) of the Issuer.

         "Declaration Event of Default" means an "Event of Default" as defined
in the Declaration.

         "Event of Default" has the meaning set forth in Section 2.4(a).

         "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) which are required to be paid on such Capital Securities to
the extent the Issuer shall have funds available therefor, (ii) the Optional
Redemption Price to the extent the Issuer has funds available therefor, with
respect to any Capital Securities called for redemption by the Issuer, (iii) the
Special Redemption Price to the extent the Issuer has funds available therefor,
with respect to Capital Securities redeemed upon the occurrence of a Special
Event, and (iv) upon a voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders of the Capital Securities in exchange
therefor as provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Capital
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").

         "Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.


                                       2
<PAGE>


         "Guarantor" means CastlePoint Bermuda Holdings, Ltd. and each of its
successors and assigns.

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

         "Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.

         "Indenture" means the Indenture dated as of the date hereof between the
Guarantor and Wilmington Trust Company, not in its individual capacity but
solely as trustee, and any indenture supplemental thereto pursuant to which the
Debentures are to be issued to the institutional trustee of the Issuer.

         "Issuer" has the meaning set forth in the opening paragraph to this
Guarantee.

         "Liquidation Distribution" has the meaning set forth in the definition
of "Guarantee Payments" herein.

         "Majority in liquidation amount of the Capital Securities" means
Holder(s) of outstanding Capital Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Capital
Securities then outstanding.

         "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.

         "Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:

     (a)  a statement  that the officer  signing the Officer's  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 the officer in rendering  the  Officer's
          Certificate;

     (c)  a  statement   that  the  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


                                       3
<PAGE>


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

         "Optional Redemption Price" has the meaning set forth in the Indenture.

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

         "Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee including any
Vice President, Assistant Vice President, Secretary, Assistant Secretary or any
other officer of the Guarantee Trustee customarily performing functions similar
to those performed by any of the above designated officers and also, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.

         "Special Event" has the meaning set forth in the Indenture.

         "Special Redemption Price" has the meaning set forth in the Indenture.

         "Subsidiary" means with respect to any Person, (i) any corporation at
least a majority of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of the outstanding partnership or
similar interests of which shall at the time be owned by such Person, or by one
or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries and (iii) any limited partnership of which such Person or any of
its Subsidiaries is a general partner. For the purposes of this definition,
"voting stock" means shares, interests, participations or other equivalents in
the equity interest (however designated) in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of
such Person, other than shares, interests, participations or other equivalents
having such power only by reason of the occurrence of a contingency.

         "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 3.1.

         "Trust Securities" means the Common Securities and the Capital
Securities.


                                       4
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                                   ARTICLE II

                        POWERS, DUTIES AND RIGHTS OF THE
                                GUARANTEE TRUSTEE

Section 2.1       Powers and Duties of the Guarantee Trustee.

(a)      This Guarantee shall be held by the Guarantee Trustee for the benefit
         of the Holders of the Capital Securities, and the Guarantee Trustee
         shall not transfer this Guarantee to any Person except a Holder of
         Capital Securities exercising his or her rights pursuant to Section
         4.4(b) or to a Successor Guarantee Trustee on 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,
         and such vesting and cessation 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)      If an Event of Default actually known to a Responsible Officer of the
         Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
         shall enforce this Guarantee for the benefit of the Holders of the
         Capital Securities.

(c)      The Guarantee Trustee, before the occurrence of any Event of Default
         and after the curing or waiving of all Events of Default that may have
         occurred, shall undertake to perform only such duties as are
         specifically set forth in this Guarantee, and no implied covenants
         shall be read into this Guarantee against the Guarantee Trustee. In
         case an Event of Default has occurred (that has not been cured or
         waived pursuant to Section 2.4) and is actually known to a Responsible
         Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise
         such of the rights and powers vested in it by this Guarantee, and use
         the same degree of care and skill in its exercise thereof, as a prudent
         person would exercise or use under the circumstances in the conduct of
         his or her own affairs.

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

     (i)  prior to the  occurrence  of any Event of Default and after the curing
          or waiving of all such Events of Default that may have occurred:

          (A)  the duties and  obligations  of the  Guarantee  Trustee  shall be
               determined  solely by the express  provisions of this  Guarantee,
               and the  Guarantee  Trustee  shall not be liable  except  for the
               performance of such duties and  obligations  as are  specifically
               set  forth  in  this  Guarantee,  and  no  implied  covenants  or
               obligations  shall  be  read  into  this  Guarantee  against  the
               Guarantee Trustee; and

          (B)  in the absence of bad faith on the part of the Guarantee Trustee,
               the Guarantee  Trustee may conclusively  rely, as to the truth of
               the  statements  and the  correctness  of the opinions  expressed
               therein,  upon any  certificates  or  opinions  furnished  to the
               Guarantee  Trustee and  conforming  to the  requirements  of this
               Guarantee;  but in the case of any such  certificates or opinions
               that by any  provision  hereof are  specifically  required  to be
               furnished to the Guarantee  Trustee,  the Guarantee Trustee shall
               be under a duty to examine the same to  determine  whether or not
               they conform to the requirements of this Guarantee;


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<PAGE>


     (ii) 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  such  Responsible  Officer  of the
          Guarantee   Trustee  or  the   Guarantee   Trustee  was  negligent  in
          ascertaining the pertinent facts upon which such judgment was made;

     (iii) 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  written  direction  of the Holders of not less than a Majority in
          liquidation  amount of the  Capital  Securities  relating to the time,
          method and place of conducting any proceeding for any remedy available
          to the Guarantee Trustee,  or relating to the exercise of any trust or
          power conferred upon the Guarantee Trustee under this Guarantee; and

     (iv) no provision of this Guarantee shall require the Guarantee  Trustee to
          expend or risk its own funds or  otherwise  incur  personal  financial
          liability in the  performance  of any of its duties or in the exercise
          of any of its rights or powers,  if the  Guarantee  Trustee shall have
          reasonable  grounds for believing  that the repayment of such funds is
          not  reasonably  assured  to it under the terms of this  Guarantee  or
          security  and  indemnity,  reasonably  satisfactory  to the  Guarantee
          Trustee,  against such risk or liability is not reasonably  assured to
          it.

Section 2.2       Certain Rights of the Guarantee Trustee.

(a)      Subject to the provisions of Section 2.1:

     (i)  The  Guarantee  Trustee  may  conclusively  rely,  and  shall be fully
          protected in acting or refraining  from acting 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  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
          shall be sufficiently evidenced by an Officer's Certificate.

     (iii) Whenever,  in the  administration  of this  Guarantee,  the Guarantee
          Trustee shall deem it desirable that a matter be proved or established
          before  taking,  suffering  or  omitting  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
          conclusively  rely  upon an  Officer's  Certificate  of the  Guarantor
          which,  upon receipt of such request,  shall be promptly  delivered by
          the Guarantor.

     (iv) The  Guarantee  Trustee  shall  have no duty to see to any  recording,
          filing  or  registration  of  any  instrument  (or  any  re-recording,
          refiling or re-registration thereof).


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<PAGE>


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

     (vi) The Guarantee  Trustee shall be under no obligation to exercise any of
          the rights or powers vested in it by this  Guarantee at the request or
          direction of any Holder, unless such Holder shall have provided to the
          Guarantee Trustee such security and indemnity, reasonably satisfactory
          to the  Guarantee  Trustee,  against  the costs,  expenses  (including
          attorneys'  fees  and  expenses  and  the  expenses  of the  Guarantee
          Trustee's  agents,  nominees or custodians) 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,  however, that nothing contained in this
          Section  2.2(a)(vi)  shall  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.

     (vii) 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.

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

     (ix) Any action  taken by the  Guarantee  Trustee  or its agents  hereunder
          shall bind the Holders of the Capital Securities, and the signature of
          the  Guarantee  Trustee or its agents  alone shall be  sufficient  and
          effective to perform any such action. No third party shall be required
          to inquire as to the authority of the  Guarantee  Trustee to so act or
          as to its  compliance  with any of the  terms and  provisions  of this
          Guarantee,  both of  which  shall  be  conclusively  evidenced  by the
          Guarantee Trustee's or its agent's taking such action.

     (x)  Whenever in the administration of this Guarantee the Guarantee Trustee
          shall  deem it  desirable  to  receive  instructions  with  respect to
          enforcing  any remedy or right or taking any other  action  hereunder,
          the Guarantee Trustee (i) may request instructions from the Holders of
          a Majority in liquidation amount of the Capital  Securities,  (ii) may
          refrain  from  enforcing  such  remedy or right or taking  such  other
          action  until  such  instructions  are  received,  and (iii)  shall be
          protected in conclusively relying on or acting in accordance with such
          instructions.


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<PAGE>


     (xi) The  Guarantee  Trustee  shall not be  liable  for any  action  taken,
          suffered,  or  omitted  to  be  taken  by it in  good  faith,  without
          negligence,  and reasonably  believed by it to be authorized or within
          the  discretion  or  rights  or  powers  conferred  upon  it  by  this
          Guarantee.

(b)      No provision of this Guarantee 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.

Section 2.3       Not Responsible for Recitals or Issuance of Guarantee.

         The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.

Section 2.4       Events of Default; Waiver.

(a) An Event of Default under this Guarantee will occur upon the failure of the
Guarantor to perform any of its payment or other obligations hereunder.

(b) The Holders of a Majority in liquidation amount of the Capital Securities
may, voting or consenting as a class, on behalf of the Holders of all of the
Capital Securities, waive any past Event of Default and its consequences. Upon
such waiver, any such Event of Default shall cease to exist, and shall be deemed
to have been cured, for every purpose of this Guarantee, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.

Section 2.5       Events of Default; Notice.

     (a)  The Guarantee Trustee shall, within 90 days after the occurrence of an
          Event of Default,  transmit by mail, first class postage  prepaid,  to
          the Holders of the Capital  Securities and the  Guarantor,  notices of
          all Events of Default  actually known to a Responsible  Officer of the
          Guarantee  Trustee,  unless such  defaults  have been cured before the
          giving of such notice,  provided,  however, that the Guarantee Trustee
          shall be  protected  in  withholding  such  notice if and so long as a
          Responsible  Officer of the Guarantee Trustee in good faith determines
          that the withholding of such notice is in the interests of the Holders
          of the Capital Securities.

     (b)  The  Guarantee  Trustee  shall not be deemed to have  knowledge of any
          Event of Default  unless the  Guarantee  Trustee  shall have  received
          written  notice  from  the  Guarantor  or  a  Holder  of  the  Capital
          Securities (except in the case of a payment default), or a Responsible
          Officer of the Guarantee  Trustee charged with the  administration  of
          this Guarantee shall have obtained actual knowledge thereof.


                                        8
<PAGE>


                                   ARTICLE III

                                GUARANTEE TRUSTEE

Section 3.1       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 banking corporation or national  association  organized and doing
          business  under the laws of the United  States of America or any State
          or  Territory  thereof  or of the  District  of  Columbia,  or  Person
          authorized under such laws to exercise corporate trust powers,  having
          a combined  capital and surplus of at least fifty million U.S. dollars
          ($50,000,000),  and subject to  supervision or examination by Federal,
          State,   Territorial  or  District  of  Columbia  authority.  If  such
          corporation or national association  publishes reports of condition at
          least  annually,  pursuant  to  law  or to  the  requirements  of  the
          supervising or examining  authority  referred to above,  then, for the
          purposes of this Section 3.1(a)(ii),  the combined capital and surplus
          of such corporation or national  association 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 3.1(a), the Guarantee Trustee shall immediately resign in the
     manner and with the effect set forth in Section 3.2(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 to the
     extent and in the manner provided by, and subject to this Guarantee.

Section 3.2       Appointment, Removal and Resignation of the Guarantee Trustee.

(a)  Subject to Section  3.2(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 in  accordance  with  Section
     3.2(a)  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  to office  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 an instrument in writing
     executed by such Successor Guarantee Trustee and delivered to the Guarantor
     and the resigning Guarantee Trustee.


                                       9
<PAGE>


(d)  If no Successor  Guarantee  Trustee shall have been  appointed and accepted
     appointment  as provided in this Section 3.2 within 60 days after  delivery
     of an instrument of removal or resignation, the Guarantee Trustee resigning
     or being  removed may  petition  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.

(e)  No  Guarantee  Trustee  shall be liable for the acts or omissions to act of
     any Successor Guarantee Trustee.

(f)  Upon  termination  of this  Guarantee  or  removal  or  resignation  of the
     Guarantee  Trustee pursuant to this Section 3.2, the Guarantor shall pay to
     the  Guarantee  Trustee all amounts  owing to the  Guarantee  Trustee under
     Sections  7.2 and 7.3 accrued to the date of such  termination,  removal or
     resignation.

                                   ARTICLE IV

                                    GUARANTEE

Section 4.1       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 the Issuer), as and when due, regardless of any defense (except the
     defense of payment by the Issuer),  right of set-off or  counterclaim  that
     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.

(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  benefit  of,  and to be  enforceable  by, all such
     Beneficiaries,  whether  or not such  Beneficiaries  have  received  notice
     hereof.

Section 4.2       Waiver of Notice and Demand.

         The Guarantor hereby waives notice of acceptance of this Guarantee and
of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the 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 4.3       Obligations Not Affected.

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


                                       10
<PAGE>


(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 Capital  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,  Optional Redemption Price, Special Redemption Price,
     Liquidation  Distribution  or any other sums payable under the terms of the
     Capital  Securities  or the  extension of time for the  performance  of any
     other obligation  under,  arising out of or in connection with, the Capital
     Securities  (other than an extension of time for payment of  Distributions,
     Optional   Redemption  Price,   Special   Redemption   Price,   Liquidation
     Distribution  or other sum payable that  results from the  extension of any
     interest  payment period on the Debentures or any extension of the maturity
     date of the Debentures permitted by the Indenture);

(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  Capital
     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;

(e)  any invalidity of, or defect or deficiency in, the Capital 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 4.3 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 consent of, the Guarantor with respect to the happening of any of the
foregoing.

Section 4.4       Rights of Holders.

(a)  The Holders of a Majority in liquidation  amount of the Capital  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 or to direct the  exercise of any trust or power  conferred
     upon the Guarantee Trustee under this Guarantee;  provided,  however,  that
     (subject  to Section  2.1) the  Guarantee  Trustee  shall have the right to
     decline to follow any such direction if the Guarantee Trustee being advised
     by counsel  determines  that the action or  proceeding  so directed may not
     lawfully be taken or if the Guarantee Trustee in good faith by its board of
     directors  or  trustees,  executive  committees  or a  trust  committee  of
     directors or trustees and/or Responsible  Officers shall determine that the
     action or proceedings  so directed  would involve the Guarantee  Trustee in
     personal liability.


                                       11
<PAGE>


(b)  Any Holder of Capital Securities may institute a legal proceeding  directly
     against the Guarantor to enforce the Guarantee  Trustee's rights under this
     Guarantee, without first instituting a legal proceeding against the Issuer,
     the Guarantee  Trustee or any other Person.  The Guarantor waives any right
     or remedy to require  that any such  action be brought  first  against  the
     Issuer,  the  Guarantee  Trustee or any other Person  before so  proceeding
     directly against the Guarantor.

Section 4.5       Guarantee of Payment.

         This Guarantee creates a guarantee of payment and not of collection.

Section 4.6       Subrogation.

         The Guarantor shall be subrogated to all (if any) rights of the Holders
of Capital Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by applicable provisions of
law) be entitled to enforce or exercise any right that 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, if, after giving effect to any such
payment, any amounts are due and unpaid under this Guarantee. 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 4.7       Independent Obligations.

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
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
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 4.3 hereof.

Section 4.8       Enforcement by a Beneficiary.

         A Beneficiary may enforce the obligations of the Guarantor contained in
Section 4.1(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. The Guarantor shall be
subrogated to all rights (if any) of any Beneficiary against the Issuer in
respect of any amounts paid to the Beneficiaries by the Guarantor under this
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
rights that 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, if
at the time of any such payment, and after giving effect to such payment, any
amounts are due and unpaid under this Guarantee.


                                       12
<PAGE>


                                   ARTICLE V

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

Section 5.1       Limitation of Transactions.

         So long as any Debentures or Capital Securities remain outstanding, if
(a) there shall have occurred and be continuing an Event of Default or a
Declaration Event of Default or (b the dollar amount of the Guarantor's and
Subsidiaries' gross written premium on a consolidated basis from insurance
policies in any calendar year fails to exceed 51% of the Guarantor's and
Subsidiaries' gross written premium on a consolidated basis from insurance
policies in the previous calendar year, (c) the Guarantor sells more than 51% of
its rights to renew insurance policies in any single transaction or series of
related transactions, (d) the Pooled Companies or any entity which becomes a
significant subsidiary (as defined in Section 1-02(w) of Regulation S-X to the
Securities Act) of the Guarantor which is rated by A.M. Best Company, Inc. (x)
receives a rating from A.M. Best Guarantor Inc. of B- or lower; or (y) submits a
request to withdraw its rating by A.M Best Guarantor, Inc; (e) the Company shall
have selected an Extension Period as provided in the Declaration and such
period, or any extension thereof, shall have commenced and be continuing, then
the Guarantor shall not and shall not permit any Subsidiary to (x) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's or such Subsidiary's
capital stock (other than payments of dividends or distributions to the
Guarantor or any Subsidiary thereof) or make any guarantee payments with respect
to the foregoing; (y) make any payment of principal of or interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Guarantor
or any Subsidiary thereof that rank pari passu in all respects with or junior in
interest to the Debentures; or (z) enter into, amend or modify any contract with
a shareholder holding more than 10% of the outstanding shares of common stock of
the Guarantor, unless such contract contains terms that are substantially at
least as favorable to the Guarantor or any Subsidiary as would be an unrelated
third party transaction (other than, with respect to clauses (x) and (y) above,
(i) repurchases, redemptions or other acquisitions of shares of capital stock of
the Guarantor or any Subsidiary thereof in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
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 of such Subsidiary, as the
case may be (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to the
occurrence of the Event of Default, Declaration Event of Default or Extension
Period, as applicable, (ii) as a result of any 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, as the case may be (or in the case of a Subsidiary of the Guarantor, any
class or series of such Subsidiary's capital stock), or of any class or series
of the Guarantor's indebtedness for any class or series of the Guarantor's
capital stock, as the case may be (or in the case of indebtedness of a
Subsidiary of the Guarantor, of any class or series of such Subsidiary's
indebtedness for any class or series of such Subsidiary's capital stock), (iii)
the purchase of fractional interests in shares of the Guarantor's capital stock
(or the capital stock of a Subsidiary of the Guarantor) pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) any declaration of a dividend in connection with
any stockholders' rights plan, or the issuance of rights, stock or other
property under any stockholders' rights plan, or the redemption or repurchase of
rights pursuant thereto, (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 and any cash payments in lieu of fractional shares issued in connection
therewith, or (vi) payments under this Guarantee).


                                       13
<PAGE>


Section 5.2       Ranking.

         This Guarantee will constitute an unsecured obligation of the Guarantor
and will rank subordinate and junior in right of payment to all present and
future Senior Indebtedness (as defined in the Indenture) of the Guarantor. By
their acceptance thereof, each Holder of Capital Securities agrees to the
foregoing provisions of this Guarantee and the other terms set forth herein.

         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 hereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any indenture
that the Guarantor may enter into in the future or otherwise.

                                   ARTICLE VI

                                   TERMINATION

Section 6.1       Termination.

         This Guarantee shall terminate as to the Capital Securities (i) upon
full payment of the Optional Redemption Price or Special Redemption Price of all
Capital Securities then outstanding, (ii) upon the distribution of all of the
Debentures to the Holders of all of the Capital Securities or (iii) upon full
payment of the amounts payable in accordance with the Declaration upon
dissolution of the Issuer. This Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any Holder of Capital
Securities must restore payment of any sums paid under the Capital Securities or
under this Guarantee.

                                  ARTICLE VII

                                 INDEMNIFICATION

Section 7.1       Exculpation.

(a)  No  Indemnified  Person  shall be liable,  responsible  or  accountable  in
     damages or otherwise to the  Guarantor or any Covered  Person for any loss,
     damage or claim  incurred  by reason of any act or  omission  performed  or
     omitted by such  Indemnified  Person in good faith in accordance  with this
     Guarantee and in a manner that such Indemnified Person reasonably  believed
     to be  within  the scope of the  authority  conferred  on such  Indemnified
     Person by this Guarantee or by law, except that an Indemnified Person shall
     be liable for any such  loss,  damage or claim  incurred  by reason of such
     Indemnified  Person's negligence or willful misconduct with respect to such
     acts or omissions.


                                       14
<PAGE>


(b)  An  Indemnified  Person  shall be fully  protected in relying in good faith
     upon the records of the Issuer or the Guarantor and upon such  information,
     opinions, reports or statements presented to the Issuer or the Guarantor by
     any Person as to matters the  Indemnified  Person  reasonably  believes are
     within such other Person's  professional  or expert  competence and who, if
     selected by such Indemnified Person, has been selected with reasonable care
     by such Indemnified Person,  including  information,  opinions,  reports or
     statements as to the value and amount of the assets, liabilities,  profits,
     losses,  or any other facts pertinent to the existence and amount of assets
     from which Distributions to Holders of Capital Securities might properly be
     paid.

Section 7.2       Indemnification.

(a)  The Guarantor agrees to indemnify each Indemnified  Person for, and to hold
     each  Indemnified  Person harmless  against,  any and all loss,  liability,
     damage,  claim or expense incurred without negligence or willful misconduct
     on the part of the Indemnified Person, arising out of or in connection with
     the  acceptance  or  administration  of  the  trust  or  trusts  hereunder,
     including, but not limited to, the costs and expenses (including reasonable
     legal  fees  and  expenses)  of the  Indemnified  Person  defending  itself
     against,  or  investigating,  any claim or liability in connection with the
     exercise or performance of any of the Indemnified Person's powers or duties
     hereunder.  The  obligation  to  indemnify as set forth in this Section 7.2
     shall survive the  resignation or removal of the Guarantee  Trustee and the
     termination of this Guarantee.

(b)  Promptly after receipt by an  Indemnified  Person under this Section 7.2 of
     notice of the commencement of any action,  such Indemnified Person will, if
     a claim in respect  thereof is to be made against the Guarantor  under this
     Section 7.2, notify the Guarantor in writing of the  commencement  thereof;
     but the  failure  so to  notify  the  Guarantor  (i) will not  relieve  the
     Guarantor from liability under paragraph (a) above unless and to the extent
     that the Guarantor did not otherwise  learn of such action and such failure
     results  in the  forfeiture  by the  Guarantor  of  substantial  rights and
     defenses and (ii) will not, in any event,  relieve the  Guarantor  from any
     obligations  to any  Indemnified  Person  other  than  the  indemnification
     obligation provided in paragraph (a) above. The Guarantor shall be entitled
     to appoint counsel of the Guarantor's choice at the Guarantor's  expense to
     represent the Indemnified Person in any action for which indemnification is
     sought (in which case the Guarantor shall not thereafter be responsible for
     the fees and expenses of any separate  counsel  retained by the Indemnified
     Person or Persons except as set forth below); provided,  however, that such
     counsel  shall  be  reasonably  satisfactory  to  the  Indemnified  Person.
     Notwithstanding  the  Guarantor's  election to appoint counsel to represent
     the Guarantor in an action,  the Indemnified Person shall have the right to
     employ separate counsel (including local counsel),  and the Guarantor shall
     bear the reasonable  fees,  costs and expenses of such separate  counsel if
     (i) the use of counsel chosen by the Guarantor to represent the Indemnified
     Person would  present  such  counsel with a conflict of interest,  (ii) the
     actual or potential  defendants  in, or targets of, any such action include
     both the Indemnified  Person and the Guarantor and the  Indemnified  Person
     shall have reasonably  concluded that there may be legal defenses available
     to it  and/or  other  Indemnified  Person(s)  which are  different  from or
     additional to those  available to the Guarantor,  (iii) the Guarantor shall
     not  have  employed  counsel  satisfactory  to the  Indemnified  Person  to
     represent the  Indemnified  Person within a reasonable time after notice of
     the  institution of such action or (iv) the Guarantor  shall  authorize the
     Indemnified  Person  to  employ  separate  counsel  at the  expense  of the
     Guarantor. The Guarantor will not, without the prior written consent of the
     Indemnified  Persons,  settle or  compromise or consent to the entry of any
     judgment with respect to any pending or threatened claim,  action,  suit or
     proceeding  in  respect of which  indemnification  or  contribution  may be
     sought  hereunder  (whether  or not the  Indemnified  Persons are actual or
     potential  parties  to  such  claim  or  action)  unless  such  settlement,
     compromise or consent includes an unconditional release of each Indemnified
     Person  from all  liability  arising  out of such  claim,  action,  suit or
     proceeding.


                                       15
<PAGE>


Section 7.3       Compensation; Reimbursement of Expenses.

         The Guarantor agrees:

(a)  to pay to the Guarantee Trustee from time to time such compensation for all
     services  rendered by it hereunder as the parties  shall agree to from time
     to time (which compensation shall not be limited by any provision of law in
     regard to the compensation of a trustee of an express trust); and

(b)  except as otherwise  expressly  provided herein, to reimburse the Guarantee
     Trustee  upon  request  for  all  reasonable  expenses,  disbursements  and
     advances  incurred or made by it in  accordance  with any provision of this
     Guarantee  (including  the  reasonable  compensation  and the  expenses and
     disbursements  of  its  agents  and  counsel),  except  any  such  expense,
     disbursement or advance as may be attributable to its negligence or willful
     misconduct.

         The provisions of this Section 7.3 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this Guarantee.

                                  ARTICLE VIII

                                  MISCELLANEOUS

Section 8.1       Successors and Assigns.

         All guarantees and agreements contained in this Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any sale, transfer
or lease of the Guarantor's assets to another entity, in each case, to the
extent permitted under the Indenture, the Guarantor may not assign its rights or
delegate its obligations under this Guarantee without the prior approval of the
Holders of at least a Majority in liquidation amount of the Capital Securities.


                                       16
<PAGE>


Section 8.2       Amendments.

         Except with respect to any changes that do not adversely affect the
rights of Holders of the Capital Securities in any material respect (in which
case no consent of Holders will be required), this Guarantee may be amended only
with the prior approval of the Holders of not less than a Majority in
liquidation amount of the Capital Securities and the Guarantor. The provisions
of the Declaration with respect to amendments thereof apply to the giving of
such approval.

Section 8.3       Notices.

         All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:

(a)  If given to the  Guarantee  Trustee,  at the  Guarantee  Trustee's  mailing
     address set forth below (or such other address as the Guarantee Trustee may
     give notice of to the Holders of the Capital Securities and the Guarantor):

                  Wilmington Trust Company
                  1100 North Market Street
                  Wilmington, Delaware 19890-1600
                  Attention: Corporate Trust Administration
                  Telecopy:  302-636-4140


(b)  If given to the Guarantor,  at the  Guarantor's  mailing  address set forth
     below (or such other  address as the  Guarantor  may give  notice of to the
     Holders of the Capital Securities and to the Guarantee Trustee):

                  CastlePoint Bermuda Holdings, Ltd.
                  Victoria Hall, 11 Victoria Street
                  Hamilton, HM 11, Bermuda
                  Attention:  Joel Weiner
                  Telecopy:  441-296-9715

(c)  If given to any Holder of the Capital Securities,  at the address set forth
     on the books and records of the Issuer.

         All such notices 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 is solely for the benefit of the Beneficiaries and,
subject to Section 2.1(a), is not separately transferable from the Capital
Securities.


                                       17
<PAGE>


Section 8.5       Governing Law.

         PURSUANT TO SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK, THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
CONFLICT OF LAW PROVISIONS.

Section 8.6       Counterparts.

         This Guarantee may be executed in one or more counterparts, each of
which shall be an original, but all of which taken together shall constitute one
and the same instrument.

Section 8.7       Separability.

         In case one or more of the provisions contained in this Guarantee 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 or illegal or unenforceable provision had never been contained herein.

                     Signatures appear on the following page


                                       18
<PAGE>



         THIS GUARANTEE is executed as of the day and year first above written.



                                CASTLEPOINT BERMUDA HOLDINGS, LTD., as Guarantor

                                By:
                                         ---------------------------------------
                                         Name:
                                         Title:



                                WILMINGTON TRUST COMPANY, as Guarantee Trustee

                                By:
                                         ---------------------------------------
                                         Name:
                                         Title:




                                       19