***
Text Omitted and Filed Separately with the Securities and Exchange
Commission.
Confidential Treatment Requested Under 17C.F.R.
Sections 200.80(b)(4) and 240.24b-2
AMENDMENT NO. 1
TO
FUMED SILICA SUPPLY
AGREEMENT
This Amendment
No. 1 to Fumed Silica Supply Agreement (this
“Amendment”) is made and executed as of September 29,
2006 (the “Effective Date”) by and between Cabot
Corporation, a Delaware corporation (“Cabot”), and
Cabot Microelectronics Corporation, a Delaware corporation
(“CMC”), and supplements and amends the FUMED SILICA
SUPPLY AGREEMENT executed on January 16, 2004 (the “Original
Agreement” and, as amended hereby, the
“Agreement”) between Cabot and CMC. Capitalized terms
used herein without definition and defined in the Original
Agreement shall have the same meanings as defined in the Original
Agreement. Cabot and CMC are each referred to from time to time in
the Original Agreement and herein as a “Party” and,
together, the “Parties.”
RECITALS
WHEREAS, CMC
and Cabot agree that [***] is beneficial to the [***] of Fumed
Silica purchased by CMC from Cabot pursuant to the Original
Agreement.
WHEREAS, CMC and Cabot agree that
the capability for [***] should be installed on Cabot’s
Tuscola A unit, Tuscola B unit and Barry B unit
where Fumed Silica supplied to CMC
is manufactured.
WHEREAS, CMC
and Cabot entered into a Letter of Agreement dated as of February
15, 2006 (the “Letter of Agreement”) regarding the
Parties’ intent with respect to [***].
WHEREAS, CMC and Cabot wish to amend the
Original Agreement to, among other things, include the
Parties’ agreement as to the [***] and the payment for such
[***].
NOW THEREFORE,
the Parties do hereby agree as follows:
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1.
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Cabot has
installed on Tuscola A unit a [***] (“TU-A Temporary
System”). The TU-A Temporary System has been in operation
since late April 2006 for [***] production. However, the TU-A
Temporary System has been used in a mode in which [***]. The result
is that the [***] and the full anticipated benefit of the system
has not been realized. When the [***], the system is said to be
operated in [***] mode. Once a permanent system has been installed
and put into operation at the Tuscola A Unit in accordance with the
terms of this Amendment, the TU-A Temporary System will be
decommissioned and the associated rented equipment
returned.
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2.
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(a) At
CMC’s request, Cabot is in the process of evaluating the
feasibility of a [***] for use at the Tuscola A Unit and the Barry
B Unit. If Cabot reasonably and in good faith determines that such
a [***] is not feasible, then a [***] shall be selected by the
Parties for use at Tuscola A Unit and Barry B Unit. On or before
December 15, 2006, Cabot will give written notice to CMC whether it
will be feasible to install and operate a [***] and if not, Cabot
will provide a written description of the reasons and basis
therefor. The system selected to [***] at the Tuscola A Unit and
Barry B Unit, either the [***] shall be referred to herein as the
“TU-A Permanent System”, and the “BA-B Permanent
System”, respectively. Cabot shall not initiate final design
and construction of the TU-A Permanent System or BA-B Permanent
System until each of the following conditions (the “Permanent
Process Conditions”) have been met: (i) Cabot has received
CMC’s written approval to proceed with the detailed design
and installation of the TU-A Permanent System and the BA-B
Permanent System (which approval shall not be unreasonably withheld
or delayed); (ii) at least [***] of CMC’s orders for a period
of at least one month for [***] to be produced at Tuscola A unit
are for [***] and (iii) either (x) CMC shall approve in writing a
Supplier Process Change Notification for production of [***] using
the TU-A Permanent System and the BA-B Permanent System,
respectively (which Permanent Systems shall, at the election of
CMC, be run [***] or, (y) the Parties reach a mutually satisfactory
alternative agreement with respect to the production of [***] on
the Tuscola A Unit and Barry B unit. Upon satisfaction of each of
the Permanent Process Conditions, Cabot will promptly thereafter
proceed with the final design, construction, installation and
operation of the TU-A Permanent System and the BA-B Permanent
System. All design, engineering, capital, installation and
operation costs relating to the operation of TU-A Permanent System
(“TU-A Permanent Expenses”) and the BA-B Permanent
System (“BA-B Permanent Expenses”) shall be at Cabot's
expense.
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(b) If any
Permanent Process Condition is not satisfied prior to December 31,
2006, then from and after January 1, 2007 Cabot will continue to
operate the TU-A Temporary System until the Permanent Process
Conditions have been satisfied, or CMC directs Cabot, on thirty
(30) days notice, to decommission the TU-A Temporary System and
return the rented equipment.
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3.
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Cabot will pay
for the TU-A Temporary System [***] costs. Cabot will pay for the
TU-A Temporary System [***] costs, including but not limited to
[***] (collectively, the TU-A [***] Costs”). Notwithstanding
the foregoing, if the Permanent Process Conditions have not been
satisfied by December 31, 2006, CMC will pay documented, actual
TU-A [***] Costs reasonably incurred for the period of time
beginning January 1, 2007 until the earlier of the date the
Permanent Process Conditions have been satisfied, or the date the
TU-A Temporary System is decommissioned and the rented equipment
returned.
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4. Cabot will install and operate [***]
(“TU-B Temporary System”). At CMC’s election, the
TU-B Temporary Expenses (as hereinafter
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