Exhibit 10.6


 


 


LOCK-UP AGREEMENT


 


October [•], 2013


 


Blue Capital Reinsurance Holdings Ltd.


 


Deutsche Bank Securities Inc.

Barclays Capital Inc.

UBS Securities LLC


 


As Representatives of the

      Several Underwriters


 


c/o Deutsche Bank Securities Inc.

60 Wall Street, 4th Floor

New York, New York 10005



Ladies and Gentlemen:


 


Montpelier Reinsurance
Ltd. (“Montpelier”) understands that Deutsche Bank Securities Inc. (“Deutsche Bank”), Barclays
Capital Inc. and UBS Securities LLC, as representatives (the “Representatives”) of the several underwriters
(the “Underwriters”), propose to enter into an Underwriting Agreement (the “Underwriting Agreement”)
with Blue Capital Reinsurance Holdings Ltd. (the “Company”), providing for the public offering by the Underwriters,
including the Representatives, of common shares, par value $1.00 per share (the “Common Shares”), of the Company
(the “Public Offering”).


 


To induce the Underwriters
that may participate in the Public Offering to continue their efforts in connection with the Public Offering, Montpelier agrees
that, without the prior written consent of Deutsche Bank, Montpelier will not, directly or indirectly, offer, sell, pledge, contract
to sell (including any short sale), grant any option to purchase or otherwise dispose of any Common Shares (including, without
limitation, Common Shares of the Company which may be deemed to be beneficially owned by Montpelier currently or hereafter in accordance
with the rules and regulations of the Securities and Exchange Commission (the “Commission”), Common Shares which
may be issued upon exercise of a stock option or warrant and any other security convertible into or exchangeable for Common Shares)
or enter into any Hedging Transaction (as defined below) relating to the Common Shares (each of the foregoing referred to as a
“Disposition”) during the period commencing on the date hereof and continuing until, and including, the date
that is 12 months after the date of the final prospectus relating to the Public Offering (the “Lock-Up Period”).
The foregoing restriction described in the immediately preceding sentence shall not apply to (A) Dispositions
of Common Shares to a controlled Affiliate of Montpelier or (B) Common Shares held on behalf of third parties or as part of Montpelier’s
Affiliates’ general investment portfolio, provided it shall be a condition to such Disposition or transfer that the
transferee execute an agreement stating that the transferee is receiving and holding the securities subject to the provisions of
this Lock-Up Agreement, and provided, further, that, during the period commencing on the date hereof and continuing until,
and including, the date that is 180 days after the date of the final prospectus relating to the Public Offering, such Disposition
or transfer does not trigger any filing or reporting requirement or obligation or result in any other voluntary or mandatory public
disclosure, including but not limited to Form 4 of Section 16 of the Securities Exchange Act of 1934, as amended. The foregoing
restrictions are expressly intended to preclude Montpelier from engaging in any Hedging Transaction or other transaction
which is designed to or reasonably expected to lead to or result in a Disposition during the Lock-Up Period even if the securities
would be disposed of by someone other than Montpelier. “Hedging Transaction” means any short sale (whether
or not against the box) or any purchase, sale or grant of any right (including, without limitation, any put or call option) with
respect to any security (other than a broad-based market basket or index) that includes, relates to or derives any significant
part of its value from the Common Shares. “Affiliate” means, as to Montpelier, any other person that, directly
or indirectly, controls, is controlled by, or is under common control with, Montpelier. For this purpose, “control”
(including, with its correlative meanings, “controlled by” and “under common control with”) shall mean
the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person, whether
through the ownership of securities or partnership or other interests, by contract or otherwise.


 






    	 



    	 



    

Montpelier agrees
that the Company may, and that Montpelier will, (i) with respect to any Common Shares or other Company securities for which the
undersigned is the record holder, cause the transfer agent for the Company to note stop transfer instructions with respect to such
securities on the transfer books and records of the Company and (ii) with respect to any Common Shares or other Company securities
for which Montpelier is the beneficial holder but not the record holder, cause the record holder of such securities to cause
the transfer agent for the Company to note stop transfer instructions with respect to such securities on the transfer books and
records of the Company.


 


Montpelier hereby agrees
that, to the extent that the terms of this Lock-Up Agreement conflict with or are in any way inconsistent with any registration
rights agreement, including the Shareholder and Registration Rights Agreement (as defined in the Underwriting Agreement), to which
Montpelier and the Company may be a party, this Lock-Up Agreement supersedes such registration rights agreement.


 


Montpelier hereby represents
and warrants that it has full power and authority to enter into this Lock-Up Agreement. Any obligations of Montpelier shall
be binding upon the successors and assigns of Montpelier.


 


Notwithstanding anything
herein to the contrary, if the closing of the Public Offering has not occurred prior to March 31, 2014, this agreement shall be
of no further force or effect.


 


	 	Montpelier Reinsurance Ltd.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


 


 


[Signature Page to
Montpelier Lock-Up Agreement]


 






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