PURCHASE AGREEMENT

PURCHASE AGREEMENT

Dated as of June 2, 2009

Among

FERRO COLOR & GLASS CORPORATION

and

FERRO PFANSTIEHL LABORATORIES, INC.
as Sellers
and
FERRO CORPORATION
as Purchaser

EXHIBIT D Form of Deferred Purchase Price Note

PURCHASE AGREEMENT
Dated as of June 2, 2009

FERRO COLOR & GLASS CORPORATION, a Pennsylvania corporation (“ Ferro Color ”) and FERRO PFANSTIEHL LABORATORIES, INC., a Delaware corporation (“ FPL ”)(Ferro Color and FPL being hereinafter sometimes referred to as the “ Sellers ”), and FERRO CORPORATION, an Ohio corporation (the “ Purchaser ” or “ Ferro ”), 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 Sellers have Receivables that they wish to sell to the Purchaser, and the Purchaser is prepared to purchase such Receivables on the terms set forth herein.:

NOW, THEREFORE, the parties agree as follows:

ARTICLE I.
DEFINITIONS

SECTION 1.01 Certain Defined Terms. As used in this Agreement and the Exhibits thereto and not otherwise defined elsewhere herein, capitalized terms have the meanings set forth in this Section 1.01 (such meanings to be equally applicable to the singular and plural forms thereof).

“ Deferred Purchase Price ” means the portion of the Purchase Price of Purchased Receivables purchased on any Purchase Date from a Seller exceeding the amount of the Purchase Price under Section 2.02 to be paid in cash to such Seller. The obligations of the Purchaser in respect of the Deferred Purchase Price payable to each Seller shall be evidenced by the Purchaser’s Deferred Purchase Price Note.

“ Deferred Purchase Price Note ” means the deferred purchase price note to be issued by Purchaser in the form of Exhibit D hereto.

“ Discount ” means, in respect of each Purchase, 1% 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 relevant 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).

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

“ Facility ” means the willingness of the Purchaser to consider making Purchases of Receivables from the Sellers 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 Receivables Purchase Agreement), (ii) the date of termination of the Facility pursuant to Section 7.01 and (iii) the date which the Sellers designate by at least two (2) Business Days’ notice to the Purchaser and its assignees (including the SPE and the Agent).

“ General Trial Balance ” of any Seller on any date means such 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.

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

“ Purchase and Contribution Agreement ” means that certain Purchase and Contribution Agreement dated as of June 2, 2009, between the Purchaser, as seller and collection agent, and the SPE, as purchaser, as 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 an amount equal to the Outstanding Balance of the Receivables that are the subject of such Purchase as set forth in the relevant Seller’s General Trial Balance, minus the Discount for such Purchase.

“ Purchase Price Credit ” has the meaning specified in Section 2.04.

“ Receivables Purchase Agreement ” means that certain Receivables Purchase Agreement, dated as of June 2, 2009, among the SPE, as seller, Wachovia Bank, National Association, as agent, the purchasers party thereto, and Ferro, as collection agent, as amended, restated, supplemented or otherwise modified from time to time.

“ Related Security ” means, with respect to any Receivable:

(i) all right, title and interest (if any) in the goods, the sale of which gave rise to such Receivable, and any and all insurance contracts with respect thereto,

(ii) all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the invoice related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,

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

(iv) all Records related to such Receivables, and

(v) all proceeds of any of the foregoing.

“ RPA Final Payment Date ” means the later of the Facility Termination Date and the date on which all Capital, Yield, Fees and other obligations under the Receivables Purchase Agreement are paid in full.

“ RPA Purchaser ” means the “Purchasers” as such term is defined in the Receivables Purchase Agreement.

“ Solvent ” means, with respect to any Person and its Subsidiaries on a particular date, that on such date (a) the fair value of the property of such Person and its Subsidiaries on a consolidated basis is greater than the total amount of liabilities, including contingent liabilities, of such Person and its Subsidiaries on a consolidated basis, (b) the present fair salable value of the assets of such Person and its Subsidiaries on a consolidated basis is not less than the amount that will be required to pay the probable liability of such Person and its Subsidiaries on a consolidated basis on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it or its Subsidiaries will, incur debts or liabilities beyond the ability of such Person and its Subsidiaries to pay as such debts and liabilities mature, and (d) such Person and its Subsidiaries on a consolidated basis is not engaged in business or a transaction, and such Person and its Subsidiaries on a consolidated basis is not about to engage in a business or a transaction, for which the property of such Person and its Subsidiaries on a consolidated basis would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, can reasonably be expected to become an actual or matured liability.

“ SPE ” means Ferro Finance Corporation, an Ohio corporation.

SECTION 1.02 Certain Terms Defined in Receivables Purchase Agreement. If a capitalized term is used in this Agreement, or any Exhibit thereto, and not otherwise defined therein, such term shall have the meaning assigned thereto in the Receivables Purchase Agreement. Among the capitalized terms used in this Agreement which are defined in the Receivables Purchase Agreement are the following:

SECTION 1.03 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

SECTION 2.01 Facility. On the terms and conditions hereinafter set forth and without recourse to any Seller (except to the extent specifically provided herein), each Seller shall sell to the Purchaser all Receivables originated by it from time to time and the Purchaser shall purchase all such Receivables of such 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) (a) Initial Purchase . Each Seller shall give the Purchaser at least one (1) 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 such 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 a Seller or the Purchaser shall notify the other parties to the contrary, each Seller shall sell to the Purchaser and the Purchaser shall purchase from such Seller, upon satisfaction of the applicable conditions set forth in Article III, all Receivables originated by such Seller which have not previously been sold to the Purchaser. On or within one (1) month 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 one (1) month 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 relevant Seller’s account designated by such Seller, (ii) an increase in the Deferred Purchase Price owing to the relevant Seller, or (iii) through an intercompany account transaction. In the case of each Seller, the allocation of the Purchase Price as between such methods of payment shall be subject in each instance to the approval of the Purchaser and such Seller; provided , however , that the Deferred Purchase Price may only be increased to the extent that the Purchaser is Solvent and shall remain Solvent after giving effect to such increase.

(d)  Ownership of Receivables and Related Security . On each Purchase Date, after giving effect to the Purchase on such date, the Purchaser shall own all Receivables originated by the Sellers as of such date (including Receivables which have been previously sold to the Purchaser hereunder). The Purchase 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 each 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 ( Bárgerliches Gesetzbuch ) to the Purchaser all Receivables (whether now existing or hereafter arising) owed to such 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 Receivables Purchase Agreement, the Collection Agent shall, on each Business Day, deposit into an account of the Purchaser or the Purchaser’s assignee all Collections of Purchased Receivables then held by the Collection Agent.

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

(c) On each Monthly Payment Date, the Purchaser shall pay to each Seller accrued interest at the rate set forth in the Deferred Purchase Price Note issued by Purchaser to Sellers on any Deferred Purchase Price owed to such Seller and the Purchaser may, at its option, prepay in whole or in part the principal amount of the Deferred Purchase Price.

SECTION 2.04 Settlement Procedures. (a) A Seller shall be deemed to have received a Deemed Collection with respect to a Receivable sold by it to Purchaser hereunder upon the occurrence of any Dilution with respect to such Receivable. Upon any Seller receipt of a Deemed Collection, Purchaser shall be entitled to a credit (each, a “ Purchase Price Credit ”) against the Purchase Price otherwise payable to such Seller hereunder in an amount equal to such Deemed Collection. If such Purchase Price Credit exceeds the original Outstanding Balance of the Receivables originated by such Seller on such day, and an Investment Excess exists or would result from such Deemed Collection, then, upon demand by Purchaser (or the Agent following the Facility Termination Date), such Seller shall pay to Purchaser the remaining amount of such Purchase Price Credit in cash on such day; provided , that if no such Investment Excess exists or would result therefrom and the Facility Termination Date has not occurred, such Seller shall be allowed to deduct the remaining amount of such Purchase Price Credit from any indebtedness owed to it under its Deferred Purchase Price Note to be issued by Purchaser in the form of Exhibit D hereto.

(b) Except as stated in subsection (a) of this Section 2.04 or as otherwise required by law or the underlying Contract, all Collections from an Obligor of any Purchased 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 any 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 Receivables Purchase Agreement, shall be those set forth in the Receivables Purchase Agreement.

(b) Each Seller shall, to the extent permitted by law, pay to the Purchaser interest on any amount not paid or deposited by such 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 three hundred sixty (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.

ARTICLE III.
CONDITIONS OF PURCHASES

SECTION 3.01 Conditions Precedent to Initial Purchase from the Sellers. The initial Purchase of Receivables from the Sellers hereunder is subject to the conditions precedent that (a) all of the conditions to the initial purchase under the Receivables Purchase Agreement have been satisfied or waived in accordance with the terms thereof, and (b) 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, and:

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

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

(iii) Acknowledgment copies or time stamped receipt copies of proper financing statements, duly filed on or before the date of the initial Purchase, naming each Seller 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 Purchased Receivables and Related Security and Collections with respect thereto.

(iv) 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 Purchased Receivables, Contracts or Related Security previously granted by each Seller.

(v) 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 (iii) above that name any Seller as debtor, together with copies of such other financing statements (none of which shall cover any Purchased Receivables, Contracts or Related Security).

SECTION 3.02 Conditions Precedent to All Purchases. Each Purchase (including the initial Purchase) hereunder shall be subject to the further conditions precedent that no Event of Termination under subsections 7.01(e), (f), (g) or (j) shall have occurred and be continuing.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES

SECTION 4.01 Representations and Warranties of the Sellers. Each Seller represents and warrants, as to itself, as follows:

(a) Such Seller is a corporation duly incorporated, validly existing and in good standing, in each case under the laws of the applicable jurisdiction set forth in Exhibit B hereto (as such Exhibit B 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 Purchased 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 such Seller of this Agreement and the other documents to be delivered by it hereunder, including such Seller’s sale of Receivables hereunder and such Seller’s use of the proceeds of Purchases, (i) are within such Seller’s corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene (1) such Seller’s charter or by-laws, (2) any law, rule or regulation applicable to such Seller, (3) any contractual restriction binding on or affecting such Seller or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting such 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 such Seller’s interest in the Purchased Receivables pursuant to this Agreement). This Agreement has been duly executed and delivered by such 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 such 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 such Seller enforceable against such Seller in accordance with its terms except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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

(f) [Intentionally Omitted.]

(g) There is no pending or, to such Seller’s knowledge, threatened action, investigation or proceeding affecting such Seller or any of its subsidiaries before any court, governmental agency or arbitrator which may materially adversely affect the financial condition or operations of such Seller or any of its subsidiaries or the ability of such Seller to perform its obligations under this Agreement or any other document to be delivered by it hereunder, or which purports to affect the legality, validity or enforceability of this Agreement or any other document to be delivered by it hereunder.

(h) No proceeds of any Purchase will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934, provided that this Section 4.01(h) shall not prohibit the Purchaser from purchasing equity securities of Ferro or the Sellers in accordance with applicable law.

(i) No transaction contemplated hereby requires compliance with any bulk sales act or similar law.

(j) Each Purchased Receivable, together with the Related Security, is owned (prior to its sale hereunder) by such Seller free and clear of any Adverse Claim (other than any Adverse Claim arising solely as the result of any action taken by the Purchaser). When Purchaser makes a Purchase it shall acquire valid and perfected first priority ownership of each Purchased Receivable and the Related Security and Collections with respect thereto free and clear of any Adverse Claim (other than any Adverse Claim arising solely as the result of any action taken by the Purchaser), and no effective financing statement or other instrument similar in effect covering any Purchased Receivable, any interest therein, the Related Security or Collections with respect thereto is on file in any recording office except such as may be filed in favor of Purchaser in accordance with this Agreement or in connection with any Adverse Claim arising solely as the result of any action taken by the Purchaser.

(k) Each Daily Report and each Monthly Report (if prepared by the relevant Seller, or to the extent that information contained therein is supplied by such Seller), and all information and each exhibit, financial statement, document, book, record or report furnished or to be furnished at any time by such Seller to the Purchaser in connection with this Agreement is or will be accurate in all material respects as of its date or (except as otherwise disclosed to the Purchaser at such time) as of the date so furnished, and no such document contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

(l) The principal place of business and chief executive office of such Seller and the office where such Seller keeps its records concerning the Purchased Receivables are located at the address or addresses referred to in Section 5.01(b). Such Seller is located in the jurisdiction of organization set forth in Exhibit B hereto for purposes of Section 9-307 of the UCC as in effect in the State of New York; and the office in the jurisdiction of organization of such Seller in which a UCC financing statement is required to be filed in order to perfect the security interest granted by such Seller hereunder is set forth in Exhibit B hereto (in each case as such Exhibit B may be amended from time to time pursuant to Section 5.01(b)).

(m) The names and addresses of all the Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified in Exhibit A (as the same may be updated from time to time pursuant to Section 5.01(h)).

(n) Such Seller is not known by and does not use any tradename or doing-business-as name.

(o) With respect to any programs used by such Seller in the servicing of the Receivables, such Seller shall pay any necessary fees associated with any sublicensing agreements necessary in connection with the designation of a new Collection Agent so that such new Collection Agent shall have the benefit of such programs ( it being understood that , however, the Collection Agent, if other than Ferro, shall be required to be bound by a confidentiality agreement reasonably acceptable to such Seller).

(p) The sale of Purchased Receivables by such Seller to the Purchaser pursuant to this Agreement, and all other transactions between such Seller and the Purchaser, have been and will be made in good faith and without intent to hinder, delay or defraud creditors of such Seller.

(q) Such Seller has (i) timely filed all federal tax returns required to be filed, (ii) timely filed all other material state and local tax returns (other than with respect to such state and local tax returns for the tax year 2005, which have been filed prior to the date hereof) and (iii) paid or made adequate provision for the payment of all taxes, assessments and other governmental charges (other than any tax, assessment or governmental charge which is being contested in good faith and by proper proceedings, and with respect to which the obligation to pay such amount is adequately reserved against in accordance with generally accepted accounting principles). Such Seller will also pay when due any taxes payable in connection with the Receivables originated by it, exclusive of taxes on or measured by income or gross receipts of Purchaser and its assigns.

(r) Such Seller is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute.

(s) Such Seller has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Receivable originated by such Seller, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation, except where such contravention or violation could not reasonably be expected to have a Material Adverse Effect.

(t) With respect to each Receivable transferred hereunder by such Seller to Purchaser, the Purchase Price received by such Seller constitutes reasonably equivalent value in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by such Seller of any Receivable hereunder is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq.), as amended.

(u) Each Contract with respect to each Receivable originated by such Seller is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(v) Each Receivable originated by such Seller is an “account” under and as defined in the UCC of all applicable jurisdictions.

(w) The manner in which such Seller accounts for the transactions contemplated by this Agreement does not jeopardize the true sale analysis.

ARTICLE V.
COVENANTS

SECTION 5.01 Covenants of the Sellers. From the date hereof until the first day following the Facility Termination Date on which all of the Purchased Receivables are either collected in full or become Defaulted Receivables:

(a)  Compliance with Laws, Etc. Each Seller will comply in all material respects with all applicable laws, rules, regulations and orders and preserve and maintain its corporate existence, rights, franchises, qualifications and privileges except to the extent that the failure so to comply with such laws, rules and regulations or the failure so to preserve and maintain such existence, rights, franchises, qualifications, and privileges would not materially adversely affect the collectibility of the Purchased Receivables or the ability of such Seller to perform its obligations under this Agreement.

(b)  Offices, Records and Books of Account . Each Seller will keep its principal place of business and chief executive office and the office where it keeps its records concerning the Purchased Receivables at the address or addresses of such Seller set