1. Employment; Term. The Company shall employ the Executive, and the Executive shall accept employment by the Company, upon the terms and provisions, and subject to the conditions, of this Agreement. The term of the Executive’s employment hereunder shall commence on and as of the Effective Date (the “Employment Date”) on the terms and conditions as set forth herein and shall terminate on March 31, 2013, subject to extension in accordance with this Section 1 or early termination as provided in this Agreement (the “Employment Term”). At the expiration of the March 31, 2013 Employment Term, this Agreement may be renewed by mutual agreement of the Company and the Executive for such period or periods (each a “Renewal Term”) as the parties hereto may mutually agree in writing, upon the terms and conditions set forth herein or upon such other terms and conditions as the parties hereto may mutually agree. As used herein, the phrase “Term of this Agreement” or the “Employment Term” shall mean and include the initial three (3) year Employment Term and each applicable Renewal Term.

(a) Position. During the Term of this Agreement, the Company shall employ the Executive, and the Executive shall serve, as the President and Chief Executive Officer of one or more direct or indirect subsidiary corporations or divisions of the Company or related affiliates of the Company (collectively referred to herein as the “Gerova Insurance Group”) that are engaged in the insurance and/or reinsurance businesses (the “Business”). The Executive shall be responsible for overseeing and managing the Business, including exercising authority for the management of the day-to-day business operations and strategy of the Gerova Insurance Group, subject only to the ultimate direction and authority of the Chief Executive Officer and the Board of Directors of the Company (the “Board”). The Executive shall have such additional responsibilities or duties with respect to the Gerova Insurance Group, and its respective operations, as may be determined and assigned to the Executive by the Chief Executive Officer of the Company or by the Board, which responsibilities and duties shall generally be of a nature which may be assigned to the most senior executive of the Gerova Insurance Group. During the Term of this Agreement, the Executive also agrees to serve as a member of the Board of any member of the Gerova Insurance Group and/or of the Company without additional compensation. The Executive shall report directly to the Chief Executive Officer of the Company and to the Board of the Company.

(b) Duties; Other Organizations. During the Employment Term, the Executive agrees to devote substantially all of his business and professional time and efforts on behalf of the Company and its subsidiaries and shall competently, diligently and effectively discharge all of his duties hereunder. During the Employment Term, the Executive shall not be prohibited in any way from (i) serving as an officer or director of any entity or business enterprise which does not interfere with the Executive’s duties and responsibilities to the Company and its subsidiaries pursuant to this Agreement; provided, however, that, except for the Executive’s existing investment in Pink Sands Reinsurance, Ltd. (the “Permitted Investment”) any such entity or business enterprise does not engage in a business that directly or indirectly competes with the Business of the Company, or (ii) otherwise participating in such educational, welfare, social, religious, charitable, civic or other non-employment organizations or activities as do not interfere with the Executive’s duties and responsibilities to the Company and its subsidiaries hereunder and which do not violate any of provisions of this Agreement. The Executive further agrees to comply fully with all reasonable Company policies as are from time to time in effect during the Employment Term.

(c) Investments. Nothing in this Agreement shall prohibit the Executive from making any investments in the securities of any entity or business enterprise whatsoever; provided, however, that except for the Permitted Investment, during the Employment Term the Executive shall not make any investments (other than “passive investments” as defined below) in the securities of any entity or business enterprise which engages in a business that that directly or indirectly competes with the Business of the Company. An investment shall be considered a “passive investment” to the extent that such securities (i) are actively traded on a United States national securities exchange, on the FINRA OTC Bulletin Board, or on any foreign securities exchange, and (ii) represent, at the time such investment is made, less than five percent (5%) of the aggregate voting power of such entity or business enterprise.

(e) Office Support. During the Employment Term, the Company shall provide and pay for a personal assistant to the Executive of such caliber befitting a senior executive officer and as selected by the Executive. The Company shall be responsible to pay all salary, wages, compensation, and health insurance benefits for such personal assistant on a bi-weekly basis. In addition, the Company shall, during the Employment Term, provide at its sole cost and expense, all office support as shall be determined by the Executive consistent with this Section 2(e), together with an office suite, telephone, fax, computers, copy machine, office supplies, and office furnishings in accordance with the terms of Section 2(d) above.

(a) Base Salary. During the Employment Term, the Company shall pay to the Executive an annual salary of Four Hundred Thousand Dollars and no cents ($400,000.00) (the “Base Salary”). The Board, in its discretion, may increase (but not decrease) the Base Salary from time to time. The Base Salary shall be payable in equal bi-weekly installments during any year of the Employment Term in accordance with the Company’s normal payroll procedures; provided, however, that such payments shall be subject to withholding for applicable taxes and any other amounts generally withheld from compensation paid to salaried senior executives of the Company.

(b) Stock Options. The Executive shall be entitled to participate in any stock options or equity incentive plans for the benefit of executives and other employees of the Company pursuant to the terms of any such plan as may be approved by the Board, and upon such terms and conditions as may be established by the Board or the Compensation Committee of the Board. In such connection, the Company shall award to the Executive upon commencement of his Term of Employment stock options (the “Stock Options”) pursuant to the Company’s Stock Option Plan, dated as of March 15, 2010 (the “Plan”), entitling the Executive to purchase over the three (3) year initial Term of this Agreement, an aggregate of One Hundred and Twenty Thousand (120,000) ordinary shares of the Company (the “Option Shares”). Such Option Shares shall:

(ii) be exercisable at a price per share that shall be the greater of (A) 100% of the closing market price of the Company’s ordinary shares, as traded on the NYSE:Amex Exchange or other national securities exchange, or (B) 100% of the per share value of the shareholders’ equity of the Company (the “Per Share Book Value”); in either case, on the Effective Date of this Agreement;

(iii) provide that if the Executive shall terminate this Agreement for “Good Reason” (as such term is defined in Section 12(d) below) or shall be terminated by the Company for reasons other than “Cause” (as such term is defined in Section 12(c) below), such Stock Options granted by the Company to the Executive which have not vested or are not yet exercisable shall automatically vest and become immediately exercisable by the Executive and for a period of five (5) years following such date;

(iv) provide that if the Company shall terminate this Agreement for “Cause” (as such term is defined in Section 12(c) below), all Stock Options that have vested on the date notice of termination shall have been given shall be immediately cancelled and forfeit, and (B) all vested Stock Options must be exercised by the Executive within ninety (90) days following the date of such Termination Notice; failing which they shall be deemed to have expired and thereafter shall no longer be exercisable; and

(c) Performance Bonus. Following the end of each Anniversary Year during the Employment Term commencing with the Anniversary year ending March 31, 2011, the Executive shall be entitled to receive an Anniversary Year end bonus in such amount as shall be determined by the Board (the “Performance Bonus”), with a target of 100% of the Executive’s Base Salary. Such Performance Bonus shall be payable in cash; provided, however, that the Executive may choose in his sole discretion to have all or any portion of said Performance Bonus paid in the form of shares of stock of the Company, valued at a per share price equal to the closing market price of the Company’s ordinary shares as at the date of the Board’s award of the Performance Bonus.

(a) Certain Benefits. During the Employment Term, the Executive may (subject to applicable eligibility requirements) participate in such insurance and health and medical benefits as are generally made available to the other employees of the Company pursuant to such plans as are from time to time maintained by the Company; provided however that such health insurance plans shall provide coverage for the Executive, his spouse and his family.

(c) Other Benefits. During the Employment Term, the Executive shall be entitled to receive such other benefits as may be provided to executives or other employees of the Company, including but not limited to participation in the Company’s 401(k) plan, other retirement plans, long term incentive plans, disability plans, life insurance plans, dental and eye care plans, medical plans welfare plans, equity incentive plans and such other benefit plans as may be offered to executives or other employees.

(d) Indemnification. During the Employment Term, the Company shall indemnify the Executive and hold the Executive fully harmless from and against all claims, actions, suits, proceedings, liabilities, damages, fines, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) which may be incurred by the Executive in connection with the performance of his duties hereunder, to the fullest extent permitted by applicable law and to the extent no less than provided to any other senior executive officer of the Company and shall advance to the Executive upon request the full amount of any costs to be incurred or which have been incurred by the Executive in connection with defending himself in any such situation where the Company is reasonably likely to be liable for indemnification to the Executive hereunder.

(e) D&O Insurance. Commencing as of no later than the Effective Date, and thereafter during the balance of the Employment Term, the Company shall maintain in full force and effect (and pay all premiums which may be due in respect thereof) on behalf of the Executive directors and officers liability insurance coverage which shall provide not less than ten million dollars ($10,000,000) of coverage per occurrence and in the aggregate. The Executive shall be entitled to review the actual or proposed terms of any such insurance coverage at any time upon request.

5. Business Expenses. Upon receipt of proper substantiation, the Company shall promptly pay directly, or reimburse the Executive for all business expenses to the extent such expenses are paid or incurred by the Executive during the Employment Term in accordance with company policy then in effect from time to time, if any, and to the extent such expenses are reasonable and necessary to the conduct by the Executive of the performance of his duties in connection with the conduct of the Business.

(a) No Solicitation. During the Employment Term and the twelve (12) month period following the Employment Term (the “Restriction Period”), unless the employment of the Executive is terminated by the Company without Cause (defined below) or by the Executive for Good Reason (defined below), the Executive shall not solicit, entice, persuade, induce or cause any employee, officer, manager, director, consultant, agent or independent contractor of the Company to terminate his, her or its employment, consultancy or other engagement by the Company to become employed by or engaged by any individual, entity, corporation, partnership, association, or other organization (collectively, “Person”) other than the Company, or approach any such employee, officer, manager, director, consultant, agent or independent contractor for any of the foregoing purposes, or authorize or assist in the taking of any of such actions by any Person.

(the Persons referred to in items (i) and (ii) above, collectively, the “Prohibited Persons”) to enter into a business relationship with any other Person for the same or similar investments, services, activities or goods that any such Prohibited Person invested in, purchased from, was engaged in with or provided to, the Company or any of its subsidiaries or to reduce or terminate such Prohibited Person’s business relationship with the Company; and the Executive shall not, directly or indirectly, approach any such Prohibited Person for any such purpose, or authorize or assist in the taking of any of such actions by any Person.

7. Non-Competition. Except as otherwise provided in this Agreement, during the Employment Term and during the Restriction Period, unless the employment of the Executive is terminated by the Company without Cause (defined below) or by the Executive for Good Reason (defined below), the Executive shall not, anywhere within the United States of America, directly or indirectly, alone or in association with any other Person, directly or indirectly, (i) acquire, or own in any manner, any interest in any Person that engages in the Business or that engages in any business, activity or enterprise that competes with any aspect of the Business, or (ii) be interested in (whether as an owner, director, officer, partner, member, lender, shareholder, vendor, consultant, employee, advisor, agent, independent contractor or otherwise), or otherwise participate in the management or operation of, any Person that engages in any business, activity or enterprise that competes with any aspect of the Business.

8. Protection of Confidential Information. The Executive acknowledges that prior to the Employment Date the Executive has had access to, and during the course of the Executive’s employment hereunder will have access to, significant Confidential Information (defined below). During the Restriction Period, (i) the Executive shall maintain all Confidential Information in strict confidence and shall not disclose any Confidential Information to any other Person, except as necessary in connection with the performance of the Executive’s duties and obligations under this Agreement, and (ii) the Executive shall not use any Confidential Information for any purpose whatsoever except in connection with the performance of the Executive’s duties and obligations under this Agreement.

For purposes of this Agreement, “Confidential Information” shall mean any and all information pertaining to the Company and the Business, whether such information is in written form or communicated orally, visually or otherwise, that is proprietary, non-public or relates to any trade secret, including, but not limited to, (i) information, observations and data obtained by the Executive while employed by the Company concerning the Business, (ii) products or services, (iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) customers, suppliers, clients and customer, supplier and client lists, (xiii) other copyrightable works, (xiv) marketing plans and trade secrets, and (xv) all similar and related information in whatever form. Notwithstanding the foregoing, “Confidential Information” shall not include information that (i) is or becomes generally available to, or known by, the public through no fault of the Executive, (ii) was already known by or available to the Executive prior to its disclosure to him, or (iii) is independently acquired or developed by the Executive without violating any of his obligations under this Agreement.

9. Return of Property. All correspondence, reports, charts, products, records, designs, patents, plans, manuals, sales and marketing material, memorandum, advertising materials, customer lists, distributor lists, vendor lists, telephones, beepers, portable computers, and any other such data, information or property collected by or delivered to the Executive by or on behalf of the Company, their representatives, customers, suppliers or others and all other materials compiled by the Executive which pertain to the business of the Company shall be and shall remain the property of the Company and shall be delivered to the Company promptly upon its request at any time and without respect upon completion or other termination of the Executive’s employment hereunder for any reason.

(b) Fair and Reasonable. The parties acknowledge that (i) the type and periods of restriction imposed in the Selected Covenants are fair and reasonable and are reasonably required to protect and maintain the proprietary and other legitimate business interests of the Company, as well as the goodwill associated with the Business conducted by the Company, (ii) the Business conducted by the Company extends throughout the United States, and (iii) the time, scope, geographic area and other provisions of the Selected Covenants have been specifically negotiated by sophisticated commercial parties represented by experienced legal counsel.

(c) Illegality. In the event that any covenant contained in this Agreement, including, without limitation, any of the Selected Covenants shall be determined by any court of competent jurisdiction to be illegal, invalid or unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, (i) such covenant shall be interpreted to extend over the maximum period of time for which it may be legal, valid and enforceable, as applicable, and/or over the maximum geographical area as to which it may be legal, valid and enforceable, as applicable, and/or to the maximum extent in all other respects as to which it may be legal, valid and enforceable, as applicable, all as determined by such court making such determination, and (ii) in its reduced form, such covenant shall then be legal, valid and enforceable, as applicable, but such reduced form of covenant shall only apply with respect to the operation of such covenant in the particular jurisdiction in or for which such adjudication is made. It is the intention of the parties that such covenants shall be enforceable to the maximum extent permitted by applicable law.

11. Specific Performance. The Executive acknowledges that any breach or threatened breach of the covenants contained in the Selected Covenants may cause the Company material and irreparable damage, the exact amount of which will be difficult to ascertain and that the remedies at law for any such breach or threatened breach will be inadequate. Accordingly, the Executive agrees that the Company shall, in addition to all other available rights and remedies (including, but not limited to, seeking such damages as either of them can show it has sustained by reason of such breach), be entitled to specific performance and injunctive relief in respect of any breach or threatened breach of any of the Selected Covenants, without being required to post bond or other security and without having to prove the inadequacy of the available remedies at law or irreparable harm.

(a) Death. In the event of the death of the Executive during the Employment Term, the Executive’s employment hereunder shall automatically terminate as of the date of death; provided, however, that the Executive’s estate or legal representative, as the case may be, shall be entitled to receive, and the Company shall pay the Executive’s estate or legal representative, as the case may be, in accordance with its normal payroll procedures, (i) the Base Salary owing to the Executive hereunder through the date of death plus the Base Salary for an additional twelve (12) months; (ii) any accrued but unpaid Performance Bonus; and (iii) any business expenses which were properly reimbursable to the Executive pursuant to Section 5 hereof, through the date of death. The Executive shall be entitled to no further payment upon such termination.

(b) Permanent Disability. In the event of the Executive’s Permanent Disability (defined below), the Company may, in its sole discretion, upon written notice to the Executive, terminate the Executive’s employment hereunder upon written notice to the Executive; provided, however, that the Executive or the Executive’s legal representative, as the case may be, shall be entitled to receive, and the Company shall pay the Executive or the Executive’s legal representative, as the case may be, in accordance with its normal payroll procedures, (i) the Base Salary owing to the Executive hereunder through the date of termination plus the Base Salary for an additional twelve (12) months; (ii) any accrued but unpaid Performance Bonus; (iii) any business expenses which were properly reimbursable to the Executive pursuant to Section 5 hereof through the date of termination; and (iv) the health, medical insurance and other benefits which are provided to the Executive in Section 4 hereunder for a period of eighteen (18) months following such termination. Upon expiration of such eighteen (18) month period, upon the written request of the Executive, the Company shall continue such health, medical insurance and other benefits, provided that the Executive shall pay or reimburse the Company for any premiums or related costs thereof. The Executive shall be entitled to no further payment upon such termination.

For purposes of this Agreement, “Permanent Disability,” shall mean the inability of the Executive, as determined by the Board, by reason of physical or mental illness to perform the duties required of him under this Agreement for more than ninety (90) days in any one (1) year period. Successive periods of disability, illness or incapacity will be considered separate periods unless the later period of disability, illness or incapacity is due to the same or related cause and commences less than one hundred eighty (180) days from the end of the previous period of disability. If a determination of the Board under as to the Permanent Disability of the Executive is disputed by the Executive, the parties agree to abide by the decision of a panel of three physicians, one (1) to be selected by each of the Company and the Executive, such two (2) physicians to jointly select the third physician. The Executive agrees to make himself available for and submit to examinations by such physicians as may be directed by Company. Failure to submit to any examination shall constitute the Executive’s accord with the Board’s determination of his Permanent Disability.

(c) For Cause. The Company shall have the right to terminate the Executive’s employment under this Agreement at any time for Cause (defined below) upon written notice to the Executive. In the event the Executive’s employment hereunder is terminated by the Company for Cause, the Executive shall be entitled to receive, and the Company shall pay the Executive in accordance with its normal payroll procedures, (i) the Base Salary owing to the Executive hereunder through the date of termination, and (ii) any business expenses which were properly reimbursable to the Executive pursuant to Section 4 hereof through the date of termination. The Executive shall be entitled to no further payment upon such termination. The Executive acknowledges and agrees that each of the factors which comprise the definition of “Cause” constitutes, on an individual basis, adequate and sufficient grounds for termination of the Executive’s employment with the Company.

(i) Any breach by the Executive of any material covenant, condition or term contained in this Agreement, which breach has been committed either in bad faith or without reasonable belief by the Executive that the act or omission giving rise to such breach was in the best interests of the Company, and the Executive’s failure to cure such breach within sixty (60) days of the Executive’s receipt of written notice with respect thereto; or

(d) Good Reason. The Executive shall be entitled to terminate his employment with the Company for Good Reason (defined below) upon notice to the Company of his intent to so terminate within sixty (60) days after he has knowledge of the event giving rise to the notice and the Company fails to cure the condition specified in the Executive’s notice to the Company required to be provided by this Section 12(d) within thirty (30) days following such notice. If the Executive terminates his employment hereunder for Good Reason or if the Company terminates his employment without Cause, the Executive shall be entitled to receive, and the Company shall pay the Executive, in accordance with the Company’s normal payroll procedures, an aggregate amount equal to the sum of:

(i) the entire Base Salary payable to the Executive through the remaining Employment Term, plus an amount (payable in the same manner as his Base Salary) equal to 50% of such remaining Base Salary payable pursuant to this clause (i) (the “Severance Payment”); provided, however, that in no event shall the aggregate amount of the Severance Payment payable to the Executive pursuant to this Agreement, exceed $800,000;

(d) Voluntary. The Executive shall be entitled to voluntarily terminate his employment with the Company prior to the end of the Employment Term upon ninety (90) days prior written notice from the Executive to the Company. If the Executive voluntarily terminates his employment hereunder, the Executive shall be entitled to receive, and the Company shall pay the Executive in accordance with its normal payroll procedures, (i) the Base Salary owing to the Executive hereunder through the date of termination; and (ii) any business expenses which were properly reimbursable to the Executive pursuant to Section 4 hereof through the date of termination. The Executive shall be entitled to no further payment upon such termination and all Options not previously vested shall immediately terminate. If the Executive voluntarily terminates his employment hereunder, it shall not be deemed a breach of this Agreement by the Executive or a violation of the Executive’s duties or obligations hereunder.

(a) Notices. All notices, demands, consents, requests, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Agreement or in connection with the transactions contemplated hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested, four (4) business days after being mailed, (iii) if delivered by overnight courier (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service of recognized standing), or (iv) if delivered by facsimile transmission, on the business day of such delivery if sent by 5:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party’s facsimile machine). If any notice, demand, consent, request, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 13(a)), or the refusal to accept same, the notice, demand, consent, request, instruction or other communication shall be deemed received on the second business day the notice is sent (as evidenced by a sworn affidavit of the sender). All such notices, demands, consents, requests, instructions and other communications will be sent to the following post office and email addresses as applicable:

(c) Entire Agreement. This Agreement contains the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes all prior and/or contemporaneous understandings and agreements of any kind and nature (whether written or oral) among the parties with respect to such subject matter, all of which are merged herein.

(d) Waiver. Any waiver by a party hereto of any breach of or failure to comply with any provision or condition of this Agreement by any other party hereto shall not be construed as, or constitute, a continuing waiver of such provision or condition, or a waiver of any other breach of, or failure to comply with, any other provision or condition of this Agreement, any such waiver to be limited to the specific matter and instance for which it is given. No waiver of any such breach or failure or of any provision or condition of this Agreement shall be effective unless in a written instrument signed by the party granting the waiver and delivered to the other party hereto in the manner provided for hereunder in Section 13(a). No failure or delay by any party to enforce or exercise its rights hereunder shall be deemed a waiver hereof, nor shall any single or partial exercise of any such right or any abandonment or discontinuance of steps to enforce such rights, preclude any other or further exercise thereof or the exercise of any other right.

(b) Jurisdiction. Each of the parties unconditionally and irrevocably consents to the exclusive jurisdiction of the federal district court of the State of North Carolina that is located closest to Charolotte, North Carolina with respect to any suit, action or proceeding arising out of or relating to this Agreement, and each of the parties hereby unconditionally and irrevocably waives any objection to venue in any such court or to assert that any such court is an inconvenient forum, and agrees that service of any summons, complaint, notice or other process relating to such suit, action or other proceeding may be effected in the manner provided in Section 13(a) hereof. Each of the parties hereby unconditionally and irrevocably waives the right to a trial by jury in any such action, suit or other proceeding.

15. Binding Effect, No Assignment, etc. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, heirs, estate, successors and permitted assigns. Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto without the prior written consent of the other party, and any attempt to do so shall be void and of no force and effect, except (i) assignments and transfers by operation of law and (ii) that the Company may assign any or all of its respective rights, interests and obligations hereunder to any purchaser of a majority of the issued and outstanding capital stock of the Company or a substantial part of the assets of the Company.

17. Headings. The section headings contained in this Agreement are inserted for reference purposes only and shall not affect in any way the meaning, construction or interpretation of this Agreement. Any reference to the masculine, feminine, or neuter gender shall be a reference to such other gender as is appropriate. References to the singular shall include the plural and vice versa.

18. Counterparts. This Agreement may be executed in two (2) or more counterparts (including by facsimile signature, which shall constitute a legal and valid signature), and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same document. This Agreement shall become effective when one or more counterparts, taken together, shall have been executed and delivered by all of the parties.

	GEROVA FINANCIAL GROUP, LTD.

	By:	/s/ Marshall Manley
		Name: Marshall Manley
		Title: Chief Executive Officer

		/s/ Lou Hensley
	LOU E. HENSLEY