AMENDED AND RESTATED PURCHASE AND CONTRIBUTION AGREEMENT

AMENDED AND RESTATED

PURCHASE AND CONTRIBUTION AGREEMENT

Dated as of April 1 2008

Between

FERRO CORPORATION

as Seller

and

FERRO FINANCE CORPORATION

1

as Purchaser
TABLE OF CONTENTS

Page

EXHIBITS

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AMENDED AND RESTATED

PURCHASE AND CONTRIBUTION AGREEMENT

Dated as of April 1 2008

FERRO CORPORATION, an Ohio corporation (“ Ferro Corporation ” or “ Seller ”), and FERRO FINANCE CORPORATION, an Ohio corporation (the “ Purchaser ”), agree as follows:

PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized and used throughout this Agreement (in addition to those defined above) are defined in Article I of this Agreement.

(2) The Seller and the Purchaser are parties to that certain Purchase and Contribution Agreement dated as of September 28, 2000 as heretofore amended (as so amended, the “ Original PCA ”). The Purchaser has acquired, and may continue to acquire, Receivables from the Seller, either by purchase or by contribution to the capital of the Seller, as determined from time to time by the Seller and the Purchaser. The parties hereto wish to amend and restate the Original PCA in its entirety and remove Ferro Electronic Materials Inc. as a party to such amended and restated agreement and to otherwise amend the Original PCA as set forth herein. Accordingly, the parties agree that the Original PCA is amended and restated in its entirety as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Certain Defined Terms . As used in this Amended and Restated Purchase and Contribution Agreement (this “ Agreement ”), the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ 2005 Downgrade Event ” means the BB Downgrade Event which occurred on June 2, 2005, as a result of the downgrade to BB by S&P of Ferro Corporation’s long term public senior unsecured non-credit-enhanced debt securities.

“ 2006 Downgrade Events ” means (i) the BB Downgrade Event which occurred on March 20, 2006, as a result of Moody’s downgrading the long term public senior unsecured non-credit-enhanced debt securities of Ferro Corporation to B1 and then withdrawing its rating on such debt securities, and (ii) the further downgrading by S&P on March 31, 2006 of the long term public senior unsecured non-credit-enhanced debt securities of Ferro Corporation to B.

“ Adverse Claim ” means a lien, security interest, or other charge or encumbrance, or any other type of preferential arrangement.

“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person or is a director or officer of such Person.

“ Agent ” means Citicorp North America, Inc., in its capacity as agent under the Sale Agreement or any successor agent thereunder.

“ Alternate Base Rate ” means a fluctuating interest rate per annum as shall be in effect from time to time, which rate shall be at all times equal to the highest of:

(a) the rate of interest announced publicly by Citibank, N.A. in New York, New York, from time to time as Citibank, N.A.’s base rate;

(b) 1/2 of one percent above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank, N.A. on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank, N.A. from three New York certificate of deposit dealers of recognized standing selected by Citibank, N.A., in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent; or

(c) the Federal Funds Rate.

“ Approved OECD Country ” means each of the countries listed on Exhibit E-1 hereto, as such Exhibit may be amended from time to time upon request of Ferro Corporation, with the prior written approval of the Purchaser and the Agent. Additionally, if the Agent removes any country from the Schedule of Approved OECD Countries attached to the Sale Agreement, such country will cease to be an Approved OECD Country hereunder and the Purchaser will immediately notify Ferro Corporation thereof.

“ BB Downgrade Event ” means any of the long term public senior unsecured non-credit-enhanced debt securities of Ferro Corporation are rated below BB+ by S&P or Ba1 by Moody’s, or if Ferro Corporation does not have long term public senior unsecured non-credit-enhanced debt ratings from both S&P and Moody’s, Ferro Corporation is judged by the Agent, in its sole discretion, to be of credit quality below (with respect to each missing rating) BB+ by S&P or Ba1 by Moody’s.

“ Business Day ” means any day on which banks are not authorized or required to close in New York, New York or Cleveland, Ohio.

“ Collection Agent ” means at any time the Person then authorized pursuant to Section 6.01 to service, administer and collect Transferred Receivables.

“ Collection Agent Fee ” has the meaning specified in Section 6.03.

“ Collections ” means, with respect to any Receivable, all cash collections and other cash proceeds of such Receivable, including, without limitation, all cash proceeds of Related Security with respect to such Receivable, and all funds deemed to have been received by the Seller or any other Person as a Collection pursuant to Section 2.04.

“ Contract ” means an agreement between an Originator (directly and not, for the avoidance of doubt, by or through a subsidiary thereof) and an Obligor, substantially in the form of one of the written contracts or (in the case of any open account agreement) one of the invoices approved by the Purchaser, pursuant to or under which such Obligor shall be obligated to pay for merchandise, insurance or services from time to time.

“ Contributed Receivable ” has the meaning specified in Section 2.06.

“ Credit and Collection Policy ” means those receivables credit and collection policies and practices of each applicable Originator in effect on the date of this Agreement applicable to the Receivables and described in Exhibit A hereto, as modified in compliance with this Agreement.

“ Daily Report ” means a report in form and substance satisfactory to the Purchaser, furnished by the Collection Agent to the Purchaser pursuant to the third sentence of Section 6.02(b).

“ Debt ” means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, and (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above.

“ Defaulted Receivable ” means a Receivable:

(i) as to which any payment, or part thereof, remains unpaid for 90 days or more from the original due date for such payment;

(ii) as to which the Obligor thereof or any other Person obligated thereon or owning any Related Security in respect thereof has taken any action, or suffered any event to occur, of the type described in Section 7.01(g); or

(iii) which, consistent with the applicable Originator’s Credit and Collection Policy, would be written off by such Originator or the Seller as uncollectible.

“ Deferred Purchase Price ” means the portion of the Purchase Price of Purchased Receivables purchased on any Purchase Date exceeding the amount of the Purchase Price under Section 2.02 to be paid in cash. The obligations of the Purchaser in respect of the Deferred Purchase Price shall be evidenced by the Purchaser’s subordinated promissory note in the form of Exhibit C hereto.

“ Designated Obligor ” means, at any time, each Obligor; provided , however , that any Obligor shall cease to be a Designated Obligor upon three Business Days’ notice by the Purchaser to the Seller.

“ Dilution ” means, with respect to any Receivable, the aggregate amount of any reductions or adjustments in the Outstanding Balance of such Receivable as a result of any defective, rejected, returned, repossessed or foreclosed merchandise or services or any cash discount, discount for quick payment or other adjustment or setoff.

“ Discount ” means, in respect of each Purchase, 0.8% of the Outstanding Balance of the Receivables that are the subject of such Purchase; provided , however , the foregoing Discount may be revised prospectively by request of the Seller or the Purchaser to reflect changes in recent experience with respect to write-offs, timing and cost of Collections and cost of funds, provided that such revision is consented to by both of such parties (it being understood that each party agrees to duly consider such request and that such consent shall not be unreasonably withheld).

“ Eligible Receivable ” means a Receivable:

(i) the Obligor of which is a resident of the United States (including, without limitation, Puerto Rico), Canada, an Approved OECD Country or an Other Approved Jurisdiction, provided that (A) the aggregate Outstanding Balance of all Eligible Receivables having Obligors which are residents of an Approved OECD Country or an Other Approved Jurisdiction may not exceed an amount equal to two times the aggregate of the Loss Reserves for all Receivable Interests at such time (as each such term is defined in the Sale Agreement), (B) the aggregate Outstanding Balance of all Eligible Receivables having Obligors which are residents of an Other Approved Jurisdiction may not exceed an amount equal to the aggregate of the Loss Reserves for all Receivable Interests at such time (as each such term is defined in the Sale Agreement), (C) the aggregate Outstanding Balance of all Eligible Receivables having Obligors which are residents of Japan may not exceed $5,000,000, and (D) with respect to each country which is an Other Approved Jurisdiction, the aggregate Outstanding Balance of all Eligible Receivables having Obligors which are residents of such country may not exceed (1) 5% of the then outstanding Capital under the Sale Agreement, at any time that the sovereign long-term debt rating of such country is at least A by S&P and at least A2 by Moody’s, and (2) 3.3% of the then outstanding Capital under the Sale Agreement, at any time that the sovereign long-term debt rating of such country is not at least A by S&P and at least A2 by Moody’s;

(ii) the Obligor of which is not an Affiliate of any of the parties hereto and is not a government or a governmental subdivision or agency;

(iii) the Obligor of which, at the time of the transfer of such Receivable under this Agreement, is a Designated Obligor and is not the Obligor of any Defaulted Receivables which in the aggregate constitute 15% or more of the aggregate Outstanding Balance of all Receivables of such Obligor;

(iv) which, at the time of the transfer thereof to the Purchaser under this Agreement, is not a Defaulted Receivable;

(v) which, according to the Contract related thereto, is required to be paid in full either (A) within not more than 60 days of the original billing date therefor or (B) within more than 60 but no more than 90 days of the original billing date therefor if the aggregate Outstanding Balance of such Receivable and all other Receivables having similar payments terms does not exceed 25% of the then Outstanding Balance of all Transferred Receivables at such time;

(vi) which is an obligation representing all or part of the sales price of merchandise, insurance or services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended, and the nature of which is such that its purchase with the proceeds of notes would constitute a “current transaction” within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

(vii) which is an “account” within the meaning of Article 9 of the UCC of the applicable jurisdictions;

(viii) which is denominated and payable only in United States dollars in the United States;

(ix) which arises under a Contract which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable and is not subject to any Adverse Claim or any dispute, offset, counterclaim or defense whatsoever (except the potential discharge in bankruptcy of such Obligor);

(x) which, together with the Contract related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no party to the Contract related thereto is in violation of any such law, rule or regulation in any material respect;

(xi) which arises under a Contract which (A) does not require the Obligor under such Contract to consent to the transfer, sale or assignment of the rights and duties of the applicable Originator under such Contract and (B) does not contain a confidentiality provision that purports to restrict the ability of the Purchaser and its assignees to exercise their rights under this Agreement, including, without limitation, their right to review the Contract;

(xii) which was generated in the ordinary course of the applicable Originator’s business;

(xiii) which, at the time of the transfer of such Receivable under this Agreement, has not been extended, rewritten or otherwise modified from the original terms thereof;

(xiv) the transfer, sale or assignment of which does not contravene any applicable law, rule or regulation;

(xv) which (A) satisfies all applicable requirements of the applicable Credit and Collection Policy and (B) complies with such other criteria and requirements (other than those relating to the collectibility of such Receivable) as the Purchaser or its assigns may from time to time specify to the Seller upon 30 days’ notice; and

(xvi) which, if it was originated by either of Ferro Glass or FPL, was originated on or after the date of the Purchase Agreement.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ Event of Termination ” has the meaning specified in Section 7.01.

“ FPL ” means Ferro Pfanstiehl Laboratories, Inc., a Delaware corporation.

“ Facility ” means the willingness of the Purchaser to consider making Purchases of Receivables from the Seller from time to time pursuant to the terms of this Agreement.

“ Facility Termination Date ” means the earliest of (i) the “Facility Termination Date” (as such term is defined in the Sale Agreement), (ii) the date of termination of the Facility pursuant to Section 7.01 and (iii) the date which the Seller designates by at least two Business Days’ notice to the Purchaser and its assignees (including the Agent).

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Citibank, N.A. from three Federal funds brokers of recognized standing selected by it.

“ Ferro Color ” means Ferro Color & Glass Corporation, a Pennsylvania corporation.

“ General Trial Balance ” of the Seller on any date means the Seller’s accounts receivable trial balance (whether in the form of a computer printout, magnetic tape or diskette) on such date, listing Obligors and the Receivables respectively owed by such Obligors on such date together with the aged Outstanding Balances of such Receivables, in form and substance satisfactory to the Purchaser.

“ Incipient Event of Termination ” means an event that but for notice or lapse of time or both would constitute an Event of Termination.

“ Indemnified Amounts ” has the meaning specified in Section 8.01.

“ Lock-Box Account ” means one or more accounts, under the exclusive ownership and control of the Purchaser (or its assignees or designees), maintained for the purpose of receiving Collections.

“ Lock-Box Agreement ” means an agreement among the Seller, the Purchaser (or its assignees or designees) and any Lock-Box Bank in form and substance satisfactory to the Purchaser (or its assignees or designees).

“ Lock-Box Bank ” means any of the banks or other financial institutions holding one or more Lock-Box Accounts.

“ Monthly Report ” means a report in form and substance satisfactory to the Purchaser, furnished by the Collection Agent to the Purchaser pursuant to the first sentence of Section 6.02(b).

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Non-Investment Grade Event ” means any of the long term public senior unsecured non-credit-enhanced debt securities of the Seller are rated below BBB- by S&P or Baa3 by Moody’s, or if the Seller does not have long term public senior unsecured non-credit-enhanced debt ratings from both S&P and Moody’s, the Seller is judged by the Agent, in its sole discretion, to be of credit quality below (with respect to each missing rating) BBB- by S&P or Baa3 by Moody’s.

“ Obligor ” means a Person obligated to make payments pursuant to a Contract.

“ Original PCA ” has the meaning specified in the preliminary statements to this Agreement.

“ Originator ” means each of the Seller, Ferro Color and FPL.

“ Other Approved Jurisdiction ” means each of the countries listed on Exhibit E-2 hereto, as such Exhibit may be amended from time to time upon request of the Seller, with prior written approval of the Purchaser and the Agent; provided , however , that at any time that the sovereign long-term debt rating of any country listed on such Exhibit falls below BBB- by S&P or below Baa3 by Moody’s, such country will cease to be an Other Approved Jurisdiction. Additionally, if the Agent at any time removes any country from the Schedule of Other Approved Jurisdictions attached to the Sale Agreement, such country will cease to be an Other Approved Jurisdiction hereunder and the Purchaser will immediately notify the Seller thereof.

“ Outstanding Balance ” of any Receivable at any time means the then outstanding principal balance thereof.

“ Person ” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“ Purchase ” means a purchase by the Purchaser of Receivables from the Seller pursuant to Article II.

“ Purchase Agreement ” means the Purchase Agreement dated as of April 1 2008 among Ferro Color and FPL, as sellers, and the Seller, as purchaser, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Purchase Date ” means each day on which a Purchase is made pursuant to Article II.

“ Purchased Receivable ” means any Receivable which is purchased by the Purchaser pursuant to Section 2.02.

“ Purchase Price ” for any Purchase means (x) in respect of any Purchase of Receivables originated by FPL or Ferro Color, an amount equal to the “Purchase Price” paid by the Seller pursuant to the Purchase Agreement for the Receivables that are the subject of such Purchase, and (y)  in respect of any other Purchase, an amount equal to the Outstanding Balance of the Receivables that are the subject of such Purchase as set forth in the Seller’s General Trial Balance, minus the Discount for such Purchase.

“ Purchaser Loan ” means any loan made by the Purchaser, at its option, to the Seller, upon the Seller’s request, provided that (a) the aggregate principal amount at any one time outstanding of Purchaser Loans shall not exceed $5,000,000, and (b) no such Purchaser Loans may be made if an Event of Termination or an Incipient Event of Termination has occurred and is continuing, or would occur after giving effect thereto, or if any amounts are outstanding under the Deferred Purchase Price. Purchaser Loans made by the Purchaser hereunder shall be evidenced by a promissory note of the Seller in substantially the form of Exhibit D hereto.

“ Receivable ” means the indebtedness of any Obligor under a Contract (whether constituting an account, instrument, chattel paper or general intangible), and includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto.

“ Related Security ” means with respect to any Receivable:

(i) all of the Seller’s or other applicable Originator’s interest in any merchandise (including returned merchandise) relating to any sale giving rise to such Receivable;

(ii) all security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements filed against an Obligor describing any collateral securing such Receivable;

(iii) all guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise;

(iv) the Contract and all other books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor; and

(v) the Purchase Agreement and all rights of the Seller to receive monies due or to become due thereunder.

“ RPA Final Payment Date ” means the later of the “Facility Termination Date” (as such term is defined in the Sale Agreement) and the date on which all Capital, Yield (each as defined in the Sale Agreement), fees and other obligations under the Sale Agreement are paid in full.

“ S&P ” means Standard & Poor’s Rating Services, a division of McGraw-Hill Companies, Inc.

“ Sale Agreement ” means that certain Second Amended and Restated Receivables Purchase Agreement, dated as of April 1 2008, among the Purchaser, as seller, CAFCO, LLC, as investor, Citibank, N.A., as a bank, Citicorp North America, Inc., as agent, Ferro Color and FPL each as an originator, and Ferro Corporation, as collection agent and an originator, as amended, restated, supplemented or otherwise modified from time to time.

“ Seller Report ” means a Monthly Report, a Weekly Report or a Daily Report.

“ Settlement Date ” means the tenth day of each month (or if such day is not a Business Day, the immediately succeeding Business Day); provided , however , that following the occurrence of an Event of Termination, Settlement Dates shall occur on such days as are selected from time to time by the Purchaser or its assignees in a written notice to the Collection Agent.

“ State ” means one of the fifty states of the United States or the District of Columbia.

“ Tangible Net Worth ” means at any time the excess of (i) the sum of (a) the product of (x) 100% minus the Discount multiplied by (y) the Outstanding Balance of all Transferred Receivables other than Defaulted Receivables plus (b) cash and cash equivalents of the Purchaser plus (c) the outstanding principal amount of Purchaser Loans, minus (ii) the sum of (a) Capital (as such term is defined in the Sale Agreement) plus (b) the Deferred Purchase Price.

“ Transferred Receivable ” means a Purchased Receivable or a Contributed Receivable.

“ UCC ” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

“ Week ” means each calendar week beginning on Saturday and ending on (and including) the following Friday.

“ Weekly Report ” means a report in form and substance satisfactory to the Purchaser, furnished by the Collection Agent to the Purchaser pursuant to the second sentence of Section 6.02(b).

Section 1.02. Other Terms . All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.

ARTICLE II

AMOUNTS AND TERMS OF PURCHASES AND CONTRIBUTIONS

Section 2.01. Facility . On the terms and conditions hereinafter set forth and without recourse to the Seller (except to the extent specifically provided herein), the Seller may at its option sell or contribute to the Purchaser all Receivables originated by it (or originated by FPL or Ferro Color and acquired by the Seller pursuant to the Purchase Agreement) from time to time and the Purchaser may at its option purchase or accept as a contribution from the Seller all Receivables originated or acquired by the Seller from time to time, in each case during the period from the date hereof to the Facility Termination Date.

Section 2.02. Making Purchases .

(a)  Initial Purchase . The Seller shall give the Purchaser at least one Business Day’s notice of its request for the initial Purchase hereunder, which request shall specify the date of such Purchase (which shall be a Business Day) and the proposed Purchase Price for such Purchase. The Purchaser shall promptly notify the Seller whether it has determined to make such Purchase. On the date of such Purchase, the Purchaser shall, upon satisfaction of the applicable conditions set forth in Article III, pay the Purchase Price for such Purchase in the manner provided in Section 2.02(c).

(b)  Subsequent Purchases . On each Business Day following the initial Purchase, unless the Seller or the Purchaser shall notify the other party to the contrary, the Seller shall sell to the Purchaser and the Purchaser shall purchase from the Seller, upon satisfaction of the applicable conditions set forth in Article III, all Receivables originated by the Seller (or originated by FPL or Ferro Color and acquired by the Seller pursuant to the Purchase Agreement) which have not previously been sold or contributed to the Purchaser; provided , however , that the Seller may, at its option on any Purchase Date, contribute all or any of such Receivables to the Purchaser pursuant to Section 2.06, instead of selling such Receivables to the Purchaser pursuant to this Section 2.02(b). On or within five Business Days after the date of each such Purchase, the Purchaser shall pay the Purchase Price for such Purchase in the manner provided in Section 2.02(c).

(c)  Payment of Purchase Price . The Purchase Price for each Purchase shall be paid on or within five Business Days after the Purchase Date therefor by means of any one or a combination of the following: (i) a deposit in same day funds to the Seller’s account designated by the Seller, (ii) an increase in the Deferred Purchase Price (subject at all times to the limitations contained in the definition thereof), or (iii) a credit against interest and/or principal owed by the Seller with respect to any Purchaser Loan. The allocation of the Purchase Price as among such methods of payment shall be subject in each instance to the approval of the Purchaser and the Seller; provided , however , that the Deferred Purchase Price may not be increased to the extent that, after giving effect to such increase, the Tangible Net Worth would be less than 10.0% of the Outstanding Balance of the Transferred Receivables.

(d)  Ownership of Receivables and Related Security . On each Purchase Date, after giving effect to the Purchase (and any contribution of Receivables) on such date, the Purchaser shall own all Receivables originated by the Seller (or originated by FPL or Ferro Color and acquired by the Seller) as of such date (including Receivables which have been previously sold or contributed to the Purchaser hereunder). The Purchase or contribution of any Receivable shall include all Related Security with respect to such Receivable.

(e)  Assignment of Receivables relating to Obligors located in Germany . In addition to the transfer of ownership of Receivables stipulated above the Seller, subject to the satisfaction of the conditions precedent set out in this Agreement hereby assigns by way of a German law assignment ( Abtretung ) within the meaning of Section 398 German Civil Code ( B á rgerliches Gesetzbuch ) to the Purchaser all Receivables (whether now existing or hereafter arising) owed to the Seller by an Obligor located in Germany (the “ German Obligor Receivables ”). The Purchaser accepts such assignment. The assignment of the German Obligor Receivables shall include all ancillary rights, priority rights as well as all other rights attached to the German Obligor Receivables.

Section 2.03. Collections . (a) Unless otherwise agreed in the Sale Agreement, the Collection Agent shall, on each Settlement Date, deposit into an account of the Purchaser or the Purchaser’s assignee all Collections of Transferred Receivables then held by the Collection Agent.

(b) In the event that the Seller believes that Collections which are not Collections of Transferred Receivables have been deposited into an account of the Purchaser or the Purchaser’s assignee, the Seller shall so advise the Purchaser and, on the Business Day following such identification, the Purchaser shall remit, or shall cause to be remitted, all Collections so deposited which are identified, to the Purchaser’s satisfaction, to be Collections of Receivables which are not Transferred Receivables to the Seller.

(c) On each Settlement Date, the Purchaser shall pay to the Seller accrued interest on the Deferred Purchase Price and the Purchaser may, at its option, prepay in whole or in part the principal amount of the Deferred Purchase Price; provided that each such payment shall be made solely from (i) Collections of Transferred Receivables after all other amounts then due from the Purchaser under the Sale Agreement have been paid in full and all amounts then required to be set aside by the Purchaser or the Collection Agent under the Sale Agreement have been so set aside or (ii) excess cash flow from operations of the Purchaser which is not required to be applied to the payment of other obligations of the Purchaser; and provided further, that no such payment shall be made at any time when an Event of Termination shall have occurred and be continuing. At such time following the Facility Termination Date when all Capital, Yield and other amounts owed by the Purchaser under the Sale Agreement shall have been paid in full, the Purchaser shall apply, on each Settlement Date, all Collections of Transferred Receivables received by the Purchaser pursuant to Section 2.03(a) (and not previously distributed) first to the payment of accrued interest on the Deferred Purchase Price, and then to the reduction of the principal amount of the Deferred Purchase Price.

Section 2.04. Settlement Procedures . (a) If on any day the Outstanding Balance of any Transferred Receivable is reduced or adjusted as a result of any defective, rejected, returned, repossessed or foreclosed merchandise or services or any cash discount, discount for quick payment or other adjustment made by the Seller, or any set-off or dispute in respect of any claim by the Obligor thereof against the Seller (whether such claim arises out of the same or a related transaction or an unrelated transaction but excluding adjustments, reductions or cancellations in respect of such Obligor’s bankruptcy), the Seller shall be deemed to have received on such day a Collection of such Transferred Receivable in the amount of such reduction or adjustment. If the Seller is not the Collection Agent, the Seller shall pay to the Collection Agent on or prior to the next Settlement Date all amounts deemed to have been received pursuant to this subsection.

(b) Upon discovery by the Seller or the Purchaser of a breach of any of the representations and warranties made by the Seller in Section 4.01(j) with respect to any Transferred Receivable, such party shall give prompt written notice thereof to the other party, as soon as practicable and in any event within three Business Days following such discovery. The Seller shall, upon not less than two Business Days’ notice from the Purchaser or its assignee or designee, repurchase such Transferred Receivable on the next succeeding Settlement Date for a repurchase price equal to the Outstanding Balance of such Transferred Receivable. Each repurchase of a Transferred Receivable shall include the Related Security with respect to such Transferred Receivable. The proceeds of any such repurchase shall be deemed to be a Collection in respect of such Transferred Receivable. If the Seller is not the Collection Agent, the Seller shall pay to the Collection Agent on or prior to the next Settlement Date the repurchase price required to be paid pursuant to this subsection.

(c) Except as stated in subsection (a) or (b) of this Section 2.04 or as otherwise required by law or the underlying Contract, all Collections from an Obligor of any Transferred Receivable shall be applied to the Receivables of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable, unless such Obligor designates its payment for application to specific Receivables.

Section 2.05. Payments and Computations, Etc. (a) All amounts to be paid or deposited by the Seller or the Collection Agent hereunder shall be paid or deposited no later than 11:00 A.M. (New York City time) on the day when due in same day funds to an account or accounts designated by the Purchaser from time to time, which accounts, during the existence of the Sale Agreement, shall be those set forth in the Sale Agreement.

(b) The Seller shall, to the extent permitted by law, pay to the Purchaser interest on any amount not paid or deposited by the Seller (whether as Collection Agent or otherwise) when due hereunder at an interest rate per annum equal to 2.0% per annum above the Alternate Base Rate, payable on demand.

(c) All computations of interest and all computations of fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit.

Section 2.06. Contributions . The Seller may from time to time at its option, by notice to the Purchaser on or prior to the date of the proposed contribution, identify Receivables which it proposes to contribute to the Purchaser as a capital contribution. On the date of each such contribution and after giving effect thereto, the Purchaser shall own in fee simple the Receivables so identified and contributed (collectively, the “ Contributed Receivables ”) and all Related Security with respect thereto. The foregoing notwithstanding, on the date of the initial Purchase hereunder the Seller agrees to contribute to the Purchaser all Receivables which are not included in such initial Purchase.

ARTICLE III

CONDITIONS OF PURCHASES

Section 3.01. Conditions Precedent to Initial Purchase from the Seller . The initial Purchase of Receivables from the Seller hereunder is subject to the conditions precedent that the Purchaser shall have received on or before the date of such Purchase the following, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Purchaser:

(a) Evidence that the Seller and each other Originator has taken any necessary corporate action to authorize this Agreement and the Purchase Agreement and certified copies of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement and the Purchase Agreement.

(b) A certificate of the Secretary or Assistant Secretary of the Seller and each other Originator certifying the names and true signatures of the officers of the Seller and each other Originator authorized to sign this Agreement and the other documents to be delivered by it hereunder.

(c) Acknowledgment copies or time stamped receipt copies of proper financing statements, duly filed on or before the date of the initial Purchase, naming each Originator as the seller/debtor and the Purchaser as the purchaser/secured party, or other similar instruments or documents, as the Purchaser may deem necessary or desirable under the UCC of all appropriate jurisdictions or other applicable law to perfect the Purchaser’s ownership of and security interest in the Transferred Receivables and Related Security and Collections with respect thereto.

(d) Acknowledgment copies or time stamped receipt copies of proper financing statements, if any, necessary to release all security interests and other rights of any Person in the Transferred Receivables, Contracts or Related Security previously granted by the Seller and each other Originator.

(e) Completed requests for information, dated on or before the date of such initial Purchase, listing all effective financing statements filed in the jurisdictions referred to in subsection (c) above that name the Seller or any other Originator as debtor, together with copies of such other financing statements (none of which shall cover any Transferred Receivables, Contracts or Related Security).

(f) [Intentionally omitted.]

(g) The Purchase Agreement, duly executed by each of the parties thereto.

Section 3.02. Conditions Precedent to All Purchases . Each Purchase (including the initial Purchase) hereunder shall be subject to the further conditions precedent that:

(a) with respect to any such Purchase, on or prior to the date of such Purchase, the Seller shall have delivered to the Purchaser, (i) if requested by the Purchaser, the Seller’s General Trial Balance (which if in magnetic tape or diskette format shall be compatible with the Purchaser’s computer equipment) as of a date not more than 31 days prior to the date of such Purchase, and (ii) a written report identifying, among other things, the Receivables to be included in such Purchase and such additional information concerning such Receivables as may reasonably be requested by the Purchaser;

(b) with respect to any such Purchase, on or prior to the date of such Purchase, the Collection Agent shall have delivered to the Purchaser, in form and substance satisfactory to the Purchaser, a completed Monthly Report, Weekly Report or Daily Report for the most recently ended reporting period for which information is required pursuant to Section 6.02(b), and containing such additional information as may reasonably be requested by the Purchaser;

(c) The Seller shall have marked its master data processing records and, at the request of the Purchaser, each Contract giving rise to Purchased Receivables and all other relevant records evidencing the Receivables which are the subject of such Purchase with a legend, acceptable to the Purchaser, stating that such Receivables, the Related Security and Collections with respect thereto, have been sold in accordance with this Agreement; and

(d) on the date of such Purchase the following statements shall be true (and the Seller, by accepting the amount of such Purchase, shall be deemed to have certified that):

(i) The representations and warranties contained in Section 4.01 are correct on and as of the date of such Purchase as though made on and as of such date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be correct as of such earlier date),

(ii) No event has occurred and is continuing, or would result from such Purchase, that constitutes an Event of Termination or would constitute an Incipient Event of Termination,

(iii) The Purchaser shall not have delivered to the Seller a notice that the Purchaser shall not make any further Purchases hereunder, and

(iv) Each of FPL and Ferro Color shall have sold to the Seller all of such Originator’s Receivables arising on or prior to such date; and

(e) the Purchaser shall have received such other approvals, opinions or documents as the Purchaser may reasonably request.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.01. Representations and Warranties of the Seller . The Seller represents and warrants as follows:

(a) The Seller is a corporation duly incorporated, validly existing and in good standing, under the laws of the applicable jurisdiction set forth in Exhibit F hereto (as such Exhibit F may be amended from time to time pursuant to Section 5.01(b)) and is duly qualified to do business, and is in good standing, in every jurisdiction where the nature of its business requires it to be so qualified, unless the failure to so qualify would not have a material adverse effect on (i) the interests of the Purchaser hereunder, (ii) the collectibility of the Transferred Receivables, or (iii) the ability of the Seller or the Collection Agent to perform their respective obligations hereunder.

(b) The execution, delivery and performance by the Seller of this Agreement and the other documents to be delivered by it hereunder, including the Seller’s sale and contribution of Receivables hereunder and the Seller’s use of the proceeds of Purchases, (i) are within the Seller’s corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene (1) the Seller’s charter or by-laws, (2) any law, rule or regulation applicable to the Seller, (3) any contractual restriction binding on or affecting the Seller or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting the Seller or its property, and (iv) do not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties (except for the transfer of the Seller’s interest in the Transferred Receivables pursuant to this Agreement). This Agreement has been duly executed and delivered by the Seller.

(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Seller of this Agreement or any other document to be delivered by it hereunder.

(d) This Agreement constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.

(e) Sales and contributions made pursuant to this Agreement will constitute a valid sale, transfer, and assignment of the Transferred Receivables to Purchaser, enforceable against creditors of, and purchasers from, the Seller. The Seller shall have no remaining property interest in any Transferred Receivable.

(f) The balance sheets of