ASSET PURCHASE AGREEMENT

(1)

Closing Date Certificate

(2)

No Notice of Objection

(3)

Notice of Objection

(1)

Closing Statement

(2)

Ferro’s Review

(3)

Informal Negotiations

(4)

Dispute Resolution

(5)

Working Capital Collar

(6)

Closing Working Capital

(7)

Amount of Adjustment

(1)

Environmental Investigations and Testing

(2)

Procedure

(3)

Responsibilities

(4)

Limitations

A.

Ferro owns 100% of the equity interest (the “Suzhou Equity Interest”) of Ferro (Suzhou) Energy Storage Materials Co. Ltd. (“Ferro Suzhou”), a wholly owned foreign enterprise established under the applicable laws and regulations of the People’s Republic of China (the “P.R.C.”), having its legal address at No. 15 Suhong East Road, Suzhou Industrial Park, Suzhou City, Jiangsu Province, P.R.C.

B.

Ferro and Ferro Suzhou are engaged in the worldwide business (as currently conducted by each of Ferro and Ferro Suzhou, the “Fine Chemicals Business”) of designing, developing, formulating, manufacturing, marketing and selling the products listed on Appendix A-1 to this Agreement (the “Products”).

C.

Novolyte desires to purchase from Ferro, and Ferro desires to sell to Novolyte, the Fine Chemicals Business on and subject to the terms and conditions of this Purchase Agreement.

D.

Simultaneously with the Closing of this Purchase Agreement, Ferro and Novolyte or its assignee are entering into that certain Suzhou Equity Transfer Agreement, the form of which is attached as Appendix L (the “Suzhou Equity Transfer Agreement”), which Suzhou Equity Transfer Agreement will be filed after the Closing pursuant to the terms thereof with the appropriate governmental authorities in the P.R.C. in order to obtain approval of the transfer and sale of the Suzhou Equity Interest to Novolyte (the “Suzhou Equity Transfer”)

1.1

Definitions. Appendix A sets forth the definitions of certain terms used in this Purchase Agreement. Those terms shall have the meanings set forth on Appendix A where used in this Purchase Agreement and identified with initial capital letters.

1.2

Construction. For purposes of this Purchase Agreement, except where the context otherwise requires —

(A)

The term “parties” means Novolyte and Ferro.

(B)

The term “person” includes any natural person, firm, association, partnership, corporation, limited liability company, limited liability partnership, governmental agency, or other entity.

(C)

The term “today” means September 29, 2008.

(D)

All currency amounts stated in this Purchase Agreement are in United States Dollars.

(E)

References to “days” mean calendar days. (If, however, an action or obligation is due to be undertaken by or on a day other than a business day, i.e., a Saturday, Sunday, or public holiday, in the United States, then that action or obligation will be deemed to be due on the next following business day.)

(F)

When introducing a series of items, the term “including” is not intended to limit the more general description that precedes the items listed.

(G)

The Table of Contents and the headings of the Articles and Sections are included for convenience of reference only and are not intended to affect the meaning of the operative provisions to which they relate.

(A)

At the Closing and except as otherwise contemplated by the Suzhou Equity Transfer Agreement, Novolyte will purchase from Ferro, and Ferro will sell, transfer, and assign to Novolyte, Ownership of all of the Acquired Assets (as defined in Section 2.2);

(B)

At the Closing and except as otherwise contemplated by the Suzhou Equity Transfer Agreement, Novolyte will assume and become directly and solely responsible for the payment or discharge of all of the Assumed Liabilities (as defined in Section 2.4);

(C)

Novolyte will pay Ferro the Purchase Price as provided in Section 2.8.

2.2

Acquired Assets. For purposes of this Purchase Agreement and except as otherwise set forth in Section 2.3, the term “Acquired Assets” means all of Ferro’s rights, title, and interest in and to the Specified Acquired Assets (as defined in Section 2.2(A)), as well as all of Ferro’s rights, title, and interest in and to those assets used primarily in Ferro’s conduct of the Fine Chemicals Business and described in Section 2.2(B) hereof, as the same shall exist as of the Closing, as follows:

(A)

Specified Acquired Assets. The Acquired Assets include all of Ferro’s rights, title and interest in and to the following specified assets (the “Specified Acquired Assets”):

(1)

All registered Intellectual Property Owned or used by Ferro and its Affiliates primarily related to the Fine Chemicals Business as more specifically described in Part H of Appendix M hereto, together with the Intellectual Property described on Appendix B hereto (“Acquired Intellectual Property”);

(2)

The assets located at The Posnick Center of Innovative Technology, 7500 East Pleasant Valley Road, Independence, Ohio 44131 (the “Posnick Location”) specifically listed on Appendix B hereto (the “Acquired Posnick Assets”);

(3)

The assets located at 7061 East Pleasant Valley Road, Independence, Ohio 44141 (the “Independence Woods Location”) specifically listed on Appendix B hereto (the “Acquired Independence Woods Assets”);

(4)

The assets of Ferro Japan K.K. (“Ferro Japan”) located at 8F, House Hamamatsu-cho Bldg., 2-7-1 Hamamatsu-cho, Minato-ku, Tokyo 105-0013 Japan (the “Japanese Location”) specifically listed on Appendix B hereto (the “Acquired Japanese Assets”);

(5)

The assets located at 7050 Krick Road, Walton Hills, OH 44146-4494 (the “Walton Hills Location”) specifically listed on Appendix B hereto (the “Acquired Walton Hills Assets”);

(6)

The Suzhou Equity Interest; and

(7)

Except as otherwise described in Section 2.3, all assets located at the Baton Rouge Location.

(B)

Other Acquired Assets. In addition to the Specified Acquired Assets, the Acquired Assets include all of Ferro’s rights, title, and interest in and to those assets used primarily in Ferro’s conduct of the Fine Chemicals Business and described in this Section 2.2(B) hereof, including without limitation:

(1)

All Acquired Trade Accounts Receivable;

(2)

All Acquired Inventories;

(3)

All Acquired Prepaid Items;

(4)

All Acquired Tangible Personal Property;

(5)

All Acquired Real Property;

(6)

So far as they can be or are lawfully assigned, transferred to, or held in trust for Novolyte, all Acquired Contracts, Acquired Leases, Acquired Licenses, and Acquired Permits;

(7)

All Acquired Third-Party Claims;

(8)

To the extent not attorney-client privileged, all Acquired Business Records;

(9)

The Inventories and Trade Accounts Receivable of Ferro Belgium Sprl (“Ferro Belgium”) exclusively related to the Fine Chemicals Business and the Business Records exclusively related to the Inventories, Trade Accounts Receivable and Trade Accounts Payable of Ferro Belgium; and

(10)

All claims, deposits, prepayments, prepaid expenses, warranties, guarantees, refunds, causes of action, rights of recovery, rights of set-off and rights of recoupment of every kind and nature (whether or not known or unknown or contingent or non-contingent) of Ferro with respect to any of the Acquired Assets or Assumed Liabilities.

2.3

Retained Assets. For purposes of this Purchase Agreement, the term “Retained Assets” means the following rights, properties, and assets as the same shall exist as of the Closing:

(A)

All Cash;

(B)

All rights, properties, and assets of Ferro that are used primarily in any business or businesses other than the Fine Chemicals Business;

(C)

Other than the Acquired Intellectual Property and the Intellectual Property described on Appendix B, all other Intellectual Property including all trademarks registered in the name of Ferro and its Affiliates and, whether or not registered, the names and trademarks “Ferro” and “Check-in-a-Circle” logo and the goodwill associated with such names, marks, and logos;

(D)

All causes of action, rights of action, and warranty and product liability claims against other persons that relate to Retained Assets or Retained Liabilities;

(E)

Subject to Section 6.8, all policies of insurance and claims and rights under such policies of insurance, whether or not related to the Fine Chemicals Business, the Acquired Assets, or the Assumed Liabilities;

(F)

All Business Records and all financial, operating, inventory, legal, personnel, payroll, and customer records and all sales and promotional literature, correspondence, and records, other than the Acquired Business Records and the Business Records of Ferro Suzhou;

(G)

Except for Foreign Plans maintained by Ferro Suzhou, all assets of Employee Benefit Plans and Foreign Plans;

(H)

Except for the Acquired Walton Hills Assets, all assets used in the conduct of the Fine Chemicals Business located at the Walton Hills Location, including without limitation the “epoxidation” technology and assets;

(I)

All assets, whether or not used by Ferro primarily in the conduct of the Fine Chemicals Business, which are identified as Retained Assets on Appendix C;

(J)

All assets of Ferro Belgium not specifically described in Section 2.2(B)(9);

(K)

Other than the Acquired Posnick Assets, all other assets located at the Posnick Location;

(L)

Other than the Acquired Independence Woods Assets, all other assets located at the Independence Woods Location;

(M)

Other than the Acquired Japanese Assets, all other assets of Ferro Japan; and

(N)

The assets located at the Acquired Real Property which are used to toll products for the PAD division of Ferro and which are identified as Retained Assets on Appendix C.

2.4

Assumed Liabilities. For purposes of this Purchase Agreement, the term “Assumed Liabilities” means only the following liabilities and obligations (including only the following liabilities and obligations of Ferro Suzhou) arising out of and directly relating to Ferro’s conduct of the Fine Chemicals Business and existing at the Closing or, only with respect to Section 8.1, Novolyte’s Employee Obligations arising immediately after the Closing, and no other liabilities or obligations (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due and regardless of when asserted):

(A)

All Assumed Trade Accounts Payable;

(B)

All liabilities and obligations that arise at or after the Closing under the Acquired Contracts, Acquired Leases, Acquired Licenses, and Acquired Permits to Novolyte under this Purchase Agreement and all liabilities that arise at or after the Closing under the Contracts, Leases, Licenses and Permits of Ferro Suzhou (other than any such liabilities or obligations that arise out of any breach or alleged breach before the Closing);

(C)

All liabilities and obligations arising out of an injury to person or damage to property caused by a product manufactured by Ferro at the Baton Rouge Location or the Suzhou Location and sold by Novolyte or its Affiliates after the Closing to the extent such injury is or is alleged to be the result of a modification to such product by Novolyte, its Affiliates, agents or assigns, or such product was manufactured by Ferro in accordance with its specifications but sold by Novolyte, its Affiliates, agents or assigns outside of such product’s specifications;

(D)

Novolyte’s Employee Obligations (as defined in Section 8.1);

(E)

Novolyte’s Environmental Obligations (as defined in Section 8.2);

(F)

Costs and expenses for which Novolyte is responsible under Section 12.2;

(G)

All liabilities and obligations of the Fine Chemicals Business that have not been fully satisfied or performed as of the Closing and that arise or have arisen out of the conduct of the Fine Chemicals Business solely to the extent that such liabilities and obligations have occurred in the ordinary course of business and are reflected on the balance sheet of the Fine Chemicals Business as of the Closing as set forth on Schedule 2.4(G); and

(H)

All Trade Accounts Payable of Ferro Belgium and Ferro Japan exclusively related to the Fine Chemicals Business.

2.5

Retained Liabilities. Neither Novolyte nor any of its Affiliates shall assume or become liable to pay, perform or discharge any liability or obligation whatsoever of Ferro, Ferro Japan, Ferro Suzhou, Ferro Belgium, or any of their respective Affiliates, whether or not relating to any of the Acquired Assets or the Fine Chemicals Business, whether known or unknown, fixed or contingent, accrued or unaccrued, except for and to the extent those liabilities and obligations are expressly included in the definition of Assumed Liabilities. All liabilities and other obligations of Ferro, Ferro Belgium, Ferro Japan, Ferro Suzhou, and/or their respective Affiliates other than the Assumed Liabilities, including the liabilities and obligations described in this Section 2.5, are referred to herein as the “Retained Liabilities.” In furtherance and not in limitation of the foregoing, except for the Assumed Liabilities, Novolyte expressly is not assuming any of the following liabilities or obligations, whether accrued or fixed, absolute or contingent, known or unknown, determined or determinable, and whenever or wherever arising, including, without limitation:

(A)

All indebtedness, including all bank loans and other indebtedness for borrowed money, all guarantees and similar obligations, all obligations secured by liens, all capital leases and all obligations incurred for all or any part of the purchase price of property or other assets;

(B)

All claims, liabilities and obligations of Ferro or any predecessor(s) or Affiliate(s) of Ferro resulting from, caused by, arising out of, or relating to, directly or indirectly the ownership or operation of any business other than the Fine Chemicals Business;

(C)

Except for the Assumed Liabilities, all claims, liabilities and obligations of Ferro or Ferro Suzhou, any predecessor(s) or Affiliate(s) of Ferro or Ferro Suzhou resulting from, caused by, arising out of, or relating to, directly or indirectly, the ownership or operation of the Fine Chemicals Business prior to the Closing;

(D)

All liabilities and obligations arising out of, relating to, or resulting from any claims or actions, whether founded upon negligence, breach of warranty, strict liability in tort, and/or other similar legal theory, seeking compensation or recovery for injury to person or damage to property alleged to have been caused by a Product sold by Ferro or its Affiliates (including Ferro Suzhou) before the Closing;

(E)

Ferro’s Employee Obligations (as defined in Section 8.1);

(F)

All liabilities and obligations (including fines and penalties, costs and expenses) relating to the Identified Environmental Matters and Ferro’s Environmental Obligations (as defined in Section 8.2);

(G)

Costs and expenses for which Ferro is responsible under Section 12.2;

(H)

All liabilities, undertakings, and obligations, whether or not arising primarily out of the conduct of the Fine Chemicals Business, which are identified as Retained Liabilities on Appendix D (the failure to list any liability, undertaking or obligation on Appendix D shall not create an Assumed Liability or any other liability on the part of Novolyte or any of its Affiliates);

(I)

All liabilities and obligations of Ferro Belgium and Ferro Japan not specifically described in Section 2.4(H);

(J)

All claims, liabilities and obligations that relate to or involve any of the Retained Assets;

(K)

All liabilities and other obligations under the Acquired Contracts, Acquired Leases, Acquired Licenses, and Acquired Permits with respect to the period prior to Closing, whether known or unknown at the Closing (other than the Assumed Liabilities);

(L)

All liabilities and other obligations under the Contracts, Leases, Licenses, and Permits that arise after the Closing but which arise out of or relate to any breach that occurred before the Closing;

(M)

Except for the Acquired Contracts, Acquired Leases, Acquired Licenses, and Acquired Permits assumed hereunder and the Contracts, Leases, Licenses and Permits of Ferro Suzhou, all other liabilities and indebtedness under Contracts, Leases, Licenses, Permits, mortgages, indentures and other instruments of Ferro and/or its Affiliates;

(N)

All liabilities and obligations of Ferro to its stockholders or other equity interest holders;

(O)

All liabilities and obligations of the Fine Chemicals Business in respect of any amounts owed to Ferro or any of its Affiliates;

(P)

All liabilities and obligations to indemnify, reimburse or advance amounts to any officer, director, employee or agent of Ferro or its Affiliates;

(Q)

All liabilities in respect of any proceeding, action, claim or investigation at law or in equity commenced or with respect to the period prior to the Closing Date in connection with the Fine Chemicals Business;

(R)

Except as otherwise set forth in Article 8 hereof, all liabilities and obligations arising out of or resulting from non-compliance with any law, ordinance, regulation, injunction or treaty by Ferro or its Affiliates;

(S)

All Pre-Closing Tax Liabilities; and

(T)

All Taxes relating to or in connection with the Split-Off Transaction or the Suzhou Equity Transfer.

2.6

Purchase Price. For purposes of this Purchase Agreement, the term “Purchase Price” means –

(A)

Fifty Six Million Dollars ($56,000,000) (the “Closing Purchase Price”), plus

(B)

Ten Million Dollars ($10,000,000) (the “Suzhou Equity Interest Purchase Price”), representing the purchase price for the Suzhou Equity Interest, plus or minus

(C)

The amount of the adjustment determined in accordance with Section 2.7 (the “Adjustment”).

2.7

Adjustment. The Adjustment will be determined as follows and will apply to the portion of the Fine Chemicals Business operated in and from the Suzhou Location, the Baton Rouge Location, the Japan Location, the Walton Hills Location, the Posnick Location, the Walton Hills Location and Louvain La Neuve, Belgium (the “Adjustment Operations”):

(A)

Closing Adjustments.

(1)

Closing Date Certificate. At least five business days before the Closing Date, Ferro will deliver to Novolyte a certificate (the “Closing Date Certificate”) setting forth Ferro’s good faith estimate of the Working Capital of the Adjustment Operations as of the Closing Date (the “Estimated Working Capital”), together with a copy of a good faith estimated unaudited balance sheet of the Adjustment Operations as of the Closing Date (the “Closing Date Balance Sheet”), upon which the computation of the Estimated Working Capital will be based. The statement of Estimated Working Capital set forth in the Closing Date Certificate will be in the same form as that used for the calculation of the working capital statement (the “Working Capital Collar Statement”) set forth on Appendix E and will be prepared in accordance with Appendix F (the “Accounting Principles”). Notwithstanding anything in this Agreement to the contrary, Estimated Working Capital will be reduced for any Pre-Closing Tax Liabilities included in Assumed Liabilities.

(2)

No Notice of Objection. If, within four business days after Novolyte receives the Closing Date Certificate and the Closing Date Balance Sheet, Novolyte has not given Ferro notice of its objection to the Estimated Working Capital, then the Closing Purchase Price will be increased by the amount, if any, that Estimated Working Capital exceeds the Working Capital Top Collar, or decreased by the amount, if any, that the Working Capital Bottom Collar exceeds the Estimated Working Capital (the “Estimated Working Capital Adjustment”).

(3)

Notice of Objection. If, within four business days after Novolyte receives the Closing Date Certificate and the Closing Date Balance Sheet, Novolyte gives notice of objection pursuant to this Section 2.7(A)(3, then there will be no Estimated Working Capital Adjustment, the Closing Purchase Price will remain fixed and the parties agree that all Adjustments will be made on a post-Closing basis pursuant to the provisions of Section 2.7(B) hereof.

(B)

Post Closing Adjustments.

(1)

Closing Statement. Within 75 days after the Closing Date, Novolyte will cause to have prepared and delivered to Ferro a statement (the “Closing Statement”) that will set forth an itemized calculation of Working Capital of the Adjustment Operations as of the Closing Date (the “Closing Working Capital”). The Closing Statement will be in the same form as that used for the calculation of the Working Capital Collar Statement set forth on Appendix E and will be prepared in accordance with the Accounting Principles set forth on Appendix F. Notwithstanding anything in this Agreement to the contrary, Closing Working Capital will be reduced for any Pre-Closing Tax Liabilities.

(2)

Ferro’s Review. Upon receipt of the Closing Statement, Ferro will immediately conduct a review of the Working Capital Statement and, within 30 days after receipt of the Working Capital Statement, either:

(3)

Informal Negotiations. If Ferro delivers a written objection notice under Section 2.7(B)(2)(b) above, then during the 30-day period following the delivery of such notice the parties will cause their representatives to meet and seek to resolve the disputed items cordially through informal negotiations and each of Novolyte and Ferro shall be responsible for their costs and expenses related thereto.

(4)

Dispute Resolution. If representatives of the parties are unable to resolve disputed items through the informal negotiations described in Section 2.7(B)(3) above, then at the end of the 30-day period described in Section 2.7(B)(3), the parties will refer the unresolved disputed items for final binding resolution to a mutually agreed internationally-recognized firm of independent certified public accountants (other than Ernst & Young, Deloitte & Touche LLP, KPMG LLP or Crowe Horwath LLP). The parties will request such firm of accountants to review and resolve the disputed items in a written report in accordance with the Accounting Principles, on a basis consistently applied, within 30 days of such reference. In resolving any disputed item, the accounting firm (i) will be bound by the provisions of this Section 2.7 and the definitions pertaining hereto, (ii) may not assign a value to any item greater than the highest value claimed for such item or less than the lowest value for such item claimed by either Ferro or Novolyte, (iii) shall restrict its decision to such items which are then in dispute and (iv) may review only the written presentations of Ferro and Novolyte in resolving any matter which is in dispute. The resolution of the disputed items by such firm will be binding on Ferro and Novolyte, will be neither appealable nor contestable by Ferro or Novolyte, and will not be subject to collateral attack by Ferro or Novolyte for any reason. The costs of such firm will be paid one-half by Novolyte and one-half by Ferro.

(5)

Working Capital Collar. The “Working Capital Bottom Collar” will be an amount equal to Fifteen Million Two Hundred Thousand Dollars ($15,200,000) and the “Working Capital Top Collar” will be an amount equal to Sixteen Million Dollars ($16,000,000), which amount was calculated in the manner set forth on Appendix E.

(6)

Closing Working Capital. The final and conclusive “Closing Working Capital” will be an amount equal to the Working Capital at and as of the Closing as determined under this Section 2.7(B) above.

(7)

Amount of Adjustment. The final Adjustment will be calculated as follows:

2.8

Payment of Purchase Price. Novolyte will pay the Purchase Price as follows:

(A)

Payment at Closing. At the Closing, Novolyte will

(1)

Pay Ferro the Closing Purchase Price, and

(2)

Pay U.S. Bank, National Association (the “Escrow Agent”) the Suzhou Equity Interest Purchase Price, which will be held pursuant to the terms of the Escrow Agreement attached hereto as Appendix G (the “Escrow Agreement”); and

(B)

Final Payment. Ferro or Novolyte (as the case may be) will pay the Adjustment, if any, calculated in accordance with Section 2.7(B)(7), together with interest thereon at the Prescribed Rate for the period of time from the Closing Date through and including the date on which the Adjustment is paid, within 10 business days after the final determination of the Purchase Price.

2.9

Method of Payment. All payments under this Purchase Agreement shall be made by delivery to the payee as follows:

(A)

Directed Payments. If a party which is entitled to a payment under this Purchase Agreement provides the other party five days’ advance written designation of a bank and account number into which the payee wishes payment to be made, then the payer will make such payment by wire transfer (in immediately available funds) to the designated account of the payee.

(B)

Other Payments. In all other cases, the party obligated to make a payment under this Purchase Agreement will do so by delivering to the payee a bank cashier’s check (in immediately available funds) payable to the order of the payee.

2.10

Allocation of Consideration. Novolyte and Ferro will work in good faith to agree to an allocation of the Purchase Price and Assumed Liabilities among the Acquired Assets within 90 days following the date on which the Closing Working Capital Statement is finally determined in accordance with Section 2.7(b). If Novolyte and Ferro agree on an allocation they will be bound to such allocation for all federal, state, local and foreign income tax purposes unless and until there is a “final determination” to the contrary, within the meaning of Section 1313(a) of the Code. However, if agreement among Novolyte and Ferro is not reached as to the appropriate allocation, each of Novolyte and Ferro may use its own allocation.

3.1

Access to Records. From today until the Closing, Ferro will cause the Fine Chemicals Business to afford duly authorized representatives of Novolyte (including its lenders) access during normal business hours, and without unreasonable interruption of the Fine Chemicals Business, to all of the assets, properties, books, and nonprivileged records of the Fine Chemicals Business and will permit such representatives to make abstracts from, or take copies of, such books, records, or other documentation, or to obtain temporary possession of any thereof as may be reasonably required by Novolyte. During such period, Ferro will furnish to Novolyte such information concerning the Fine Chemicals Business, and its assets, liabilities, or condition as Novolyte or its representatives (including its lenders) may reasonably request. Notwithstanding the foregoing, however, Ferro will not be obligated to disclose or make available to Novolyte any information concerning the Fine Chemicals Business that, in the opinion of Ferro’s counsel, should not be disclosed to Novolyte as a matter of law. No investigation or inspection by Novolyte shall in any way affect or diminish any of the representations or warranties made by Ferro in this Purchase Agreement or the conditions to the obligations of Ferro to consummate the transactions contemplated by this Purchase Agreement; provided that (i) if the investigation or inspection by Novolyte causes Ferro to breach a representation or warranty then Ferro shall be relieved of its indemnity obligations under Article 9 to the extent the loss in respect of any such indemnity claim was caused by such investigation or inspection by Novolyte, and (ii) if the investigation or inspection by Novolyte causes a closing condition under Article 4 not to be satisfied then such condition shall be deemed satisfied to the extent of the consequence of any such investigation or inspection by Novolyte.

3.2

Interim Conduct of the Fine Chemicals Business. From today until the Closing, Ferro will conduct the Fine Chemicals Business only in the ordinary and usual course, subject to Novolyte’s approval of certain transactions pursuant to Section 3.3. Without limiting the generality of the foregoing but specifically excluding actions related to the Split-Off Transaction and related to the buy-back of Trade Accounts Receivable by Ferro pursuant to the terms of agreements set forth in Part I of the Disclosure Schedule, insofar as the Fine Chemicals Business is concerned, Ferro will use its reasonable efforts to:

(A)

Preserve substantially intact the Fine Chemicals Business’ material relationships with suppliers, customers, employees, creditors, and others having business dealings with the Fine Chemicals Business;

(B)

Maintain in full force and effect its existing policies of insurance which materially affect the Fine Chemicals Business;

(C)

Prepare and file in the ordinary course of business and in accordance with prior custom and practice all Tax Returns exclusively related to the Fine Chemicals Business that are required to be filed before the Closing Date; provided that Ferro will promptly deliver to Novolyte duplicate copies of such Tax Returns to Novolyte;

(D)

Continue performance in the ordinary course of its obligations under contracts, commitments, or other obligations to be included as part of the Fine Chemicals Business; and

(E)

Purchase Inventory, collect Trade Accounts Receivable and pay Trade Accounts Payable consistent with historical practice and in the ordinary and usual course of business.

3.3

Novolyte’s Approval of Certain Transactions. Except as may otherwise be required under this Purchase Agreement and except with regard to any actions related to the Split-Off Transaction or with regard to the buy-back of Trade Accounts Receivable by Ferro pursuant to the terms of agreements set forth in Part I of the Disclosure Schedules, from today until the Closing, insofar as the Fine Chemicals Business is concerned, Ferro will not do any of the following (or permit Ferro Suzhou to do any of the following) without the prior approval with written confirmation of Novolyte, which approval may not be unreasonably withheld:

(A)

Incur or permit the incurrence of any indebtedness for borrowed money;

(B)

Purchase or dispose of any Real Property or interests in Real Property or create or permit the creation of any Encumbrances against the Real Property other than Permitted Encumbrances;

(C)

Enter into or amend any Lease involving a term of more than one year or rental obligation exceeding $100,000 per annum in any single case;

(D)

Voluntarily permit any Encumbrances to be incurred on material assets of the Fine Chemicals Business except in the ordinary course of business;

(E)

Except for normal merit, promotional, or cost of living increases in accordance with Ferro’s past practices or any change required by applicable law, increase the rate of compensation or bonuses for any of the employees or consultants of the Fine Chemicals Business or otherwise enter into or alter any employment, consulting, or managerial services agreement primarily affecting the Fine Chemicals Business;

(F)

Adopt, commence, enter into, amend or alter any Employee Benefit Plan or Foreign Plan in which employees of the Fine Chemicals Business participate or are, or would be, eligible to participate, except to the extent required by law;

(G)

Make any single new commitment or increase any single previous commitment for capital expenditures for the Fine Chemicals Business in an amount exceeding $100,000 or $250,000 individually or in the aggregate among all such commitments;

(H)

Accelerate or delay the sale of any material amount of Products or delay the purchase of raw materials except as may be necessary in the ordinary course of business consistent with historical practice;

(I)

Sell, assign, transfer, license, or convey any of the Intellectual Property to be included as part of the Fine Chemicals Business;

(J)

Enter into or amend any Contract (other than purchase orders) or License that has a term of more than one year or that involves payment by the Fine Chemicals Business of in excess of $100,000;

(K)

Solely to the extent it impacts the Fine Chemicals Business, make or change any Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax;

(L)

Hire any employee whose base salary exceeds $100,000 per year or otherwise outside the ordinary course of business; or

(M)

Enter into or amend any Contract, Lease, License or other agreement or arrangement with any Affiliate.

3.4

Negotiation of Other Agreements. From today until the Closing and except to the extent any such agreements or terms are attached to this Agreement as an Appendix, the parties will negotiate in good faith such other and further agreements as they may deem appropriate or necessary for the orderly transfer of the Fine Chemicals Business from Ferro to Novolyte, including the agreements listed on Appendix I, and including Ferro causing Ferro Belgium and Ferro Japan to enter into such transfer agreements with Novolyte as are necessary to transfer and assign the applicable Acquired Assets of such Affiliates to Novolyte. (Such agreements, the agreements and terms attached to this Agreement as Appendixes and any other agreements into which the parties enter in connection with the transactions contemplated by this Purchase Agreement, are collectively referred to as the “Other Agreements.”)

3.5

Consents. From today until the Closing, Ferro shall use its reasonable efforts to obtain the consents or approvals (or effective waivers thereof) of all persons whose consents or approvals are required for the disclosure and assignment of Ferro’s rights under the Acquired Contracts, Acquired Leases, Acquired Licenses, Acquired Permits, Acquired Trade Account Receivables and other similar items, including without limitation, related to the buy-back of Trade Accounts Receivable by Ferro pursuant to the terms of the agreements set forth in Part I of the Disclosure Schedule. Failure of the parties to obtain the consents or approvals described in this Section 3.5 shall not be deemed to be a breach of this Purchase Agreement and shall not give rise to monetary damages against either party.

3.6

Coordination of Public Announcements. From today until the Closing, no party will make any public announcement concerning the transactions contemplated by this Purchase Agreement without having previously consulted with and having received the consent of the other parties, such consent not to be withheld unreasonably. Nothing in the preceding sentence, however, will prevent any party from making any announcement required by law, by the rules of any securities exchange, or by any listing agreement with a securities exchange to which such party is a party or by which it is bound. Except as stated in the foregoing sentence, the parties will cooperate in the planning, preparation, and issuance of any and all public announcements concerning this Purchase Agreement and the transactions contemplated by this Purchase Agreement.

3.7

Regulatory Approvals. Immediately after the execution and delivery of this Purchase Agreement, the parties will promptly proceed with the preparation and filings, as applicable, of any required filings necessary in order to obtain the approval or authorization of those governmental agencies or instrumentalities whose approval or authorization is necessary in order to consummate the transactions contemplated by this Purchase Agreement, including the following:

(A)

All required notifications and filings with the Suzhou Industrial Park Economic and Trade Development Bureau (“SIP Commerce Authority”) and the Suzhou Industrial Park Administration of Industry and Commerce (“SIP AIC”) related to the Suzhou Equity Transfer, provided that the exact timing of the filings and actions with regard to the SIP Commerce Authority, SIP AIC and other governmental authorities in the P.R.C. will be determined by Ferro and Novolyte and after the execution and delivery of the Suzhou Equity Transfer Agreement;

(B)

Any required notification to, filing with or approval by the P.R.C. Ministry of Commerce in accordance with relevant P.R.C antitrust laws and regulations, if applicable; and

(C)

Any required notification to the U.S. Federal Trade Commission under Title II of the Hart Scott Rodino Antitrust Improvements Act, as amended (the “HSR Act”), and the rules of the Federal Trade Commission thereunder (the “Regulations”).

3.8

Novolyte’s Financing. From today until the Closing, Novolyte will use commercially reasonable efforts (but without requirement of instituting any litigation) to implement Novolyte’s Financing Plan (as defined in Section 7.3(G) below) in order to be able to make the payment required under Section 2.8(A) above on the Closing Date. Without limiting the generality of the foregoing, Novolyte will –

(A)

Provide Ferro on a current and updated basis such reports as to Novolyte’s progress toward implementing Novolyte’s Financing Plan, including without limitation copies of any commitment letters, as Ferro may from time to time reasonably request;

(B)

Promptly notify Ferro of any material change in Novolyte’s Financing Plan; and

(C)

Promptly notify Ferro if and when Novolyte determines that there is a material risk that Novolyte’s Financing Plan cannot or will not be implemented or otherwise that Novolyte will not have sufficient cash funds to make the payment required under Section 2.8(A) above.

3.9

Exclusivity. Between today and the earlier to occur of the Closing Date or the date on which this Agreement is terminated, neither Ferro nor Ferro Suzhou will, nor will they permit any of their respective officers, directors, Affiliates, agents or representatives to, directly or indirectly,

(A)

Solicit, initiate or encourage inquiries or proposals or conduct or engage in any discussions or negotiations to enter into any agreement or understanding, with any other person or entity relating to a merger, business combination, recapitalization or similar corporate event involving the Fine Chemicals Business or relating to the sale of any of the capital stock of Ferro or the registered capital of Ferro Suzhou or any material portion of the assets of the Fine Chemicals Business, or

(B)

Disclose any nonpublic information relating to Ferro or Ferro Suzhou or afford access to the properties or the books and records of Ferro or Ferro Suzhou, to any other person or entity that may be considering any such transaction.

3.10

Contact with Certain Employees. From today until the Closing, Ferro will cause the Fine Chemicals Business to afford duly authorized representatives of Novolyte access during normal business hours, and without unreasonable interruption of the Fine Chemicals Business, to those employees of the Fine Chemicals Business as have been mutually agreed upon by the parties or as may be reasonably requested by Novolyte, for purposes of negotiating and entering into employment and non-compete agreements.

3.11

Contact with Customers. From today until the Closing, Ferro will cause the Fine Chemicals Business to afford duly authorized representatives of Novolyte (including Novolyte’s lender(s)) access during normal business hours, and without unreasonable interruption of the Fine Chemicals Business, to the Top Ten Customers of the Fine Chemicals Business as reasonably requested by Novolyte for purposes of conducting customer due diligence; provided, however, that Novolyte will make no contact with any customer of the Fine Chemicals Business, including the Top Ten Customers, unless a representative of Ferro is present at any such meeting or on any such call and unless such meeting or call is initially based on a script to be reasonably agreed upon by Ferro and Novolyte.

3.12

Contact with Suppliers. From today until the Closing, Ferro will cause the Fine Chemicals Business to afford duly authorized representatives of Novolyte (including Novolyte’s lender(s)) access during normal business hours, and without unreasonable interruption of the Fine Chemicals Business, to the Top Ten Suppliers of the Fine Chemicals Business as reasonably requested by Novolyte for purposes of conducting supplier due diligence; provided, however, that Novolyte will make no contact with any supplier of the Fine Chemicals Business, including the Top Ten Suppliers, unless a representative of Ferro is present at any such meeting or on any such call and unless such meeting or call is initially based on a script to be reasonably agreed upon by Ferro and Novolyte.

4.1

Conditions to Novolyte’s Obligations. The obligation of Novolyte to consummate the transactions contemplated by this Purchase Agreement is subject to the satisfaction of the following conditions at or before the Closing:

(A)

The representations and warranties of Ferro contained in Section 7.1 of this Purchase Agreement shall be true, accurate, and complete in all material respects as of today and as of the Closing (except with respect to the effect of transactions contemplated or permitted by this Purchase Agreement);

(B)

The representations and warranties of Ferro contained in Section 7.2 of this Purchase Agreement shall be true, accurate, and complete in all material respects as of today and as of the Closing (except with respect to the effect of transactions contemplated or permitted by this Purchase Agreement and matters reflected in updates to the Disclosure Schedules as provided in Section 8.4 (i) with regard to all pre-signing breaches, if such matters reflect a condition or circumstance that would give rise to damages to Novolyte which do not exceed One Million Dollars ($1,000,000) in the aggregate, and (ii) with regard to post-signing breaches, if such matters reflect conditions or circumstances that would not result in a material and adverse effect on the Fine Chemicals Business Condition);

(C)

Ferro shall have performed and complied with all material undertakings required by this Purchase Agreement to be performed or satisfied by Ferro before the Closing;

(D)

Ferro shall have taken all corporate and other proceedings or actions necessary to be taken by Ferro for consummation of the transactions contemplated by this Purchase Agreement;

(E)

Ferro shall have delivered the documents listed in Appendix J, duly executed by the appropriate parties thereto (other than Novolyte);

(F)

The parties shall have received all regulatory approvals mentioned in Section 3.7(C) above and all waiting periods (and any extension thereof) applicable to the transactions contemplated by this Agreement under the HSR Act, shall have terminated or expired;

(G)

There shall not have been issued and in effect any injunction or similar legal order prohibiting or restraining or any action by any governmental authority seeking to enjoin the consummation of any of the transactions contemplated in this Purchase Agreement;

(H)

Ferro shall have caused Ferro Belgium and Ferro Japan to execute and deliver to Novolyte such documents as are necessary to transfer and assign the applicable Acquired Assets of such entities to Novolyte;

(I)

Novolyte shall have obtained senior debt financing for the transactions contemplated by this Purchase Agreement;

(J)

Novolyte’s due diligence with respect to Ferro Suzhou shall not disclose any matter(s) which is reasonably likely to have a material adverse effect on the ability of Novolyte to operate the Fine Chemicals Business, as currently conducted by Ferro Suzhou, from and after the Suzhou Equity Closing;

(K)

Following Novolyte’s review of contracts and diligence calls with eight (8) of the Top Ten Customers and eight (8) of the Top Ten Suppliers, no matter shall have been disclosed which would be reasonably likely to have a material adverse effect on the Fine Chemicals Business Condition; provided, however, for purposes of making this determination, price and terms shall not be considered;

(L)

All consents, authorizations, approvals and waivers from third parties and governmental authorities and other parties set forth on Appendix Y hereto shall have been obtained, shall be in form and substance reasonably satisfactory to Novolyte, shall not be subject to the satisfaction of any condition that has not been satisfied or waived and shall be in full force and effect;

(M)

Ferro shall have delivered to Novolyte certifications and such other documents reasonably requested by Novolyte to the effect that Ferro is a “United States person” for purposes of Sections 897 and 1445 of the Code and that Novolyte is not otherwise obligated to withhold from any payment hereunder;

(N)

Ferro shall have received the certificate of approval and business license from the SIP Commerce Authority and SIP AIC evidencing the Split-Off Transaction; and

(O)

The Title Company (defined hereinafter) shall be prepared to close the conveyance of the Real Property in accordance with Section 5.5 of this Purchase Agreement and the Title Company shall be prepared to issue and deliver the Title Policies (defined hereinafter) as set forth in such section.

4.2

Conditions to Ferro’s Obligations. The obligation of Ferro to consummate the transactions contemplated by this Purchase Agreement is subject to the satisfaction of the following conditions at or before the Closing:

(A)

The representations and warranties of Novolyte contained in Section 7.3 of this Purchase Agreement shall be true, accurate, and complete in all material respects as of today and as of the Closing (except with respect to the effect of transactions contemplated or permitted by this Purchase Agreement);

(B)

Novolyte shall have substantially performed and complied with all material undertakings required by this Purchase Agreement to be performed or satisfied by Novolyte before the Closing;

(C)

Novolyte shall have taken all corporate and other proceedings or actions necessary to be taken by Novolyte for consummation of the transactions contemplated by this Purchase Agreement;

(D)

Novolyte shall be prepared to deliver the documents listed in Appendix K;

(E)

If Novolyte has assigned its rights and delegated its duties under this Purchase Agreement to an Affiliate as permitted under Section 12.4, Novolyte Guarantee shall remain in full force and effect;

(F)

The parties shall have received all regulatory approvals mentioned in Section 3.7(C) and all waiting periods (and any extension thereof) applicable to the transactions contemplated by this Agreement under the HST Act, shall have terminated or expired; and

(G)

There shall not have been issued and in effect any injunction or similar legal order prohibiting or restraining the consummation of any of the transactions contemplated in this Purchase Agreement.

4.3

Parties’ Best Commercial Efforts. From today until the Closing, the parties will cooperate and use their respective best commercial efforts to cause the conditions set forth in this Article 4 over which they may respectively have influence or control to be satisfied as soon as reasonably practicable.

5.1

The Closing. For purposes of this Purchase Agreement, the term “Closing” means the time at which the transactions contemplated by this Purchase Agreement will be consummated after satisfaction or written waiver of the conditions set forth in Article 4 of this Purchase Agreement. At the Closing, the parties will execute and deliver the Suzhou Equity Transfer Agreement and after the Closing Ferro will make the filings with the SIP Commerce Authority and the SIP AIC and related actions required under Section 6.1 of this Agreement and the applicable terms of the Suzhou Equity Transfer Agreement. The closing of the Suzhou Equity Transfer (the “Suzhou Equity Closing”) will be carried out pursuant to the terms of the Suzhou Equity Transfer Agreement.

5.2

Date, Time, and Place of Closing. Subject to the satisfaction of the conditions set forth in Article 4, the Closing will occur at 10:00 a.m. (Eastern Time) on October 31, 2008, or such other date as the parties may agree in writing (the “Closing Date”). The Closing will take place at the offices of Ferro at 1000 Lakeside Avenue, Cleveland, Ohio, or at such other place as the parties may agree in writing. The Closing will be deemed to have occurred as of 11:59 p.m. on the Closing Date (the “Closing Time”) and the Closing Working Capital shall be determined as of the Closing Time.

5.3

Novolyte’s Obligations. At the Closing, Novolyte will deliver to Ferro the following:

(A)

The documents, certificates, and other items referred to in Appendix K;

(B)

Such instruments as may be necessary or appropriate to reflect Novolyte’s assumption of the Assumed Liabilities effective as of the Closing; and

(C)

The amount specified in Section 2.6, as adjusted pursuant to 2.7(A).

5.4

Ferro’s Obligations. At the Closing, Ferro will deliver to Novolyte the following:

(A)

The documents, certificates, and other items referred to in Appendix J;

(B)

Other than the Suzhou Equity Interest which will be governed by the terms of the Suzhou Equity Transfer Agreement, Ownership to and possession of the Acquired Assets as contemplated in this Purchase Agreement;

(C)

Such deeds, bills of sale, and such other instruments as may be necessary or appropriate to reflect Ferro’s conveyance of the Acquired Assets to Novolyte, it being understood that the Suzhou Equity Transfer will not occur as of the Closing but rather pursuant to the terms of the Suzhou Equity Transfer Agreement.

5.5

U.S. Real Estate Conveyance. Ferro will convey the Real Property that is located in the United States and included in the Acquired Assets as follows:

(A)

Title Commitments, Title Policy and Surveys. Ferro has, at its sole cost and expense, provided Novolyte with an ALTA title insurance commitment (the “Title Commitment”) issued from Chicago Title Insurance Company dated April 21, 2008 as File No. 08-0400 (the “Title Company”) committing to insure good and marketable fee simple title to the Real Property located in the United States. Novolyte may, at its sole cost and expense, obtain an update of the survey prepared by Bock & Clark National Surveyors Network, through Collins & Associates Land Surveyors, Inc., dated May 30, 2006, as revised June 28, 2006 for the portion of the Real Property reflected thereon (the “Existing Survey”) and certified to Novolyte (or its nominee) (the “Updated Survey”). If Novolyte desires to have the Updated Survey cover more or different acres of the Real Property then included in the Existing Survey, the cost thereof will also be at Novolyte’s sole cost and expense. Novolyte shall use commercially reasonable efforts to obtain promptly any Updated Survey which it determines is necessary or desirable in connection with the consummation of the transactions contemplated by this Agreement.

(B)

Title Company. At Novolyte’s sole cost and expense, Novolyte may cause the Title Company to issue to Novolyte (or its nominee) at and as a condition of the Closing (and Ferro will take all reasonable actions and deliver all required instruments to satisfy all requirements set forth in the Title Commitment to enable the Title Company to issue) an ALTA form Owner’s Policy of Title Insurance (the “Title Policy”) in an amount equal to the fair market value of the insured Real Property located in the United States insuring fee simple title to such Real Property to be in Novolyte (or its nominee), subject only to Permitted Encumbrances and the standard pre-printed exceptions of the Title Company. Novolyte shall use commercially reasonable efforts to obtain promptly any Title Policy which it determines is necessary or desirable in connection with the consummation of the transactions contemplated by this Agreement. With respect to the delivery of the Deed (defined hereinafter) and the issuance and delivery of the Title Policy at Closing, the Closing will be performed as a “New York” style closing such that the Title Company will insure title to the Real Property located in the United States as set forth herein as of and upon release of the Deed from the Title Company for recording upon the telephonic instructions to the Title Company as set forth in Section 5.5(C) below.

(C)

Deed. No later than two days before the Closing Date, Ferro will execute and deliver to the Title Company a corporate warranty deed with special warranty covenants in a form reasonably acceptable to the Title Company (the “Deed”) conveying and warranting with special warranty covenants fee simple title to such Real Property to Novolyte (or its nominee), subject only to the exceptions set forth on the Title Commitment. The Existing Survey and the Updated Survey, if so obtained by Novolyte, together with such affidavits, certifications, and other instruments as are ordinarily delivered to a purchaser of real estate or filed in the public records of the community where such Real Property is located and as may otherwise be reasonably required by the Title Commitment and/or the Title Company in order for the Title Company to issue the Title Policy at Closing as set forth in Section 5.5(A) above, including without limitation, a gap, survey and possession affidavit in the form generally utilized by the Title Company and reasonably acceptable to Ferro, a FIRPTA affidavit, and any other recording forms reasonably necessary to effectuate the recording of the Deed (collectively, the “Conveyance Instruments”).

(D)

Instructions. At the time Ferro delivers the Deed to the Title Company, Ferro and Novolyte will also deliver to the Title Company a joint letter instructing the Title Company to hold the Deed until the Closing and, at the Closing,

(1)

If, at Closing, the Title Company is then prepared to issue to Novolyte the Title Policy, and upon joint telephonic instructions from Ferro and Novolyte, to record the Deed in the appropriate public records, or

(2)

Otherwise, to return the Deed to Ferro.

(E)

Confirmation. If the Title Company is instructed to record the Deed, then the Deed will be deemed to have been recorded as of the Closing Time and the Title Policy will be deemed in effect and effective as of the date of such recording provided that the Title Company has insured over any gap between the release of the Deed from the Title Company and recording thereof.

6.1

Suzhou Equity Transfer and Local Formalities. Simultaneously with the Closing of this Purchase Agreement, Novolyte and Ferro will execute and deliver the Suzhou Equity Transfer Agreement, the Management and Transition Service Agreement, the Escrow Agreement, and such other agreements and documents required under the Suzhou Equity Transfer Agreement to be executed and delivered simultaneously therewith. The Suzhou Equity Transfer Agreement sets forth the terms of the transfer of the Suzhou Equity Interest and the Management and Transition Service Agreement sets forth the arrangements of Ferro and Novolyte whereby Ferro will operate the Fine Chemicals Business in the P.R.C. until the Suzhou Equity Closing. The Suzhou Equity Transfer Agreement is not intended to amend, supplement, or supersede this Purchase Agreement or any of its terms or conditions. If any of the provisions of this Purchase Agreement conflict with the terms and conditions of the Suzhou Equity Transfer Agreement, then the terms and conditions of this Purchase Agreement, and not those of the Suzhou Equity Transfer Agreement, shall govern. On the Suzhou Equity Closing, Ferro will deliver a certificate from authorized directors and/or officers of Ferro confirming that all of the representations and warranties related to Ferro Suzhou contained in Section 6.1 of the Suzhou Equity Transfer Agreement and Sections 7.2 (A), (I), (M), (N), (O), (P), (Q) and (S) of this Purchase Agreement continue to be true, accurate, and complete in all material respects as of the date thereof, as though such representations and warranties had been made anew as of the Suzhou Equity Closing except with respect to the effect of transactions contemplated or permitted by this Purchase Agreement or the Suzhou Equity Transfer Agreement and matters reflected in updates to the Disclosure Schedules as provided in Section 8.4(B): (i) with regard to all pre-signing (of the Suzhou Equity Transfer Agreement) breaches, if such matters reflect conditions or circumstances that would give rise to damages to Novolyte which do not exceed Two Hundred Thousand Dollars ($200,000) in the aggregate, and (ii) with regard to post-signing (of the Suzhou Equity Transfer Agreement) breaches, if such matters reflect conditions or circumstances that would not result in a material and adverse effect on Ferro Suzhou, it being confirmed by the parties that such certificate shall be subject to the exception and exclusion contained in Section 5.4(A) of the Suzhou Equity Transfer Agreement. Notwithstanding anything to the contrary contained in this Agreement or the Suzhou Equity Transfer Agreement, Novolyte shall have no obligation to close the Suzhou Equity Transfer if Ferro fails or is otherwise unable to deliver to Novolyte the certificate referenced in the immediately preceding sentence. In the case of any supplement or amendment which constitutes a pre-signing (of the Suzhou Equity Transfer Agreement) breach and the closing of the Suzhou Equity Transfer occurs, Novolyte will not be deemed to have waived any right or claim pursuant to the terms of this Agreement, including pursuant to Article 9, with respect to any pre-signing (of the Suzhou Equity Transfer Agreement) breach that is disclosed pursuant to any such supplement or amendment made by Ferro at or before the Suzhou Equity Closing.

6.2

Further Conveyances. After the Closing, Ferro will, without further cost or expense to Novolyte, execute and deliver to Novolyte (or cause the same be executed and delivered to Novolyte), such additional instruments of conveyance, and Ferro will take such other and further actions as Novolyte may reasonably request and which are ordinarily provided by a seller, more completely to sell, transfer, and assign to Novolyte and vest in Novolyte Ownership to the Acquired Assets.

6.3

Further Consents. If and to the extent the parties fail to obtain before Closing the consent or approval (or an effective waiver thereof) of any person or persons with respect to any item described in Section 3.5, then after the Closing

(A)

Until such consent or approval (or an effective waiver thereof) has been obtained —

(1)

On behalf of Ferro, Novolyte will perform all of Ferro’s duties with respect to such item, other than any duty arising from any breach occurring at or prior to the Closing,

(2)

On behalf of Novolyte, Ferro will exercise all of Ferro’s rights with respect to such item as directed by Novolyte; and

(3)

Any such Contract, Lease, License or Permit shall not be deemed an Acquired Contract, Acquired Lease, Acquired License or Acquired Permit, as applicable, until any such consent, approval or waiver has been obtained.

(B)

The parties will use reasonable efforts to obtain from such person or persons the consents or approvals (or effective waivers thereof).

(C)

If the parties are unable to obtain any such consent, approval, or waiver, then

(1)

This Purchase Agreement shall not constitute or be deemed to be a contract to assign the same if an attempted assignment without such consent, approval, or waiver would constitute a breach of such item or create in the issuer or any party thereto the right or power to cancel or terminate such item; and

(2)

Ferro will cooperate with Novolyte in any reasonable arrangement designed to provide Novolyte with the benefit of Ferro’s rights under such item, including enforcement (at Novolyte’s expense) of any and all rights of Ferro against such person as Novolyte may reasonably request.

6.4

Accounting Reports. Except with regard to the preparation and delivery of the Closing Working Capital, the Closing Statement and the documentation related thereto, which shall be prepared and delivered to Ferro at Novolyte’s cost, after the Closing, Novolyte will cause the management of the Fine Chemicals Business to prepare and deliver to Ferro (at Ferro’s cost) –

(A)

Year-end, quarterly, and/or monthly trial balances for the Fine Chemicals Business, together with supporting detail, for periods on or before the Closing Date normally provided by Ferro business units;

(B)

Information needed in order to file statutory financial statements and Tax Returns for Ferro in respect of periods on or before the Closing Date; and

(C)

Such other records and accounts as may reasonably be required by Ferro in order to complete financial statements and reports relating to the pre-Closing activities of the Fine Chemicals Business.

6.5

Non-Competition; Non-Solicitation.

(A)

Generally. Subject to Section 6.5(B), in order to protect the goodwill of the Fine Chemicals Business, for a period of five (5) years after the Closing, neither Ferro nor any of its Affiliates will, directly or indirectly, engage in, or have an ownership interest in or act as agent, advisor, lender or consultant of or to any person, firm, partnership, corporation or other entity that is engaged in the business of designing, developing, formulating, manufacturing, marketing or selling the Products currently sold by the Fine Chemicals Business (the “Non-Compete Business”). Nothing in this Section 6.5(A), however, shall be deemed to prohibit or restrict Ferro or any of its Affiliates –

(1)

From continuing to conduct any business in which Ferro or its Affiliates are currently engaged in the manner such business is conducted as of the Closing;

(2)

From acquiring or owning less than a 10% equity interest in any publicly-traded company (whether or not such company is engaged in a business that competes with the Non-Compete Business);

(3)

From acquiring a controlling equity interest in any company or other entity that is engaged in a business that competes with the Non-Compete Business if the annual sales from such entity’s competing business or entity do not exceed ten (10) percent of total revenues from such entity in the 12-month period immediately preceding such acquisition; provided that the acquisition of such competing business was not the principal purpose of such acquisition;

(4)

From acquiring a controlling equity interest in any company or other entity that is engaged in a business that competes with the Non-Compete Business if the annual sales from such entity’s competing business or entity exceed ten (10) percent but are less than forty percent (40%) of such business’ or entity’s total revenues in the 12-month period immediately preceding such acquisition (“Acquired Competing Business”) provided that (i) the acquisition of such Acquired Competing Business was not the principal purpose of such acquisition and (ii) within thirty (30) days following the consummation of the acquisition of the Acquired Competing Business Ferro shall notify Novolyte of such acquisition, including a description in reasonable details of the nature of the business and such other information as reasonably requested by Novolyte, and offer Novolyte the opportunity to purchase the Acquired Competing Business. If Novolyte makes such an offer to purchase the Acquired Competing Business it shall do so in writing within thirty (30) days of the notification by Ferro. Ferro and Novolyte shall negotiate in good faith to consummate such sale for a period of sixty (60) days after receipt of Novolyte’s written offer. If Ferro does not accept Novolyte’s offer for the Acquired Competing Business or Novolyte and Ferro are otherwise unable to enter into a definitive agreement for the sale of the Acquired Competing Business, Ferro may offer for sale the Acquired Competing Business to a third party for a price greater than the amount, or other terms more favorable, when viewed as a whole, than that offered by Novolyte, as applicable. Notwithstanding anything herein to the contrary, if Ferro has not disposed of the Acquired Competing Business within eighteen (18) months after its acquisition (subject to such period being extended pursuant to any bona fide letter of intent or written agreement that Ferro has with a third party) and Novolyte made an offer to purchase such business under this paragraph, then Ferro sell such business to Novolyte at the price and otherwise on the terms specified in Novolyte’s offer notice;

(5)

From conducting those activities described in Section 6.5(B) hereto; and

(6)

From Ferro Corporation being acquired by or merged into any company or other entity that engages in a Non-Compete Business.

(B)

Additional Agreements if Suzhou Equity Transfer Is Not Consummated. If the Suzhou Equity Transfer is not consummated pursuant to the terms of the Suzhou Equity Transfer Agreement, on or prior to June 30, 2009, then Ferro shall continue to operate the Suzhou business for the benefit of Novolyte pursuant to the terms of the Management and Transition Services Agreement and at such time as shall be mutually determined by Novolyte and Ferro, Ferro shall sell, transfer and convey to Novolyte or its assignee all of the Tangible Personal Property located at the Suzhou Location on an AS-IS basis (the “Suzhou Personal Property”) for a price equal to $10 million (the “Suzhou Personal Property Price”) minus the aggregate cost to Novolyte of (1) transporting the Suzhou Personal Property to a location determined by Novolyte, and (2) purchasing or establishing an operational business at such location having the same production capabilities as the Suzhou business (items (1) and (2) hereof are collectively, the “New Establishment Costs”); provided, however, in no event will the amount paid to Ferro be less than $3.5 million and provided further, that the parties shall cause such funds to be released from the Escrow Agent on or before December 31, 2009. For the avoidance of doubt, Ferro may not (a) sell the Suzhou Personal Property to any third party, or (b) use the Suzhou Personal Property for any purpose other than pursuant to this Section 6.5(B), and Ferro Suzhou shall remain subject to the provisions of Section 6.5(A). For the avoidance of doubt, if the Suzhou Equity Closing has not occurred by June 30, 2009 and has not otherwise been extended pursuant to the terms of the Suzhou Equity Transfer Agreement, Novolyte shall be entitled to receive $6.5 million out of the Escrow Funds on June 30, 2009 and Ferro shall be entitled to receive $3.5 million out of the Escrow Funds by December 31, 2009.

(C)

Relief and Other Matters. If any breach or threatened breach by Ferro of this Section 6.5 or Section 8.1(E), Novolyte will be entitled to injunctive or other equitable relief to restrain Ferro from engaging in conduct that would constitute a breach of its obligations under this Purchase Agreement. Such relief will be in addition to and not in lieu of any other remedies that may be available, including an action for the recovery of damages. Ferro acknowledges and agrees that the provisions of this Section 6.5 and Section 8.1(E) may be enforced by Novolyte or any successor or assign of Novolyte and that the provisions of this Section 6.5 and Section 8.1(E) are intended for the benefit of Novolyte and its Affiliates. Ferro agrees that if any provision of this Section 6.5 or Section 8.1(E) shall be held to be unenforceable or invalid, the remaining parts hereof shall nevertheless continue to be valid and enforceable as though the invalid portions were not a part of this Purchase Agreement. If the provisions of this Section 6.5 or Section 8.1(E) relating to the area of restriction, the period of restriction, or the scope of restriction exceed the maximum area, period of time or scope that a court of competent jurisdiction will enforce, said area, period of time and scope shall, for purposes of this Purchase Agreement, be deemed to be the maximum area or period of time or scope which a court of competent jurisdiction would deem valid and enforceable. Ferro further acknowledges that (i) the making of the restrictive covenants contained in this Section 6.5 and Section 8.1(E) by it was a material inducement to Novolyte entering into this Purchase Agreement and (ii) the restrictions contained in this Section 6.5 and Section 8.1(E) are fair, reasonable and supported by legitimate business interests of Novolyte.

6.6

Access to Former Business Records. For a period of seven years after the Closing, or until any audits of Ferro’s Tax Returns relating to periods before or including the Closing are completed, whichever occurs later, Novolyte will retain all business records constituting part of the Acquired Assets. During such period, to the extent permitted by law, Novolyte will afford duly authorized representatives of Ferro reasonable access to all of such records and will permit such representatives, at Ferro’s expense, to make abstracts from, or to make copies of any of such records created, produced, or obtained before the Closing; provided that Novolyte may restrict access to information relating to any dispute between the parties or which is privileged. During such period, Novolyte will, to the extent permitted by law, cooperate with Ferro, and cause employees of the Fine Chemicals Business to cooperate with Ferro, in furnishing information, evidence, testimony, and other assistance in connection with any action, proceeding, or investigation relating to Ferro’s conduct of the Fine Chemicals Business before the Closing.

6.7

Access to Former Employees. After the Closing, each party will make available to the other party the employees of Novolyte, Ferro, and the Fine Chemicals Business whom the other party may reasonably need in order to defend or prosecute any legal or administrative action to which Ferro or Novolyte are a party and which relates to the conduct of the Fine Chemicals Business. The requesting party will pay or reimburse the other party for all reasonable expenses which may be incurred by such employees in connection therewith, including all travel, lodging, and meal expenses, and will further compensate the other party for the number of whole business days spent by each such employee in providing such services at the rate of 130% of the average daily gross pay per business day (excluding the value of employee benefits) of such employee during the calendar month in which such services are performed.

6.8

Insurance Coverage. Subject to the terms set forth in Appendix Q relating to Ferro’s COBRA obligations, at or after the Closing, Ferro and its Affiliates will have the right to terminate any and all insurance coverage affecting the Fine Chemicals Business, provided that other than any self-insured coverage, no such termination shall be solely related to the Fine Chemicals Business, with the effect that Novolyte will have no right of recovery with respect to any claim under policies or for refunds of premiums of insurance that previously covered the Fine Chemicals Business. To the extent such insurance is maintained, Novolyte and the Fine Chemicals Business will continue to be entitled to non-self-insured recoveries (net of deductibles and out-of-pocket claims handling costs) after the Closing under occurrence-based insurance policies in respect of insured events that occurred before the Closing, and Ferro will, as directed by Novolyte, diligently pursue non-self-insured recoveries under such policies (in the case of out-of-pocket expenses, at Novolyte’s cost) and promptly pay over such net recoveries upon receipt. Ferro will be responsible for the administration of claims for such recoveries, but shall have no obligation or responsibility for any payments, whether premiums, deductibles or otherwise, in respect to any such policy.

6.9

Trade Accounts Receivable/Collections. After the Closing, Ferro will permit, and hereby authorizes Novolyte to collect, in the name of Ferro and Ferro Belgium, as applicable, all Trade Accounts Receivable constituting part of the Acquired Assets and to endorse with the name of Ferro or Ferro Belgium, as applicable, for deposit in Novolyte’s account any checks or drafts received in payment thereof. Ferro will promptly deliver (and will cause Ferro Belgium to promptly deliver) to Novolyte any cash, checks or other property that it may receive after the Closing in respect of any Trade Accounts Receivable or other asset constituting part of the Acquired Assets.

7.1

Ferro’s Representations and Warranties Generally. Ferro represents and warrants to Novolyte the following:

(A)

Organization and Existence. Ferro is a corporation duly organized, validly existing, and in good standing under the laws of the State of Ohio and Ferro Suzhou is a wholly-owned foreign enterprise organized and existing under the laws of the P.R.C.

(B)

Capitalization of Ferro Suzhou. As of the date of this Agreement (which shall be updated by Ferro immediately prior to the closing of the Suzhou Equity Transfer), Ferro Suzhou’s authorized capital consists solely of a total investment of $8,032,000 (U.S.) and registered capital of $4,016,000 (U.S.), of which the Suzhou Equity Interest is the only capital stock outstanding. The Suzhou Equity Interest has been duly issued, has been fully paid, and is nonassessable. Neither Ferro nor Ferro Suzhou has issued or granted to any person any option, warrant, conversion right, or other right of any kind to acquire any other equity capital of Ferro Suzhou.

(C)

Power and Authority. Ferro has full power and authority under its constitutive documents and the laws of the State of Ohio to execute, deliver, and perform this Purchase Agreement.

(D)

Authorization. The execution, delivery, and performance of this Purchase Agreement by Ferro has been duly authorized by all requisite corporate action on the part of Ferro.

(E)

Binding Effect. This Purchase Agreement is a valid, binding, and legal obligation of Ferro.

(F)

No Default. Neither the execution and delivery of this Purchase Agreement or any Other Document nor Ferro’s full performance of its obligations under this Purchase Agreement or any Other Document will violate or breach, or otherwise constitute or give rise to a Default under, the terms or provisions of Ferro’s constitutive documents.

(G)

Finders. With the sole exception of KeyBanc Capital Markets, Ferro has not engaged and is not directly or indirectly obligated to any person acting as a broker, finder, or similar capacity in connection with the transactions contemplated by this Purchase Agreement.

(H)

HSR Act. Ferro acknowledges that Novolyte is relying on the most recent regularly prepared Fine Chemicals Business’ balance sheet as provided by Ferro for the purpose of making its determination whether a filing is required to be made under the HSR Act and Regulations, in respect of the transactions contemplated by this Purchase Agreement and such most recent balance sheet is true and correct in all material respects.

7.2

Representations and Warranties Concerning the Fine Chemicals Business. Simultaneously with the execution and delivery of this Purchase Agreement, Ferro is delivering to Novolyte Disclosure Schedules, which will solely contain the information described in Appendix M (the “Disclosure Schedules”). Ferro represents and warrants to Novolyte the following:

(A)

Organization. Except for the Suzhou Equity Interest and as otherwise disclosed on Part A of the Disclosure Schedule, neither Ferro nor Ferro Suzhou owns or holds any other equity interest, directly or indirectly, in any company, corporation, partnership, joint venture, business, firm, or other entity which engages in a Non-Compete Business, and except for the Fine Chemicals Business, neither Ferro nor any of its Affiliates is engaged in a Non-Compete Business.

(B)

Financial Statements. Except as otherwise disclosed on Part B of the Disclosure Schedule, the financial statements contained in Subparts B-1 to B-6 of the Disclosure Schedule are (1) true, correct copies and complete in all material respects, (2) are derived from management accounts created and maintained by Ferro and Ferro Suzhou in the ordinary course in accordance with its respective standard practices, and (3) present fairly and accurately, in all material respects, the financial position, results of operations, and changes in financial condition of the Fine Chemical Business at the dates and for the periods set forth therein.

(C)

Inventories. Except as otherwise disclosed on Part C of the Disclosure Schedule, (1) Ferro, Ferro Suzhou, Ferro Japan or Ferro Belgium, as applicable, Own all Inventories described on Part C of the Disclosure Schedule; and (2) such Inventories have been valued on the books of Ferro, Ferro Suzhou, Ferro Japan or Ferro Belgium, as applicable, in accordance with the Accounting Principles.

(D)

Trade Accounts Receivable. Except as otherwise disclosed on Part D of the Disclosure Schedule, (1) all of the Trade Accounts Receivable arose out of the ordinary course conduct of the Fine Chemicals Business, (2) Ferro, Ferro Suzhou or Ferro Belgium, as applicable Own all of the Trade Accounts Receivable listed or described on Part D of the Disclosure Schedule; (3) none of such Trade Accounts Receivable is owing by Ferro or any of its Affiliates; and (4) the Trade Account Receivable are not subject to any valid counterclaim or set off.

(E)

Trade Accounts Payable. Except as otherwise disclosed on Part E of the Disclosure Schedule, (1) all of the Trade Accounts Payable liabilities reflected on Ferro’s, Ferro Suzhou’s or Ferro Belgium’s books arose out of the ordinary course conduct of the Fine Chemicals Business; (2) no such liabilities are owing to Ferro or any of its Affiliates; and (3) neither Ferro, Ferro Suzhou nor Ferro Belgium are in Default under any note, bond, debenture, mortgage, indenture, security agreement, guaranty, or other instrument of indebtedness.

(F)

Real Property. Except as otherwise disclosed on Part F of the Disclosure Schedule, (1) Ferro or Ferro Suzhou, as applicable, Own all of the Real Property listed as “ owned ” on Subpart F 1 of the Disclosure Schedule; and there is no other real property owned by Ferro or its Affiliates that is used primarily in connection with the Fine Chemicals Business and there is no other real