Document:

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                                                                    EXHIBIT 10.2

               INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT,

                           DATED AS OF MARCH 28, 2000,

                                 BY AND BETWEEN

                                CABOT CORPORATION

                                       AND

                       CABOT MICROELECTRONICS CORPORATION
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                                                                    Exhibit 10.2

                                TABLE OF CONTENTS

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1. DEFINITIONS                                                                                             2

2. THE INITIAL PUBLIC OFFERING AND THE DISTRIBUTION                                                        9
            2.1. THE INITIAL PUBLIC OFFERING                                                               9
            2.2. THE DISTRIBUTION                                                                          9
            2.3. CERTAIN STOCKHOLDER MATTERS                                                               9
            2.4. PRIOR RELATIONSHIP                                                                       10
            2.5. FURTHER ASSURANCES REGARDING THE DISTRIBUTION                                            10
            2.6. ABANDONMENT OF THE DISTRIBUTION                                                          11

3. EXPENSES 11
            3.1. GENERAL                                                                                  11
            3.2. CERTAIN EXPENSES RELATING TO THE INITIAL PUBLIC OFFERING AND THE SEPARATION              11
            3.3. CERTAIN EXPENSES RELATING TO THE DISTRIBUTION                                            11

4. CERTAIN COVENANTS                                                                                      12
            4.1. FINANCIAL AND OTHER INFORMATION                                                          12
            4.2. OTHER COVENANTS                                                                          19
            4.3. COVENANTS REGARDING THE INCURRENCE OF INDEBTEDNESS                                       21

5. INDEMNIFICATION                                                                                        22
            5.1. INDEMNIFICATION BY CMC                                                                   22
            5.2. INDEMNIFICATION BY CABOT                                                                 23
            5.3. OTHER LIABILITIES                                                                        24
            5.4. TAX EFFECTS OF INDEMNIFICATION                                                           24
            5.5. EFFECT OF INSURANCE UPON INDEMNIFICATION                                                 25
            5.6. PROCEDURE FOR INDEMNIFICATION INVOLVING THIRD-PARTY CLAIMS                               25
            5.7. PROCEDURE FOR INDEMNIFICATION NOT INVOLVING THIRD-PARTY CLAIMS                           27
            5.8. EXCLUSIVE REMEDIES                                                                       27

6. MISCELLANEOUS                                                                                          28
            6.1. DISPUTE RESOLUTION                                                                       28
            6.2. SURVIVAL                                                                                 28
            6.3. COMPLETE AGREEMENT                                                                       28
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<S>                                                                                                <C>
            6.4. AUTHORITY                                                                                28
            6.5. GOVERNING LAW                                                                            28
            6.6. CONSENT TO EXCLUSIVE JURISDICTION                                                        29
            6.7. NOTICES                                                                                  29
            6.8. AMENDMENT AND MODIFICATION                                                               30
            6.9. BINDING EFFECT; ASSIGNMENT                                                               30
            6.10. THIRD PARTY BENEFICIARIES                                                               31
            6.11. COUNTERPARTS                                                                            31
            6.12. WAIVER                                                                                  31
            6.13. SEVERABILITY                                                                            31
            6.14. REMEDIES                                                                                32
            6.15. PERFORMANCE                                                                             32
            6.16. REFERENCES; CONSTRUCTION                                                                32

EXHIBITS

Agreements Subject to Section 4.2(e)                                                                Exhibit A
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               INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT

                  This INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT (the
"Agreement") is made and entered into as of March 28, 2000, by and between Cabot
Corporation, a Delaware corporation ("Cabot"), and Cabot Microelectronics
Corporation, a Delaware corporation and a wholly owned subsidiary of Cabot
("CMC"). Certain capitalized terms used herein are defined in Section 1 of this
Agreement.

                                    RECITALS

                  WHEREAS, the Board of Directors of Cabot has determined that
it would be in the best interests of Cabot and its stockholders to completely
separate the MMD Business from Cabot;

                  WHEREAS, Cabot has caused CMC to be incorporated in order to
effect such separation;

                  WHEREAS, Cabot and CMC have previously entered into the Master
Separation Agreement and the Ancillary Agreements (other than this Agreement),
each effective as of March 28, 2000, pursuant to which Cabot has contributed and
transferred to CMC, and CMC has received and assumed, the assets and liabilities
then associated with the MMD Business as described therein;

                  WHEREAS, Cabot and CMC intend that the Contribution qualify
either as a tax-free reorganization under Section 368(a)(1)(D) of the Code or as
a tax-free transfer of assets under Section 351 of the Code;

                  WHEREAS, Cabot currently owns all of the issued and
outstanding CMC Common Stock;

                  WHEREAS, CMC has previously filed the IPO Registration
Statement with the SEC but it has not yet become effective;

                  WHEREAS, the parties currently contemplate that, reasonably
promptly following the execution of this Agreement, CMC shall consummate the
Initial Public Offering;

                  WHEREAS, immediately following the consummation of the Initial
Public Offering, Cabot shall own approximately 82.6%of the outstanding shares of
CMC Common Stock (or approximately 80.5% if the underwriters exercise their
over-allotment option in full in accordance with the Underwriting Agreement);

                  WHEREAS, Cabot currently intends to divest itself of its
entire ownership of CMC within twelve months following the closing of the
Initial Public Offering by

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distributing in the Distribution all of its shares of CMC Common Stock to the
holders of Cabot Common Stock;

                  WHEREAS, Cabot currently expects to accomplish the
Distribution by means of a spin-off;

                  WHEREAS, Cabot and CMC intend that the Distribution will be
tax-free to Cabot and its stockholders under Section 355 of the Code;

                  WHEREAS, the parties intend in this Agreement to set forth the
principal arrangements between them regarding the Initial Public Offering and
the Distribution; and

                  WHEREAS, the parties hereto have determined that in order to
accomplish the objectives of the Initial Public Offering and the Distribution
and to facilitate the consummation thereof, it is necessary and desirable to
restructure certain intercompany relationships, allocate certain liabilities and
provide for certain indemnification, all as set forth herein;

                  NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:

1.       DEFINITIONS.

                  "Abandonment Notice" has the meaning set forth in Section 2.6.

                  "Active Trade or Business" means the active conduct of the
trade or business (as defined in Section 355(b)(2) of the Code and the
regulations thereunder) conducted by CMC immediately prior to the applicable
Distribution Date.

                  "Affiliate" means a CMC Affiliate or a Cabot Affiliate, as the
case may be.

                  "Agreement" has the meaning set forth in the Preamble.

                  "Ancillary Agreements" has the meaning ascribed to such term
in the Master Separation Agreement.

                  "Annual Financial Statements" has the meaning set forth in
Section 4.1(a)(vi).

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                  "Below the Threshold Action" has the meaning set forth in
Section 4.2(c).

                  "Business" means the CMC Business or the Cabot Business, as
the case may be.

                  "Business Day" means any day other than a Saturday, a Sunday,
or a day on which banking institutions located in the State of Illinois are
authorized or obligated by law or executive order to close.

                  "Cabot Affiliate" means a Person that, after giving effect to
the Distribution, directly or indirectly through one or more intermediaries, is
Controlled by Cabot.

                  "Cabot Annual Statements" has the meaning set forth in Section
4.1(b)(ii).

                  "Cabot Business" means any business or operations of Cabot or
any Cabot Affiliates other than the CMC Business.

                  "Cabot Common Stock" means the Common Stock, par value $1.00
per share, of Cabot.

                  "Cabot Disclosure Portions" means all material set forth in,
or incorporated by reference into, either the IPO Registration Statement or the
Distribution Registration Statement, as applicable, to the extent relating
exclusively to (i) Cabot and the Cabot Affiliates (excluding CMC and the CMC
Affiliates), (ii) the Cabot Business, (iii) Cabot's intentions with respect to
the Distribution or (iv) the terms of the Distribution, including, without
limitation, the form, structure and terms of any transaction(s) and/or
offering(s) to effect the Distribution and the timing of and conditions to the
consummation of the Distribution.

                  "Cabot Public Filings" has the meaning set forth in Section
4.1(a)(xiii).

                  "Cabot Transfer Agent" means Boston EquiServe, L.P., in its
capacity as the transfer agent and registrar for the Cabot Common Stock.

                  "Cabot's Auditors" has the meaning set forth in Section
4.1(c)(ii).

                  "Claim" has the meaning set forth in Section 5.7.

                  "CMC Affiliate" means a Person that, after giving effect to
the Distribution, directly or indirectly through one or more intermediaries, is
Controlled by, or is under common Control with CMC.

                  "CMC Business" means any business or operations of CMC or any
CMC Affiliates, including, in all cases, any predecessor entities (including,
without limitation,

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the MMD Business).

                  "CMC Capital Stock" means all classes or series of capital
stock of CMC.

                  "CMC Common Stock" means the Common Stock, par value $.001 per
share, of CMC.

                  "CMC Indebtedness" has the meaning set forth in Section 4.3.

                  "CMC Public Filings" has the meaning set forth in Section
4.1(a)(ix).

                  "CMC Transfer Agent" means Boston EquiServe, L.P., in its
capacity as the transfer agent and registrar for the CMC Common Stock.

                  "CMC's Auditors" has the meaning set forth in Section
4.1(b)(i).

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time, together with the rules and regulations promulgated
thereunder.

                  "Contribution" means the transfer of certain assets by Cabot
to CMC (and the assumption by CMC of certain liabilities) as contemplated by the
Master Separation Agreement.

                  "Control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

                  "D Reorganization" means a transaction qualifying as a
reorganization under Section 368(a)(1)(D) of the Code.

                  "Disputes" has the meaning set forth in Section 7.1.

                  "Dispute Notice" means written notice of any dispute between
Cabot and CMC arising out of or relating to this Agreement, which shall set
forth, in reasonable detail, the nature of the dispute.

                  "Distribution" means the distribution of CMC Common Stock by
Cabot in one or more transactions occurring after the Initial Public Offering
that collectively have the effect that all shares of CMC Common Stock held by
Cabot are distributed to Cabot stockholders, whenever such transaction(s) shall
occur.

                  "Distribution Date" means any date or dates, as the case may
be, determined by Cabot, in its sole and absolute discretion, to be a date on
which shares of CMC Common Stock held by Cabot are distributed in connection
with the Distribution.

                  "Distribution Registration Statement" means any and all
registration

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statements, information statements or other documents filed by any party with
the SEC in connection with any transaction constituting part of the
Distribution, in each case as supplemented or amended from time to time.

                  "Employee Benefit Plan Issuance" shall have the meaning set
forth in Section 4.2(d).

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, together with the rules and regulations promulgated
thereunder.

                  "GAAP" means generally accepted accounting principles,
consistently applied.

                  "Indemnifying Party" means a Person that is obligated to
provide indemnification under this Agreement.

                  "Indemnitee" means a Person that is entitled to seek
indemnification under this Agreement.

                  "Indemnity Payment" means an amount that an Indemnifying Party
is required to pay to an Indemnitee under this Agreement.

                  "Initial Public Offering" means the initial public offering by
CMC of shares of CMC Common Stock as contemplated by the IPO Registration
Statement.

                  "Insurance Proceeds" means the payment received by an insured
from an insurance carrier or paid by an insurance carrier on behalf of the
insured, net of any applicable premium adjustment and tax effect.

                  "IPO Registration Statement" means the Registration Statement
on Form S-1, Registration No. 333-95093, of CMC, as supplemented and amended
from time to time.

                  "IRS" means Internal Revenue Service of the U.S. Department of
Treasury or any successor agency.

                  "Losses" means all losses, liabilities, claims, obligations,
demands, judgments, damages, dues, penalties, assessments, fines (civil or
criminal), costs, liens, expenses, forfeitures, settlements, or fees, reasonable
attorneys' fees and court costs, of any nature or kind, whether or not the same
would properly be reflected on a balance sheet, and "Loss" means any of these.

                  "Master Separation Agreement" means the Master Separation
Agreement by and between Cabot and CMC, dated as of March 28, 2000, as amended
from time to time.

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                  "MMD Business" has the meaning ascribed to such term in the
Master Separation Agreement.

                  "Notice" means any notice, request, claim, demand, or other
communication under this Agreement.

                  "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

                  "Pre-Distribution Period" means the period of time from the
date hereof until the completion of the Distribution.

                  "Quarterly Financial Statements" has the meaning set forth in
Section 4.1(a)(v).

                  "Regulation S-K" means Regulation S-K of the General Rules and
Regulations promulgated by the SEC.

                  "Regulation S-X" means Regulation S-X of the General Rules and
Regulations promulgated by the SEC.

                  "Representative" means, with respect to any Person, any of
such Person's directors, officers, employees, agents, consultants, advisors,
accountants or attorneys.

                  "Request" has the meaning set forth in Section 5.7.

                  "Rights Plan" means the Agreement by and between CMC and
BankBoston N.A., as Rights Agent, as amended from time to time.

                  "SEC" means the United States Securities and Exchange
Commission or any successor agency.

                  "Section 4.2(d) Per Share Fair Market Value" means, as of any
date of determination, (i) with respect to any share of CMC Common Stock or any
other share of CMC Capital Stock quoted on the Nasdaq National Market or any
other stock exchange or inter-dealer or other quotation system, the average of
the closing prices of CMC Common Stock or such other CMC Capital stock on the
Nasdaq National Market or such other stock exchange or inter-dealer or other
quotation system during the sixty (60) trading days immediately preceding such
date of determination (it being understood and agreed that if any class of CMC
Common Stock or CMC Capital Stock is traded and/or quoted on more than one stock
exchange or inter-dealer or other quotation system, the calculation to be made
pursuant to this clause (i) shall be based upon the closing prices of such class
of CMC Common Stock or CMC Capital Stock on the stock exchange or inter-

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dealer or other quotation system which had the greatest average daily trading
volume in shares of such class during the relevant sixty (60) trading day
period), and (ii) with respect to any share of CMC Capital Stock that is not
publicly traded, the per share fair market value as determined by a nationally
recognized investment banking firm mutually agreed by CMC and Cabot in their
reasonable discretion.

                  "Securities Act" means the Securities Act of 1933, as amended
from time to time, together with the rules and regulations promulgated
thereunder.

                  "Separate Counsel" has the meaning set forth in Section
5.6(b).

                  "Service Agent" means (i) for Cabot, The Corporation Trust
Company, with offices on the date hereof at 1209 Orange Street, Wilmington,
County of New Castle, Delaware 19801; and (ii) for CMC, The Corporation Trust
Company, with offices on the date hereof at 1209 Orange Street, Wilmington,
County of New Castle, Delaware 19801.

                  "Subsequent Tax Opinion/Ruling" means either (i) an opinion of
counsel selected by Cabot, in its sole and absolute discretion, confirming, in
form and substance reasonably satisfactory to Cabot, that, as a consequence of
the consummation of a subsequent transaction, no income, gain or loss for U.S.
federal income tax purposes will be recognized by Cabot, the stockholders or
former stockholders of Cabot, or any Cabot Affiliate with respect to the
Distribution, or (ii) an IRS private letter ruling to the same effect.

                  "Subsidiary" means with respect to any specified Person, any
corporation or other legal entity of which such Person or any of its
Subsidiaries Controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote with respect to the election of
members to the board of directors or similar governing body; provided, however,
that for the purposes of this Agreement, neither CMC nor any of the Subsidiaries
of CMC shall be deemed to be Subsidiaries of Cabot or of any of the Subsidiaries
of Cabot.

                  "Tax" or "Taxes" has the meaning set forth in the Tax Sharing
Agreement.

                  "Tax Control" means, with respect to CMC, ownership of CMC
Capital Stock which constitutes at least 80% of both (i) the total combined
voting power of all outstanding shares of Voting Stock of CMC and (ii) each
class and series of CMC Capital Stock other than Voting Stock of CMC.

                  "Tax Counsel" means the law firm of Fried, Frank, Harris,
Shriver & Jacobson.

                  "Tax-Free Status of the Distribution" means the nonrecognition
of taxable gain or loss for U.S. federal income tax purposes to Cabot, Cabot
Affiliates and Cabot's stockholders in connection with the Distribution.

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                  "Tax Opinions/Rulings" means the opinions of Tax Counsel and
the rulings by the IRS deliverable to Cabot in connection with the Contribution
and the Distribution.

                  "Tax-Related Losses" means (i) all federal, state and local
Taxes (including interest and penalties thereon) imposed pursuant to any
settlement, final determination, judgment or otherwise; (ii) all accounting,
legal and other professional fees, and court costs incurred in connection with
such taxes; and (iii) all costs and expenses that may result from adverse tax
consequences to Cabot payable by Cabot or Cabot Affiliates.

                  "Tax Sharing Agreement" means the Tax Sharing Agreement
between Cabot and CMC, dated March 28, 2000.

                  "Third-Party Claim" means any claim, suit, arbitration,
inquiry, proceeding or investigation by or before any court, governmental or
other regulatory or administrative agency or commission or any arbitration
tribunal asserted by a Person other than Cabot or any Cabot Affiliate or CMC or
any CMC Affiliate which gives rise to a right of indemnification hereunder.

                  "Underwriting Agreement" means the Underwriting Agreement
between CMC and the underwriters relating to the Initial Public Offering, as
amended from time to time.

                  "Value" means with respect to any trade or business (or
portion thereof), the fair market value of the assets constituting such trade or
business, less the current liabilities associated with such trade or business,
in each case determined as of the applicable Distribution Date.

                  "Voting Stock" means with respect to any Person, all classes
and series of the capital stock of such Person entitled to vote generally in the
election of directors.

2.       THE INITIAL PUBLIC OFFERING AND THE DISTRIBUTION.

                  2.1. THE INITIAL PUBLIC OFFERING. CMC shall consult with, and
cooperate in all respects with, Cabot in connection with the pricing of the CMC
Common Stock to be offered in the Initial Public Offering and shall, at Cabot's
direction, promptly take any and all actions necessary or desirable to
consummate the Initial Public Offering as contemplated by the IPO Registration
Statement and the Underwriting Agreement.

                  2.2. THE DISTRIBUTION. Cabot currently intends, following the
consummation of the Initial Public

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Offering, to complete the Distribution within six to twelve months of the date
of a letter ruling from the IRS confirming that the Distribution is tax-free to
Cabot. Cabot intends to complete the Distribution through means of a spin-off.
Cabot shall, in its sole and absolute discretion, determine whether to proceed
with all or part of the Distribution and all terms of the Distribution,
including, without limitation, the form, structure and terms of any
transaction(s) and/or offering(s) to effect the Distribution and the timing of
and conditions to the consummation of the Distribution. In addition, Cabot may
at any time and from time to time until the completion of the Distribution
modify or change the terms of the Distribution, including, without limitation,
by accelerating or delaying the timing of the consummation of all or part of the
Distribution. CMC shall cooperate with Cabot in all respects to accomplish the
Distribution and shall, at Cabot's direction, promptly take any and all actions
necessary or desirable to effect the Distribution, including, without
limitation, the registration under the Securities Act of CMC Common Stock on an
appropriate registration form or forms to be designated by Cabot. Cabot shall
select any investment banker(s) and manager(s) in connection with the
Distribution, as well as any financial printer, solicitation and/or exchange
agent and outside counsel for Cabot; provided that nothing herein shall prohibit
CMC from engaging (at its own expense) its own financial, legal, accounting and
other advisors in connection with the Distribution.

                  2.3. CERTAIN STOCKHOLDER MATTERS. From and after the
distribution of CMC Common Stock in connection with any transaction(s) included
as part of the Distribution and until such CMC Common Stock is duly transferred
in accordance with applicable law, CMC shall regard the Persons receiving CMC
Common Stock in such transaction(s) as record holders of CMC Common Stock in
accordance with the terms of such transaction(s) without requiring any action on
the part of such Persons. CMC agrees that, subject to any transfers of such
stock, (a) each such holder shall be entitled to receive all dividends payable
on, and exercise voting rights and all other rights and privileges with respect
to, the shares of CMC Common Stock then held by such holder and (b) each such
holder shall be entitled, without any action on the part of such holder, to
receive one or more certificates representing, or other evidence of ownership
of, the shares of CMC Common Stock then held by such holder. Cabot shall
cooperate, and shall instruct the Cabot Transfer Agent to cooperate, with CMC
and the CMC Transfer Agent, and CMC shall cooperate, and shall instruct the CMC
Transfer Agent to cooperate, with Cabot and the Cabot Transfer Agent, in
connection with all aspects of the Distribution and all other matters relating
to the issuance and delivery of certificates representing, or other evidence of
ownership of, the shares of CMC Common Stock distributed to the holders of Cabot
Common Stock in connection with any transaction(s) included as part of the
Distribution. Following the Distribution, Cabot shall instruct the Cabot
Transfer Agent to deliver to the CMC Transfer Agent true, correct and complete
copies of the stock and transfer records reflecting the holders of Cabot Common
Stock receiving shares of CMC Common Stock in connection with any transaction(s)
included as part of the Distribution.

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                  2.4. PRIOR RELATIONSHIP. CMC, with respect to CMC and all of
the CMC Affiliates, and Cabot, with respect to Cabot and all of the Cabot
Affiliates, agree to take all commercially reasonable action to discontinue
their respective uses as promptly as is commercially reasonable of any printed
material that indicates an ownership or other relationship between or among
Cabot and CMC or any of their respective Affiliates that has changed as a result
of the Initial Public Offering, the Distribution or any other transactions
contemplated hereby; provided that this Section 2.4 shall not prohibit the use
of printed material containing appropriate and accurate references to such
relationship.

                  2.5. FURTHER ASSURANCES REGARDING THE DISTRIBUTION. In
addition to the actions specifically provided for elsewhere in this Agreement,
CMC shall, at Cabot's direction, use all commercially reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things commercially reasonably necessary, proper or expeditious under applicable
laws, regulations and agreements in order to consummate and make effective the
Distribution as promptly as reasonably practicable. Without limiting the
generality of the foregoing, CMC shall, at Cabot's direction, cooperate with
Cabot, and execute and deliver, or use all commercially reasonable efforts to
cause to have executed and delivered, all instruments, including instruments of
conveyance, assignment and transfer, and to make all filings with, and to obtain
all consents, approvals or authorizations of, any domestic or foreign
governmental or regulatory authority requested by Cabot in order to consummate
and make effective the Distribution.

                  2.6. ABANDONMENT OF THE DISTRIBUTION. The parties expressly
acknowledge and agree that Cabot is not obligated in any respect to proceed with
or complete the Distribution and that Cabot may, in its sole and absolute
discretion, at any time abandon its plans to proceed with or complete the
Distribution. In the event that Cabot so determines that it no longer intends to
proceed with or complete the Distribution, Cabot shall provide to CMC a written
notification of such determination (an "Abandonment Notice"). Effective as of
the date of the Abandonment Notice, (a) provided that no Distribution Date has
yet occurred, Sections 4.2 and 4.3 of this Agreement shall terminate, become
null and void and have no further force and effect (it being expressly
understood and agreed by the parties that such Sections shall remain in full
force and effect in the event that a Distribution Date has occurred on or prior
to the date of the Abandonment Notice) and (b) Cabot's rights, and CMC's
obligations, set forth in the Registration Rights Agreement shall immediately
become effective.

3.       EXPENSES.

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                  3.1. GENERAL. Except as otherwise provided in this Agreement,
the Master Separation Agreement, any of the other Ancillary Agreements or any
other agreement between the parties relating to the Contribution, the Initial
Public Offering or the Distribution, all costs and expenses of either party
hereto in connection with the Contribution, the Initial Public Offering and the
Distribution shall be paid by the party that incurs such costs and expenses.

                  3.2. CERTAIN EXPENSES RELATING TO THE INITIAL PUBLIC OFFERING
AND THE SEPARATION. CMC shall be liable for all costs, fees and expenses
relating to the Initial Public Offering. CMC shall also be liable for all costs,
fees and expenses relating to the transfer of Assets from Cabot and the Relevant
Cabot Subsidiaries to CMC and the assumption by CMC of the Assumed Liabilities,
all in accordance with the Master Separation Agreement (as all such capitalized
terms (except for the Master Separation Agreement, are defined in the Master
Separation Agreement)).

                  3.3. CERTAIN EXPENSES RELATING TO THE DISTRIBUTION. Cabot
shall liable for all costs, fees and expenses relating to the Distribution;
provided that CMC shall be responsible for the payment of (a) the costs, fees
and expenses of all of CMC's financial, legal, accounting and other advisors
incurred in connection with the Distribution and (b) any internal fees, costs
and expenses incurred by CMC or any CMC Affiliate in connection with the
Distribution.

4.       CERTAIN COVENANTS.

                  4.1.     FINANCIAL AND OTHER INFORMATION.

                  (a) CMC Financial Information. CMC agrees that, for so long as
Cabot is required to consolidate CMC's results of operations and financial
position or to account for its investment in CMC under the equity method of
accounting (determined in accordance with generally accepted accounting
principles consistently applied):

                           (i) CMC shall, and shall cause each of its
                  Subsidiaries to, maintain a system of internal accounting
                  controls that will provide reasonable assurance that: (A)
                  CMC's and such Subsidiaries' books, records

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                  and accounts fairly reflect all transactions and dispositions
                  of assets and (B) the specific objectives of accounting
                  control are achieved.

                           (ii) CMC shall, and shall cause each of its
                  Subsidiaries to, maintain a fiscal year which commences on
                  October 1 and ends on September 30 of each calendar year.

                           (iii) CMC shall deliver to Cabot all schedules
                  consistent with Cabot's corporate closing requirements and in
                  a time consistent with Cabot's corporate closing schedule.

                           (iv) As soon as practicable, and in any event within
                  35 days after the end of each of the first three fiscal
                  quarters in each fiscal year of CMC and no later than five
                  days before CMC intends to file its Quarterly Financial
                  Statements (as defined below) with the SEC, CMC shall deliver
                  to Cabot drafts of (A) the consolidated financial statements
                  of CMC and its Subsidiaries (and notes thereto) for such
                  periods and for the period from the beginning of the current
                  fiscal year to the end of such quarter, setting forth in each
                  case in comparative form for each such fiscal quarter of CMC
                  the consolidated figures (and notes thereto) for the
                  corresponding quarter and periods of the previous fiscal year
                  and all in reasonable detail and prepared in accordance with
                  Article 10 of Regulation S-X, and (B) a discussion and
                  analysis by management of CMC's and its Subsidiaries'
                  financial condition and results of operations for such fiscal
                  period, including, without limitation, an explanation of any
                  material adverse change, all in reasonable detail and prepared
                  in accordance with Item 303(b) of Regulation S-K. The
                  information set forth in (A) and (B) above is herein referred
                  to as the "Quarterly Financial Statements." No later than the
                  earlier of (x) two Business Days prior to the date CMC
                  publicly files the Quarterly Financial Statements with the SEC
                  or otherwise makes such Quarterly Financial Statements
                  publicly available or (y) two Business Days prior to the date
                  on which Cabot has notified CMC that it intends to file its
                  quarterly financial statements with the SEC, CMC shall deliver
                  to Cabot the final form of the Quarterly Financial Statements
                  certified by the chief financial officer of CMC as presenting
                  fairly, in all material respects, the financial condition and
                  results of operations of CMC and its Subsidiaries; provided
                  that CMC may continue to revise such Quarterly Financial
                  Statements prior to the filing thereof in order to make
                  corrections and changes which corrections and changes shall be
                  delivered by CMC to Cabot as soon as practicable, and in any
                  event within eight hours thereafter; and, provided, further,
                  that Cabot and CMC financial representatives shall actively
                  consult with each other regarding any changes (whether or not
                  substantive) which CMC may consider making to its Quarterly
                  Financial Statements and related

                                     - 12 -
<PAGE>   16
                  disclosures during the three Business Days immediately prior
                  to any anticipated filing with the SEC, and CMC shall obtain
                  Cabot's consent prior to making any change to CMC's Quarterly
                  Financial Statements or related disclosures which would have
                  an effect upon Cabot's financial statements or related
                  disclosures. In addition to the foregoing, no Quarterly
                  Financial Statement or any other document which refers, or
                  contains information with respect, to the ownership of CMC by
                  Cabot, the separation of CMC from Cabot or the Distribution
                  shall be filed with the SEC or otherwise made public by CMC or
                  any of its Subsidiaries without the prior written consent of
                  Cabot.

                           (v) CMC shall deliver to Cabot as soon as
                  practicable, and in any event within 45 days after the end of
                  each fiscal year of CMC and no later than 10 days before CMC
                  intends to file its Annual Financial Statements (as defined
                  below) with the SEC, (A) drafts of the consolidated financial
                  statements of CMC (and notes thereto) for such year, setting
                  forth in each case in comparative form the consolidated
                  figures (and notes thereto) for the previous fiscal year and
                  all in reasonable detail and prepared in accordance with
                  Regulation S-X and (B) a discussion and analysis by management
                  of CMC's and its Subsidiaries' financial condition and results
                  of operations for such year, including, without limitation, an
                  explanation of any material adverse change, all in reasonable
                  detail and prepared in accordance with Item 303(a) of
                  Regulation S-K. The information set forth in (A) and (B) above
                  is herein referred to as the "Annual Financial Statements."
                  CMC shall deliver to Cabot all revisions to such drafts as
                  soon as any such revisions are prepared or made. No later than
                  the earlier of (1) five Business Days prior to the date CMC
                  publicly files the Annual Financial Statements with the SEC or
                  otherwise makes such Annual Financial Statements publicly
                  available or (2) five Business Days prior to the date on which
                  Cabot has notified CMC that it intends to file its annual
                  financial statements with the SEC, CMC shall deliver to Cabot
                  the final form of the Annual Financial Statements certified by
                  the chief financial officer of CMC as presenting fairly, in
                  all material respects, the financial condition and results of
                  operations of CMC and its Subsidiaries; provided that CMC may
                  continue to revise such Annual Financial Statements prior to
                  the filing thereof in order to make corrections and changes
                  which corrections and changes shall be delivered by CMC to
                  Cabot as soon as practicable, and in any event within eight
                  hours thereafter; and, provided, further, that Cabot and CMC
                  financial representatives shall actively consult with each
                  other regarding any changes (whether or not substantive) which
                  CMC may consider making to its Annual Financial Statements and
                  related disclosures during the three Business Days immediately
                  prior to any anticipated filing with the SEC, and CMC shall
                  obtain Cabot's consent prior

                                     - 13 -
<PAGE>   17
                  to making any change to CMC's Annual Financial Statements or
                  related disclosures which would have an effect upon Cabot's
                  financial statements or related disclosures. In addition to
                  the foregoing, no Annual Financial Statement or any other
                  document which refers, or contains information with respect,
                  to the ownership of CMC by Cabot, the separation of CMC from
                  Cabot or the Distribution shall be filed with the SEC or
                  otherwise made public by CMC or any of its Subsidiaries
                  without the prior written consent of Cabot. In any event, CMC
                  shall deliver to Cabot, no later than 70 days after the end of
                  each fiscal year of CMC, the final form of the Annual
                  Financial Statements accompanied by an opinion thereon by
                  CMC's independent certified public accountants.

                           (vi) CMC shall deliver to Cabot all Quarterly and
                  Annual Financial Statements of each Subsidiary of CMC which is
                  itself required to file financial statements with the SEC or
                  otherwise make such financial statements publicly available,
                  with such financial statements to be provided in the same
                  manner and detail and on the same time schedule as those
                  financial statements of CMC required to be delivered to Cabot
                  pursuant to this Section 4.1.

                           (vii) All information provided by CMC or any of its
                  Subsidiaries to Cabot pursuant to Sections 4.1(a)(iii) through
                  (vii) inclusive shall be consistent in terms of format and
                  detail and otherwise with the procedures in effect on the date
                  hereof with respect to the provision of such financial
                  information by the CMC Business and/or CMC and its
                  Subsidiaries, as applicable, to Cabot (and, where appropriate,
                  as presently presented in financial reports to Cabot's Board
                  of Directors), with such changes therein as may be requested
                  by Cabot from time to time consistent with changes in
                  reporting by sectors and Subsidiaries of Cabot.

                           (viii) CMC and each of its Subsidiaries which files
                  information with the SEC shall deliver to Cabot: (A) as soon
                  as the same are prepared, substantially final drafts of: (x)
                  all reports, notices and proxy and information statements to
                  be sent or made available by CMC or any of its Subsidiaries to
                  their security holders, (y) all regular, periodic and other
                  reports to be filed under Sections 13, 14 and 15 of the
                  Exchange Act (including Reports on Forms 10-K, 10-Q and 8-K
                  and Annual Reports to Shareholders), and (z) all registration
                  statements and prospectuses to be filed by CMC or any of its
                  Subsidiaries with the SEC or any securities exchange pursuant
                  to the listed company manual (or similar requirements) of such
                  exchange (collectively, the documents identified in clauses
                  (x), (y) and (z) are referred to herein as "CMC Public
                  Filings"), and (B) as soon as practicable, but in no event
                  later than five Business Days prior to the date

                                     - 14 -
<PAGE>   18
                  the same are printed, sent or filed, whichever is earliest,
                  final copies of all such CMC Public Filings; provided that CMC
                  may continue to revise such CMC Public Filings prior to the
                  filing thereof in order to make corrections and changes which
                  corrections and changes shall be delivered by CMC to Cabot as
                  soon as practicable, and in any event within four hours
                  thereafter; and, provided, further, that Cabot and CMC
                  financial representatives shall actively consult with each
                  other regarding any changes (whether or not substantive) which
                  CMC may consider making to any of its CMC Public Filings and
                  related disclosures prior to any anticipated filing with the
                  SEC, and CMC shall obtain Cabot's consent prior to making any
                  change to its CMC Public Filings or related disclosures which
                  would have an effect upon Cabot's financial statements or
                  related disclosures. In addition to the foregoing, no CMC
                  Public Filings or any other document which refers, or contains
                  information with respect, to the ownership of CMC by Cabot,
                  the separation of CMC from Cabot or the Distribution shall be
                  filed with the SEC or otherwise made public by CMC or any of
                  its Subsidiaries without the prior written consent of Cabot.

                           (ix) CMC shall, as promptly as practicable, deliver
                  to Cabot copies of all annual and other budgets and financial
                  projections (consistent in terms of format and detail and
                  otherwise with the procedures in effect on the date hereof)
                  relating to CMC or any of its Subsidiaries and shall provide
                  Cabot an opportunity to meet with management of CMC to discuss
                  such budgets and projections.

                           (x) With reasonable promptness, CMC shall deliver to
                  Cabot such additional financial and other information and data
                  with respect to CMC and its Subsidiaries and their business,
                  properties, financial positions, results of operations and
                  prospects as from time to time may be reasonably requested by
                  Cabot.

                           (xi) Prior to issuance, CMC shall deliver to Cabot
                  copies of substantially final drafts of all press releases and
                  other statements to be made available by CMC or any of its
                  Subsidiaries to employees of CMC or any of its Subsidiaries or
                  to the public concerning material developments in the
                  business, properties, earnings, results of operations,
                  financial condition or prospects of CMC or any of its
                  Subsidiaries or the relationship between (A) CMC or any of its
                  Subsidiaries and (B) Cabot or any of its Affiliates. In
                  addition, prior to the issuance of any such press release or
                  public statement, CMC shall consult with Cabot regarding any
                  changes (other than typographical or other similar minor
                  changes) to such substantially final drafts. Immediately
                  following the issuance thereof, CMC shall deliver to Cabot
                  copies of final drafts of all press releases and other public
                  statements.

                                     - 15 -
<PAGE>   19
                  CMC and Cabot will consult with each other as to the timing of
                  their annual and quarterly earnings releases and will give
                  each other an opportunity to review the information therein
                  relating to CMC and its Subsidiaries and to comment thereon.

                           (xii) CMC shall cooperate fully, and cause its
                  accountants to cooperate, with Cabot to the extent reasonably
                  requested by Cabot in the preparation of Cabot's public
                  earnings releases, quarterly reports on Form 10-Q, Annual
                  Reports to Shareholders, Annual Reports on Form 10-K, any
                  Current Reports on Form 8-K and any other proxy, information
                  and registration statements, reports, notices, prospectuses
                  and any other filings made by Cabot with the SEC, any national
                  securities exchange or otherwise made publicly available
                  (collectively, "Cabot Public Filings"). CMC agrees to provide
                  to Cabot all information that Cabot reasonably requests in
                  connection with any Cabot Public Filings or that, in the
                  judgment of Cabot's legal staff, is required to be disclosed
                  or incorporated by reference therein under any law, rule or
                  regulation. Such information shall be provided by CMC in a
                  timely manner on the dates reasonably requested by Cabot
                  (which may be earlier than the dates on which CMC otherwise
                  would be required hereunder to have such information
                  available) to enable Cabot to prepare, print and release all
                  Cabot Public Filings on such dates as Cabot shall determine.
                  CMC shall cause its accountants to consent to any reference to
                  them as experts in any Cabot Public Filings required under any
                  law, rule or regulation. If and to the extent reasonably
                  requested by Cabot, CMC shall diligently and promptly review
                  all drafts of such Cabot Public Filings and prepare in a
                  diligent and timely fashion any portion of such Cabot Public
                  Filing pertaining to CMC. Prior to any printing or public
                  release of any Cabot Public Filing, an appropriate executive
                  officer of CMC shall, if requested by Cabot, certify that the
                  information relating to CMC, any CMC Affiliate or the CMC
                  Business in such Cabot Public Filing is accurate, true and
                  correct in all material respects. Unless required by law, rule
                  or regulation, CMC shall not publicly release any financial or
                  other information which conflicts with the information with
                  respect to CMC, any CMC Affiliate or the CMC Business that is
                  included in any Cabot Public Filing without Cabot's prior
                  written consent. Prior to the release or filing thereof, Cabot
                  shall provide CMC with a draft of any portion of a Cabot
                  Public Filing containing information relating to CMC and its
                  Subsidiaries and shall give CMC an opportunity to review such
                  information and comment thereon; provided that Cabot shall
                  determine in its sole discretion the final form and content of
                  all Cabot Public Filings.

                  (b) Cabot shall cooperate fully, and cause its accountants to
cooperate fully, with CMC to the extent reasonably requested by CMC in the
preparation of any

                                     - 16 -
<PAGE>   20
CMC Public Filings. Cabot agrees to provide to CMC all
information that CMC reasonably requests in connection with any CMC Public
Filings or that, in the judgment of CMC's legal staff, is required to be
disclosed or incorporated by reference therein under any law, rule or
regulation. Such information shall be provided by Cabot in a timely manner on
the dates reasonably requested by CMC (which may be earlier than the dates on
which Cabot otherwise would be required hereunder to have such information
available) to enable CMC to prepare, print and release all CMC Public Filings on
such dates as CMC shall determine. Cabot shall cause its accountants to consent
to any reference to them as experts in any CMC Public Filings required under any
law, rule or regulation. If and to the extent reasonably requested by CMC, Cabot
shall diligently and promptly review all drafts of such CMC Public Filings and
prepare in a diligent and timely fashion any portion of such CMC Public Filing
pertaining to Cabot. Prior to any printing or public release of any CMC Public
Filing, an appropriate executive officer of Cabot shall, if requested by CMC,
certify that the information relating to Cabot, any Cabot Affiliate or any of
their respective businesses in such CMC Public Filing is accurate, true and
correct in all material respects. Unless required by law, rule or regulation,
Cabot shall not publicly release any financial or other information which
conflicts with the information with respect to Cabot, any Cabot Affiliate or any
of their respective businesses that is included in any CMC Public Filing without
CMC's prior written consent. Prior to the release or filing thereof, CMC shall
provide Cabot with a draft of any portion of a CMC Public Filing containing
information relating to Cabot and its Subsidiaries and shall give Cabot an
opportunity to review such information and comment thereon; provided that CMC
shall determine in its sole discretion the final form and content of all CMC
Public Filings.

                  (c) Auditors and Audits; Annual Statements and Accounting. CMC
agrees that, for so long as Cabot is required to consolidate CMC's results of
operations and financial position or to account for its investment in CMC under
the equity method of accounting (in accordance with generally accepted
accounting principles):

                           (i) CMC shall not select a different accounting firm
                  than PricewaterhouseCoopers, LLP to serve as its (and its
                  Subsidiaries') independent certified public accountants
                  ("CMC's Auditors") without Cabot's prior written consent
                  (which shall not be unreasonably withheld).

                           (ii) CMC shall use its reasonable best efforts to
                  enable the CMC's Auditors to complete their audit such that
                  they will date their opinion on CMC's audited annual financial
                  statements on the same date that Cabot's independent certified
                  public accountants ("Cabot's Auditors") date their opinion on
                  Cabot's audited annual financial statements (the "Cabot Annual
                  Statements"), and to enable Cabot to meet its timetable for
                  the printing, filing and public dissemination of the Cabot
                  Annual Statements.

                           (iii) CMC shall provide to Cabot on a timely basis
                  all information

                                     - 17 -
<PAGE>   21
                  that Cabot reasonably requires to meet its schedule for the
                  preparation, printing, filing, and public dissemination of the
                  Cabot Annual Statements. Without limiting the generality of
                  the foregoing, CMC will provide all required financial
                  information with respect to CMC and its Subsidiaries to CMC's
                  Auditors in a sufficient and reasonable time and in sufficient
                  detail to permit CMC's Auditors to take all steps and perform
                  all reviews necessary to provide sufficient assistance to
                  Cabot's Auditors with respect to information to be included or
                  contained in the Cabot Annual Statements.

                           (iv) CMC shall authorize CMC's Auditors to make
                  available to Cabot's Auditors both the personnel who performed
                  or are performing the annual audit of CMC and work papers
                  related to the annual audit of CMC, in all cases within a
                  reasonable time prior to CMC's Auditors' opinion date, so that
                  Cabot's Auditors are able to perform the procedures they
                  consider necessary to take responsibility for the work of
                  CMC's Auditors as it relates to Cabot's Auditors' report on
                  Cabot's statements, all within sufficient time to enable Cabot
                  to meet its timetable for the printing, filing and public
                  dissemination of the Cabot Annual Statements.

                           (v) CMC shall provide Cabot's internal auditors
                  access to CMC's and its Subsidiaries, books and records so
                  that Cabot may conduct reasonable audits relating to the
                  financial statements provided by CMC pursuant hereto as well
                  as to the internal accounting controls and operations of CMC
                  and its Subsidiaries.

                           (vi) CMC shall give Cabot as much prior notice as
                  reasonably practical of any proposed determination of, or any
                  significant changes in, its accounting estimates or accounting
                  principles from those in effect on the date hereof. CMC will
                  consult with Cabot and, if requested by Cabot, CMC will
                  consult with Cabot's independent public accountants with
                  respect thereto. CMC will not make any such determination or
                  changes without Cabot's prior written consent if such a
                  determination or a change would be sufficiently material to be
                  required to be disclosed in CMC's financial statements as
                  filed with the SEC or otherwise publicly disclosed therein.

                           (vii) Notwithstanding clause (vi) above, CMC shall
                  make any changes in its accounting estimates or accounting
                  principles that are requested by Cabot in order for CMC's
                  accounting estimates and principles to be consistent with
                  those of Cabot.

Nothing in this Section 4.1 shall require CMC to violate any agreement with any
of its customers regarding the confidentiality of commercially sensitive
information relating to that customer or its business; provided that in the
event that CMC is required under this Section 4.1 to disclose any such
information, CMC shall use all commercially reasonable

                                     - 18 -
<PAGE>   22
efforts to seek to obtain such customer's consent to the disclosure of such
information.

                  4.2. OTHER COVENANTS. CMC hereby covenants and agrees that,
for so long as Cabot beneficially owns at least 50% of the outstanding shares of
CMC Common Stock:

                  (a) CMC shall not, without the prior written consent of Cabot
(which it may withhold in its sole and absolute discretion), take, or cause to
be taken, directly or indirectly, any action, including making or failing to
make any election under the law of any state, which has the effect, directly or
indirectly, of restricting or limiting the ability of Cabot to freely sell,
transfer, assign, pledge or otherwise dispose of shares of CMC Common Stock or,
other than as provided in the Rights Plan, would restrict or limit the rights of
any transferee of Cabot as a holder of CMC Common Stock. Without limiting the
generality of the foregoing, CMC shall not, without the prior written consent of
Cabot (which it may withhold in its sole and absolute discretion), (i) amend,
supplement, restate, modify or alter the Rights Plan or any successor
stockholder rights plan in any manner that would result in (A) the ownership of
CMC Common Stock by Cabot causing the rights thereunder to detach or become
exercisable and/or (B) Cabot and its transferees not being entitled to the same
rights thereunder as other holders of CMC Common Stock or (ii) take any action,
or take any action to recommend to its stockholders any action, which would
among other things, limit the legal rights of, or deny any benefit to, Cabot as
a CMC stockholder in a manner not applicable to CMC stockholders generally.

                  (b) CMC shall not, without the prior written consent of Cabot
(which it may withhold in its sole and absolute discretion), issue any shares of
CMC Capital Stock or any rights, warrants or options to acquire CMC Capital
Stock (including, without limitation, securities convertible or exchangeable for
CMC Capital Stock), if after giving effect to such issuances and considering all
of the shares of CMC Capital Stock acquirable pursuant to such rights, warrants
and options to be outstanding on the date of such issuance (whether or not then
exercisable), Cabot would own less than 80.5% of the then outstanding shares of
CMC Common Stock.

                  (c) Subject to Section 4.2(d), if Cabot determines in its sole
discretion that CMC has taken, is taking or will or will likely undertake any
action, including, without limitation, the issuance or distribution of any
equity securities, that has or will or will likely result in Cabot owning less
than 80.5% of the then outstanding shares of CMC Capital Stock (a "Below the
Threshold Action"), (i) CMC shall, at Cabot's option, (x) upon notice from Cabot
immediately seek to reverse any such action already taken, cease any such action
being taken or not take any future action, as the case may be, in each case to
the satisfaction of Cabot or (y) issue or otherwise distribute to Cabot, at no
cost to Cabot, additional equity securities such that, after the consummation of
any such action Cabot will again or will continue to (as the case may be) own
not less than 80.5% of the then outstanding shares of CMC Capital Stock, or (ii)
Cabot shall have the right to

                                     - 19 -
<PAGE>   23
purchase shares of CMC Capital Stock on the open market or from third parties
sufficient to ensure that after the consummation of any such action Cabot will
again or will continue to (as the case may be) own not less than 80.5% of the
then outstanding shares of CMC Capital Stock, and CMC shall promptly reimburse
Cabot for the purchase price of such shares of CMC Capital Stock, together with
all fees, commissions and other expenses incurred by Cabot in making such
purchase.

                  (d) If Cabot determines in its sole discretion that CMC has
taken, is taking or will or will likely undertake a Below the Threshold Action
after the second anniversary of the closing date of the Initial Public Offering
consisting solely of, or solely as a result of, the issuance of CMC Common Stock
under CMC's 2000 Equity Incentive Plan or CMC's Employee Stock Purchase Plan as
such plans are in effect on such closing date (an "Employee Benefit Plan
Issuance"), (i) CMC shall have no obligation to comply with Section
4.2(c)(i)(x), (ii) any additional equity securities of CMC required to be issued
or otherwise distributed by CMC to Cabot in accordance with Section 4.2(c)(i)(y)
shall be issued to Cabot at a price per share equal to the Section 4.2(d) Per
Share Fair Market Value and (iii) CMC shall have no obligation to reimburse
Cabot for purchases by Cabot of CMC Capital Stock on the open market or from
third parties in accordance with Section 4.2(c)(ii), provided that this Section
4.2(d) shall be of no force and effect and Section 4.2(c) shall continue to
apply to any Below the Threshold Action if Cabot determines, in its reasonable
discretion, that (x) the Below the Threshold Action is not solely attributable
to an Employee Benefit Plan Issuance or (y) it cannot in good faith determine
whether the Below the Threshold Action is solely attributable to an Employee
Benefit Plan Issuance.

                  (e) To the extent that Cabot is a party to any contracts or
agreements that provide that certain actions of Cabot's Subsidiaries may result
in Cabot being in breach of or in default under such agreements and Cabot has
advised CMC of the existence, and has furnished CMC with copies, of such
contracts or agreements (or the relevant portions thereof), CMC shall not take
any actions that reasonably could result in Cabot being in breach of or in
default under any such contract or agreement. As of the date hereof, the
contracts and agreements (or relevant portions thereof) applicable to this
covenant are set forth on Exhibit A attached hereto. CMC hereby acknowledges and
agrees that Cabot has furnished it with copies of each contract or agreement (or
the relevant portion thereof) listed on Exhibit A. The parties acknowledge and
agree that, after the date hereof, Cabot may in good faith (and not solely with
the intention of imposing restrictions on CMC pursuant to this covenant) enter
into additional contracts or agreements that provide that certain actions of
Cabot's Subsidiaries may result in Cabot being in breach of or in default under
such agreements. In such event, Exhibit A shall be deemed to be automatically
amended to reflect the addition of any other contracts or agreements (or
relevant portions thereof) of which Cabot advises CMC after the date hereof in
accordance with this Section 4.2(e). CMC agrees to keep confidential and not to
disclose any information provided to it pursuant to this Section 4.2(e).

                                     - 20 -
<PAGE>   24
                  4.3.     COVENANTS REGARDING THE INCURRENCE OF INDEBTEDNESS.

                  (a) CMC hereby covenants and agrees that, for so long as Cabot
continues to beneficially own at least 50% of the outstanding shares of CMC
Common Stock, CMC shall not, and shall not permit any of its Subsidiaries to,
without Cabot's prior written consent (which it may withhold in its sole and
absolute discretion), create, incur, assume or suffer to exist any CMC
Indebtedness in excess of an aggregate of $50,000,000 outstanding at any time.

                  (b) In order to implement this Section 4.3, CMC shall notify
Cabot in writing at least 15 Business Days prior to the time it or any of its
Subsidiaries contemplates incurring any CMC Indebtedness or agreeing to acquire
Control of an Acquisition Target of its intention to do so and shall either (i)
demonstrate to Cabot's satisfaction that this Section 4.3 shall not be violated
by such proposed additional CMC Indebtedness or acquisition or (ii) obtain
Cabot's prior written consent to such proposed additional CMC Indebtedness or
acquisition. Any such written notification from CMC to Cabot shall include
documentation of any existing CMC Indebtedness and estimated CMC Indebtedness
after giving effect to such proposed incurrence of additional CMC Indebtedness
or acquisition and, if delivered in connection with any transaction(s) involving
an Acquisition Target, (A) documentation of the Acquisition Target's Target
Indebtedness, (B) calculations of the Acquisition Target's FFO to Debt Ratio and
(C) calculations of compliance with this Section 4.3, including the Adjusted CMC
Indebtedness, if applicable. Cabot shall have the right to verify the accuracy
of such information and CMC shall cooperate fully with Cabot in such effort
(including, without limitation, by providing Cabot with access to the working
papers and underlying documentation related to any calculations used in
determining such information).

                  (c) For purposes of this Section 4.3, the following terms
shall have the following meanings:

                  "CMC Indebtedness" means the sum of (i) the aggregate
principal amount of total liabilities (whether long-term or short-term) for
borrowed money (including capitalized leases) of CMC and its Subsidiaries, as
determined for purposes of its consolidated financial statements prepared in
accordance with GAAP, and (ii) the aggregate amount attributable to all
factoring or securitization of receivables and other financial assets by CMC and
its Subsidiaries.

5.       INDEMNIFICATION.

                                     - 21 -
<PAGE>   25
                  5.1. INDEMNIFICATION BY CMC. Subject to Section 5.3, CMC shall
indemnify, defend and hold harmless Cabot, all Cabot Affiliates and each of
their respective directors, officers and employees (in their capacities as
such), from and against:

                  (a) all Losses relating to, arising out of, or due to,
directly or indirectly, any breach by CMC or any CMC Affiliate of any of the
provisions of this Agreement;

                  (b) all Losses relating to, arising out of, or due to,
directly or indirectly, any incorrect, inaccurate or incomplete financial and
other information provided by CMC or any CMC Affiliate to Cabot pursuant to
Section 4.1 of this Agreement;

                  (c) all Losses relating to, arising out of, or due to any
untrue statement or alleged untrue statement of a material fact contained in, or
incorporated by reference into, the IPO Registration Statement or the omission
or alleged omission to state (whether pursuant to direct statement or
incorporation by reference) in the IPO Registration Statement a material fact
required to be stated therein or necessary to make the statements therein not
misleading other than with respect to the Cabot Disclosure Portions; and

                  (d) all Losses relating to, arising out of, or due to any
untrue statement or alleged untrue statement of a material fact contained in, or
incorporated by reference into, the Distribution Registration Statement or the
omission or alleged omission to state (whether pursuant to direct statement or
incorporation by reference) in the Distribution Registration Statement a
material fact required to be stated therein or necessary to make the statements
therein not misleading other than with respect to the Cabot Disclosure Portions.

                  5.2. INDEMNIFICATION BY CABOT. Subject to Section 5.3, Cabot
shall indemnify, defend, and hold harmless CMC, all CMC Affiliates, and each of
their respective directors, officers and employees (in their capacities as
such), from and against:

                  (a) all Losses relating to, arising out of, or due to,
directly or indirectly, any breach by Cabot or any Cabot Affiliate of any of the
provisions of this Agreement;

                  (b) all Losses relating to, arising out of, or due to,
directly or indirectly, any incorrect, inaccurate or incomplete financial and
other information provided by Cabot or any Cabot Affiliate to CMC pursuant to
Section 4.1 of this Agreement;

                  (c) all Losses relating to, arising out of, or due to any
untrue statement or alleged untrue statement of a material fact contained in, or
incorporated by reference into, the Cabot Disclosure Portions of the IPO
Registration Statement or the omission or alleged omission to state (whether
pursuant to direct statement or incorporation by

                                     - 22 -
<PAGE>   26
reference) in the Cabot Disclosure Portions of the IPO Registration Statement a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and

                  (d) all Losses relating to, arising out of, or due to any
untrue statement or alleged untrue statement of a material fact contained in, or
incorporated by reference into, the Cabot Disclosure Portions of the
Distribution Registration Statement or the omission or alleged omission to state
(whether pursuant to direct statement or incorporation by reference) in the
Cabot Disclosure Portions of the Distribution Registration Statement a material
fact required to be stated therein or necessary to make the statements therein
not misleading.

                  5.3.     OTHER LIABILITIES.

                  (a) Except as provided in Section 5.4, this Section 5 shall
not be applicable to any Tax-Related Losses, which shall be governed by the Tax
Sharing Agreement.

                  (b) This Section 5 shall not be applicable to any Losses
relating to, arising out of, or due to any breach of the provisions of any other
contract, agreement or understanding between Cabot or any Cabot Affiliate and
CMC or any CMC Affiliate, including, without limitation, the Master Separation
Agreement, the Tax Sharing Agreement and any of the other Ancillary Agreements,
which Losses shall be governed by the terms of such contract, agreement or
understanding.

                  5.4.     TAX EFFECTS OF INDEMNIFICATION.

                  (a) Any indemnification payment made under this Agreement
shall be characterized for tax purposes as if such payment were made immediately
prior to the latest Distribution Date, and shall therefore be treated, to the
extent permitted by law, as either (i) a distribution from CMC to Cabot or (ii)
a capital contribution from Cabot to CMC.

                  (b) The amount of any Loss for which indemnification is
provided under this Agreement shall be (i) increased to take account of net Tax
cost, if any, incurred by the Indemnitee arising from the receipt or accrual of
an Indemnity Payment hereunder (grossed up for such increase) and (ii) reduced
to take account of net Tax benefit, if any, realized by the Indemnitee arising
from incurring or paying such Loss. In computing the amount of any such Tax cost
or Tax benefit, the Indemnitee shall be deemed to recognize all other items of
income, gain, loss, deduction or credit before recognizing any item arising from
the receipt or accrual of any Indemnity Payment hereunder or incurring or

                                     - 23 -
<PAGE>   27
paying any indemnified Loss. Any Indemnity Payment hereunder shall initially be
made without regard to this Section 5.4 and shall be increased or reduced to
reflect any such net Tax cost (including gross-up) or net Tax benefit only after
the Indemnitee has actually realized such cost or benefit. For purposes of this
Agreement, an Indemnitee shall be deemed to have "actually realized" a net Tax
cost or a net Tax benefit to the extent that, and at such time as, the amount of
Taxes payable by such Indemnitee is increased above or reduced below, as the
case may be, the amount of Taxes that such Indemnitee would be required to pay
but for the receipt or accrual of the Indemnity Payment or the incurrence or
payment of such Loss, as the case may be. The amount of any increase or
reduction hereunder shall be adjusted to reflect any final determination (which
shall include the execution of Form 870-AD or successor form) with respect to
the Indemnity's liability for Taxes, and payments between Cabot and CMC to
reflect such adjustment shall be made if necessary.

                  5.5. EFFECT OF INSURANCE UPON INDEMNIFICATION. The amount
which an Indemnifying Party is required to pay to any Indemnitee pursuant to
this Section 5 shall be reduced (including retroactively) by any Insurance
Proceeds and other amounts actually recovered by such Indemnitee in reduction of
the related Loss, it being understood and agreed that each of CMC and Cabot
shall use commercially reasonable efforts to collect any such proceeds or other
amounts to which it or any of its Affiliates is entitled, without regard to
whether it is the Indemnifying Party hereunder. No Indemnitee shall be required,
however, to collect any such proceeds or other amounts prior to being entitled
to indemnification from an Indemnifying Party hereunder. If an Indemnitee
receives an Indemnity Payment in respect of a Loss and subsequently receives
Insurance Proceeds or other amounts in respect of such Loss, then such
Indemnitee shall pay to such Indemnifying Party an amount equal to the
difference between (a) the sum of the amount of such Indemnity Payment and the
amount of such Insurance Proceeds or other amounts actually received and (b) the
amount of such Loss, in each case adjusted (at such time as appropriate
adjustment can be determined) to reflect any premium adjustment attributable to
such claim.

                  5.6.     PROCEDURE FOR INDEMNIFICATION INVOLVING THIRD-PARTY
                           CLAIMS.

                  (a) Notice of Claim. If any Indemnitee receives notice of the
assertion of any Third-Party Claim with respect to which an Indemnifying Party
is obligated under this Agreement to provide indemnification, such Indemnitee
shall give such Indemnifying Party notice thereof (together with a copy of such
Third-Party Claim, process or other legal pleading) promptly after becoming
aware of such Third-Party Claim; provided, however, that the failure of any
Indemnitee to give notice as provided in this Section shall

                                     - 24 -
<PAGE>   28
not relieve any Indemnifying Party of its obligations under this Section 5,
except to the extent that such Indemnifying Party is actually prejudiced by such
failure to give notice. Such notice shall describe such Third-Party Claim in
reasonable detail.

                  (b) Obligation of Indemnifying Party. An Indemnifying Party,
at such Indemnifying Party's own expense and through counsel chosen by such
Indemnifying Party (which counsel shall be reasonably acceptable to the
Indemnitee), may elect to defend any Third-Party Claim. If an Indemnifying Party
elects to defend a Third-Party Claim, then, within ten Business Days after
receiving notice of such Third-Party Claim (or sooner, if the nature of such
Third-Party Claim so requires), such Indemnifying Party shall notify the
Indemnitee of its intent to do so, and such Indemnitee shall cooperate in the
defense of such Third-Party Claim. Such Indemnifying Party shall pay such
Indemnitee's reasonable out-of-pocket expenses incurred in connection with such
cooperation. Such Indemnifying Party shall keep the Indemnitee reasonably
informed as to the status of the defense of such Third-Party Claim. After notice
from an Indemnifying Party to an Indemnitee of its election to assume the
defense of a Third-Party Claim, such Indemnifying Party shall not be liable to
such Indemnitee under this Section 5 for any legal or other expenses
subsequently incurred by such Indemnitee in connection with the defense thereof
other than those expenses referred to in the preceding sentence; provided,
however, that such Indemnitee shall have the right to employ one law firm as
counsel, together with a separate local law firm in each applicable jurisdiction
("Separate Counsel"), to represent such Indemnitee in any action or group of
related actions (which firm or firms shall be reasonably acceptable to the
Indemnifying Party) if, in such Indemnitee's reasonable judgment at any time,
either a conflict of interest between such Indemnitee and such Indemnifying
Party exists in respect of such claim, or there may be defenses available to
such Indemnitee which are different from or in addition to those available to
such Indemnifying Party and the representation of both parties by the same
counsel would be inappropriate, and in that event (i) the reasonable fees and
expenses of such Separate Counsel shall be paid by such Indemnifying Party (it
being understood, however, that the Indemnifying Party shall not be liable for
the expenses of more than one Separate Counsel (excluding local counsel) with
respect to any Third-Party Claim (even if against multiple Indemnitees)) and
(ii) each of such Indemnifying Party and such Indemnitee shall have the right to
conduct its own defense in respect of such claim. If an Indemnifying Party
elects not to defend against a Third-Party Claim, or fails to notify an
Indemnitee of its election as provided in this Section 5 within the period of
ten Business Days described above, the Indemnitee may defend, compromise, and
settle such Third-Party Claim and shall be entitled to indemnification hereunder
(to the extent permitted hereunder); provided, however, that no such Indemnitee
may compromise or settle any such Third-Party Claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, the Indemnifying Party shall
not, without the prior written consent of the Indemnitee, (i) settle or
compromise any Third-Party Claim or consent to the entry of any judgment which
does not include as an unconditional term thereof the delivery by the

                                     - 25 -
<PAGE>   29
claimant or plaintiff to the Indemnitee of a written release from all liability
in respect of such Third-Party Claim or (ii) settle or compromise any
Third-Party Claim in any manner that would be reasonably likely to have a
material adverse effect on the Indemnitee.

                  (c) Joint Defense of Certain Claims. Notwithstanding the
provisions of Section 5.6(b), Cabot and CMC shall jointly control the defense
of, and cooperate with each other with respect to defending, any Third-Party
Claim with respect to which each party is claiming that it is entitled to
indemnification under Section 5.1 or 5.2. If either Cabot or CMC fails to defend
jointly any such Third-Party Claim, the other party shall solely defend such
Third-Party Claim and the party failing to defend jointly shall use all
commercially reasonable efforts to cooperate with the other party in its defense
of such Third-Party Claim; provided, however, that neither party may compromise
or settle any such Third-Party Claim without the prior written consent of the
other party, which consent shall not be unreasonably withheld or delayed. All
costs and expenses of either party in connection with, and during the course of,
the joint control of the defense of any such Third-Party Claim shall be
initially paid by the party that incurs such costs and expenses. Such costs and
expenses shall be reallocated and reimbursed in accordance with the respective
indemnification obligations of the parties at the conclusion of the defense of
such Third-Party Claim.

                  5.7. PROCEDURE FOR INDEMNIFICATION NOT INVOLVING THIRD-PARTY
CLAIMS. If any Indemnitee desires to assert against an Indemnifying Party any
claim for indemnification under this Section 5 other than a Third-Party Claim (a
"Claim"), the Indemnitee shall deliver to the Indemnifying Party notice of its
demand for satisfaction of such Claim (a "Request"), specifying in reasonable
detail the amount of such Claim and the basis for asserting such Claim. Within
30 days after the Indemnifying Party has been given a Request, the Indemnifying
Party shall either (i) satisfy the Claim requested to be satisfied in such
Request by delivering to the Indemnitee payment by wire transfer or a certified
or bank cashier's check payable to the Indemnified Party in immediately
available funds in an amount equal to the amount of such Claim, or (ii) notify
the Indemnitee that the Indemnifying Party contests such Claim by delivering to
the Indemnitee a Dispute Notice, stating that the Indemnifying Party objects to
such Claim and specifying in reasonable detail the basis for contesting such
Claim. Any dispute described in clause (ii) of this Section 5.7 shall be subject
to the provisions of Section 6.1.

                  5.8. EXCLUSIVE REMEDIES. Except for the right to pursue
equitable remedies, the remedies provided in this Section 5 shall be deemed the
sole and exclusive remedies of the parties with respect to the subject matters
of the indemnification provisions of this Section 5.

                                     - 26 -
<PAGE>   30
6.       MISCELLANEOUS.

                  6.1. DISPUTE RESOLUTION. Except as otherwise set forth in the
Ancillary Agreements, resolution of any and all disputes arising from or in
connection with this Agreement, whether based on contract, tort, or otherwise
(collectively, "Disputes"), shall be exclusively governed by and settled in
accordance with the provisions of this Section 6.1. The parties hereto shall use
all commercially reasonable efforts to settle all Disputes without resorting to
mediation, arbitration, litigation or other third party dispute resolution
mechanisms. If any Dispute remains unsettled, the parties hereby agree to
mediate such Dispute using a mediator reasonably acceptable to all parties
involved in such Dispute. If the Parties are unable to resolve such dispute
through mediation, each Party will be free to commence proceedings for the
resolution thereof. No Party shall be entitled to consequential, special,
exemplary or punitive damages.

                  6.2. SURVIVAL. The representations and warranties contained in
this Agreement shall survive the execution and delivery hereof and all
Distribution Dates until the expiration of all applicable statutes of
limitations.

                  6.3. COMPLETE AGREEMENT. Except as otherwise set forth in this
Agreement, this Agreement and the exhibits hereto shall constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and shall supersede all prior agreements and understandings, whether written or
oral, between the parties with respect to such subject matter.

                  6.4. AUTHORITY. Each of the parties hereto represents to the
other that (a) it has the corporate power and authority to execute, deliver and
perform this Agreement, (b) the execution, delivery and performance of this
Agreement by it has been duly authorized by all necessary corporate action, (c)
it has duly and validly executed and delivered this Agreement, and (d) this
Agreement is a legal, valid and binding obligation, enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equity principles.

                  6.5. GOVERNING LAW.

                                     - 27 -
<PAGE>   31
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware (other than the laws regarding conflicts of laws) as to
all matters, including matters of validity, construction, effect, performance
and remedies.

                  6.6. CONSENT TO EXCLUSIVE JURISDICTION. Any action, suit or
proceeding arising out of any claim that the parties cannot settle through good
faith negotiations shall be litigated exclusively in the state courts of
Delaware. Each of the parties hereto hereby irrevocably and unconditionally (a)
submits to the jurisdiction of the state courts of Delaware for any such action,
suit or proceeding, (b) agrees not to commence any such action, suit or
proceeding except in the state courts of Delaware, (c) waives, and agrees not to
plead or to make, any objection to the venue of any such action, suit or
proceeding in the state courts of Delaware, (d) waives, and agrees not to plead
or to make, any claim that any such action, suit or proceeding brought in the
state courts of Delaware has been brought in an improper or otherwise
inconvenient forum, (e) waives, and agrees not to plead or to make, any claim
that the state courts of Delaware lack personal jurisdiction over it, and (f)
waives its right to remove any such action, suit or proceeding to the federal
courts except when such courts are vested with sole and exclusive jurisdiction
by statute. Cabot and CMC shall cooperate with each other in connection with any
such action, suit or proceeding to obtain reliable assurances that confidential
treatment will be accorded any information that either party shall reasonably
deem to be confidential or proprietary. Each of the parties hereto irrevocably
designates and appoints its respective Service Agent as its agent to receive
service of process in any such action, suit or proceeding. Each of the parties
hereto further covenants and agrees that, until the expiration of all applicable
statutes of limitations relating to potential claims under this Agreement, each
such party shall maintain a duly appointed agent for the service of summonses
and other legal process in the State of Delaware, and shall promptly notify the
other party hereto of any change in the name or address of its Service Agent and
the name and address of any replacement for its Service Agent, if such agent is
no longer the Service Agent named herein. Notwithstanding anything contained in
this Section 6.6, all claims for indemnification under Section 5 shall be
governed by the provisions thereof.

                  6.7. NOTICES. All Notices and other communications hereunder
shall be in writing and shall be delivered in person, by telecopy, by express or
overnight mail delivered by a nationally recognized air courier (delivery
charges prepaid), or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:

                  (a)      If to Cabot, to:

                           Cabot Corporation
                           75 State Street

                                     - 28 -
<PAGE>   32
                           Boston, Massachusetts 02109

                           Attention:            Chief Financial Officer
                           Telecopy No.:         (617) 342-6281

                           With a copy to:

                           Law Department
                           Cabot Corporation
                           75 State Street
                           Boston, Massachusetts  02109

                           Attention:            General Counsel
                           Telecopy No.:         (617) 342-6039
                  (b)      If to CMC, to:

                           Cabot Microelectronics Corporation
                           870 North Commons Drive
                           Aurora, Illinois 60504

                           Attention:            President
                           Telecopy No.:         (630) 375-5593

or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery or when delivery is refused. Any notice or communication sent by
telecopy or by air courier shall be deemed effective on the first Business Day
at the place at which such notice or communication is received following the day
on which such notice or communication was sent.

                  6.8. AMENDMENT AND MODIFICATION. This Agreement may not be
amended or modified in any respect except by a written agreement signed by both
of the parties hereto.

                  6.9. BINDING EFFECT; ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon the parties hereto and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except with respect to a merger of either party with another Person,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either party hereto without the prior written consent of
the other

                                     - 29 -
<PAGE>   33
party, which consent shall not be unreasonably withheld or delayed.

                  6.10. THIRD PARTY BENEFICIARIES. The Indemnitees and their
respective successors shall be third party beneficiaries of the indemnification
provisions of Section 6, as applicable, and shall be entitled to enforce those
provisions and in connection with such enforcement shall be subject to Section
6.6, in each such case as fully and to the same extent as if they were parties
to this Agreement. Except as provided in the previous sentence, nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person
any legal or equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement, and no Person (other than as provided in the
previous sentence) shall be deemed a third party beneficiary under or by reason
of this Agreement.

                  6.11. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The Agreement may be
executed by facsimile signature.

                  6.12. WAIVER. The observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) by the party entitled to enforce such term, but such waiver
shall be effective only if it is in writing signed by the party against which
such waiver is to be asserted. Unless otherwise expressly provided in this
Agreement, no delay or omission on the part of any party in exercising any right
or privilege under this Agreement shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right or privilege under this
Agreement operate as a waiver of any other right or privilege under this
Agreement nor shall any single or partial exercise of any right or privilege
preclude any other or further exercise thereof or the exercise of any other
right or privilege under this Agreement. No failure by either party to take any
action or assert any right or privilege hereunder shall be deemed to be a waiver
of such right or privilege in the event of the continuation or repetition of the
circumstances giving rise to such right unless expressly waived in writing by
the party against whom the existence of such waiver is asserted.

                  6.13. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                                     - 30 -
<PAGE>   34
                  6.14. REMEDIES. Each of Cabot and CMC shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. Each of Cabot and CMC acknowledges and agrees that under certain
circumstances the breach by Cabot or any of its Affiliates or CMC or any of its
Affiliates of a term or provision of this Agreement will materially and
irreparably harm the other party, that money damages will accordingly not be an
adequate remedy for such breach and that the non-defaulting party, in its sole
discretion and in addition to its rights under this Agreement and any other
remedies it may have at law or in equity, may apply to any court of law or
equity of competent jurisdiction (without posting any bond or deposit) for
specific performance and/or other injunctive relief in order to enforce or
prevent any breach of the provisions of this Agreement.

                  6.15. PERFORMANCE. Each of the parties hereto shall use all
commercially reasonable efforts to cause to be performed all actions, agreements
and obligations set forth herein to be performed by any Affiliate of such party.

                  6.16. REFERENCES; CONSTRUCTION. The table of contents and the
section and other headings and subheadings contained in this Agreement and the
exhibits hereto are solely for the purpose of reference, are not part of the
agreement of the parties hereto, and shall not in any way affect the meaning or
interpretation of this Agreement or any exhibit hereto. All references to days
or months shall be deemed references to calendar days or months. All references
to "$" shall be deemed references to United States dollars. Unless the context
otherwise requires, any reference to a "Section" or an "Exhibit" shall be deemed
to refer to a section of this Agreement or an exhibit to this Agreement, as
applicable. The words "hereof," "herein" and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, unless otherwise
specifically provided, they shall be deemed to be followed by the words "without
limitation." This Agreement shall be construed without regard to any presumption
or rule requiring construction or interpretation against the party drafting or
causing the document to be drafted.

                                    * * * * *

                                     - 31 -
<PAGE>   35
                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date and year first
written above.

                                       CABOT CORPORATION

                                       By:    /s/ Samuel W. Bodman
                                              --------------------
                                              Name:  Samuel W. Bodman
                                              Title: Chairman and
                                                     Chief Executive Officer

                                       CABOT MICROELECTRONICS CORPORATION

                                       By:    /s/ Matthew Neville
                                              --------------------
                                              Name:  Matthew Neville
                                              Title: President and
                                                     Chief Executive Officer

                                     - 32 -
<PAGE>   36
                                    EXHIBIT A

                      AGREEMENTS SUBJECT TO SECTION 4.2(e)

Cabot is a party to the following agreements, the covenants of which shall be
subject to Section 4.2(e) of the IPO and Distribution Agreement:

1.       Indenture, dated as of December 1, 1987, between Cabot Corporation and
         the First National Bank of Boston, Trustee.

2.       First Supplemental Indenture dated as of June 17, 1992, to Indenture,
         dated as of December 1, 1987, between Cabot Corporation and the First
         National Bank of Boston, Trustee.

3.       Second Supplemental Indenture, dated as of January 31, 1997, between
         Cabot Corporation and State Street Bank and Trust Company, Trustee.

4.       Third Supplemental Indenture, dated as of November 20, 1998, between
         Cabot Corporation and State Street Bank and Trust Company, Trustee.

5.       Credit Agreement, dated as of January 3, 1997, among Cabot Corporation,
         the banks listed therein and Morgan Guaranty Trust Company of New York,
         as Agent.

6.       Note Purchase Agreement between John Hancock Mutual Life Insurance
         Company, State Street Bank and Trust Company, as trustee for the Cabot
         Corporation Employee Stock Ownership Plan, and Cabot Corporation.,
         dated as of November 15, 1988.

7.       Various confidentiality and secrecy agreements between Cabot
         Corporation and third parties with respect to which employees of CMC
         have knowledge as a result of their employment with Cabot Corporation.

                                     - 33 -<PAGE>   1
                                                                    Exhibit 10.6

                   CONFIDENTIAL DISCLOSURE & LICENSE AGREEMENT

                  This Confidential Disclosure & License Agreement (as such
agreement may be amended from time to time, the "CDL Agreement") is entered into
as of March 28, 2000 by and between Cabot Corporation, a Delaware corporation
("Cabot") and Cabot Microelectronics Corporation, a Delaware corporation
("CMC"). Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in Article 1 hereof.

         WHEREAS, in connection with the contribution of substantially all of
the assets and liabilities of the MMD BUSINESS (as hereinafter defined) by Cabot
to its subsidiary, CMC, and the separation of such MMD BUSINESS from Cabot's
other businesses, Cabot and CMC desire to enter into this CDL Agreement
concerning the obligations of the parties with respect to confidential or
proprietary information, intellectual property, and other matters that are set
forth below.

         NOW, THEREFORE, in consideration of the mutual promises contained
herein, and intending to be legally bound, the parties agree as follows:

DEFINITIONS:

         For all purposes of this CDL Agreement, and except as otherwise
expressly provided, capitalized terms used herein shall have the following
meanings:

         "AFFILIATE" of any specified Person means any other Person directly or
indirectly Controlling, Controlled by, or under common Control with, such
specified Person; provided, however, that for purposes of this CDL Agreement,
(i) Cabot and its subsidiaries (other than CMC and its subsidiaries) shall not
be considered Affiliates of CMC and (ii) CMC and its subsidiaries shall not be
considered Affiliates of Cabot.

         "ANCILLARY AGREEMENTS" shall have the same meaning as set forth in the
Master Separation Agreement, by and among the parties hereto, dated the date
hereof (the "Master Separation Agreement").

         "MMD ASSETS" shall have the same meaning as set forth in the Master
Separation Agreement.

         "CABOT BUSINESSES" means the businesses conducted by Cabot and/or any
of its Affiliates at any time on or before the Contribution Date, but excluding
the MMD Business.

         "CABOT CONFIDENTIAL INFORMATION" means confidential or proprietary
information relating to the Cabot Businesses, including, but not limited to, any
unpublished Technology, unpublished patent applications, and other confidential
or proprietary technical and business information relating to the Cabot
Businesses. Examples of Cabot Confidential Information include, without
limitation: trade secrets and other proprietary or confidential information of
Cabot relating to the Cabot Businesses; trade secrets and other proprietary or
confidential information of any other person entrusted to Cabot in connection
with the Cabot
<PAGE>   2
Businesses; and trade secrets and other proprietary or confidential information
relating to the Cabot Businesses developed by any employee of the MMD Business
prior to the Contribution Date or to which any employee of the MMD Business was
provided access on or prior to the Contribution Date.

         "CMP" means chemical mechanical polishing consumables for use in the
semiconductor, electronic, rigid disk and magnetic head, and flat panel display
industries, such as polishing slurries, polishing pads, cleaning compositions,
precursor compositions, and related consumables.

         "CONTRIBUTION DATE" means March 28, 2000.

         "CONTROL" means the possession, direct or indirect, of the power to
direct or cause the direction of the management of the policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have the corollary meanings ascribed thereto.

         "COPYRIGHTS" means all registered and unregistered copyrights and
applications therefor.

         "MMD BUSINESS" means the business conducted by the Microelectronics
Materials Division of Cabot at any time on or before the Contribution Date,
either directly or indirectly through Cabot Carbon Ltd. and Cabot Specialty
Chemicals International Corporation, including, but not limited to, (i) all
business operations whose financial performance is reflected in the financial
statement (including the notes thereto) for the period ended September 30, 1999,
as set forth in the Registration Statement on form S-1, Reg. No. 333-95093, as
it may be amended (the "CMC Financial Statements") and (ii) all business
operations initiated or acquired by the Microelectronics Materials Division of
Cabot after the date of the CMC Financial Statements.

        "MMD CONFIDENTIAL INFORMATION" means confidential or proprietary
information relating exclusively to the MMD Business, including, but not limited
to, any unpublished Technology, unpublished patent applications, and other
confidential or proprietary technical and business information relating
exclusively to the MMD Business. Examples of MMD Confidential Information
include, without limitation: trade secrets and other proprietary or confidential
information transferred to CMC as part of the Assets; and trade secrets and
other proprietary or confidential information of any other person entrusted to
Cabot solely in connection with the MMD Business on or prior to the Contribution
Date.

         "PATENTS" means all patents and patent applications (including any
divisions, continuations, continuations-in-part, reexaminations, extensions,
renewals or reissues thereof), design registrations, utility models and similar
rights and applications therefor.

         "PERSON" means an individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated association, any other entity,
or any government or any department or agency or other unit thereof.

         "TECHNOLOGY" means all technology and know-how, including without
limitation,

                                      -2-
<PAGE>   3
technical information, trade secrets and knowledge, design rights (other than
statutory registrations), whether included in or derived from specifications,
manuals, notebooks, reports, documents, blue prints, inventions, drawings,
formulae, procedures, processes, devices, software and source code and
documentation therefor, flow charts, recording media, and other intangible,
tangible and electronic embodiments of information.

1.       CONFIDENTIALITY

1.1 Cabot agrees to keep confidential and not disclose, and shall cause its
Affiliates to keep confidential and not disclose, to any third party and not to
use for any purpose not authorized by CMC, in whole or in part, any MMD
Confidential Information.

1.2 CMC agrees to keep confidential and not disclose, and to cause its
Affiliates to keep confidential and not disclose, to any third party and not to
use for any purpose not authorized by Cabot, in whole or in part, any Cabot
Confidential Information.

1.3 For purposes of this CDL Agreement, Cabot Confidential Information and MMD
Confidential Information do not include, and a party and a party's Affiliates (a
party and Affiliates of the party being referred to as the "receiving party")
will have no obligations under this CDL Agreement, with respect to any
information of the other party or any Affiliate of the other party (the other
party and Affiliates of the other party being referred to as the "disclosing
party") which:

         (i) in the case of Cabot, is known to Cabot from a source other than
the MMD Business or CMC, as evidenced by competent proof thereof; or

         (ii) in the case of CMC, is known to CMC from a source other than Cabot
Businesses, as evidenced by competent proof thereof; or

         (iii) is or becomes publicly known through no wrongful act of the
receiving party (in which event the receiving party's obligations under this CDL
Agreement in respect thereto shall terminate on the date such information enters
the public domain); or

         (iv) is or was rightfully received by the receiving party from a third
party without violation of any obligations of confidentiality and/or use
restrictions owed by the third party to the disclosing party or any other party;
or

         (v) is disclosed by the disclosing party to a third party without
restrictions on the third party's right to use or disclose such information; or

         (vi) is independently developed by employees or consultants of the
receiving party without use of or reference to the disclosing party's
proprietary information; or

         (vii) is approved for release by the prior written authorization of the
disclosing party.

                                      -3-
<PAGE>   4
In addition, if the receiving party is requested or required (by oral questions,
interrogatories, request for information or documents, subpoena, civil
investigative demand, similar process or otherwise) to disclose any Confidential
Information of the disclosing party, such receiving party will provide prompt
notice to the disclosing party on such request(s) so that such disclosing party
may seek any appropriate protective order and/or waive compliance with the
provisions of this CDL Agreement. Failing the entry of a protective order or the
receipt of a waiver hereunder, if the receiving party is in the written opinion
of its attorneys legally required to disclose any of the disclosing party's
Confidential Information under pain of liability for contempt or other material
censure or material penalty, the receiving party may disclose such Confidential
Information without liability hereunder upon notice to the disclosing party.
Notwithstanding the foregoing, Cabot is permitted to disclose MMD Confidential
Information as required in litigation that is pending as of the Contribution
Date.

2.       ANCILLARY LICENSE GRANT BY CABOT

2.1 As of the Contribution Date, Cabot hereby grants to CMC and its Affiliates
(but only so long as an Affiliate of CMC) for CMP a fully paid-up, world-wide,
non-exclusive license to only such Copyrights, Patents, and Technology of Cabot
that:

         (x)      are not included within the MMD Assets, AND,

         (y)      (a)      are owned by Cabot on the Contribution Date,

                  (b)      do NOT relate to (i) treated or untreated fumed metal
                           oxide particles or the manufacture or treatment of
                           fumed metal oxide particles; or (ii) cesium chemicals
                           or other products of Cabot's Performance Materials
                           Division or the manufacture thereof;

                  (c)      would be infringed in the case of Copyrights and
                           Patents, or misappropriated in the case of
                           Technology, by the manufacture, treatment,
                           processing, handling, marketing, sale, or use of any
                           products (excluding treated or untreated fumed metal
                           oxide particles and cesium chemicals or other
                           products of Cabot's Performance Materials Division)
                           of the type sold or offered for sale by the MMD
                           Business as of the Contribution Date, and

                  (d)      were used by Cabot in connection with activities
                           undertaken by the MMD Business on or prior to the
                           Contribution Date.

 (The license granted in this Subsection 2.1 is hereinafter also referred to as
the "Ancillary License").

2.2 All trade secrets and other confidential or proprietary Technology,
unpublished Copyrights, and unpublished patent applications licensed to CMC and
its Affiliates pursuant to the Ancillary License that fall within the definition
of Cabot Confidential Information shall

                                      -4-
<PAGE>   5
remain subject to the provisions of Article 1 of this CDL Agreement.

2.3 Cabot shall not assert, and shall cause its Affiliates not to assert, any of
the Patents or copyrights in published copyrightable works licensed to CMC and
its Affiliates under the Ancillary License against their respective customers
with respect to their customers' use of CMP products manufactured and/or
supplied by CMC or any of its Affiliates pursuant to the Ancillary License.

2.4 The Ancillary License does not include the right to grant sublicenses to
others without the prior written authorization of Cabot. Any sublicense(s)
granted by CMC or any of its Affiliates in violation of this provision shall be
void, and the granting or any attempted grant by CMC or any of its Affiliates of
any sublicense(s) in violation of this provision shall in particular constitute
a material breach of this CDL Agreement by CMC.

2.5 Notwithstanding Section 8.6 herein, the rights of CMC and its Affiliates
pursuant to this Ancillary License are personal to CMC and its Affiliates and
shall not be assignable without the prior written authorization of Cabot.

2.6 In no event shall the Ancillary License be used in connection with or
support of any activity that is competitive with any activity of Cabot.

3. LICENSE GRANT TO CABOT BY CMC

3.1 As of the Effective Date of this CDL Agreement, CMC hereby grants to Cabot
and its Affiliates (but only so long as an Affiliate of Cabot) a fully paid-up,
worldwide, non-exclusive license to Copyrights, Patents, and Technology that are
among the MMD Assets, that would be infringed by the manufacture, treatment,
processing, handling, marketing, sale, or use of any products or services sold
or offered for sale by Cabot or any of its Affiliates for applications other
than CMP.

(The license granted in this Subsection 3.1 is hereinafter also referred to as
the "Cabot License").

3.2 All trade secrets and other confidential or proprietary Technology,
unpublished Copyrights, and unpublished patent applications licensed to Cabot
and its Affiliates pursuant to the Cabot License that fall within the definition
of MMD Confidential Information shall remain subject to the provisions of
Article 1 of this CDL Agreement.

3.3 CMC shall not assert, and shall cause its Affiliates not to assert, any of
the Patents or copyrights in published copyrightable works licensed to Cabot
under the Cabot License against Cabot's customers with respect to their
customers' use of non-CMP products manufactured and/or supplied by Cabot or its
Affiliates pursuant to the Cabot License.

3.4 The Cabot License does not include the right to grant sublicenses to others
without the prior written authorization of CMC. Any sublicense(s) granted by
Cabot or any of its Affiliates in violation of this provision shall be void, and
the granting or any attempted grant by Cabot or

                                      -5-
<PAGE>   6
any Affiliate of Cabot of any sublicense(s) in violation of this provision shall
in particular constitute a material breach of this CDL Agreement by CABOT.

3.5 Notwithstanding Section 8.6 herein, the rights of Cabot and its Affiliates
pursuant to this Cabot License are personal to Cabot and its Affiliates and
shall not be assignable without the prior written authorization of CMC.

3.6 In no event shall the Cabot License be used in connection with or support of
any activity that is competitive with any activity of CMC.

4.       COOPERATION

4.1 The parties will do everything that is necessary or appropriate to conform
to the purpose and spirit of this CDL Agreement, including, without limitation,
cooperating with the other party in connection with the maintenance, enforcement
and protection of the Copyrights, Patents and Technology, and executing any and
all documents or instruments, or obtaining any consents, in order to assign,
transfer, perfect, record, maintain, enforce or otherwise carry out the intent
of the terms of this CDL Agreement.

4.2 Each party will take appropriate measures to assure the confidentiality and
non-use obligations and other applicable obligations of a party pursuant to this
CDL Agreement are met by its legal representatives, members of supervisory
bodies, management, employees or other agents.

5.       CABOT PARTICLE AND PERFORMANCE MATERIALS TECHNOLOGY

In addition to its obligations pursuant to Section 1 above, CMC agrees, and
shall cause its Affiliates to agree, not to use any information in its
possession as of the Contribution Date concerning (i) Cabot's fumed metal oxide
products (treated and untreated) and related manufacturing or treatment
processes; (ii) cesium chemicals and other products of Cabot's Performance
Materials Division and related manufacturing processes; and (iii) any
information concerning the raw materials, suppliers, and/or equipment used in
any such processes, including product specifications, to manufacture or have
manufactured (a) treated or untreated fumed metal oxide particles and/or (b)
cesium chemicals and other products of Cabot's Performance Materials Division.
CMC further agrees, and shall further cause its Affiliates to agree, not to
disclose same to any third party. The obligations of CMC and its Affiliates
pursuant to this Section 5 shall apply to the foregoing information without
regard to whether or not it falls within the exceptions set forth in Subsection
1.3 above.

6. DISPERSION INTELLECTUAL PROPERTY

6.1 Cabot hereby agrees to assign to CMC an undivided one-half joint interest in
and to Cabot's rights in the Patents listed in Schedule 6.1 hereto ("Dispersion
Patents") (including the

                                      -6-
<PAGE>   7
right, subject to Section 6.10 below, to enforce Dispersion Patents, including
the right to sue for past, present, and future violations thereof, and to seek
and obtain relief and judgment therefor and/or to settle any such claims and to
collect monies owed in connection with such judgments or settlements). Subject
to the parties' respective undertakings of Sections 6.9 and 6.10, each of Cabot
and CMC shall enjoy its rights as a joint owner of the Dispersion Patents in
each applicable country without the consent of, and without accounting to, the
other joint owner.

6.2 Cabot hereby agrees to assign to CMC an undivided one-half joint interest in
and to Cabot's rights in the Technology owned by Cabot which relates to fumed
metal oxide dispersions, the preparation of fumed metal oxide dispersions,
quality control procedures and other testing and analytical procedures
associated therewith, handling and packaging processes and procedures for such
dispersions and raw materials, ISO documentation, and other information,
processes, specifications, data, formulae and formulations (including, e.g., the
identity and amounts of the dispersion medium, fumed metal oxide(s), other
ingredients included for the purpose of preparing stable, clean, fumed metal
oxide dispersions (e.g., stabilizers, surfactants, acid, base, biocide, etc.))
used in or relating to fumed metal oxide dispersions made by Cabot (including
those made by the MMD Division thereof) on or prior to the Contribution Date
("Dispersion Technology"). As used herein, "Dispersion Technology" does not
include ingredients and process information, the sole purpose and function of
which is specific to a particular end-use application for the fumed metal oxide
dispersion. Subject to the parties' respective undertakings of Sections 6.9 and
6.10, each of Cabot and CMC shall enjoy its rights as a joint owner of
Dispersion Technology without the consent of, and without accounting to, the
other joint owner.

6.3 As soon as reasonably practicable after the date of this CDL Agreement, CMC
will deliver to Cabot, and Cabot will deliver to CMC, copies of all tangible and
electronic documentation of Dispersion Technology within its possession or
control (including, without limitation, that within the possession of Davies)
that is reasonably required to use, and/or to develop and commercialize fumed
metal oxide dispersions made with, the Dispersion Technology. Cabot and CMC, as
the case may be, will further provide copies of tangible and/or electronic
documentation not previously provided in response to reasonable requests from
the other.

6.4 Cabot hereby agrees to assign to CMC an undivided one-half joint interest in
and to Cabot's rights in the registered copyrights and pending applications for
copyright registration listed in Schedule 6.4 hereto and the unpublished
copyrighted works included within the Dispersion Technology ("Dispersion
Copyrights"). Subject to the parties' respective undertakings of Sections 6.9
and 6.10, each of Cabot and CMC shall enjoy its rights as a joint owner of the
Dispersion Copyrights in each applicable country without the consent of, and
without accounting to, the other joint owner.

6.5 With respect to Dispersion Patents, Dispersion Copyrights, and Dispersion
Technology (hereinafter collectively referred to as the "Dispersion Intellectual
Property"), Cabot shall deliver to CMC on the Contribution Date an omnibus
transfer and assignment of an undivided one-half joint interest in and to the
Dispersion Intellectual Property "AS IS" and shall thereafter deliver to CMC
good and sufficient instruments of conveyance and assignment, all in recordable
form, for all patents, pending patent applications, registered copyrights and
pending copyright applications

                                      -7-
<PAGE>   8
with respect to any of the foregoing.

6.6 All transfer costs, taxes, and other related fees and expenses (except for
Cabot's internal costs) associated with the assignment, transfer, and
recordation of an undivided one-half joint interest in and to the Dispersion
Intellectual Property to CMC pursuant to this CDL Agreement shall be borne by
CMC.

6.7 Costs associated with the prosecution and maintenance of the Dispersion
Patents shall be shared equally by Cabot and CMC. Cabot shall pay all such costs
and CMC shall promptly reimburse Cabot for one-half of such costs upon
presentation of appropriate supporting documentation. Neither party will
knowingly take any actions or intentionally fail to take any actions which will
cause the Dispersion Patents to become expired, abandoned or otherwise invalid
without providing thirty (30) days advance written notice thereof to the other
party. If at any time Cabot or CMC elects to not maintain any patent or
application of the Dispersion Patents, the party desiring to prosecute or
maintain the patent or application shall pay the entire cost thereof, and the
party not desiring to prosecute or maintain the particular patent or application
shall assign its rights to the particular patent or application to the party
desiring to prosecute or maintain same. Decisions as to prosecuting and/or
maintaining particular patents or patent applications of the Dispersion Patents
shall be on a country-by-country basis, and a party's decision not to
participate in prosecuting or maintaining a particular patent or application in
one country shall not prejudice its right to participate in another country
directed to the same patent or application.

6.8 All trade secrets, unpublished Dispersion Copyrights, unpublished patent
applications of the Dispersion Patents, and other confidential or proprietary
Dispersion Technology shall be deemed to be both Cabot Confidential Information
and CMC Confidential Information and subject to the provisions of Article 1 of
this CDL Agreement. However, notwithstanding the obligations of Article 1, Cabot
and CMC shall be permitted to disclose to its respective customers, potential
customers, and suppliers only such confidential Dispersion Technology as is
reasonably and commercially necessary for such manufacturing, distribution,
marketing and sales, provided, the third party to whom such disclosure is to be
made agrees to undertake obligations of confidentiality and non-use appropriate
to the circumstances. Such circumstances will include, for example, the quantity
and quality of information to be disclosed, the potential and likelihood of
adverse use of the information by the third party, and the like. Should a party
desire to disclose any of the confidential Dispersion Technology beyond that
which is reasonably and commercially necessary for the manufacture,
distribution, marketing, and sales of products, the parties agree to discuss
diligently and in good faith a waiver of the other party's obligations with
respect thereto to the extent needed to enable that other party to undertake
reasonably effective manufacturing, distribution, marketing and sales of any
products.

6.9 With respect to Dispersion Intellectual Property (in which Cabot and CMC
each own an undivided one-half interest), Cabot and CMC, as the case may be,
agree as follows:

         (a) Cabot shall not license or assign any of such Dispersion
         Intellectual Property to any party (other than an Affiliate of Cabot,
         but only so long as an Affiliate) for use in the

                                      -8-
<PAGE>   9
         production and/or sale or use of CMP consumables without the prior
         written authorization of CMC; and

         (b) CMC shall not license or assign any of such Dispersion Intellectual
         Property to any party (other than an Affiliate of CMC, but only so long
         as an Affiliate) for use in the production and/or sale or use of
         products for use in non-CMP applications without the prior written
         authorization of Cabot.

Any assignment by either Cabot or CMC of its interest in any Dispersion
Intellectual Property, or any of its rights therein, to any Person (including an
Affiliate) shall be subject to this Section 6.9 and other applicable provisions
of this CDL Agreement.

6.10 Cabot and/or CMC, at its sole discretion, individually or jointly, may
bring enforcement proceedings against an infringer of any Dispersion
Intellectual Property. However, the parties shall jointly discuss any such
possible enforcement proceeding prior to engaging litigation counsel in
connection therewith and/or notifying the party believed to infringe. The costs
of any jointly brought proceeding shall be borne equally by the parties unless
otherwise agreed. The costs of any proceeding brought by an individual party
shall be borne solely by that party (the "enforcing party"). The non-enforcing
party agrees to cooperate with the enforcing party and will join as an
indispensable party when deemed to be required by law. The enforcing party will
reimburse the non-enforcing party for its costs and expenses (including attorney
fees, but excluding the non-enforcing party's internal costs) for its
participation. Any monies recovered by way of damages or otherwise in respect to
any such proceeding shall be kept by the party which bore the costs of such
proceeding; or, in the case where the parties have shared the costs, shall be
shared in the same proportion as the costs, unless otherwise agreed.

6.11 CMC and Cabot each agrees to notify the other of (i) any threat or
allegation made by any third party, that any Dispersion Intellectual Property,
or the practice thereof, infringes any third party intellectual property rights,
or (ii) any activities or threatened activities of any third party of which CMC
or Cabot, as the case may be, becomes aware that infringe or will infringe upon
the Dispersion Intellectual Property.

7.       DISCLAIMER

         Nothing in this CDL Agreement shall be construed as a warranty or
representation that anything made, used, sold, offered for sale, or otherwise
disposed of under any license granted in this CDL Agreement is or will be free
from infringement of any intellectual property right of any third party
including any patent, copyright, copyright registration, mask work registration,
trademark, or trademark registration issued or to be issued by any country.

8.       MISCELLANEOUS

8.1 Except as otherwise set forth in this CDL Agreement, this CDL Agreement and
any schedules hereto and the Master Separation Agreement and any schedules
thereto shall constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and shall supersede all prior agreements
and understandings, whether written or oral, between the parties

                                      -9-
<PAGE>   10
with respect to such subject matter.

8.2 This CDL Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware (other than the laws regarding conflicts of laws)
as to all matters, including matters of validity, construction, effect,
performance and remedies.

8.3 Each of the parties hereto shall use all commercially reasonable efforts to
cause to be performed all actions, agreements and obligations set forth herein
to be performed by any Affiliate of such party.

8.4 All notices and other communications hereunder shall be in writing and shall
be delivered in person, by telecopy, by express or overnight mail delivered by a
nationally recognized air courier (delivery charges prepaid), or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties as follows:

(a)               If to Cabot, to:

                           Cabot Corporation
                           75 State Street
                           Boston, Massachusetts  02109
                           Attention:
                           Telecopy No.:

                           With a copy to:

                           Law Department
                           Cabot Corporation
                           75 State Street
                           Boston, Massachusetts  02109
                           Attention:
                           Telecopy No.:

(b)               If to CMC, to:

                           Cabot Microelectronics Corporation
                           870 North Commons Drive
                           Aurora, Illinois  60504
                           Attention:
                           Telecopy No.:

or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery or when delivery is refused. Any notice or communication sent by
telecopy or by air courier shall be deemed effective on the first Business Day
at the place at which such notice or communication is received following the day
on which such notice or communication was sent.

                                      -10-
<PAGE>   11
8.5 This CDL Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement. The CDL Agreement may be delivered by
facsimile transmission of a signed copy thereof.

8.6 This CDL Agreement and all of the provisions hereof shall be binding upon
the parties hereto and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Except with respect to a merger of
either party with another Person, neither this CDL Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either party
hereto without the prior written consent of the other party, which consent shall
not be unreasonably withheld or delayed; provided, however, that Cabot and CMC
may assign their respective rights, interests, duties, liabilities and
obligations under this CDL Agreement to any of their respective Affiliates, but
such assignment shall not relieve Cabot or CMC, as the assignee, of its
obligations hereunder. The Schedules attached hereto or referred to herein are
an integral part of this CDL Agreement and are hereby incorporated into this CDL
Agreement and made a part hereof as if set forth in full herein. Notwithstanding
anything contained in this Agreement, Cabot and CMC shall not assign the
Ancillary License, in the case of CMC, or the Cabot License, in the case of
Cabot, to another Person, even upon a merger, without the prior written
authorization of the other party.

8.7 All disputes arising from or in connection with this CDL Agreement, whether
based on contract, tort, or otherwise (collectively, "Disputes"), shall be
exclusively governed by and settled in accordance with the provisions of Section
8.8 of the Mater Separation Agreement.

8.8 Any provision of this CDL Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

8.9 The observance of any term of this CDL Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
by the party entitled to enforce such term, but such waiver shall be effective
only if it is in writing signed by the party against which such waiver is to be
asserted. Unless otherwise expressly provided in this CDL Agreement, no delay or
omission on the part of any party in exercising any right or privilege under
this CDL Agreement shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any right or privilege under this CDL Agreement operate
as a waiver of any other right or privilege under this CDL Agreement, nor shall
any single or partial exercise of any right or privilege preclude any other or
further exercise thereof or the exercise of any other right or privilege under
this CDL Agreement. No failure by either party to take any action or assert any
right or privilege hereunder shall be deemed to be a waiver of such right or
privilege in the event of the continuation or repetition of the circumstances
giving rise to such right unless expressly waived in writing by the party
against whom the existence of such waiver is asserted.

8.10 This CDL Agreement may not be amended or modified in any respect except by
a written agreement signed by both of the parties hereto.

                                      -11-
<PAGE>   12
8.11 Each of the parties hereto represents to the other that (a) it has the
corporate power and authority to execute, deliver and perform this CDL
Agreement, (b) the execution, delivery and performance of this CDL Agreement by
it has been duly authorized by all necessary corporate action, (c) it has duly
and validly executed and delivered this CDL Agreement, and (d) this CDL
Agreement is a legal, valid and binding obligation, enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equity principles.

8.12 The headings contained in this CDL Agreement and in any Schedule hereto are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this CDL Agreement. Any capitalized term used in any Schedule
but not otherwise defined therein, shall have the meaning assigned to such term
in this CDL Agreement. When a reference is made in this CDL Agreement to an
Article or a Section or Schedule, such reference shall be to an Article or
Section of, or a Schedule to, this CDL Agreement unless otherwise indicated.
After the Contribution Date, the MMD Business shall be deemed to no longer exist
and all references made herein to CMC as a party which operate as of a time
following the Contribution Date, shall be deemed to refer to CMC and its
subsidiaries as a single party.

                                 * * * * * * * *

                         [SIGNATURES ON FOLLOWING PAGE]

                                      -12-
<PAGE>   13
                  IN WITNESS WHEREOF, each of the parties has caused this CDL
Agreement to be executed on its behalf by its officers thereunto duly authorized
on the day and year first above written.

                                               CABOT CORPORATION

                                               By:   /s/  Samuel W. Bodman
                                                  ------------------------------
                                                     Name:   Samuel W. Bodman
                                                     Title:  Chairman and CEO

                                               CABOT MICROELECTRONICS
                                                CORPORATION

                                               By:   /s/  Matthew Neville
                                                  ------------------------------
                                                     Name:  Matthew Neville
                                                     Title:  President and CEO

                                      -13-
<PAGE>   14
                                  SCHEDULE 6.1

<TABLE>
<CAPTION>
 COUNTRY                             APPLIC. NO.         FILING DATE            PATENT NO.         GRANT DATE
 -------                             -----------         -----------            ----------         ----------
<S>               <C>                <C>                 <C>                    <C>                <C>
ASTL              52010/90            21MR1990             625980               21MR1990
BELG              9000319             21MR1990             BR266/90             02JL1991
BRAZ              PI9001302           21MR1990             PI9001302            25NO1997
CANA              2012719-8           21MR1990             2012719              08JE1999
CHIN              90101525            21MR1990             28833                16OC1994
FRAN              9003557             20MR1990             9003557              11FE1994
GBRI              9006122.7           19MR1990             2229432              19MR1990
GERW              P4006392.5          01MR1990
INDI              869/MAS/89          29NO1989             175167               01DE1995
ITAL              19748A90            21MR1990             01239546             05NO1993
JAPA              2-68568             20MR1990             2949633              09JL1999
KORS              3705/1990           20MR1990             148692               29MY1998
MAYS              PI9000449           21MR1990
MEXI              19969               20MR1990             176811               05DE1994
TAIW              79100101            08JA1990             NI-43287             02AP1991
THAI              010174              26JA1990             7128                 11SE1997
USA               07/829609           30JA1992             5246624              21SE1993

USA               07/326891           1MR1989              5116535              26MY1992
ASTL              52009/90            21MR1990             631847               21MR1990
BELG              9000320             21MR1990             9000320              27AU1991
BRAZ              PI9001239           15MR1990             PI9001239            25NO1997
CANA              2012718-0           21MR1990             2012718              03DE1996
CHIN              90101086            28FE1990             29805                22JA1995
FRAN              9003558             20MR1990             9003558              04FE1994
GBRI              9006121.9           19MR1990             2229715              14OC1992
GERW              P4006393.3-41       01MR1990
INDI              912/MAS/89          11DE1989             175056               03NO1995
ITAL              19747A90            21MR1990             01241073             29DE1993
JAPA              2-68569             20MR1990             2935125              04JE1999
KORS              3706/1990           20MR1990             145729               06MY1998
MAYS              PI9000448           21MR1990
MEXI              19968               20MR1990             176602               14NO1994
TAIW              79102182            20MR1990             NI-44248             10MY1991
THAI              010175              26JA1990
</TABLE>

                                      -14-
<PAGE>   15
                                  SCHEDULE 6.4

                                        None

                                      -15-

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