Underwriting Agreement (2006)Full Document 

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COMMON SHARESAGNICO-EAGLE MINES LIMITEDUNDERWRITING AGREEMENT

June 7, 2006

MERRILL LYNCH CANADA INC.
    on behalf of the
    several Underwriters named in
Schedule I hereto and the Sub-Underwriter named herein
c/o Merrill Lynch Canada Inc.
BCE Place
181 Bay Street
Toronto, ON
M5J 2V8

Ladies/Gentlemen:

        Agnico-Eagle Mines Limited, a corporation organized and existing under the laws of Ontario (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to the several underwriters named in Schedule I to this agreement (the "Underwriters") an aggregate of 8,455,000 of its common shares (the "Firm Shares"), and, for the sole purpose of covering over-allotments in connection with the sale of the Firm Shares, at the option of the Underwriters, up to an additional 1,268,250 of its common shares (the "Optional Shares"). The Firm Shares and any Optional Shares purchased by the Underwriters are referred to herein as the "Shares". Merrill Lynch Canada Inc. is acting as lead manager (the "Lead Manager") in connection with the offering and sale of the Shares contemplated herein (the "Offering").

        The Company has prepared and filed a preliminary short form base shelf prospectus dated October 27, 2004 (the "Preliminary Base Shelf Prospectus") and a final short form base shelf prospectus dated November 15, 2004 (the "Final Base Shelf Prospectus") in respect of up to US$500,000,000 of the Company's debt securities, common shares and warrants with the Ontario Securities Commission (the "Reviewing Authority") and the Canadian securities regulatory authorities (collectively, the "Qualifying Authorities") in each of Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Quebec, Prince Edward Island and Saskatchewan (the "Qualifying Provinces"); and the Reviewing Authority has issued an MRRS decision document under National Policy 43-201- Mutual Reliance Review System for Prospectuses and Annual Information Forms (an "MRRS Decision Document") on behalf of the Qualifying Authorities for each of the Preliminary Base Shelf Prospectus and the Final Base Shelf Prospectus. The term "Canadian Base Prospectus" means the Final Base Shelf Prospectus, including documents incorporated therein by reference, at the time the Reviewing Authority issued an MRRS Decision Document with respect thereto in accordance with the rules and procedures established under all applicable securities laws in each of the Qualifying Provinces and the respective regulations and rules under such laws together with applicable published policy statements and instruments of the securities regulatory authorities in the Qualifying Provinces ("Canadian Securities Laws"), including National Instrument 44-101 — Short Form Prospectus Distributions and National Instrument 44-102 — Shelf Distributions (together, the "Shelf Procedures"). The term "Canadian Preliminary Prospectus" means the prospectus supplement (the "Canadian Preliminary Prospectus Supplement") relating to the Offering, which excluded certain pricing information, filed with the Canadian Qualifying Authorities on June 5, 2006, together with the Canadian Base Prospectus, including all documents incorporated therein by reference. The term "Canadian Prospectus" means the prospectus supplement (the "Canadian Prospectus Supplement") relating to the Offering, which includes the pricing information omitted from the Canadian Preliminary Prospectus, to be dated the date hereof and filed with the Qualifying Authorities in accordance with the Shelf Procedures, together with the Canadian Base Prospectus, including all documents incorporated therein by reference.


        The Company filed with the Securities and Exchange Commission (the "Commission") a registration statement under the United States Securities Act of 1933, as amended (the "1933 Act") and the rules and regulations thereunder (the "1933 Act Regulations") on Form F-10 (Registration No. 333-120043) on October 28, 2004 as amended by Amendment No. 1 thereto on November 17, 2004, providing for the registration of up to US$500,000,000 of the Company's debt securities, common shares and warrants. Such registration statement, as amended on November 17, 2004, which includes the Canadian Base Prospectus (with such deletions therefrom and additions thereto as are permitted or required by Form F-10, the 1933 Act and the 1933 Act Regulations), each in the form previously delivered to you, including exhibits to such registration statement and all documents incorporated by reference in the prospectus contained therein, became effective pursuant to Rule 467(a) under the 1933 Act on November 17, 2004. Such registration statement at any given time, as amended to such time, including any exhibits and all documents incorporated therein by reference, and the documents otherwise deemed to be a part thereof or included therein by 1933 Act Regulations, is referred to herein as the "Registration Statement". The Registration Statement at the time it originally became effective is referred to herein as the "Original Registration Statement". In connection with the filing of the Registration Statement, the Company filed with the Commission as of October 28, 2004 an appointment of agent for service of process upon the Company on Form F-X under the 1933 Act (the "Form F-X"), which was amended by Amendment No. 1 thereto filed by the Company with the Commission on June 5, 2006 (the "Amended Form F-X"), The prospectus included in the Original Registration Statement is referred to herein as the "U.S. Base Prospectus". The preliminary prospectus supplement relating to the Shares filed with the Commission on June 5, 2006 pursuant to General Instruction II.L. of Form F-10 (the "U.S. Preliminary Prospectus Supplement") together with the U.S. Base Prospectus is hereafter referred to as the "U.S. Preliminary Prospectus". The prospectus supplement relating to the Shares, filed with the Commission on June 8, 2005 pursuant to General Instruction II.L. of Form F-10 (the "U.S. Prospectus Supplement") together with the U.S. Base Prospectus is hereafter referred to as the "U.S. Prospectus". The U.S. Preliminary Prospectus relating to the Shares, as amended or supplemented immediately prior to the Applicable Time (as defined below), is hereafter referred to as the "Pricing Prospectus". Any Issuer General Use Free Writing Prospectus (as defined below) issued at or prior to the Applicable Time; and the Pricing Prospectus, as supplemented by the information listed in Schedule H hereto, taken together, are hereafter referred to collectively as the "Pricing Disclosure Package". Any reference herein to any U.S. Preliminary Prospectus or the U.S. Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Form F-10 that were filed with the Reviewing Authority or the Commission on or before the date of such U.S. Preliminary Prospectus or U.S. Prospectus, as the case may be and the documents otherwise deemed to be a part thereof or included therein by 1933 Act Regulations; and any reference herein to any "amendment" or "supplement" to any U.S. Preliminary Prospectus or the U.S. Prospectus shall be deemed to refer to and include (i) the filing of any document with the Reviewing Authority or the Commission after the date of such U.S. Preliminary Prospectus or U.S. Prospectus, as the case may be, which is incorporated therein by reference or is otherwise deemed to be a part thereof or included therein by 1933 Act Regulations and (ii) any such document so filed.

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        The Company understands that a portion of the Shares to be purchased by Citigroup Global Markets Inc. may be offered and sold in the Qualifying Provinces by Citigroup Global Markets Canada Inc. (the "Sub-Underwriter"), the Canadian investment dealer affiliate of Citigroup Global Markets Inc. pursuant to the Canadian Prospectus. The Sub-Underwriter, subject to the terms and conditions set forth herein, agrees to use reasonable efforts to sell such Shares in the Qualifying Provinces. Any Shares sold by the Sub-Underwriter will be purchased by the Sub-Underwriter from Citigroup Global Markets Inc. at the applicable Closing Date at a price equal to the price set forth in Section 3(a) below or such purchase price less an amount to be mutually agreed upon by the Sub-Underwriter and Citigroup Global Markets Inc., which amount shall not be greater than the underwriting commission set forth in Section 4.

        All references in this Agreement to the Registration Statement, any U.S. Preliminary Prospectus or the U.S. Prospectus, or any amendments or supplements to any of the foregoing, shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System.

        In this agreement:

    (a)
    "Applicable Time" means 7:45 p.m. (Toronto time) on the date of this agreement or such other time as agreed to by the Company and the Lead Manager;

    (b)
    "Amended Form F-X" has the meaning ascribed thereto in the third paragraph of this agreement;

    (c)
    "Business Day" means a day which is not a Saturday, a Sunday or a statutory or civic holiday in the City of Toronto or The City of New York;

    (d)
    "Canadian Base Prospectus" has the meaning ascribed thereto in the second paragraph of this agreement;

    (e)
    "Canadian Preliminary Prospectus" has the meaning ascribed thereto in the second paragraph of this agreement;

    (f)
    "Canadian Preliminary Prospectus Supplement" has the meaning ascribed thereto in the second paragraph of this agreement;

    (g)
    "Canadian Preliminary Prospectus Supplement" has the meaning ascribed thereto in the second paragraph of this agreement;

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      (h)
      "Canadian Prospectus" has the meaning ascribed thereto in the second paragraph of this agreement;

      (i)
      "Canadian Prospectus Supplement" has the meaning ascribed thereto in the second paragraph of this agreement;

      (j)
      "Canadian Securities Laws" has the meaning ascribed thereto in the second paragraph of this agreement;

      (k)
      "CIA" has the meaning ascribed thereto in Paragraph 2(h) of this agreement;

      (l)
      "Closing" means the completion of the issue and sale by the Company of Shares and the purchase by the Underwriters of the Shares pursuant to this agreement;

      (m)
      "Closing Date" means June 13, 2006 or such later date as the Company and the Underwriters may agree upon in writing, provided that in no event shall the Closing Date be later than June 30, 2006 and in the event the Over-allotment Option is exercised, "Closing Date" shall mean each date on which the Underwriters have agreed to purchase the Optional Shares in accordance with the terms of this agreement;

      (n)
      "Closing Time" means 8:30 a.m. (Toronto time) on any Closing Date or such other time on the Closing Date as the Company and the Underwriters may agree;

      (o)
      "Commission" has the meaning ascribed thereto in the third paragraph of this agreement;

      (p)
      "Common Shares" means the common shares in the capital of the Company;

      (q)
      "Distribution" means "distribution" of the Shares or "distribution to the public" of the Shares as those terms are defined in applicable securities legislation;

      (r)
      "Exchanges" means the Toronto Stock Exchange (referred to herein as the "TSX") and the New York Stock Exchange (referred to herein as the "NYSE");

      (s)
      "Final Base Shelf Prospectus" has the meaning ascribed thereto in the second paragraph of this agreement;

      (t)
      "Final Filing Time" has the meaning ascribed thereto in Section 1(a) of this agreement;

      (u)
      "Financial Information" means (1) the consolidated comparative financial statements of the Company for (i) the year ended December 31, 2005, the notes thereto and the auditors' report thereon, (ii) the three months ended March 31, 2006 and the notes thereto, (2) the Company's Management Discussion and Analysis of Financial Conditions and Results of Operations (i) for the year ended December 31, 2005 and (ii) for the three months ended March 31, 2006, (3) any other financial statements, incorporated or deemed to be incorporated by reference in the Canadian Prospectus, U.S. Prospectus or the Pricing Disclosure Package and any financial data derived from the foregoing;

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        (v)
        "Firm Shares" has the meaning ascribed thereto in the first paragraph of this agreement;

        (w)
        "Form 20-F" means the Annual Report of the Company for the year ended December 31, 2005 on Form 20-F pursuant to the 1934 Act, as amended by the Company's Annual Report on Form 20-F/A filed with the Commission and the Qualifying Authorities on May 26, 2006 (including the documents incorporated by reference therein);

        (x)
        Form F-X" has the meaning ascribed thereto in the third paragraph of this agreement.

        (y)
        "Indemnified Party" means a person or company who has the benefit of the indemnity provisions of Section 7 of this agreement;

        (z)
        "Indemnifying Party" means a party to this agreement which is under an obligation to indemnify an Indemnified Party under the indemnity provisions of Section 7 of this agreement;

        (aa)
        "Issuer Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433 of the 1933 Act Regulations ("Rule 433"), relating to the Shares that (i) is required to be filed with the Commission by the Company, (ii) is a "road show that is a written communication" within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company's records pursuant to Rule 433(g);

        (bb)
        "Issuer General Use Free Writing Prospectus" means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors which is specified in Schedule K hereto;

        (cc)
        "Issuer Limited Use Free Writing Prospectus" means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus;

        (dd)
        "Lead Manager" means Merrill Lynch Canada Inc.;

        (ee)
        "MRRS Decision Document" has the meaning ascribed thereto in the second paragraph of this agreement;

        (ff)
        "Material Adverse Effect" has the meaning ascribed thereto in paragraph 2(l) of this agreement;

        (gg)
        "misrepresentation", "material fact" and "material change" have the respective meanings ascribed thereto in the Securities Act (Ontario);

        (hh)
        "Noon Buying Rate" has the meaning ascribed thereto in the paragraph 3(a) of this agreement;

        (ii)
        "Offering" has the meaning ascribed thereto in the first paragraph of this agreement;

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          (jj)
          "Optional Shares" has the meaning ascribed thereto in the first paragraph of this agreement;

          (kk)
          "Over-allotment Option" has the meaning ascribed thereto in paragraph 3(a) of this agreement;

          (ll)
          "Permitted Free Writing Prospectus" has the meaning ascribed thereto in paragraph 3(e) of this agreement;

          (mm)
          "Preliminary Base Shelf Prospectus" has the meaning ascribed thereto in the second paragraph of this agreement;

          (nn)
          "Pricing Disclosure Package" has the meaning ascribed thereto in the third paragraph of this agreement;

          (oo)
          "Pricing Prospectus" has the meaning ascribed thereto in the third paragraph of this agreement;

          (pp)
          "Qualifying Authorities" has the meaning ascribed thereto in the second paragraph of this agreement;

          (qq)
          "Qualifying Provinces" has the meaning ascribed thereto in the second paragraph of this agreement;

          (rr)
          "Registration Statement" has the meaning ascribed thereto in the third paragraph of this agreement;

          (ss)
          "Reviewing Authority" means the Ontario Securities Commission;

          (tt)
          "Shares" has the meaning ascribed thereto in the first paragraph of this agreement;

          (uu)
          "Shelf Procedures" has the meaning ascribed thereto in the second paragraph of this agreement;

          (vv)
          "Sub-Underwriter" means Citigroup Global Markets Canada Inc.

          (ww)
          "Subsidiaries" means the subsidiaries of the Company within the meaning ascribed thereto under the Business Corporations Act (Ontario);

          (xx)
          "Supplementary Material" means collectively any amendment to the Canadian Prospectus or Registration Statement, any amended or supplemented prospectus or auxiliary material, information, evidence, return, report, application, statement or document that may be filed by or on behalf of the Company under Canadian Securities Laws, the 1933 Act or the 1934 Act prior to the Closing Time or, where such documents are deemed to be incorporated by reference into the Canadian Prospectus, Registration Statement or U.S. Prospectus, prior to the expiry of the period of distribution of the Shares;

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            (yy)
            "this agreement" or "the agreement" means the agreement resulting from the acceptance by the Company of the offer made by the Underwriters by this letter;

            (zz)
            "U.S. Base Prospectus" has the meaning ascribed thereto in the third paragraph of this agreement;

            (aaa)
            "U.S. Preliminary Prospectus" has the meaning ascribed thereto in the third paragraph of this agreement;

            (bbb)
            "U.S. Preliminary Prospectus Supplement" has the meaning ascribed thereto in the third paragraph of this agreement;

            (ccc)
            "U.S. Prospectus" has the meaning ascribed hereto in the third paragraph of this agreement;

            (ddd)
            "U.S. Prospectus Supplement" has the meaning ascribed thereto in the third paragraph of this agreement;

            (eee)
            "Underwriters" means the several underwriters named in Schedule I to this agreement;

            (fff)
            "United States" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;

            (ggg)
            "1933 Act" has the meaning ascribed in the second paragraph of this agreement;

            (hhh)
            "1933 Act Regulations" has the meaning ascribed thereto in the second paragraph of this agreement; and

            (iii)
            "1934 Act" means the United States Securities Exchange Act of 1934, as amended.

          The following schedules are attached to and form part of this agreement:

            Schedule A — List of Subsidiaries
            Schedule B — Form of Opinion of Canadian Counsel
            Schedule C — Form of Opinion of Quebec Counsel
            Schedule D — Form of Opinion of Finnish Counsel
            Schedule E — Form of Opinion of Swedish Counsel
            Schedule F — Form of Opinion of U.S. Counsel
            Schedule G — Form of Opinion of Special U.S. Counsel
            Schedule H — Pricing Terms
            Schedule I — Underwriters Purchase Obligations
            Schedule J — Form of Lock-Up Agreement
            Schedule K — Issuer General Use Free Writing Prospectus

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          TERMS AND CONDITIONS

                  SECTION 1. Covenants of the Company. The Company covenants with each Underwriter as follows:

            (a)
            Filing of Canadian Prospectus Supplement and U.S. Prospectus Supplement.    The Company will, as soon as possible and in any event no later than 5:00 p.m. (Toronto time) on June 8, 2006 (the "Final Filing Time"), prepare and file (1) with each Qualifying Authority, the Canadian Prospectus Supplement (in the English and French languages, as applicable), and (2) with the Commission, the U.S. Prospectus Supplement; provided that the Company will use commercially reasonable efforts to file the Canadian Prospectus Supplement (in the English and French languages) with each Qualifying Authority before 9:30 a.m. on June 8, 2006.

            (b)
            Compliance with Securities Regulations and Commission Requests.    During the period of the distribution of the Shares, the Company will notify the Underwriters promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall have been filed with the Commission or shall have become effective, and when any supplement to the U.S. Base Prospectus or the Canadian Base Prospectus or any amended U.S. Prospectus, amended Canadian Prospectus or any Supplementary Material shall have been filed, (ii) of any request by any Qualifying Authority to amend or supplement the Canadian Preliminary Prospectus or the Canadian Prospectus, or for additional information, or of any request by the Commission to amend the Registration Statement or to amend or supplement the U.S. Prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any of the U.S. Base Prospectus, Canadian Base Prospectus, the U.S. Prospectus, or the Canadian Prospectus, or of the suspension of the qualification of the Shares or for offering or sale in any jurisdiction, or of the institution or, to the knowledge of the Company, threatening of any proceedings for any such purpose, and (iv) of the issuance by any Qualifying Authority or either Exchange of any order having the effect of ceasing or suspending the distribution of the Shares or the trading in the Common Shares, or of the institution or, to the knowledge of the Company, threatening of any proceedings for any such purpose. The Company will use every reasonable effort to prevent the issuance of any such stop order or of any order preventing or suspending such use or such order ceasing or suspending the distribution of the Shares or the trading in the Common Shares and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

            (c)
            Filing of Amendments.    The Company will not at any time file or make any amendment or supplement to the Registration Statement, the U.S. Prospectus or the Canadian Prospectus, any Supplementary Material or Issuer Free Writing Prospectus, of which the Underwriters shall not have previously been advised and furnished a copy or to which the Underwriters shall have objected promptly after reasonable notice thereof.

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