EMPLOYMENT AGREEMENT

                              EMPLOYMENT AGREEMENT


         THIS AGREEMENT dated and effective as of April 29, 2005 (the "Effective
Date"), between James River Group, Inc., a Delaware corporation ("Company") and
Michael T. Oakes ("Executive").


                                   WITNESSETH:

         WHEREAS, the Board of Directors of the Company desires to continue to
employ the Executive as Chief Financial Officer, and the Executive has agreed to
continue to be so employed; and

         WHEREAS, the parties desire to set forth herein the terms of such
continued employment;

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows.

         1. EMPLOYMENT AND TERM. The Company hereby employs Executive as Chief
Financial Officer, and Executive hereby accepts such employment on the terms
hereinafter set forth. The term of this Agreement shall commence as of the
Effective Date and shall continue until the third anniversary of the Effective
Date. The term of this Agreement shall thereafter be automatically be renewed
for additional three (3) year periods unless written notice to the contrary
shall be given by either party to the other not less than one hundred eighty
(180) days prior to the end of the initial or any renewal term that the term
shall not thereafter be renewed. The initial term plus any renewals thereof
shall hereafter be referred to as the "Term".

         2. COMPENSATION. Executive shall be paid a base salary of not less than
Two Hundred Eighty-three Thousand dollars ($283,000) per year, payable in
periodic installments in accordance with the Company's regular payroll
practices. Executive shall be eligible to receive such discretionary bonuses as
the Board of Directors of the Company ("Board"), in its discretion, may
determine. Within one hundred eighty (180) days after the close of each fiscal
year of the Company during the Term, the Board shall review Executive's
performance during such fiscal year and decide whether to increase Executive's
base salary and award any discretionary bonus to Executive. Executive shall also
be entitled during the Term to participate in all retirement, disability,
pension, savings, health, medical, dental, insurance and other fringe benefits
or plans of the Company generally available to executive employees including
specifically the following at the Company's expense:

                           (a) six (6) weeks of paid vacation per annum (not
         subject to rollover);

                           (b) coverage under the Company's current health care
         insurance plans in effect from time to time, including coverage for
         Executive's dependents, 





         on the same terms and conditions, including any required payment of
         premiums or other costs by Executive, as are applicable to other
         executive employees; and,

                           (c) coverage under the Company's group term life and
         accidental death and dismemberment and long term disability coverage,
         all on the same terms and conditions, including any required payment of
         premiums or other costs by Executive, as are applicable to other
         executive employees.

         3. DUTIES. Executive shall perform all duties normally associated with
the position of Chief Financial Officer, and such other reasonable duties as may
be assigned to him by the Chief Executive Officer or the Board. Executive will
devote his full business time and effort to discharge his duties.

         4.  PRIVILEGED INFORMATION.

         (a) Executive will not at any time during the Term or thereafter:

                             (i) reveal, divulge or make known to any person,
firm or corporation or use for his personal benefit or the benefit of others
(except the Company), directly or indirectly, any confidential or proprietary
information received or developed by him during the course of his employment.
For the purposes of this Section 4(a)(i) confidential and proprietary
information ("Privileged Information") shall be defined to mean (1) all
historical and pro forma projections of loss ratios incurred by the Company and
any of its direct or indirect subsidiaries (hereinafter referred to as
"Affiliates"), (2) all historical and pro forma actuarial data relating to the
Company and any of the Affiliates, (3) historical and pro forma financial
results, revenue statements, and projections for the Company and its Affiliates,
(4) all information relating to the Company's or the Affiliates' systems and
software (other than the portion thereof provided by the vendor to all
purchasers of such systems and software), (5) all information relating to the
Company's unique underwriting approach, (6) all information relating to plans
for acquisitions of any business entities or blocks of business, (7) non-public
business plans, and (8) all other information relating to the financial,
business or other affairs of the Company and its Affiliates, including their
customers. Section 4(a)(i) shall not apply to Executive following the
termination of his employment with the Company or its Affiliates with respect to
any Privileged Information known or made generally available to the general
public or within the industry.

                             (ii) reveal, divulge or make known to any person,
firm or corporation, or use for his personal benefit or the benefit of others
(except the Company), directly or indirectly, the name or names of any customers
of the Company or any of its Affiliates, nor will he reveal, divulge or make
known to any person, firm or corporation, or use for his personal benefit or the
benefit of others (except the Company), directly or indirectly, any trade
secrets or any knowledge or information, or any fact concerning any business
methods or operational procedures engaged in by the Company or its Affiliates
(collectively, "Privileged Information"); provided, however, the restrictions
set forth in this Section 4(a)(ii) shall not apply to Executive following the
termination of his employment with the Company or its Affiliates with respect to
any Privileged


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Information known or made generally available to the general public or within
the industry.

         5.  NON-COMPETITION.

                  (a) Executive acknowledges and agrees that (i) the Company has
spent substantial money, time and effort in developing customer goodwill and
relationships for the benefit of the Company, (ii) as the Company's Chief
Financial Officer, Executive has knowledge of the Company's most Confidential
and Privileged Information, and has been and will be compensated for the
development, and supervising the development, of the same, and (iii) Executive
has unique insight into and knowledge of the skills, talents and capabilities of
the Company's key employees. Executive also acknowledges and agrees that
execution of this Agreement provides changes in the terms and conditions of his
employment favorable to Executive that constitute sufficient consideration for
Executive's agreement to the noncompetition restrictions set forth in this
Section.

                  (b) Executive agrees that during his employment by the
Company, and for the restricted period ("Restricted Period") after his
employment with the Company ceases, he will not:

                           (i) compete against the Company by engaging in, or by
assisting any other person or entity to engage in, or by having an ownership
interest in, any Competitive Business in the Territory (as defined below);

                           (ii) compete against the Company by soliciting any
Customer (as defined below) of the Company or its Affiliates to provide any
goods or services in competition against the Company or its Affiliates;

                           (iii) induce or persuade any Customer of the Company
or its Affiliates not to do business with, or to switch business from, the
Company or its Affiliates;

                           (iv) solicit, or assist others in soliciting, Key
Employees (as defined below) to either leave the Company or to engage in a
Competitive Business.

                  (c) For purposes of this Agreement, the following capitalized
terms shall have the meanings set forth below:

                           (i) "Restricted Period" shall mean one (1) year,
unless a court with jurisdiction determines that such period is overbroad or
unenforceable in which case it shall mean either nine (9) months, six (6)
months, or three (3) months, whichever period is the maximum enforceable
Restricted Period.

                           (ii) "Competitive Business" shall mean the business
of acquiring, holding and/or operating insurance companies that offer excess and
surplus line or workers' compensation insurance, and any other material business
that the Company or any of its Affiliates is engaged in as of the date of this
Agreement and as the business of 


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the Company and its Affiliates evolves during its Term; provided, however, that
if a court with jurisdiction determines that such definition is overbroad or
unenforceable, it shall be further limited to the business of the Company and
its Affiliates regarding which Executive had Confidential or Privileged
Information during the last year of the Term, and if this narrowed definition is
still deemed by such court to be overbroad or unenforceable, it shall be further
limited to business of the Company under Executive's management and control
during the last year of the Term;

                           (iii) "Territory" shall mean each and every state or
other United States jurisdiction ("State(s)") where Company is licensed or
approved to underwrite or offer insurance at the end of the Term and/or is then
in the process of seeking to be so licensed or approved; provided, however, that
if a court with jurisdiction determines that su