Exhibit
10.63


Execution Version


AIRCRAFT TIME SHARING AGREEMENT


          THIS
TIME SHARING AGREEMENT (this “Agreement”) is entered
into on February 22, 2011, by X.L. America, Inc., a Delaware corporation,
(“XL”) and Michael S. McGavick, a U.S. citizen and resident of Bermuda
(“Lessee”).


BACKGROUND


A. Wilmington Trust Company (“WTC”) is the registered owner of
undivided interests in a Raytheon Hawker 800XP aircraft, bearing Manufacturer’s
Serial Number 258452 and the United States Federal Aviation Administration
(“FAA”) Registration Number N852QS (the “Hawker Aircraft”) and a Gulfstream
IV-SP aircraft, bearing Manufacturer’s Serial Number 1392 and the FAA
Registration Number N492QS (the “Gulfstream Aircraft”).


B. XL entered into a Trust Agreement, dated March 20, 2001, as
supplemented, with WTC, pursuant to which WTC entered into the following
agreements (collectively, “Operative Agreements”) not in its individual
capacity but solely as owner trustee on XL’s behalf, which enables XL to
conduct operations under Federal Aviation Regulations (“FAR”) Part 91, Subpart
K in accordance with such agreements: 


          1 A
Fractional Ownership Program Management Services Agreement, dated March 8,
2006, (the “Hawker Management Agreement”) and subsequently amended, with
NetJets International, Inc. (“NetJets”) under which, inter alia, NetJets
manages the Hawker Aircraft and provides a fully qualified crew to XL in
accordance with FAR Part 91, Subpart K; 


          2. A Master
Dry-Lease Aircraft Exchange Agreement, dated March 8, 2006, (the “Hawker
Exchange Agreement”) with NetJets under which NetJets administers a dry-lease
aircraft exchange program pursuant to which XL may use other aircraft managed
by NetJets under FAR Part 91, Subpart K and other participants may use the
Hawker Aircraft; 


          3. A
Management Agreement, dated March 22, 2001, (the “Gulfstream Management
Agreement”) with NetJets (f/k/a Executive Jet International, Inc.), under
which, pursuant to a Letter Agreement on Aircraft Substitution dated September
15, 2003, and a Renewal Amendment dated March 8, 2006, NetJets agrees to manage
the Gulfstream Aircraft, and pursuant to which NetJets in fact manages the
Gulfstream Aircraft in accordance with FAR Part 91, Subpart K; and


          4. A Master
Interchange Agreement, dated March 22, 2001, (the “Gulfstream Interchange
Agreement”) with NetJets pursuant to which XL participates in an





interchange arrangement in which XL may operate other aircraft managed
by NetJets and other participants may use the Gulfstream Aircraft. 


C. FAR
Section 91.501(b)(10) authorizes fractional program operations under Subpart K,
including time sharing agreements permitted by Section 91.501(b)(6).


D. From
time to time, XL, as operator, may desire to lease the Hawker Aircraft, the
Gulfstream Aircraft, or another aircraft available to XL under the Hawker
Exchange Agreement or the Gulfstream Interchange Agreement (collectively, the
“Aircraft” and, individually, an “Aircraft”) and provide fully qualified crews
for Lessee’s personal travel at XL’s discretion on a time sharing basis as
defined in FAR Section 91.501(c)(1) and in accordance with Section
91.501(b)(6), (b)(10), and (d).


NOW,
THEREFORE, the parties agree as follows:


1. Subject to the terms and conditions of this Agreement, XL agrees to
lease the Aircraft to Lessee for Lessee’s use at Lessee’s discretion (subject
to the limitations in Section 11) pursuant to the provisions of FAR Section
91.501(b)(6), (b)(10), (c)(1) and (d) and to provide a fully qualified flight
crew, pursuant to either the Hawker Management Agreement or the Gulfstream
Management Agreement, for all operations for flights scheduled in accordance
with the terms of this Agreement during the period commencing on the date of
this Agreement and terminating on the earlier of (a) the termination of this
Agreement by consent of XL and Lessee, (b) the date of Lessee’s termination of
employment with XL’s parent company XL Group plc, and (c) the date of Lessee’s
death. XL shall have the right to add or substitute aircraft of similar type,
quality, and equipment, and to remove aircraft from the fleet, from time to
time, during the term of this Agreement. XL shall notify Lessee of any
addition, substitution, or removal of aircraft from its fleet of aircraft
subject to this Agreement. In the case of any such addition, substitution, or
removal of aircraft, references herein to the term “Aircraft” shall include any
such added or substituted aircraft and shall cease to include removed aircraft,
and references to any or all of the “Operative Agreements” shall include the
corresponding agreements with respect to such added or substituted aircraft and
shall cease to include such agreements with respect to removed aircraft.


2. Lessee shall pay XL for each flight conducted under this Agreement
the greater of the following two amounts:


	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the amount of incremental costs as determined by XL that otherwise
 would be required to be reported as a perquisite with respect to such flight
 on the Form 10-K or proxy statement, as the case may be, of XL’s parent
 company, XL Group plc, pursuant to federal securities laws, including without
 limitation Item 402 of Regulation S-K as promulgated by the U.S. Securities
 Exchange Commission, as it may be amended from time to time, and

 


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 (b)

 	
 the amount that must otherwise be reported for federal income tax
 purposes as a taxable fringe benefit with respect to the flight based on
 Standard Industry Fare Level (“SIFL”) rates pursuant to Treasury Regulation
 Section 1.61-21(g).

 


Notwithstanding the foregoing, Lessee’s payment to XL for any flight
shall not exceed the actual expenses of that specific flight as authorized by
FAR Section 91.501(d) as in effect from time to time. On the date of this
Agreement these expenses include and are limited to:


	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 fuel, oil, lubricants and other additives;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 travel expenses of the crew, including food, lodging and ground
 transportation;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 hangar and tie down costs away from the Aircraft’s base of operation;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 insurance obtained for the specific flight;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 landing fees, airport taxes and similar assessments;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 customs, foreign permit and similar fees directly related to the
 flight;

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 in-flight food and beverages;

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 passenger ground transportation;

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 flight planning and weather contract services;

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 an additional charge equal to one hundred percent (100%) of the
 expenses listed in clause (a) above.

 


3. XL will pay all expenses related to the operation of each Aircraft
when incurred and will provide monthly invoices to Lessee for the amount
provided in Section 2 above. Lessee shall pay XL the amount provided in
Section 2 above within thirty (30) days after receipt of the related invoice.


4. In the event that Lessee desires to use the Aircraft pursuant to
this Agreement, Lessee will so notify XL no later than 14 hours before proposed
flight departure, and will provide XL with requests for flight time and
proposed flight schedules as far as possible in advance of any given flight. Requests
for flight time shall be in a form, whether oral or written, mutually
convenient to and agreed upon by XL and Lessee. 


5. XL shall have sole and exclusive authority over the scheduling of
the Aircraft, including which Aircraft is used for any particular flight. 


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6. XL shall provide to Lessee, pursuant to either the Hawker Management
Agreement or the Gulfstream Management Agreement, a fully qualified flight crew
for each flight undertaken under this Agreement. In accordance with applicable
FARs, the fully qualified crew will exercise all of its duties and
responsibilities with respect to the safety of each flight conducted under this
Agreement. Lessee agrees that the pilot-in-command shall have the final and
complete authority, in his/her sole discretion, to terminate any flight, refuse
to commence any flight, or take other action, for any reason or condition,
that, in the considered judgment of the pilot-in-command, is necessitated by
considerations of safety; provided, however, that XL shall have and exercise
exclusive operational control of the Aircraft during all phases of all flights
performed under this Agreement, including, without limitation, all flights
during which Lessee, and/or his or her guests or designees, are on-board the
Aircraft. Without limiting the generality of Section 6, no such action of the
pilot-in-command shall create or support any liability for loss, injury,
damage, or delay to Lessee or any other person.


7. The XL and Lessee agree that XL shall not be liable to Lessee or any
other person for loss, injury, or damage occasioned by the delay or failure to
furnish the Aircraft with crew pursuant to this Agreement for any reason.


8. Consistent with XL’s operational control responsibilities set forth
in Section 6, XL shall be solely responsible for causing NetJets to secure
maintenance, preventive maintenance and required or otherwise necessary
inspections on the Aircraft, and shall take such requirements into account in
scheduling the Aircraft. 


9. XL shall be solely responsible for causing NetJets to maintain in
full force and effect throughout the term of this Agreement aircraft liability
insurance in respect of the Aircraft in an amount consistent with the terms of
the Operative Agreements. XL shall cause NetJets to have Lessee named as an
additional insured on such liability policy. The liability insurance policies
on which Lessee is named an additional insured shall provide that as to Lessee
coverage shall not be invalidated or adversely affected by any action or
inaction, omission or misrepresentation by XL or any other person. The risk of
loss during the period when any Aircraft is operated on behalf of Lessee under
this Agreement shall remain with XL, and XL will retain all rights and benefits
with respect to the proceeds payable under policies of hull insurance
maintained by or for XL that may be payable as a result of any incident or
occurrence while an Aircraft is being operated on behalf of Lessee under this
Agreement. Any hull insurance maintained by XL or NetJets on any Aircraft used
by Lessee under this Agreement shall include a waiver of any rights of
subrogation of the insurers against Lessee.


10. A copy of this Agreement shall be delivered to and held by NetJets
and made available for review upon request of the FAA.


11. Lessee represents, warrants and covenants to XL that:


	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 He will use each Aircraft pursuant to this Agreement for and on his
 own account only; only his spouse and immediate family members may 

 


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 accompany him pursuant to this Agreement on flights on the Aircraft;
 and he will not use any Aircraft for the purposes of providing transportation
 of passengers or cargo in air commerce for compensation or hire;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 He shall refrain from incurring any mechanics or other lien in
 connection with inspection, preventative maintenance, maintenance or storage
 of the Aircraft, whether permissible or impermissible under this Agreement,
 and he shall not attempt to convey, mortgage, assign, lease or any way
 alienate the Aircraft or create any kind of lien or security interest
 involving the Aircraft or do anything or take any action that might mature
 into such a lien; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 During the term of this Agreement, he will abide by and conform to
 all such laws, governmental, and airport orders, rules and regulations as
 shall from time to time be in effect relating in any way to the operation and
 use of the Aircraft by a time-sharing lessee.

 


12. Neither this Agreement nor any party’s interest in this Agreement
shall be assignable to any other person or entity.


13. This Agreement shall be governed by and construed in accordance
with the laws of New York (excluding the conflicts of law rules thereof).


14. This Agreement constitutes the entire understanding between XL and
Lessee with respect to its subject matter, and there are no representations,
warranties, conditions, covenants, or agreements other than as set forth
expressly herein. Any changes or modifications to this Agreement must be in
writing and signed by authorized representatives of both parties. This
Agreement may be executed in counterparts, which shall, singly or in the
aggregate, constitute a fully executed and binding Agreement. 


15. Any notice, request, or other communication to any party by the
other party under this Agreement shall be conveyed in writing and shall be
deemed given on the earlier of the date (i) notice is personally delivered with
receipt acknowledged, (ii) a facsimile or other electronic notice is
transmitted, or (iii) three (3) days after notice is mailed by certified mail,
return receipt requested, postage paid, and addressed to the party at the
address set forth below. The address of a party to which notices or copies of
notice are to be given may be changed from time to time by such party by
written notice to the other party.


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 XL:

 
	
  

 	
 X.L. America, Inc.

 
	
  

 	
  

 
	
  

 	
 c/o Richard
 G. McCarty

 
	
  

 	
 Seaview
 House

 
	
  

 	
 70 Seaview
 Avenue

 
	
  

 	
 Stamford, CT
 06902

 
	
  

 	
  

 
	
  

 	
 Lessee:

 
	
  

 	
 Michael S.
 McGavick

 
	
  

 	
  

 
	
  

 	
 XL Group plc

 
	
  

 	
 XL House

 
	
  

 	
 One
 Bermudiana Road

 
	
  

 	
 Hamilton HM
 08 Bermuda

 


16. If any one or more of the provisions of the Agreement shall be held
invalid, illegal, or unenforceable, the remaining provisions of this Agreement
shall be unimpaired, and the invalid, illegal, or unenforceable provision shall
be replaced by a mutually acceptable provision, which, being valid, legal and
enforceable, comes closest to the intention of the parties underlying the
invalid, illegal, or unenforceable provision. To the extent permitted by
applicable law, the parties hereby waive any provision of law, which renders any
provision of this Agreement prohibited or unenforceable in any respect.


17. Neither XL (nor its affiliates) makes, has made or shall be deemed
to make or have made, and XL (for itself and its affiliates) hereby disclaims,
any warranty or representation, either express or implied, written or oral,
with respect to any Aircraft to be used hereunder or any engine or component
thereof including, without limitation, any warranty as to design, compliance
with specifications, quality of materials or workmanship, merchantability,
fitness or any purpose, use of operation, airworthiness, safety, patent,
trademark or copyright infringement or title.


18. Truth in
leasing statement under FAR Section 91.23 reproduced in large print as required
by regulation:


	
  

 	
  

 	
  

 
	
  

 	
  (a)

 	
 XL HEREBY CERTIFIES THAT, BASED
 UPON THE REPRESENTATIONS OF NETJETS, EACH AIRCRAFT HAS BEEN INSPECTED AND
 MAINTAINED WITHIN THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE OF THIS
 AGREEMENT, EXCEPT TO THE EXTENT THE AIRCRAFT IS LESS THAN TWELVE (12) MONTHS OLD,
 IN ACCORDANCE WITH THE PROVISIONS OF FAR SECTION 91.409(F)(3) AND PART 135,
 AND THE AIRCRAFT ARE IN 

 


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 COMPLIANCE WITH ALL APPLICABLE
 REQUIREMENTS FOR THE MAINTENANCE AND INSPECTION THEREUNDER AND WILL CONTINUE
 TO BE MAINTAINED AND INSPECTED UNDER FAR SECTION 91.409(F)(3) AND PART 135
 FOR OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.

 
	
  

 	
  

 	
  

 
	
  

 	
  (b)

 	
 EACH PARTY CERTIFIES THAT IT UNDERSTANDS
 ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION
 REGULATIONS. FURTHER, THE UNDERSIGNED REPRESENTATIVE OF X.L. AMERICA, INC.,
 RICHARD G. MCCARTY, AS GENERAL COUNSEL OF X.L. AMERICA, INC., CERTIFIES THAT
 X.L. AMERICA, INC. IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT FOR
 OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT. 

 
	
  

 	
  

 	
  

 
	
  

 	
  (c)

 	
 EACH PARTY UNDERSTANDS THAT AN
 EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FARS CAN
 BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL
 AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT OFFICE. EACH PARTY AGREES TO
 UNDERSTAND AND ABIDE BY THESE REGULATIONS.

 


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          IN
WITNESS WHEREOF, XL’s authorized representative and
Lessee have affixed their signatures below on the day and year first above
written.


	
  

 	
  

 	
  

 
	
  

 	
 XL:

 	
  

 
	
  

 	
 X.L. AMERICA, INC. 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Richard G. McCarty

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	

 


 	
  

 
	
  

 	
 By: Richard
 G. McCarty

 	
  

 
	
  

 	
 Title:
 Senior Vice President, General 

 	
  

 
	
  

 	
           Counsel
 and Secretary

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 LESSEE:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Michael
 S. McGavick 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	

 


 	
  

 
	
  

 	
 Michael S.
 McGavick

 	
  

 


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