Document:

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                                                                   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

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     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";

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          (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

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     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.

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          "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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          "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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     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.

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                                   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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     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;

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          (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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     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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     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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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<PAGE>

                                                               EXHIBIT 10.30

                                                                  EXECUTION COPY

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

                               PURCHASE AGREEMENT

                                      among

                       NORTH POINTE HOLDINGS CORPORATION,

                               NP CAPITAL TRUST I

                                       and

                           MERRILL LYNCH INTERNATIONAL

                                   ----------

                          Dated as of February 22, 2006

                                   ----------

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

<PAGE>

                               PURCHASE AGREEMENT
                    ($20,000,000 Trust Preferred Securities)

     THIS PURCHASE AGREEMENT, dated as of February 22, 2006 (this "Purchase
Agreement"), is entered into among North Pointe Holdings Corporation, a Michigan
corporation (the "Company"), and NP Capital Trust I, a Delaware statutory trust
(the "Trust", and together with the Company, the "Sellers"), and Merrill Lynch
International or its assignee. (the "Purchaser").

                                   WITNESSETH:

     WHEREAS, the Sellers propose to issue and sell 20,000 Floating Rate
Preferred Securities of the Trust, having a stated liquidation amount of $1,000
per security, bearing a fixed rate of 8.70% per annum through the interest
payment date in March 2011 and a variable rate, reset quarterly, equal to LIBOR
(as defined in the Indenture (as defined below)) plus 3.64% thereafter (the
"Preferred Securities");

     WHEREAS, the Preferred Securities will be guaranteed by the Company (the
"Guarantee") pursuant to the Guarantee Agreement (the "Guarantee Agreement"),
dated as of the Closing Date (defined below), and executed and delivered by the
Company and LaSalle Bank National Association, a national banking association,
as trustee (in such capacity, the "Guarantee Trustee"), for the benefit of the
holders from time to time of the Preferred Securities;

     WHEREAS, the entire proceeds from the sale of the Preferred Securities will
be combined with the entire proceeds from the sale by the Trust to the Company
of its common securities (the "Common Securities"), and will be used by the
Trust to purchase Twenty Million Six Hundred Twenty Thousand Dollars
($20,620,000) in principal amount of the unsecured junior subordinated
deferrable interest notes of the Company (the "Junior Subordinated Notes");

     WHEREAS, the Preferred Securities and the Common Securities for the Trust
will be issued pursuant to the Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of the Closing Date, among the Company, as depositor,
LaSalle Bank National Association, a national banking association, as property
trustee (in such capacity, the "Property Trustee"), Christiana Bank & Trust
Company, a Delaware banking corporation, as Delaware trustee (in such capacity,
the "Delaware Trustee"), the Administrative Trustees named therein (in such
capacities, the "Administrative Trustees") and the holders from time to time of
undivided beneficial interests in the assets of the Trust; and

     WHEREAS, the Junior Subordinated Notes will be issued pursuant to a Junior
Subordinated Indenture, dated as of the Closing Date (the "Indenture"), between
the Company and LaSalle Bank National Association, a national banking
association, as indenture trustee (in such capacity, the "Indenture Trustee").

<PAGE>

     NOW, THEREFORE, in consideration of the mutual agreements and subject to
the terms and conditions herein set forth, the parties hereto agree as follows:

          1. DEFINITIONS. The Preferred Securities, the Common Securities and
the Junior Subordinated Notes are collectively referred to herein as the
"Securities." This Purchase Agreement, the Indenture, the Trust Agreement, the
Guarantee Agreement and the Securities are collectively referred to herein as
the "Operative Documents." All other capitalized terms used but not defined in
this Purchase Agreement shall have the respective meanings ascribed thereto in
the Indenture.

          2. PURCHASE AND SALE OF THE PREFERRED SECURITIES.

          (a) The Sellers agree to sell to the Purchaser, and the Purchaser
agrees to purchase from the Sellers the Preferred Securities for an amount (the
"Purchase Price") equal to Twenty Million Dollars ($20,000,000). The Purchaser
shall be responsible for the rating agency costs and expenses. The Sellers shall
use the Purchase Price, together with the proceeds from the sale of the Common
Securities, to purchase the Junior Subordinated Notes.

          (b) Delivery or transfer of, and payment for, the Preferred Securities
shall be made at 10:00 A.M. Chicago time (11:00 A.M. New York time), on February
22, 2006 or such later date (not later than 30 days later) as the parties may
designate (such date and time of delivery and payment for the Preferred
Securities being herein called the "Closing Date"). The Preferred Securities
shall be transferred and delivered to the Purchaser against the payment of the
Purchase Price to the Sellers made by wire transfer in immediately available
funds on the Closing Date to a U.S. account designated in writing by the Company
at least two business days prior to the Closing Date.

          (c) Delivery of the Preferred Securities shall be made at such
location, and in such names and denominations, as the Purchaser shall designate
at least two business days in advance of the Closing Date. The Company and the
Trust agree to have the Preferred Securities available for inspection and
checking by the Purchaser in Chicago, Illinois, not later than 1:00 P.M.,
Chicago time (2:00 P.M. New York time), on the business day prior to the Closing
Date. The closing for the purchase and sale of the Preferred Securities shall
occur at the offices of Mayer, Brown, Rowe & Maw LLP, 71 South Wacker, Chicago,
Illinois 60606, or such other place as the parties hereto shall agree.

          3. CONDITIONS. The obligations of the parties under this Purchase
Agreement are subject to the following conditions:

          (a) The representations and warranties contained herein shall be
accurate as of the date of delivery of the Preferred Securities.

          (b) [Reserved.]

          (c) Honigman Miller Schwartz and Cohn LLP, counsel for the Company and
the Trust (the "Company Counsel"), shall have delivered an opinion, dated the
Closing Date, addressed to the Purchaser and LaSalle Bank National Association,
in substantially the form set

                                       3

<PAGE>

out in Annex A-I hereto and (ii) the Company shall have furnished to the
Purchaser the opinion of the Company's General Counsel or a certificate signed
by the Company's Chief Executive Officer, President, an Executive Vice
President, Chief Financial Officer, Treasurer or Assistant Treasurer, dated the
Closing Date, addressed to the Purchaser, in substantially the form set out in
Annex A-II hereto. In rendering their opinion, the Company Counsel may rely as
to factual matters upon certificates or other documents furnished by officers,
directors and trustees of the Company and the Trust and by government officials
(provided, however, that copies of any such certificates or documents are
delivered to the Purchaser) and by and upon such other documents as such counsel
may, in their reasonable opinion, deem appropriate as a basis for the Company
Counsel's opinion. The Company Counsel may specify the jurisdictions in which
they are admitted to practice and that they are not admitted to practice in any
other jurisdiction and are not experts in the law of any other jurisdiction. If
the Company Counsel is not admitted to practice in the State of New York, the
opinion of the Company Counsel may assume, for purposes of the opinion, that the
laws of the State of New York are substantively identical, in all respects
material to the opinion, to the internal laws of the state in which such counsel
is admitted to practice. Such Company Counsel Opinion shall not state that they
are to be governed or qualified by, or that they are otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).

          (d) The Purchaser shall have been furnished the opinion of Honigman
Miller Schwartz and Cohn LLP, special tax counsel, dated the Closing Date,
addressed to the Purchaser and LaSalle Bank National Association, in
substantially the form set out in Annex B hereto.

          (e) The Purchaser shall have received the opinion of Morris, James,
Hitchens & Williams LLP, special Delaware counsel for the Trust, dated the
Closing Date, addressed to the Purchaser, LaSalle Bank National Association, the
Delaware Trustee and the Company, in substantially the form set out in Annex C
hereto.

          (f) The Purchaser shall have received the opinion of Morris, James,
Hitchens & Williams LLP, special Delaware counsel for the Property Trustee, the
Guarantee Trustee and the Indenture Trustee, dated the Closing Date, addressed
to the Purchaser, in substantially the form set out in Annex D hereto.

          (g) The Purchaser shall have received the opinion of Morris, James,
Hitchens & Williams LLP, special Delaware counsel for the Delaware Trustee,
dated the Closing Date, addressed to the Purchaser and LaSalle Bank National
Association, in substantially the form set out in Annex E hereto.

          (h) The Company shall have furnished to the Purchaser a certificate of
the Company, signed by the Chief Executive Officer, President or an Executive
Vice President, and Chief Financial Officer, Treasurer or Assistant Treasurer of
the Company, and the Trust shall have furnished to the Purchaser a certificate
of the Trust, signed by an Administrative Trustee of the Trust, in each case
dated the Closing Date, and, in the case of the Company, as to (i) and (ii)
below and, in the case of the Trust, as to (i) below.

                                       4

<PAGE>

               (i) the representations and warranties in this Purchase Agreement
     are true and correct on and as of the Closing Date with the same effect as
     if made on the Closing Date, and the Company and the Trust have complied
     with all the agreements and satisfied all the conditions on either of their
     part to be performed or satisfied at or prior to the Closing Date; and

               (ii) since the date of the Interim Financial Statements (as
     defined below), there has been no material adverse change in the condition
     (financial or other), earnings, business, assets or business prospects of
     the Company and its subsidiaries, whether or not arising from transactions
     occurring in the ordinary course of business.

          (i) Subsequent to the execution of this Purchase Agreement, there
shall not have been any change, or any development involving a prospective
change, in or affecting the condition (financial or other), earnings, business,
assets or business prospects of the Company and its subsidiaries, whether or not
occurring in the ordinary course of business, the effect of which is, in the
Purchaser's judgment, so material and adverse as to make it impractical or
inadvisable to proceed with the purchase of the Preferred Securities.

          (j) Prior to the Closing Date, the Company and the Trust shall have
furnished to the Purchaser and its counsel such further information,
certificates and documents as the Purchaser or its counsel may reasonably
request.

     If any of the conditions specified in this Section 3 shall not have been
fulfilled when and as provided in this Purchase Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Purchase Agreement shall not be reasonably satisfactory in form and substance to
the Purchaser or its counsel, this Purchase Agreement and all the Purchaser's
obligations hereunder may be canceled at, or at any time prior to, the Closing
Date by the Purchaser. Notice of such cancellation shall be given to the Company
and the Trust in writing or by telephone or facsimile confirmed in writing.

     Each certificate signed by any trustee of the Trust or any officer of the
Company and delivered to the Purchaser or the Purchaser's counsel in connection
with the Operative Documents and the transactions contemplated hereby and
thereby shall be deemed to be a representation and warranty of the Trust and/or
the Company, as the case may be, and not by such trustee or officer in any
individual capacity.

          4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE TRUST. The
Company and the Trust jointly and severally represent and warrant to, and agree
with the Purchaser, as follows:

          (a) Neither the Company nor the Trust, nor any of their "Affiliates"
(as defined in Rule 501(b) of Regulation D ("Regulation D") under the Securities
Act (as defined below)), nor any person acting on its or their behalf, has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of any of the Securities under the Securities Act of 1933, as
amended (the "Securities Act").

                                       5

<PAGE>

          (b) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities.

          (c) The Securities (i) are not and have not been listed on a national
securities exchange registered under section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or quoted on a U.S. automated
inter-dealer quotation system and (ii) are not of an open-end investment
company, unit investment trust or face-amount certificate company that are, or
are required to be, registered under section 8 of the Investment Company Act of
1940, as amended (the "Investment Company Act"), and the Securities otherwise
satisfy the eligibility requirements of Rule 144A(d)(3) promulgated pursuant to
the Securities Act ("Rule 144A(d)(3)").

          (d) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf, has engaged, or will engage, in
any "directed selling efforts" within the meaning of Regulation S under the
Securities Act with respect to the Securities.

          (e) Neither the Company nor the Trust is, and, immediately following
consummation of the transactions contemplated hereby and the application of the
net proceeds therefrom, will not be, an "investment company" or an entity
"controlled" by an "investment company," in each case within the meaning of
section 3(a) of the Investment Company Act.

          (f) Neither the Company nor the Trust has paid or agreed to pay to any
person any compensation for soliciting another to purchase any of the
Securities, except for the Preferred Securities Commission and/or the sales
commission the Company has agreed to pay to Cohen Bros. & Company (or to the
Company's introducing agent on their behalf)" pursuant to the letter agreement
between the Company and Cohen Bros. & Company, dated December 22, 2005.

          (g) The Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C.
Section 3801, et seq. (the "Statutory Trust Act") with all requisite power and
authority to own property and to conduct the business it transacts and proposes
to transact and to enter into and perform its obligations under the Operative
Documents to which it is a party. The Trust is duly qualified to transact
business as a foreign entity and is in good standing in each jurisdiction in
which such qualification is necessary, except where the failure to so qualify or
be in good standing would not have a material adverse effect on the condition
(financial or otherwise), earnings, business, assets or business prospects of
the Trust, whether or not occurring in the ordinary course of business. The
Trust is not a party to or otherwise bound by any agreement other than the
Operative Documents. The Trust is and will be, under current law, classified for
federal income tax purposes as a grantor trust and not as an association or
publicly traded partnership taxable as a corporation.

          (h) The Trust Agreement has been duly authorized by the Company and,
on the Closing Date specified in Section 2(b), will have been duly executed and
delivered by the Company and the Administrative Trustees of the Trust, and,
assuming due authorization,

                                       6

<PAGE>

execution and delivery by the Property Trustee and the Delaware Trustee, will be
a legal, valid and binding obligation of the Company and the Administrative
Trustees, enforceable against them in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general principles of equity. Each of the Administrative
Trustees of the Trust is an employee of the Company or one of its subsidiary
insurance companies and has been duly authorized by the Company to execute and
deliver the Trust Agreement.

          (i) Each of the Guarantee Agreement and the Indenture has been duly
authorized by the Company and, on the Closing Date, will have been duly executed
and delivered by the Company, and, assuming due authorization, execution and
delivery by the Guarantee Trustee in the case of the Guarantee Agreement, and by
the Indenture Trustee in the case of the Indenture, will be a legal, valid and
binding obligation of the Company enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity.

          (j) The Preferred Securities and the Common Securities have been duly
authorized by the Trust and, when issued and delivered against payment therefor
on the Closing Date in accordance with this Purchase Agreement, in the case of
the Preferred Securities, and in accordance with the Common Securities
Subscription Agreement, in the case of the Common Securities, will be validly
issued, fully paid and non-assessable and will represent undivided beneficial
interests in the assets of the Trust entitled to the benefits of the Trust
Agreement, enforceable against the Trust in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general principles of equity. The issuance of the
Securities is not subject to any preemptive or other similar rights. On the
Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance of any kind (each, a "Lien").

          (k) The Junior Subordinated Notes have been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered to
the Indenture Trustee for authentication in accordance with the Indenture and,
when authenticated in the manner provided for in the Indenture and delivered to
the Trust against payment therefor in accordance with the Junior Subordinated
Note Purchase Agreement, will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
principles of equity.

          (l) This Purchase Agreement has been duly authorized, executed and
delivered by the Company and the Trust.

          (m) Neither the issue and sale of the Common Securities, the Preferred
Securities or the Junior Subordinated Notes, nor the purchase of the Junior
Subordinated Notes by the Trust, nor the execution and delivery of and
compliance with the Operative Documents by the Company or the Trust, nor the
consummation of the transactions contemplated herein or

                                       7

<PAGE>

therein, (i) will conflict with or constitute a violation or breach of the Trust
Agreement or the charter or bylaws of the Company or any subsidiary of the
Company or any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, governmental authority, agency or instrumentality
or court, domestic or foreign, having jurisdiction over the Trust or the Company
or any of its subsidiaries or their respective properties or assets
(collectively, the "Governmental Entities"), (ii) will conflict with or
constitute a violation or breach of, or a default or Repayment Event (as defined
below) under, or result in the creation or imposition of any Lien upon any
property or assets of the Trust, the Company or any of the Company's
subsidiaries pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which (A) the Trust, the Company
or any of its subsidiaries is a party or by which it or any of them may be
bound, or (B) to which any of the property or assets of any of them is subject,
or any judgment, order or decree of any court, governmental authority or
arbitrator, except, in the case of this clause (ii), for such conflicts,
breaches, violations, defaults, Repayment Events (as defined below) or Liens
which (X) would not, singly or in the aggregate, adversely affect the
consummation of the transactions contemplated by the Operative Documents and (Y)
would not, singly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or business prospects,
liabilities and assets (taken as a whole) or business prospects of the Company
and its subsidiaries taken as a whole, whether or not occurring in the ordinary
course of business (a "Material Adverse Effect") or (iii) require the consent,
approval, authorization or order of any court or Governmental Entity. As used
herein, a "Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person acting
on such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Trust or the Company
or any of its subsidiaries prior to its scheduled maturity.

          (n) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Michigan, with all requisite
corporate power and authority to own, lease and operate its properties and
conduct the business it transacts and proposes to transact, and is duly
qualified to transact business and is in good standing as a foreign corporation
in each jurisdiction where the nature of its activities requires such
qualification, except where the failure of the Company to be so qualified would
not, singly or in the aggregate, have a Material Adverse Effect.

          (o) The Company has no subsidiaries that are material to its business,
financial condition or earnings other than those subsidiaries listed in Schedule
1 attached hereto (collectively, the "Significant Subsidiaries"). Each
Significant Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized, with all requisite corporate power and authority to own,
lease and operate its properties and conduct the business it transacts and
proposes to transact. Each Significant Subsidiary is duly qualified to transact
business and is in good standing as a foreign corporation in each jurisdiction
where the nature of its activities requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect.

                                       8

<PAGE>

          (p) Each of the Trust, the Company and each of the Company's
subsidiaries hold all necessary approvals, authorizations, orders, licenses,
consents, registrations, qualifications, certificates and permits (including,
without limitation, insurance licenses from the insurance departments of the
various states and jurisdictions where the Company's insurance subsidiaries
write insurance business or otherwise conduct insurance or reinsurance business,
as the case may be, or as may be required by any applicable insurance statutes
of such states or other jurisdictions (collectively, the "Insurance Licenses"))
(collectively, including the Insurance Licenses, the "Governmental Licenses") of
and from Governmental Entities necessary to conduct their respective businesses
as now being conducted, and neither the Trust, the Company nor any of the
Company's subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Government License, except where the
failure to be so licensed or approved or the receipt of an unfavorable decision,
ruling or finding, would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity or the failure of such Governmental Licenses
to be in full force and effect, would not, singly or in the aggregate, have a
Material Adverse Effect; and the Company and its subsidiaries are in compliance
with all applicable laws, rules, regulations, judgments, orders, decrees and
consents, except where the failure to be in compliance would not, singly or in
the aggregate, have a Material Adverse Effect.

          (q) All of the issued and outstanding shares of capital stock of the
Company and each of its subsidiaries are validly issued, fully paid and
non-assessable; all of the issued and outstanding capital stock of each
subsidiary of the Company is owned by the Company, directly or through
subsidiaries, free and clear of any Lien, claim or equitable right; and none of
the issued and outstanding capital stock of the Company or any subsidiary was
issued in violation of any preemptive or similar rights arising by operation of
law, under the charter or by-laws of such entity or under any agreement to which
the Company or any of its subsidiaries is a party.

          (r) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or by-laws or similar organizational
documents or (ii) in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which the
Company or any such subsidiary is a party or by which it or any of them may be
bound or to which any of the property or assets of any of them is subject,
except, in the case of clause (ii), where such violation or default would not,
singly or in the aggregate, have a Material Adverse Effect.

          (s) There is no action, suit or proceeding before or by any
Governmental Entity, arbitrator or court, domestic or foreign, now pending or,
to the knowledge of the Company or the Trust after due inquiry, threatened
against or affecting the Trust or the Company or any of the Company's
subsidiaries, except for such actions, suits or proceedings that, if adversely
determined, would not, singly or in the aggregate, adversely affect the
consummation of the transactions contemplated by the Operative Documents or have
a Material Adverse Effect; and the aggregate of all pending legal or
governmental proceedings to which the Trust or the Company or any of its
subsidiaries is a party or of which any of their respective properties or assets
is subject, including ordinary routine litigation incidental to the business,
are not expected to result in a Material Adverse Effect.

                                       9

<PAGE>

          (t) The accountants of the Company who certified the Financial
Statements (as defined below) are independent public accountants of the Company
and its subsidiaries within the meaning of the Securities Act, and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder.

          (u) The audited consolidated financial statements (including the notes
thereto) and schedules of the Company and its consolidated subsidiaries for the
fiscal year ended September 30, 2005 (the "Financial Statements") and the
interim unaudited consolidated financial statements of the Company and its
consolidated subsidiaries for the quarter ended December 31, 2005 (the "Interim
Financial Statements") provided to the Purchaser are the most recent available
audited and unaudited consolidated financial statements of the Company and its
consolidated subsidiaries, respectively, and fairly present in all material
respects, in accordance with U.S. generally accepted accounting principles, the
financial position of the Company and its consolidated subsidiaries, and the
results of operations and changes in financial condition as of the dates and for
the periods therein specified, subject, in the case of Interim Financial
Statements, to year-end adjustments (which are expected to consist solely of
normal recurring adjustments). Such consolidated financial statements and
schedules have been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP")consistently applied throughout the periods
involved (except as otherwise noted therein).

          (v) The statutory financial statements dated as of September 30, 2005
(the "Statutory Financial Statements") of each of the Company's insurance
company subsidiaries have, for each relevant period, been prepared in accordance
with statutory accounting principles ("SAP") prescribed or permitted by the
National Association of Insurance Commissioners, and with respect to each
insurance company subsidiary, each the appropriate insurance department of the
state of domicile of such insurance company subsidiary, and such accounting
practices have been applied on a consistent basis throughout the periods
involved (whether GAAP or SAP, as applicable, the "Applicable Accounting
Principles").

          (w) None of the Trust, the Company nor any of its subsidiaries has any
material liability, whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due, including any liability for
taxes (and there is no past or present fact, situation, circumstance, condition
or other basis for any present or future action, suit, proceeding, hearing,
charge, complaint, claim or demand against the Company or its subsidiaries that
could give rise to any such liability), except for (i) liabilities set forth in
the Financial Statements or the Interim Financial Statements and (ii) normal
fluctuations in the amount of the liabilities referred to in clause (i) above
occurring in the ordinary course of business of the Trust, the Company and all
of its subsidiaries since the date of the most recent balance sheet included in
such Financial Statements.

          (x) The reports required by Governmental Entities, regulators,
insurance commissioners or similar entities of the states of incorporation of
the Company or its insurance subsidiaries, if any, (the "Regulatory Reports"),
provided to the Purchaser are the most recently available such report, and the
information therein fairly presents in all material respects the financial
position of the Company and its subsidiaries. None of the Company or any of its

                                       10

<PAGE>

subsidiaries has been requested by a Governmental Entity to republish, restate,
or refile any regulatory or financial report

          (y) Since the respective dates of the Financial Statements, Interim
Financial Statements, Statutory Financial Statements and the Regulatory Reports,
there has not been (A) any material adverse change or development with respect
to the condition (financial or otherwise), earnings, business, assets or
business prospects of the Company and its subsidiaries, taken as a whole,
whether or not occurring in the ordinary course of business or (B) any dividend
or distribution of any kind declared, paid or made by the Company on any class
of its capital stock other than regular quarterly dividends on the Company's
common stock.

          (z) The authorized capitalization of the Company and its subsidiary
insurance companies are as set forth in the Financial Statements, the Interim
Financial Statements, the Statutory Financial Statements and the Regulatory
Reports and meet all applicable regulatory requirements with respect thereto.

          (aa) The documents of the Company filed with the Commission in
accordance with the Exchange Act, from and including the commencement of the
fiscal year covered by the Company's most recent Annual Report on Form 10-K, at
the time they were or hereafter are filed by the Company with the Commission
(collectively, the "1934 Act Reports"), complied and will comply in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations"), and, at the date of
this Purchase Agreement and on the Closing Date, do not and will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and other than
such instruments, agreements, contracts and other documents as are filed as
exhibits to the Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q or Current Reports on Form 8-K, there are no instruments, agreements,
contracts or documents of a character described in Item 601 of Regulation S-K
promulgated by the Commission to which the Company or any of its subsidiaries is
a party. The Company is in compliance with all currently applicable requirements
of the Exchange Act that were added by the Sarbanes-Oxley Act of 2002.

          (bb) None of the Trust, the Company nor any of its subsidiaries, or
any of their respective officers, directors, employees or representatives, is
subject or is party to, or has received any notice from any Regulatory Agency
(as defined below) that any of them will become subject or party to any
investigation with respect to, any cease-and-desist order, agreement, civil
monetary penalty, consent agreement, memorandum of understanding or other
regulatory enforcement action, proceeding or order with or by, or is a party to
any commitment letter or similar undertaking to, or is subject to any directive
by, or has been a recipient of any supervisory letter from, or has adopted any
board resolutions at the request of, any Regulatory Agency that, in any such
case, currently restricts in any material respect the conduct of their business
or that in any material manner relates to their capital adequacy, capital
reserves, their marketing or sales practices, their ability or authority to pay
dividends or make distributions to their shareholders or make payments of
principal or interest on their debt obligations, their management or their
business (each, a "Regulatory Action"), nor has the Trust, the Company or

                                       11

<PAGE>

any of its subsidiaries been advised by any Regulatory Agency that it is
considering issuing or requesting any such Regulatory Action; and there is no
unresolved violation, criticism or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of the Trust,
the Company or any of its subsidiaries, except where such unresolved violation,
criticism or exception would not, singly or in the aggregate, have a Material
Adverse Effect. As used herein, the term "Regulatory Agency" means any federal
or state agency charged with the supervision or regulation of insurance
companies or holding companies of insurance companies, or engaged in the
insurance of insurance company reserves, or any court, administrative agency or
commission or other governmental agency, authority or instrumentality having
supervisory or regulatory authority with respect to the Trust, the Company or
any of its subsidiaries.

          (cc) No labor dispute with the employees of the Trust, the Company or
any of its subsidiaries exists or, to the knowledge of the executive officers of
the Trust or the Company, is imminent, except those which would not, singly or
in the aggregate, have a Material Adverse Effect.

          (dd) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any Governmental Entity, other
than those that have been made or obtained, is necessary or required for the
performance by the Trust or the Company of their respective obligations under
the Operative Documents, as applicable, or the consummation by the Trust and the
Company of the transactions contemplated by the Operative Documents.

          (ee) Each of the Trust, the Company and each subsidiary of the Company
has good and marketable title to all of its respective real and personal
properties, in each case free and clear of all Liens and defects, except for
those that would not, singly or in the aggregate, have a Material Adverse
Effect; and all of the leases and subleases under which the Trust, the Company
or any subsidiary of the Company holds properties are in full force and effect,
except where the failure of such leases and subleases to be in full force and
effect would not, singly or in the aggregate, have a Material Adverse Effect,
and none of the Trust, the Company or any subsidiary of the Company has any
notice of any claim of any sort that has been asserted by anyone adverse to the
rights of the Trust, the Company or any subsidiary of the Company under any such
leases or subleases, or affecting or questioning the rights of such entity to
the continued possession of the leased or subleased premises under any such
lease or sublease, except for such claims that would not, singly or in the
aggregate, have a Material Adverse Effect.

          (ff) The Company has no present intention to exercise its option to
defer payments of interest on the Junior Subordinated Notes as provided in the
Indenture. The Company believes that the likelihood that it would exercise its
rights to defer payments of interest on the Junior Subordinated Notes as
provided in the Indenture at any time during which the Junior Subordinated Notes
are outstanding is remote because of the restrictions that would be imposed on
the Company's ability to declare or pay dividends or distributions on, or to
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock and on the Company's ability to make any payments of
principal, interest or premium, if any, on, or repay, repurchase or redeem, any
of its debt securities that rank pari passu in all respects with or junior in
interest to the Junior Subordinated Notes.

                                       12

<PAGE>

          (gg) The information provided by the Company and the Trust pursuant to
this Purchase Agreement does not, as of the date hereof, and will not, as of the
Closing Date, contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

          5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants to, and agrees with, the Company and the Trust as
follows:

          (a) The Purchaser is aware that the Securities and the guarantee by
the Company set forth in the Guaranty Agreement have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to "U.S. persons" (as defined in Regulation S under the
Securities Act) except in accordance with Rule 903 of Regulation S under the
Securities Act or pursuant to an exemption from the registration requirements of
the Securities Act.

          (b) The Purchaser is an "accredited investor," as such term is defined
in Rule 501(a) of Regulation D under the Securities Act.

          (c) Neither the Purchaser, nor any of the Purchaser's affiliates, nor
any person acting on the Purchaser's or the Purchaser's Affiliate's behalf has
engaged, or will engage, in any form of "general solicitation or general
advertising" (within the meaning of Regulation D under the Securities Act) in
connection with any offer or sale of the Preferred Securities.

          (d) The Purchaser understands and acknowledges that (i) no public
market exists for any of the Securities and that it is unlikely that a public
market will ever exist for the Securities, (ii) the Purchaser is purchasing the
Securities for its own account, for investment and not with a view to, or for
offer or sale in connection with, any distribution thereof in violation of the
Securities Act or other applicable securities laws, subject to any requirement
of law that the disposition of its property be at all times within its control
and subject to its ability to resell such Securities pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption
therefrom or in a transaction not subject thereto, and the Purchaser agrees to
the legends and transfer restrictions applicable to the Securities contained in
the Indenture, and (iii) the Purchaser has had the opportunity to ask questions
of, and receive answers and request additional information from, the Company and
is aware that it may be required to bear the economic risk of an investment in
the Securities.

          (e) The Purchaser is a company with limited liability duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is organized with all requisite (i) power and authority
to execute, deliver and perform the Operative Documents to which it is a party,
to make the representations and warranties specified herein and therein and to
consummate the transactions contemplated herein and (ii) right and power to
purchase the Securities.

          (f) This Purchase Agreement has been duly authorized, executed and
delivered by the Purchaser and no filing with, or authorization, approval,
consent, license, order registration, qualification or decree of, any
governmental body, agency or court having

                                       13

<PAGE>

jurisdiction over the Purchaser, other than those that have been made or
obtained, is necessary or required for the performance by the Purchaser of its
obligations under this Purchase Agreement or to consummate the transactions
contemplated herein.

          6. AGREEMENTS OF THE COMPANY AND THE TRUST. The Company and the Trust
jointly and severally agree with the Purchaser as follows:

          (a) During the period from the date of this Agreement to the Closing
Date, the Company and the Trust shall use their best efforts and take all action
necessary or appropriate to cause their representations and warranties contained
in Section 4 hereof to be true as of the Closing Date, after giving effect to
the transactions contemplated by this Purchase Agreement, as if made on and as
of the Closing Date.

          (b) The Company and the Trust will arrange for the qualification of
the Preferred Securities for sale under the laws of such jurisdictions as the
Purchaser may designate and will maintain such qualifications in effect so long
as required for the sale of the Preferred Securities. The Company or the Trust,
as the case may be, will promptly advise the Purchaser of the receipt by the
Company or the Trust, as the case may be, of any notification with respect to
the suspension of the qualification of the Preferred Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.

          (c) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates to, nor will either of them permit any person
acting on its or their behalf (other than the Purchaser) to, resell any
Preferred Securities that have been acquired by any of them.

          (d) Neither the Company nor the Trust will, nor will either of them
permit any of their Affiliates or any person acting on their behalf to, engage
in any "directed selling efforts" within the meaning of Regulation S under the
Securities Act with respect to the Securities.

          (e) Neither the Company nor the Trust will, nor will either of them
permit any of their Affiliates or any person acting on their behalf to, directly
or indirectly, make offers or sales of any security, or solicit offers to buy
any security, under circumstances that would require the registration of any of
the Securities under the Securities Act.

          (f) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates or any person acting on their behalf to, engage in
any form of "general solicitation or general advertising" (within the meaning of
Regulation D) in connection with any offer or sale of the any of the Securities.

          (g) So long as any of the Securities are outstanding, (i) the
Securities shall not be listed on a national securities exchange registered
under section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system and (ii) neither the Company nor the Trust shall be an open-end
investment company, unit investment trust or face-amount certificate company
that is, or is required to be, registered under section 8 of the Investment
Company Act, and, the Securities shall otherwise satisfy the eligibility
requirements of Rule 144A(d)(3).

                                       14

<PAGE>

          (h) Each of the Company and the Trust shall furnish to (i) the
holders, and subsequent holders of the Preferred Securities, (ii) Cohen Bros.
Financial Management LLC (at 1818 Market Street, 28th Floor, Philadelphia,
Pennsylvania 19013, or such other address as designated by Cohen Bros. Financial
Management LLC) and (iii) any beneficial owner of the Securities reasonably
identified to the Company and the Trust (which identification may be made by
either such beneficial owner or by Cohen Bros. Financial Management LLC), a duly
completed and executed certificate in the form attached hereto as Annex F,
including the financial statements referenced in such Annex, which certificate
and financial statements shall be so furnished by the Company and the Trust at
the times set forth in the Trust Agreement and/or the Indenture. To the extent
that the parties identified in this Section 6(h) receive such certificates and
statements pursuant to the Trust Agreement and/or the Indenture, delivery of
such certificates and statements to such party pursuant to the Trust Agreement
and/or the Indenture shall satisfy the obligation of the Company and the Trust
under this Section 6(h).

          (i) Each of the Company and the Trust will, during any period in which
it is not subject to and in compliance with section 13 or 15(d) of the Exchange
Act, or it is not exempt from such reporting requirements pursuant to and in
compliance with Rule 12g3-2(b) under the Exchange Act, shall provide to each
holder of the Securities and to each prospective purchaser (as designated by
such holder) of the Securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under the
Securities Act. If the Company and the Trust are required to register under the
Exchange Act, such reports filed in compliance with Rule 12g3-2(b) shall be
sufficient information as required above. This covenant is intended to be for
the benefit of the Purchaser, the holders of the Securities, and the prospective
purchasers designated by the Purchaser and such holders, from time to time, of
the Securities.

          (j) Neither the Company nor the Trust will, until one hundred eighty
(180) days following the Closing Date, without the Purchaser's prior written
consent, offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of, directly or indirectly, (i) any Preferred Securities or
other securities substantially similar to the Preferred Securities other than as
contemplated by this Purchase Agreement or (ii) any other securities convertible
into, or exercisable or exchangeable for, any Preferred Securities or other
securities substantially similar to the Preferred Securities.

          7. PAYMENT OF EXPENSES. The Company, as depositor of the Trust, agrees
to pay all costs and expenses incident to the performance of the obligations of
the Company and the Trust under this Purchase Agreement, whether or not the
transactions contemplated herein are consummated or this Purchase Agreement is
terminated, including all costs and expenses incident to (i) the authorization,
issuance, sale and delivery of the Preferred Securities and any taxes payable in
connection therewith; (ii) the fees and expenses of qualifying the Preferred
Securities under the securities laws of the several jurisdictions as provided in
Section 6(b); (iii) the fees and expenses of the counsel, the accountants and
any other experts or advisors retained by the Company or the Trust; (iv) the
fees and all reasonable expenses of the Guarantee Trustee, the Property Trustee,
the Delaware Trustee, the Indenture Trustee and any other trustee or paying
agent appointed under the Operative Documents, including the fees and
disbursements of counsel for such trustees, which fees shall not exceed a $2,000
acceptance fee, $3,500 for the

                                       15

<PAGE>

fees and expenses of Morris James Hitchens & Williams LLP, special Delaware
counsel retained by the Delaware Trustee in connection with the Closing, and
$4,000 in administrative fees annually; and (vi) $20,000 for the fees and
expenses of Mayer, Brown, Rowe & Maw LLP, special counsel retained by the
Purchaser.

          If the sale of the Preferred Securities provided for in this Purchase
Agreement is not consummated because any condition set forth in Section 3 hereof
to be satisfied by either the Company or the Trust is not satisfied, because
this Purchase Agreement is terminated pursuant to Section 9 or because of any
failure, refusal or inability on the part of the Company or the Trust to perform
all obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by the Purchaser, the
Company will reimburse the Purchaser upon demand for all reasonable
out-of-pocket expenses (including the fees and expenses of each of the
Purchaser's counsel specified in subparagraphs (v) and (vi) of the immediately
preceding paragraph) that shall have been incurred by the Purchaser in
connection with the proposed purchase and sale of the Preferred Securities. The
Company shall not in any event be liable to the Purchaser for the loss of
anticipated profits from the transactions contemplated by this Purchase
Agreement.

          8. INDEMNIFICATION. (a) The Company and the Trust agree jointly and
severally to indemnify and hold harmless the Purchaser, the Purchaser's
affiliates, Cohen Bros. & Company and Merrill Lynch & Co. (collectively, the
"Indemnified Parties") and the Indemnified Parties' respective directors,
officers, employees and agents and each person who "controls" the Indemnified
Parties within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
information or documents furnished or made available to the Purchaser by or on
behalf of the Company, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (iii) the breach or alleged breach of any
representation, warranty or agreement of either Seller contained herein, and
agrees to reimburse each such Indemnified Party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Company or the Trust
may otherwise have.

          (b) The Company agrees to indemnify the Trust against all loss,
liability, claim, damage and expense whatsoever due from the Trust under
paragraph (a) above.

          (c) Promptly after receipt by an Indemnified Party under this Section
8 of notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, promptly notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve the indemnifying party from liability under paragraph (a) above unless
and to the extent that such failure results in the forfeiture by the
indemnifying party

                                       16

<PAGE>

of material rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any Indemnified Party other than the
indemnification obligation provided in paragraph (a) above. Purchaser shall be
entitled to appoint counsel to represent the Indemnified Party in any action for
which indemnification is sought. An indemnifying party may participate at its
own expense in the defense of any such action; provided, that counsel to the
indemnifying party shall not (except with the consent of the Indemnified Party)
also be counsel to the Indemnified Party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all Indemnified Parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. An indemnifying party will not, without the prior written consent
of the Indemnified Parties, 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 may be sought hereunder (whether
or not the Indemnified Parties are actual or potential parties to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party from all liability
arising out of such claim, action, suit or proceeding.

          9. TERMINATION. This Purchase Agreement shall be subject to
termination in the absolute discretion of the Purchaser, by notice given to the
Company and the Trust prior to delivery of and payment for the Preferred
Securities, if prior to such time (i) a downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization," as that term is used by
the Commission in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, or such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the Company's debt
securities or preferred stock, (ii) the Trust shall be unable to sell and
deliver to the Purchaser at least $20,000,000 stated liquidation value of
Preferred Securities, (iii) the Company or any of its subsidiaries that is an
insurance company shall cease to be "adequately-capitalized" under the statutes,
rules, regulations, codes or ordinances of any Regulatory Agency within the
meaning of any applicable regulations of any Regulatory Agency, or any formal
administrative or judicial action is taken by any appropriate state or federal
insurance regulator against the Company or of its subsidiary insurance companies
for unsafe and unsound insurance practices, or violations of law, (iv) a
suspension or material limitation in trading in securities generally shall have
occurred on the New York Stock Exchange, (v) a suspension or material limitation
in trading in any of the Company's securities shall have occurred on the
exchange or quotation system upon which the Company' securities are traded, if
any, (vi) a general moratorium on commercial insurance activities shall have
been declared either by federal or Michigan authorities or (vii) there shall
have occurred any outbreak or escalation of hostilities, or declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the Purchaser's
judgment, impracticable or inadvisable to proceed with the offering or delivery
of the Preferred Securities.

          10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and the Trust or their respective officers or trustees and of the
Purchaser set forth in or made pursuant to this Purchase Agreement will remain
in full force and effect, regardless of any investigation

                                       17

<PAGE>

made by or on behalf of the Purchaser, the Company or the Trust or any of the
their respective officers, directors, trustees or controlling persons, and will
survive delivery of and payment for the Preferred Securities. The provisions of
Sections 7 and 8 shall survive the termination or cancellation of this Purchase
Agreement.

          11. AMENDMENTS. This Purchase Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement by each of the parties hereto.

          12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Purchaser, will be mailed,
delivered by hand or courier or sent by facsimile and confirmed to the
Purchaser, c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated, 250 Vesey
Street, New York, New York 10080, Attention: Phil Kostrowicki, Telephone: (212)
449-5113, Facsimile: (212) 449-3695; with a copy to Cohen Bros. & Company, 1818
Market Street, Philadelphia, PA 19103, Attention: Matthew T. Mueller, Facsimile
(215) 861-7868 and a copy to Mayer, Brown, Rowe & Maw LLP, 71 South Wacker,
Chicago, Illinois 60606, Attention: J. Paul Forrester, Facsimile: (312) 701-7711
or other address as the Purchaser shall designate for such purpose in a notice
to the Company and the Trust; and if sent to the Company or the Trust, will be
mailed, delivered by hand or courier or sent by facsimile and confirmed to it at
North Pointe Holdings Corporation, 28819 Franklin Road, Southfield, MI 48034,
Attention: Brian J. Roney, Facsimile: (248) 358-3041.

          13. SUCCESSORS AND ASSIGNS. This Purchase Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing expressed or mentioned in this
Purchase Agreement is intended or shall be construed to give any person other
than the parties hereto and the affiliates, directors, officers, employees,
agents and controlling persons referred to in Section 8 hereof and their
successors, assigns, heirs and legal representatives, any right or obligation
hereunder. None of the rights or obligations of the Company or the Trust under
this Purchase Agreement may be assigned, whether by operation of law or
otherwise, without the Purchaser's prior written consent. The rights and
obligations of the Purchaser under this Purchase Agreement may be assigned by
the Purchaser without the Company's or the Trust's consent; provided that the
assignee assumes the obligations of the Purchaser under this Purchase Agreement.

          14. APPLICABLE LAW. THIS PURCHASE AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW).

          15. SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING BY OR
AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS PURCHASE
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

                                       18

<PAGE>

MANHATTAN). BY EXECUTION AND DELIVERY OF THIS PURCHASE 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
PURCHASE AGREEMENT.

          16. COUNTERPARTS AND FACSIMILE. This Purchase Agreement may be
executed by any one or more of the parties hereto in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument. This Purchase Agreement may be
executed by any one or more of the parties hereto by facsimile.

                                       19

<PAGE>

     IN WITNESS WHEREOF, this Purchase Agreement has been entered into as of the
date first written above.

                                        NORTH POINTE HOLDINGS CORPORATION

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

                                        NP CAPITAL TRUST I

                                        By: NORTH POINTE HOLDINGS CORPORATION,
                                            as Depositor

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

                                       20

<PAGE>

                                        MERRILL LYNCH INTERNATIONAL

                                        By: /s/ R. A. Bellis
                                            ------------------------------------
                                        Name: R. A. Bellis
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                       21

<PAGE>

                                                                      SCHEDULE 1

                        LIST OF SIGNIFICANT SUBSIDIARIES

NORTH POINTE INSURANCE COMPANY

NORTH POINTE CASUALTY INSURANCE COMPANY

HOME POINTE INSURANCE COMPANY

MIDFIELD INSURANCE COMPANY

NORTH POINTE FINANCIAL SERVICES, INC.

                                       22

<PAGE>

                                                                       ANNEX A-I

          Pursuant to Section 3(c)(i) of the Purchase Agreement, Honigman Miller
Schwartz and Cohn LLP, counsel for the Company, shall deliver an opinion to the
effect that:

          (i) The Company is validly existing as a corporation in good standing
under the Laws of the State of Michigan and each of the Company and the
Significant Subsidiaries has the requisite corporate power and authority to own
or lease its properties, and to conduct its business as such business is
currently conducted, each as described in the Company's registration statement
on Form S-1, as amended, and the Company's periodic reports filed with the
Securities and Exchange Commission (together, the Company's "SEC Filings").
Based solely on our review of the organization documents, minute books and stock
ledgers of the Companies, all outstanding shares of capital stock of the
Significant Subsidiaries have been duly authorized and validly issued and are,
to our Actual Knowledge, fully paid and nonassessable and owned of record and
beneficially, directly or indirectly, by the Company. For purposes of the
opinions set forth in this paragraph 1 with respect to the Significant
Subsidiaries organized under Florida Law, we have assumed, with your permission,
that the Florida Insurance Code is the same as the Michigan Insurance Code of
1956.

          (ii) The Company has the requisite corporate power and authority to
(i) execute and deliver, and to perform its obligations under, the Operative
Documents to which it is a party and (ii) issue and perform its obligations
under the Junior Subordinated Notes. Neither the issue and sale of the Common
Securities, the Preferred Securities or the Junior Subordinated Notes, nor the
execution and delivery of and compliance with the Operative Documents by the
Company nor the consummation of the transactions contemplated thereby will
constitute a breach or violation of the Trust Agreement or the articles of
incorporation or bylaws of the Company.

          (iii) The execution, delivery and performance by the Company of the
Operative Documents to which the Company is a party has been duly authorized by
all necessary corporate action on the part of the Company, and each of such
Operative Documents has been duly executed and delivered by the Company.

          (iv) Each of the Guarantee Agreement and the Indenture constitutes a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights generally and to general principles of equity
(regardless of whether enforcement is considered in a proceeding of law or
equity).

          (v) The Junior Subordinated Notes, when authenticated in accordance
with the provisions of the Indenture and delivered to the Trust against payment
therefor, will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or and similar laws

                                      A-I-1

<PAGE>

affecting creditors' rights generally and to general principles of equity
(regardless of whether enforcement is considered in a proceeding of law or
equity).

          (vi) The Trust is not, and, following the issuance of the Preferred
Securities and the consummation of the transactions contemplated by the
Operative Documents and the application of the proceeds therefrom, the Trust
will not be, an "investment company" or, to our Actual Knowledge, an entity
"controlled" by an "investment company," in each case within the meaning of
Section 3(a) of the Investment Company Act.

          (vii) Assuming the truth and accuracy of the representations and
warranties of the Purchaser in the Purchase Agreement, it is not necessary in
connection with the offer, sale and delivery of the Common Securities, the
Preferred Securities, the Junior Subordinated Notes and the Guarantee Agreement
or the Guarantee, under the circumstances contemplated in the Purchase Agreement
and the Trust Agreement, to register the same under the Securities Act of 1933,
as amended, or to require qualification of the Indenture under the Trust
Indenture Act of 1939, as amended.

          (viii) The Purchase Agreement constitutes a legal, valid and binding
obligation of the Company and the Trust enforceable against the Company and the
Trust in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights generally and to general principles of equity
(regardless of whether enforcement is considered in a proceeding of law or
equity).

                                      A-I-2

<PAGE>

                                                                      ANNEX A-II

     Pursuant to Section 3(c)(ii) of the Purchase Agreement, General Counsel for
the Company shall deliver an opinion to the effect that:

               (i) all of the issued and outstanding shares of capital stock of
     each Significant Subsidiary are owned of record by the Company, and the
     issuance of the Preferred Securities and the Common Securities is not
     subject to any contractual preemptive rights known to such counsel;

               (ii) no consent, approval, authorization or order of any court or
     governmental authority is required for the issue and sale of the Common
     Securities, the Preferred Securities or the Junior Subordinated Notes, the
     purchase by the Trust of the Junior Subordinated Notes, the execution and
     delivery of and compliance with the Operative Documents by the Company or
     the Trust or the consummation of the transactions contemplated in the
     Operative Documents, except such approvals (specified in such opinion) as
     have been obtained;

               (iii) to the knowledge of such counsel, there is no action, suit
     or proceeding before or by any government, governmental instrumentality,
     arbitrator or court, domestic or foreign, now pending or threatened against
     or affecting the Trust or the Company or any Significant Subsidiary that
     could adversely affect the consummation of the transactions contemplated by
     the Operative Documents or could have a Material Adverse Effect.

               (iv) the Company is duly registered as an insurance holding
     company under the Insurance Code of the State of Michigan and the
     regulations thereunder of the Office of Financial and Insurance Services,
     and the capital reserves accounts of the Company and its insurance
     subsidiaries are in compliance with all applicable regulatory authorities
     with jurisdiction over such entities;

               (v) The execution, delivery and performance of the Operative
     Documents, as applicable, by the Company and the Trust and the consummation
     by the Company and the Trust of the transactions contemplated by the
     Operative Documents, as applicable, (i) will not result in any violation of
     the charter or bylaws of the Company, the charter or bylaws of the
     Company's subsidiaries, the Trust Agreement or the Certificate of Trust of
     the Trust, and (ii) will not conflict with, or result in a breach of any of
     the terms or provisions of, or constitute a default (or an event which,
     with notice or lapse of time or both, would constitute a default) under, or
     result in the creation or imposition of any lien, charge and encumbrance
     upon any assets or properties of the Company or any Significant Subsidiary
     under, (a) any agreement, indenture, mortgage or instrument that the
     Company or any Significant Subsidiary of the Company is a party to or by
     which it may be bound or to which any of its assets or properties may be
     subject, or (b) any existing applicable law, rule or administrative
     regulation [FOR GENERAL COUNSEL ONLY: EXCEPT THAT I EXPRESS NO OPINION WITH
     RESPECT TO THE SECURITIES LAWS OF THE STATE OF DELAWARE] of any court or
     governmental agency or authority having jurisdiction over

                                     A-II-1

<PAGE>

     the Company or any Significant Subsidiary of the Company or any of their
     respective assets or properties, except in case of (ii), where any such
     violation, conflict, breach, default, lien, charge or encumbrance, would
     not have a material adverse effect on the assets, properties, business,
     results of operations or financial condition of the Company and its
     subsidiaries, taken as whole.

                                     A-II-2

<PAGE>

                                                                         ANNEX B

          Pursuant to Section 3(d) of the Purchase Agreement, Honigman Miller
Schwartz and Cohn LLP, special tax counsel, shall deliver an opinion to the
effect that:

               (i) the Trust will be classified for United States federal income
     tax purposes as a grantor trust and not as an association or a publicly
     traded partnership taxable as a corporation; and

               (ii) for United States federal income tax purposes, the Junior
     Subordinated Notes will constitute indebtedness of the Company.

     In rendering such opinions, such counsel may (A) state that its opinion is
limited to the federal laws of the United States and (B) rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials.

                                       B-1

<PAGE>

                                                                         ANNEX C

          Pursuant to Section 3(e) of the Purchase Agreement, Morris, James,
Hutchins & Williams LLP, special Delaware counsel for the Delaware Trustee,
shall deliver an opinion to the effect that:

          1. (i) The Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a statutory trust have been made.

          2. Under the Delaware Statutory Trust Act and the Trust Agreement, the
Trust has the trust power and authority (i) to own property and conduct its
business, all as described in the Trust Agreement, (ii) to execute and deliver,
and to perform its obligations under, each of the Purchase Agreement, the Common
Securities Subscription Agreement and the Junior Subordinated Note Purchase
Agreement, (iii) to issue and perform its obligations under the Preferred
Securities and the Common Securities, and (iv) to acquire and hold the Junior
Subordinated Notes.

          3. The Trust Agreement constitutes a valid and binding obligation of
the Company and the Trustees, enforceable against the Company and the Trustees
in accordance with its terms.

          4. Under the Delaware Statutory Trust Act and the Trust Agreement, the
execution and delivery by the Trust of the Purchase Agreement, the Common
Securities Subscription Agreement and the Junior Subordinated Note Purchase
Agreement, and the performance by the Trust of its obligations thereunder, have
been duly authorized by all necessary trust action on the part of the Trust.

          5. Under the Delaware Statutory Trust Act, the certificate attached to
the Trust Agreement as Exhibit C is an appropriate form of certificate to
evidence ownership of the Preferred Securities; the Preferred Securities have
been duly authorized by the Trust Agreement and, when issued in accordance with
the Trust Agreement and delivered against payment therefor in accordance with
the Trust Agreement and the Purchase Agreement, the Preferred Securities will be
validly issued and (subject to the qualifications set forth in this paragraph)
fully paid and nonassessable and will represent undivided beneficial interests
in the assets of the Trust. The holders of the Preferred Securities will be
entitled to the benefits of the Trust Agreement and, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware, except that the holders of the
Preferred Securities may be obligated to make payments or provide indemnity or
security as set forth in the Trust Agreement.

          6. The Common Securities have been duly authorized by the Trust
Agreement and, when issued in accordance with the Trust Agreement and delivered
against payment therefor in accordance with the Trust Agreement and the Common
Securities

                                       C-1

<PAGE>

Subscription Agreement, will be validly issued and fully paid and will represent
undivided beneficial interests in the assets of the Trust, and the holder of the
Common Securities will be entitled to the benefits of the Trust Agreement.

          7. Under the Delaware Statutory Trust Act and the Trust Agreement, the
issuance of the Preferred Securities and the Common Securities is not subject to
preemptive rights.

          8. No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body of the State of
Delaware is required solely in connection with the issuance and sale by the
Trust of the Preferred Securities and the Common Securities, the acquisition by
the Trust of the Junior Subordinated Notes, the execution, delivery and
performance by the Trust of the Purchase Agreement, the Common Securities
Subscription Agreement and the Junior Subordinated Note Purchase Agreement, or
the consummation by the Trust of the transaction contemplated by the Purchase
Agreement, the Common Securities Subscription Agreement and the Junior
Subordinated Note Purchase Agreement.

          9. The issuance and sale by the Trust of the Preferred Securities and
the Common Securities, the execution, delivery and performance by the Trust of
the Purchase Agreement, the Common Securities Subscription Agreement and the
Junior Subordinated Note Purchase Agreement, and the consummation by the Trust
of the transactions contemplated by the Purchase Agreement, the Common
Securities Subscription Agreement and the Junior Subordinated Note Purchase
Agreement, are not prohibited by (i) the Certificate of Trust or the Trust
Agreement, or (ii) any statute, rule or regulation of the State of Delaware
applicable to the Trust.

          10. The holders of the Preferred Securities (other than those holders
of the Preferred Securities who reside or are domiciled in the State of
Delaware) will have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the Trust and the Trust
will not be liable for any income tax imposed by the State of Delaware.

     In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware, (B) rely as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of the Company
and public officials and (C) take customary assumptions and exceptions as to
enforceability and other matters.

                                       C-2

<PAGE>

                                                                         ANNEX D

     Pursuant to Section 3(f) of the Purchase Agreement, , Morris, James,
Hutchins & Williams LLP, special counsel for the Guarantee Trustee, the Property
Trustee and the Indenture Trustee, shall deliver an opinion to the effect that:

          1. LaSalle Bank National Association is validly existing as a national
banking association with trust powers under the laws of the United States of
America.

          2. LaSalle Bank National Association has requisite corporate power and
authority to execute and deliver, and to perform its obligations under, the
Trust Agreement, the Guarantee Agreement and the Indenture and to authenticate
and deliver the Preferred Securities and the Junior Subordinated Notes.

          3. The execution, delivery, and performance by LaSalle Bank National
Association of the Trust Agreement, the Guarantee Agreement and the Indenture,
including the authentication and delivery by LaSalle Bank National Association
of the Preferred Securities pursuant to the Trust Order and the Junior
Subordinated Notes pursuant to the Company Order, have been duly authorized by
all necessary corporate action on the part of LaSalle Bank National Association,
and the Trust Agreement, the Guarantee Agreement and the Indenture have been
duly executed and delivered by LaSalle Bank National Association.

          4. The execution, delivery and performance by LaSalle Bank National
Association of the Trust Agreement, the Guarantee Agreement and the Indenture,
including the authentication and delivery by LaSalle Bank National Association
of the Preferred Securities pursuant to the Trust Order and the Junior
Subordinated Notes pursuant to the Company Order, are not prohibited by (i) the
charter or By-laws of LaSalle Bank National Association, or (ii) any law or
regulation of the State of Delaware or the United States of America governing
the trust powers of LaSalle Bank National Association.

          5. No approval, authorization or other action by, or filing with, any
governmental authority or agency under any law or regulation of the State of
Delaware or the United States of America governing the trust powers of LaSalle
Bank National Association is required solely in connection with the execution,
delivery and performance by LaSalle Bank National Association of the Trust
Agreement, the Guarantee Agreement and the Indenture, including the
authentication and delivery by LaSalle Bank National Association of the
Preferred Securities pursuant to the Trust Order or the Junior Subordinated
Notes pursuant to the Company Order.

          6. The Junior Subordinated Notes delivered on the date hereof have
been authenticated by due execution thereof and delivered by LaSalle Bank
National Association, as Indenture Trustee, in accordance with the Company
Order. The Preferred Securities delivered on the date hereof have been
authenticated by due execution thereof and delivered by LaSalle Bank National
Association, as Property Trustee, in accordance with the Trust Order.

                                       D-1

<PAGE>

          In rendering such opinions, such counsel may (A) state that its
opinion is limited to the laws of the State of Delaware or the United States of
America and (B) rely as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of LaSalle Bank National Association, the
Company and public officials.

                                       C-2

<PAGE>

                                                                         ANNEX E

          Pursuant to Section 3(g) of the Purchase Agreement, , Morris, James,
Hutchins & Williams LLP, counsel for the Delaware Trustee, shall deliver an
opinion to the effect that:

          1. Christiana Bank & Trust Company is duly incorporated and validly
existing as a Delaware banking corporation in good standing under the laws of
the State of Delaware.

          2. Christiana Bank & Trust Company has requisite corporate power and
authority to execute and deliver, and to perform its obligations under, the
Trust Agreement.

          3. The execution, delivery, and performance by Christiana Bank & Trust
Company of the Trust Agreement has been duly authorized by all necessary
corporate action on the part of Christiana Bank & Trust Company, and the Trust
Agreement has been duly executed and delivered by Christiana Bank & Trust
Company.

          4. The execution, delivery and performance by Christiana Bank & Trust
Company of the Trust Agreement are not prohibited by (i) the charter or bylaws
of Christiana Bank & Trust Company, or (ii) any law or regulation of the State
of Delaware or the United States of America governing the trust powers of
Christiana Bank & Trust Company.

          5. No approval, authorization or other action by, or filing with, any
governmental authority or agency under any law or regulation of the State of
Delaware or the United States of America governing the trust powers of
Christiana Bank & Trust Company is required solely in connection with the
execution, delivery and performance by Christiana Bank & Trust Company of the
Trust Agreement, except for the filing of the Certificate of Trust with the
Secretary of State of the State of Delaware, which Certificate of Trust has been
duly filed with the Secretary of State of the State of Delaware

     In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and the federal laws of the United
States governing the trust powers of Christiana Bank & Trust Company, (B) rely
as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials and (C) take customary
assumptions and exceptions.

                                       E-1

<PAGE>

                                                                         ANNEX F

                         OFFICER'S FINANCIAL CERTIFICATE

     The undersigned, the [Chairman/Vice Chairman/Chief Executive
Officer/President/ Vice President/Chief Financial Officer/Treasurer/Assistant
Treasurer], hereby certifies, pursuant to Section 6(h) of the Purchase
Agreement, dated as of February 22, 2006, among North Pointe Holdings
Corporation (the "Company"), NP Capital Trust I (the "Trust") and Merrill Lynch
International, that, as of [date], [20__], the Company and its Subsidiary
Insurance Companies (as defined below) had the following ratios and balances:

[For the Company, if applicable, and each Subsidiary Insurance Company (as
defined below) provide:]

[INSURANCE COMPANY]
As of [Quarterly/Annual Financial Date], 20__

<TABLE>
<S>                                                                     <C>
NAIC Risk Based Capital Ratio (authorized control level)                 _____%
Total Policyholders' Surplus                                            $_____
Consolidated Debt to Total Policyholders' Surplus                        _____%
Total Assets                                                            $_____
NAIC Class 1 & 2 Rated Investments to Total Fixed Income Investments     _____%
NAIC Class 1 & 2 Rated Investments to Total Investments                  _____%
Return on Policyholders' Surplus                                         _____%
[For Property & Casualty Companies also provide:]
[Expense Ratio]                                                          _____%
Loss and LAE Ratio                                                       _____%
Combined Ratio                                                           _____%
Net Premiums Written (annualized) to Policyholders' Surplus              _____%]
</TABLE>

*    A table describing the quarterly report calculation procedures is provided
     on page __

The following is a complete list as of [Quarterly/Annual Financial Date] of the
Company's subsidiaries which are authorized to write insurance business or
otherwise conduct insurance or reinsurance business (the "Subsidiary Insurance
Companies"):

                    [List of Subsidiary Insurance Companies]

                                       F-1

<PAGE>

[FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of the Company and its consolidated subsidiaries for the
three years ended [date], 20__ and all required Statutory Financial Statements
(as defined in the Purchase Agreement) for the year ended [date], 20__]

[FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of the Company and its consolidated subsidiaries and all required
Statutory Financial Statements (as defined in the Purchase Agreement) for the
year ended [date], 20__] for the fiscal quarter ended [date], 20__.]

The financial statements fairly present in all material respects, in accordance
with U.S. generally accepted accounting principles ("GAAP"), the financial
position of the Company and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the date, and for the [___
quarter interim] [annual] period ended [date], 20__, and such financial
statements have been prepared in accordance with GAAP consistently applied
throughout the period involved (expect as otherwise noted therein).

The Statutory Financial Statements fairly present in all material respects in
accordance with Applicable Accounting Principles as defined in the Indenture)
the financial position of the subject insurance company and have been prepared
in accordance with Applicable Accounting Principles.

     IN WITNESS WHEREOF, the undersigned has executed this Officer's Financial
Certificate as of this _____ day of _____________, 20__.

                                        North Pointe Holdings Corporation

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

                                        28819 Franklin Road
                                        Southfield, MI 48034
                                        (248) 359-9945

                                       F-2

<PAGE>

            DEFINITIONS FOR QUARTERLY OFFICER'S FINANCIAL CERTIFICATE

<TABLE>
<CAPTION>
               ITEM                               DEFINITION/FORMULA
               ----                               ------------------
<S>                                  <C>
NAIC RISK BASED CAPITAL RATIO-P&C    Total Adjusted Capital/Authorized Control
                                     Level Risk-Based Capital

NAIC RISK BASED CAPITAL RATIO-LIFE   (Total Adjusted Capital-Asset Valuation
                                     Reserve)/Authorized Control Level
                                     Risk-Based Capital

TOTAL CAPITAL AND SURPLUS-LIFE       Common Capital Stock + Preferred Capital
                                     Stock + Aggregate Write-Ins for other than
                                     special surplus funds + Surplus Notes
                                     + Gross Paid-In and Contributed Surplus +
                                     Aggregate Write-Ins for Special Surplus
                                     Funds + Unassigned Funds (Surplus) -
                                     Treasury Stock

TOTAL CAPITAL AND SURPLUS-P&C        Aggregate Write-Ins for Special Surplus
                                     Funds + Common Capital Stock + Preferred
                                     Capital Stock + Aggregate Write Ins for
                                     other than special surplus funds + Surplus
                                     Notes +Gross Paid-In and Contributed
                                     Surplus + Unassigned Funds (Surplus) -
                                     Treasury Stock

TOTAL CLASS 1 & 2 RATED              (Total Class 1 + Total Class 2 Rated
INVESTMENTS TO TOTAL FIXED INCOME    Investments)/Total Fixed Income Investments
INVESTMENTS

TOTAL CLASS 1 & 2 RATED              (Total Class 1 + Total Class 2 Rated
INVESTMENTS TO TOTAL INVESTMENTS     Investments)/Total Investments

TOTAL ASSETS                         Total Assets

RETURN ON POLICYHOLDERS' SURPLUS     Net Income/Policyholders' Surplus

EXPENSE RATIO                        Other Underwriting Expenses Incurred/Net
                                     premiums Earned

LOSS AND LAE RATIO                   (Losses Incurred + Loss Expenses
                                     Incurred)/Net Premiums Earned

COMBINED RATIO                       Expense Ratio + Loss and LAE Ratio

NET PREMIUMS WRITTEN (ANNUALIZED)    Net Premiums Written/Policyholders' Surplus
TO POLICYHOLDERS' SURPLUS
</TABLE>

                                       F-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}]]