EXECUTIVE EMPLOYMENT AGREEMENT

1.

Term of Employment. The period of employment of Employee by the Company under this Agreement (the Employment Period) shall be deemed to have commenced on the Effective Date and shall terminate on February 7, 2011. The Employment Period may be sooner terminated in accordance with Section 7 of this Agreement.

2.

Duties. During his employment by the Company, the Employee shall perform such duties as shall from time to time be delegated or assigned to him by the Company. Employee agrees to serve the Company in the position of President and Chief Executive Officer and to perform diligently and to the best of his abilities the duties and services pertaining to such office. Employee’s employment shall also be subject to the policies maintained and established by the Company, if any, as the same may be amended from time to time. Unless otherwise agreed by the Company and Employee, Employee’s principal place of business with the Company shall be in Bermuda. Employee acknowledges and agrees that Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of the Company and to do no act that would injure the business, interests, or reputation of the Company or any of its Affiliates. In keeping with these duties, Employee shall make full disclosure to the Board of Directors of all business opportunities pertaining to the business of the Company or its Affiliates and should not appropriate for Employee’s own benefit business opportunities that fall within the scope of the businesses conducted by the Company and its Affiliates.

3.

Compensation.

(a)

Base Salary. The Company shall pay to Employee an initial base salary of $1,000,000 per annum (the "Base Salary"), less all applicable legal deductions and/or withholding. The Base Salary shall be payable in accordance with the Company’s policies in effect from time to time, but in any event no less frequently than monthly. The Base Salary shall be reviewed annually by the Compensation Committee of the Board of Directors ("the Committee") for possible increase (but not decrease); the Board of Directors may, in its sole discretion, choose to increase the Base Salary during the Term of this Agreement. If the Base Salary is increased by the Company, such Base Salary then constitutes the Base Salary for all purposes of this Agreement. Such Base Salary shall be deemed effective as of June 1, 2007 and the Employee shall be paid in a lump sum the difference between the Base Salary paid to the Employee by Argonaut between June 1, 2007 and the date hereof and the Base Salary that would have been payable hereunder.

(b)

Incentive Bonus. In addition to the Base Salary, during the Term of this Agreement, Employee may, in the sole discretion of the Board of Directors, be awarded an incentive bonus based upon the achievement of specific Company objectives as determined by the Company and the Employee and set forth in a separate written bonus plan (the "Bonus Plan").

(c)

Equity Compensation. The Employee shall be entitled to participate in the equity compensation plans established from time to time by the Company on a basis no less favorable than any other senior officers of the Company.

(d)

Housing Allowance. During the Employment Period and while he is a Bermuda resident, the Employee shall be paid a housing allowance of US $30,000 per month.

(e)

Home Leave Allowance. During the Employment Period and while he is a Bermuda resident, the Employee shall be paid a home leave allowance of US$3,333 per month.

(f)

Relocation Allowance. Upon execution of this Agreement, the Employee shall be paid, in a lump sum, a relocation allowance of US$1,500,000; provided, that, Employee shall promptly refund such relocation allowance to the Company if the Employee terminates his employment with the Company without Good Reason prior to the first anniversary of the date hereof.

(g)

Additional Payment. Upon execution of this Agreement, the Employee shall be paid, in a lump sum, an additional payment of US$1,400,000; provided, that, if the Employee terminates his employment with the Company without Good Reason and in the absence of the occurrence of a Change of Control prior to the fourth anniversary of the date hereof, the Employee shall promptly refund to the Company an amount equal to US$1,400,000 multiplied by a fraction, the numerator of which shall be the days of the Employment Period

that elapsed before such termination and the denominator of which shall be the days of the Employment Period that would have elapsed had the Employment Period continued through the fourth anniversary of the date hereof.

(h)

As additional compensation for the Employee, the Company shall provide or maintain the medical and health insurance benefits on the same terms and conditions as are made available to all employees of the Company generally.

4.

Vacation. Employee shall be entitled to a reasonable vacation(s) during each year of his employment under this Agreement.

5.

Reimbursement For Expenses; Working Space. The Company shall reimburse the Employee within 30 days of the submission of appropriate documentation, and in no event later than the last day of the calendar year following the year in which an expense was incurred, for all reasonable and necessary travel expenses and other disbursements incurred by him for or on behalf of the Company in the course and scope of his employment under this Agreement. The Company shall furnish Employee with offices, supplies, equipment and such other facilities and services as are suitable for performance of Employee’s duties hereunder at the Company’s offices in Bermuda or provide an allowance sufficient to allow Employee to obtain same.

6.

Remedies for Breach. In addition to the rights and remedies provided in Section 7, and without waiving the same if Employee breaches, or threatens to breach, any of the provisions of Sections 9 or 10, the Company shall have the following rights and remedies, in addition to any others, each of which shall be independent of the other and severally enforceable:

(a)

The right and remedy to have such provisions specifically enforced by any court having equity jurisdiction. Employee specifically acknowledges and agrees that any breach or threatened breach of the provisions of Sections 9 or 10 hereof will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. Such injunction shall be available without the posting of any bond or other security. If the Employee is determined to have breached any provision of Sections 9 or 10 the court or arbitrators shall extend the effect of the non-competition provisions for an amount of time equal to the time the Employee was in breach thereof.

(b)

The right to require Employee to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits (hereinafter collectively the "Benefits") derived or received by the Employee as a result of any transactions constituting a breach of any of the provisions of Sections 9 or 10.

(c)

Upon discovery by the Company of a breach or threatened breach of Sections 9 or 10, the right to immediately suspend payments to Employee under Section 3 or 8(b) pending a resolution of the dispute.

(d)

The right to terminate Employee’s employment pursuant to Section 7.

7.

Termination of Agreement.

(a)

Death. This Agreement shall automatically terminate upon the death of Employee.

(b)

Disability. If, as a result of Employee’s incapacity due to physical or mental illness, Employee shall have been substantially unable, either with or without reasonable accommodation, to perform his duties hereunder for an entire period of six (6) consecutive months, and within thirty (30) days after written Notice of Termination is given after such six (6) month period, Employee shall not have returned to the substantial performance of his duties on a full-time basis, the Company shall have the right to terminate Employee’s employment hereunder for Disability, and such termination in and of itself shall not be, nor shall it be deemed to be, a breach of this Agreement. Any dispute between the Employee and the Company regarding whether Employee has a Disability shall be determined in writing by a qualified independent physician mutually acceptable to the Employee and the Company. If the Employee and the Company cannot agree as to a qualified independent physician, each shall appoint a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and Employee shall be final and conclusive for all purposes of the Agreement. Employee acknowledges and agrees that a request by the Company for such a determination shall not be considered as evidence that the Company regarded the Employee as having a Disability.

(c)

Termination By Company For Cause. The Company may terminate this Agreement upon written notice to Employee at any time for "Cause" in accordance with the procedures provided below; provided, however , that the Company may instead give the Employee a written notice that it has elected to place the Employee on "garden leave" for a period of up to one year and that this Agreement will terminate on the date immediately following the end of such garden leave period. If the Company elects to place the Employee on garden leave, the Company may during the period immediately preceding such termination date in its absolute discretion direct the Employee (i) to perform only such of his duties as the Company may direct; and/or, (ii) to refrain from contacting any customers, clients, advertisers, suppliers, agents, professional advisors, brokers or employees of the Company or any of its Affiliates (as defined in Section 12(b)(iii)); and/or, (iii) not to enter all or any premises of the Company or any of its Affiliates and/or; (iv) to immediately resign without claim for compensation from office as director of the Company and any of its Affiliates and from any other office held by him in the Company or any of its Affiliates.

(i)

During any period when the provisions of this Section 7(c) are invoked, the Employee’s salary and other contractual benefits and compensation (including the vesting and exercisability of any equity awards) will continue to be paid or provided by the Company and the Employee will continue to comply without exception with all the Employee’s obligations under this Agreement. Notwithstanding anything herein to the contrary, the Company’s invocation of the provisions of this Section 7(c) shall not

constitute Good Reason and the Company shall not be obligated to make any new awards under the Company’s Bonus Plan or equity compensation plans (other than awards, if any, due prior to the date that the Employee ceases to perform substantial duties for the Company pursuant to this Section 7(c)) during any period when the Employee is performing no substantial duties for the Company pursuant to this Section 7(c).

(d)

For purposes of this Agreement, "Cause" shall mean:

(i)

the material breach of any provision of this Agreement by Employee which has not been cured within five business (5) days after the Company provides notice of the breach to Employee; provided, however, if the act or omission that is the subject of such notice is substantially similar to an act or omission with respect to which Employee has previously received notice and an opportunity to cure, then no additional notice is required and this Agreement may be terminated immediately upon the Company’s election and written notice to Employee);

(ii)

the entry of a plea of guilty or judgment entered after trial finding Employee guilty of a crime punishable by imprisonment in excess of one year involving moral turpitude (meaning a crime that includes the commission of an act of gross dishonesty or bad morals);

(iii)

willfully engaging by Employee in conduct that the Employee knows or reasonably should know is detrimental to the reputation, character or standing or otherwise injurious to the Company or any of its shareholders, direct or indirect subsidiaries and Affiliates, monetarily or otherwise;

(iv)

without limiting the generality of Section 7(c)(i), the breach or threatened breach of any of the provisions of Sections 9, 10 or 11; or

(v)

a ruling in any state or federal court or by an arbitration panel that the Employee has breached the provisions of a non-compete or non-disclosure agreement, or any similar agreement or understanding which would in any way limit, as determined by the Board of Directors of the Company, the Employee’s ability to perform under this Agreement now or in the future.

(e)

Termination By Company Without Cause. The Company may terminate this Agreement at any time, and for any reason, by providing at least thirty (30) days written notice to Employee.

(f)

Termination By Employee With Good Reason. Employee may terminate his employment with good reason anytime after Employee has actual knowledge of the occurrence, without the written consent of Employee, of one of the following events (each event being referred to herein as "Good Reason"):

(i)

(A) any change in the duties or responsibilities (including reporting responsibilities) of Employee that is inconsistent in any adverse respect

with Employee’s position(s), duties, responsibilities or status with the Company immediately prior to such change (including any diminution of such duties or responsibilities) or (B) an adverse change in Employee’s titles or offices (including, membership on the Board of Directors) with the Company;

(ii)

a reduction in Employee’s Base Salary or Bonus opportunity;

(iii)

the relocation of the Company’s principal executive offices from Bermuda;

(iv)

the failure of the Company to continue in effect any material employee benefit plan, compensation plan, welfare benefit plan or fringe benefit plan in which Employee is participating immediately prior to the date of this Agreement or the taking of any action by the Company which would adversely affect Employee’s participation in or reduce Employee’s benefits under any such plan, unless Employee is permitted to participate in other plans providing Employee with substantially equivalent benefits;

(v)

any refusal by the Company to continue to permit Employee to engage in activities not directly related to the business of the Company which Employee was permitted to engage in prior to the date of this Agreement;

(vi)

the Company’s failure to provide in all material respects the indemnification set forth in the Company’s Articles of Incorporation, By-Laws, or any other written agreement between Employee and Company;

(vii)

a Change in Control of the Company;

(viii)

the failure of the Company to obtain the assumption agreement from any successor giving rise to a Change of Control as contemplated in Section 12 (a);

(ix)

any other breach of a material provision of this Agreement by the Company.

For purposes of clauses (iii) through (vi) and (ix) above, an isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by Employee shall not constitute Good Reason. Employee’s right to terminate employment with Good Reason shall not be affected by Employee’s incapacity due to mental or physical illness and Employee’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting cause.

8.

Effect of Termination. Upon the termination of this Agreement, no rights of Employee which shall have accrued prior to the date of such termination, including the right to

receive any bonus Fully-Earned through the date of such termination, shall be affected in any way.

(a)

Upon Death of Employee.

During the Term, if Employee’s employment is terminated due to his death, Employee’s estate shall be entitled to receive the Base Salary set forth in Section 3 accrued through the date of death and any bonus Fully-Earned (as herein defined) through the date of such termination; provided, however, Employee’s estate shall not be entitled to any other benefits (except as provided by law or separate agreement). "Fully-Earned" shall mean that for purposes of determining whether the Employee shall be entitled to a bonus, that such Employee shall be treated as if he had been employed through the last date of the